<PAGE>
File No.: 33-86330
Securities and Exchange Commission
Washington, D.C.
Form N-4
Registration Statement Under the Securities Act of 1933
-----
Pre-Effective Amendment No. / /
----- ----
Post-Effective Amendment No. 1 / X /
----- ----
and/or
Registration Statement Under the Investment Company Act of 1940
Amendment No. 1
-----
(check appropriate box or boxes)
ITT Hartford Life and Annuity Insurance Company
Separate Account Six
(Exact Name of Registrant)
ITT Hartford Life and Annuity Insurance Company
(Name of Depositor)
P. O. Box 2999
Hartford, CT 06104-2999
(Address of Depositor's Principal Offices)
Depositor's Telephone Number: (203) 843-8847
Rodney J. Vessels, Esquire
P.O. Box 2999
Hartford, CT 06104-2999
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering:
As soon as practicable after the effective date of this Registration Statement.
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragrah (b) of Rule 485
-----
X on May 1, 1995 pursuant to paragraph (b)(1)(v) of Rule 485
-----
60 days after filing pursuant to paragraph (a)(1) of Rule 485
-----
on May 1, 1995 pursuant to paragraph (a)(1) of Rule 485
-----
75 days after filing pursuant to paragraph (a)(2) of Rule 485
-----
on May 1, 1995 pursuant to paragraph (a)(2) of Rule 485
-----
<PAGE>
-2-
Calculation of Registration Fee Under Securities Act of 1933
- --------------------------------------------------------------------------------
Title of Amount Proposed Maximum Proposed Maximum Amount of
Securities Being Offering Aggregate Registration
Being Registered Registered Price Per Unit Offering Price Fee
- --------------------------------------------------------------------------------
ITT Hartford and Annuity Pursuant to Regulation 270. 24f-2 under the
Insurance Company Investment Company Act of 1940, Registrant has
Separate Account Six previously elected to register an indefinite number
Units of Interest of units of interest in this Separate Account.
- --------------------------------------------------------------------------------
Rule 24f-2 Notice for the Registrant's most recent fiscal year will be filed on
or about February 28, 1995
<PAGE>
-3-
CROSS REFERENCE SHEET
PURSUANT TO RULE 495(a)
-----------------------
N-4 Item No. Prospectus Heading
- -------------------------------------- -------------------------------------
1. Cover Page Cover Page
2. Definitions Glossary of Special Terms
3. Synopsis or Highlights Summary
4. Condensed Financial Information Statement of Additional Information
5. General Description of Registrant, The Contract;
Depositor, and Portfolio Companies The Separate Account;
The Fixed Account;
The Company;
The Funds; General Matters
6. Deductions Charges Under the Contract
7. General Description of Operation of the Contract
Annuity Contracts Accumulation Period;
Death Benefit; The Contract;
The Separate Account;
General Matters
8. Annuity Period Annuity/Payout Period
9. Death Benefit Death Benefit
10. Purchases and Contract Value Operation of the Contract/
Accumulation Period
11. Redemptions Operation of the Contract/
Accumulation Period
12. Taxes Federal Tax Considerations
13. Legal Proceedings General Matters -- Legal
Proceedings
14. Table of Contents of the Statement Table of Contents to Statement
of Additional Information of Additional Information
15. Cover Page Part B; Statement of Additional
Information
16. Table of Contents Tables of Contents
<PAGE>
-4-
17. General Information and Introduction
History
18. Services None
19. Purchase of Securities Distribution of Contracts
being Offered
20. Underwriters Distribution of Contracts
21. Calculation of Performance Calculation of Yield and
Data Return
22. Annuity Payments Annuity/Payout Period
23. Financial Statements Financial Statements
24. Financial Statements and Financial Statements and
Exhibits Exhibits
25. Directors and Officers of the Directors and Officers of the
Depositor Depositor
26. Persons Controlled by or Under Persons Controlled by or Under
Common Control with the Depositor Common Control with the Depositor
or Registrant or Registrant
27. Number of Contract Owners Number of Contract Owners
28. Indemnification Indemnification
29. Principal Underwriters Principal Underwriters
30. Location of Accounts and Records Location of Accounts and Records
31. Management Services Management Services
32. Undertakings Undertakings
<PAGE>
-5-
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY--
SEPARATE ACCOUNT SIX
- -------------------------------------------------
This Prospectus describes the Woodward Variable Annuity Contract ("Contract"), a
tax deferred variable annuity issued by ITT Hartford Life and Annuity Insurance
Company ("ILA"). Payments for the Contract will be held in the Fixed Account
and/or a series of ITT Hartford Life and Annuity Insurance Company -- Separate
Account Six (the "Separate Account").
There are currently nine Sub-Accounts available under the Contract, investing in
shares of The Woodward Variable Annuity Fund or the Putnam Capital Manager
Trust. The underlying investment portfolios ("Funds") for the Sub-Accounts are
the Woodward Balanced Fund, Woodward Growth/Value Fund, Woodward Opportunity
Fund, Woodward Capital Growth Fund and Woodward Money Market Fund of The
Woodward Variable Annuity Fund; and the PCM Global Growth Fund, PCM Global Asset
Allocation Fund, PCM Diversified Income Fund and PCM U.S. Government and High
Quality Bond Fund of the Putnam Capital Manager Trust.
This Prospectus sets forth the information concerning the Separate Account and
the Fixed Account that investors should know before investing. This Prospectus
should be kept for future reference. Additional information about the Separate
Account and the Fixed Account has been filed with the Securities and Exchange
Commission and is available without charge upon request. To obtain the
Statement of Additional Information send a written request to ITT Hartford Life
and Annuity Insurance Company, Attn: Individual Annuity Operations, P.O. Box
2999, Hartford, CT 06104-2999. The Table of Contents for the Statement of
Additional Information may be found on page ____ of this Prospectus. The
Statement of Additional Information is incorporated by reference into this
Prospectus.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
MUTUAL FUNDS, ANNUITIES AND INSURANCE PRODUCTS ARE NOT DEPOSITS OR OBLIGATIONS
OF, OR GUARANTEED BY BANK, NOR ARE THEY INSURED BY THE FDIC; THEY ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL INVESTMENT.
- --------------------------------------------------------------------------------
THIS PROSPECTUS IS ACCOMPANIED BY CURRENT PROSPECTUSES FOR THE WOODWARD VARIABLE
ANNUITY FUND AND THE PUTNAM CAPITAL MANAGER TRUST AND IS VALID ONLY WHEN SO
ACCOMPANIED.
Prospectus Dated: May 1, 1995
Statement of Additional Information Dated: May 1, 1995
<PAGE>
-6-
TABLE OF CONTENTS
-----------------
Page
----
GLOSSARY OF SPECIAL TERMS. . . . . . . . . . . . . . . . . . . . . . . . .
FEE TABLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PERFORMANCE RELATED INFORMATION. . . . . . . . . . . . . . . . . . . . . .
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE CONTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right to Cancel Period . . . . . . . . . . . . . . . . . . . . . . .
THE SEPARATE ACCOUNT.. . . . . . . . . . . . . . . . . . . . . . . . . . .
THE FIXED ACCOUNT. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OPERATION OF THE CONTRACT/ACCUMULATION/PERIOD. . . . . . . . . . . . . . .
Premium Payments. . . . . . . . . . . . . . . . . . . . . . . . . . .
Value of Accumulation Units . . . . . . . . . . . . . . . . . . . . .
Value of the Fixed Account. . . . . . . . . . . . . . . . . . . . . .
Value of the Contract . . . . . . . . . . . . . . . . . . . . . . . .
Transfers Among Sub-Accounts. . . . . . . . . . . . . . . . . . . . .
Transfers Between the Fixed Account and the Sub-Accounts. . . . . . .
Redemption/Surrender of a Contract. . . . . . . . . . . . . . . . . .
<PAGE>
-7-
Page
----
DEATH BENEFIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CHARGES UNDER THE CONTRACT.. . . . . . . . . . . . . . . . . . . . . . . .
CONTINGENT DEFERRED SALES CHARGES. . . . . . . . . . . . . . . . . . . . .
During the First Seven Contract Years . . . . . . . . . . . . . . . .
After the Seventh Contract Year . . . . . . . . . . . . . . . . . . .
Mortality and Expense Risk Charge . . . . . . . . . . . . . . . . . .
Administration and Maintenance Fees . . . . . . . . . . . . . . . . .
Premium Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ANNUITY BENEFITS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Annuity Options . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Annuity Unit and Valuation. . . . . . . . . . . . . . . . . . . .
Determination of Payment Amount . . . . . . . . . . . . . . . . . . .
FEDERAL TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxation of ILA and the Separate Account. . . . . . . . . . . . . . .
Taxation of Annuities in General -- Non-Tax Qualified Purchasers .. .
Federal Income Tax Withholding. . . . . . . . . . . . . . . . . . . .
General Provisions Affecting Tax Qualified Plans. . . . . . . . . . .
Aggregation of Two or More Annuity Contracts. . . . . . . . . . . . .
GENERAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Modification. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
-8-
Page
----
Delay of Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Voting Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distribution of the Contracts. . . . . . . . . . . . . . . . . . . . . . .
Other Contracts Offered. . . . . . . . . . . . . . . . . . . . . . . . . .
Custodian of Separate Account Assets . . . . . . . . . . . . . . . . . . .
Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . .
APPENDIX I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TABLE OF CONTENTS TO STATEMENT OF ADDITIONAL INFORMATION.. . . . . . . . .
<PAGE>
-9-
GLOSSARY OF SPECIAL TERMS
-------------------------
ACCUMULATION UNIT: An accounting unit of measure used to calculate values
before Annuity payments begin.
ANNUAL WITHDRAWAL AMOUNT: The amount which can be withdrawn in any Contract
year without surrender charges.
ANNUITANT: The person or participant upon whose life the Contract is issued.
ANNUITY: A series of payments for life, or for life with a minimum number of
payments or a determinable sum guaranteed, or for a joint lifetime and
thereafter during the lifetime of the survivor, or for a designated period.
ANNUITY COMMENCEMENT DATE: The date on which Annuity payments are to commence.
For group unallocated contracts, the date for each participant is determined by
the Contract Owner in accordance with the terms of the Plan.
ANNUITY UNIT: An accounting unit of measure used to calculate the value of
Annuity payments.
BENEFICIARY: The person(s) who receive Contract Values in the event of the
Annuitant's or Contract Owner's death under certain conditions. Under a group
unallocated Contract, the person named within the Plan documents/enrollment
forms by each Participant entitled to receive benefits as per the terms of the
Contract in case of the death of the Participant.
CODE: The Internal Revenue Code of 1986, as amended.
COMMISSION: Securities and Exchange Commission.
CONTINGENT ANNUITANT: The person so designated by the Contract Owner, who upon
the Annuitant's death, prior to the Annuity Commencement Date, becomes the
Annuitant.
CONTRACT ANNIVERSARY: The anniversary of the Contract Date.
CONTRACT OWNER(S): The owner(s) of the Contract, trustee or other entity,
sometimes herein referred to as "you".
CONTRACT VALUE: The aggregate value of any Sub-Account Accumulation Units held
under the Contract plus the value of the Fixed Account.
CONTRACT YEAR: A period of 12 months commencing with the Contract Date or any
anniversary thereof.
<PAGE>
-10-
FIXED ACCOUNT: Part of the General Account of ILA to which a Contract Owner may
allocate all or a portion of his Premium Payment or Contract Value.
DEATH BENEFIT: The amount payable upon the death of a Contract Owner,
Annuitant, or Participant, in the case of group contracts, prior to age 90 and
before annuity payments have started.
FIXED ANNUITY: An Annuity providing for guaranteed payments which remain fixed
in amount throughout the payment period and which do not vary with the
investment experience of a separate account.
GENERAL ACCOUNT: The General Account of ILA which consists of all assets of the
ITT Hartford Life and Annuity Insurance Company other than those allocated to
the separate accounts of the ITT Hartford Life and Annuity Insurance Company.
ILA: ITT Hartford Life and Annuity Insurance Company.
HOME OFFICE OF THE COMPANY: Currently located at 200 Hopmeadow Street,
Simsbury, Connecticut. All correspondence concerning the Contract should be
sent to P.O. Box 2999, Hartford, CT 06104-2999, Attn: Individual Annuity
Operations.
MAXIMUM ANNIVERSARY VALUE -- A value used in determining the death benefit. It
is based on a series of calculations of Contract Values on Contract
Anniversaries, premium payments and partial surrenders, as described on page___.
MINIMUM DEATH BENEFIT: The minimum amount payable upon the death of the
Contract Owner/Annuitant or Participant in the case of group contracts prior to
age 90 and before annuity payments have commenced.
PARTICIPANT: (For Group Unallocated Contracts Only). Any eligible employee of
an employer/Contract Owner participating in the Plan.
PLAN: A voluntary Plan of an Employer which qualifies for special tax treatment
under a section of the Internal Revenue Code.
FUNDS: Currently, the portfolios of The Woodward Variable Annuity Fund and the
Putnam Capital Manager Trust described on page ___ of this Prospectus.
PREMIUM PAYMENT: A payment made to ILA pursuant to the terms of the Contract.
PREMIUM TAX: A tax charged by a state or municipality on Premium Payments or
Contract Values.
<PAGE>
-11-
SEPARATE ACCOUNT: The ILA separate account entitled "ITT Hartford Life and
Annuity Insurance Company -- Separate Account Six."
SUB-ACCOUNT: Accounts established within the Separate Account with respect to a
Fund.
TERMINATION VALUE: The Contract Value upon termination of the Contract prior to
the Annuity Commencement Date, less any applicable Premium Taxes, the Annual
Maintenance Fee and any applicable contingent deferred sales charges.
UNALLOCATED CONTRACTS -- Contracts issued to employers or such other entities as
Contract Owners with no allocation to a specific Participant, as defined herein.
The Plans will be responsible for the individual allocations.
VALUATION DAY: Every day the New York Stock Exchange is open for trading. The
value of the Separate Account is determined at the close of the New York Stock
Exchange (currently 4:00 p.m. Eastern Time) on such days.
VALUATION PERIOD: The period between the close of business on successive
Valuation Days.
VARIABLE ANNUITY: An Annuity providing for payments varying in amount in
accordance with the investment experience of the assets of the Separate Account.
<PAGE>
-12-
FEE TABLES
Separate Account Six
Summary
<TABLE>
<CAPTION>
Contract Owner Transaction Expenses (All Sub-Accounts)
<S> <C>
Sales Load Imposed on Purchases
(as a percentage of premium payments) None
- ---------------------------------------------------------------------
Exchange Fee $0
- ---------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Deferred Sales Load (as a percentage of amounts withdrawn)
NUMBER OF YEARS (1) CHARGE
- ------------------- ------
<S> <C>
First Year 6%
- ---------------------------------------------------------------------
Second Year 6%
- ---------------------------------------------------------------------
Third Year 5%
- ---------------------------------------------------------------------
Fourth Year 5%
- ---------------------------------------------------------------------
Fifth Year 4%
- ---------------------------------------------------------------------
Sixth Year 3%
- ---------------------------------------------------------------------
Seventh Year 2%
- ---------------------------------------------------------------------
Eighth Year 0%
- ---------------------------------------------------------------------
Annual Contract Fee (2) $30
- ---------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
ANNUAL EXPENSES-SEPARATE ACCOUNT (as percentage of average account value)
<S> <C>
Mortality and Expense Risk 1.250%
Administrative Fees 0.150%
Total 1.400%
<FN>
(1) The length of time from receipt of premium payment to the surrender
determines the number of years for purposes of applying the charge. For
example, a Contract Owner who makes a premium payment in June of one year
and surrenders in July of the next year is in the second year for purposes
of calculating the charge for that premium, which in this case would be 6%.
(2) The annual maintenance charge is a single $30 charge on a Contract. It is
deducted proportionally from the investment options in use at the time of
the charge. In the Example, the annual maintenance charge is approximated
as a 0.08% annual asset charge based on the experience of the Contracts.
</TABLE>
<PAGE>
-13-
ANNUAL FUND OPERATING EXPENSES (as percentage of net assets)
<TABLE>
<CAPTION>
Total Fund
Management Other Operating
Fees Expenses(3) Expenses
---------------------------------------
<S> <C> <C> <C>
Woodward Balanced Fund 0.75% 0.10% 0.85%
Woodward Growth/Value Fund 0.75% 0.10% 0.85%
Woodward Opportunity Fund 0.75% 0.10% 0.85%
Woodward Capital Growth Fund 0.75% 0.10% 0.85%
Woodward Money Market Fund 0.45% 0.05% 0.50%
PCM Global Growth Fund 0.60% 0.17% 0.77%
PCM Global Asset Allocation Fund 0.66% 0.10% 0.76%
PCM Diversified Income Fund 0.67% 0.13% 0.80%
PCM U.S. Government
and High Quality Bond Fund 0.60% 0.07% 0.67%
- -------------------------------------------------------------------------------
<FN>
(3) Other expenses for the Funds of The Woodward Variable Annuity Fund are
estimated for the current fiscal year.
</TABLE>
<PAGE>
-14-
EXAMPLE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
If you surrender your contract at the If you annuitize at the end of the
end of the applicable time period: You applicable time period: You would
would pay the following expenses on a pay the following expenses on a
$1,000 Investment, assuming a 5% $1,000 Investment, assuming a 5%
annual return on assets: annual return on assets:
- --------------------------------------------------------------------------------------------------------------------------
Sub-Account 1 3 5 10 1 3 5 10
yr. yrs. yrs. yrs. yr. yrs. yrs. yrs.
--- ---- ---- ---- --- --- ---- ----
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Woodward Balanced Fund 84 124 166 269 23 73 125 268
- --------------------------------------------------------------------------------------------------------------------------
Woodward Growth/Value Fund 84 124 166 269 23 73 125 268
- --------------------------------------------------------------------------------------------------------------------------
Woodward Opportunity Fund 84 124 166 269 23 73 125 268
- --------------------------------------------------------------------------------------------------------------------------
Woodward Capital Growth Fund 84 124 166 269 23 73 125 268
- --------------------------------------------------------------------------------------------------------------------------
Woodward Money Market Fund 80 113 148 232 19 62 107 231
- --------------------------------------------------------------------------------------------------------------------------
PCM Global Growth Fund 83 121 162 261 22 70 121 260
- --------------------------------------------------------------------------------------------------------------------------
PCM Global Asset Allocation Fund 83 121 161 260 22 70 120 259
- --------------------------------------------------------------------------------------------------------------------------
PCM Diversified Income Fund 83 122 163 264 23 71 122 263
- --------------------------------------------------------------------------------------------------------------------------
PCM U.S. Government and High 82 118 157 250 21 67 116 249
Quality Bond Fund
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------
If you do not surrender your
contract: You would pay the
following expenses on a $1,000
Investment, assuming a 5%
annual return on assets:
- ------------------------------------------------------------------------------
Sub-Account 1 3 5 10
yr. yrs. yrs. yrs.
--- ---- ---- ----
- ------------------------------------------------------------------------------
Woodward Balanced Fund 24 74 126 269
- ------------------------------------------------------------------------------
Woodward Growth/Value Fund 24 74 126 269
- ------------------------------------------------------------------------------
Woodward Opportunity Fund 24 74 126 269
- ------------------------------------------------------------------------------
Woodward Capital Growth Fund 24 74 126 269
- ------------------------------------------------------------------------------
Woodward Money Market Fund 20 63 108 232
- ------------------------------------------------------------------------------
PCM Global Growth Fund 23 71 122 261
- ------------------------------------------------------------------------------
PCM Global Asset Allocation Fund 23 71 121 260
- ------------------------------------------------------------------------------
PCM Diversified Income Fund 23 72 123 264
- ------------------------------------------------------------------------------
PCM U.S. Government and High 22 68 117 250
Quality Bond Fund
- ------------------------------------------------------------------------------
</TABLE>
The purpose of this table is to assist the Contract Owner in understanding
various costs and expenses that a contract owner will bear directly or
indirectly. The table reflects expenses of the Separate Account and Funds.
Premium taxes may also be applicable.
This EXAMPLE should not be considered a representation of past or future
expenses and actual expenses may be greater or less than those shown.
<PAGE>
-15-
SUMMARY
WHAT IS THE CONTRACT AND HOW MAY I PURCHASE ONE?
The Contract offered is a tax deferred Variable Annuity Contract (see "Taxation
of Annuities in General," page ____). Generally, the Contract is purchased by
completing an application or an order to purchase a Contract and submitting it,
along with the initial Premium Payments, to ILA for its approval. The minimum
initial Premium Payment is $1,000 with a minimum allocation to any Fund of $500.
Certain plans may make smaller initial and subsequent periodic premium payments.
Subsequent Premium Payments, if made, must be a minimum of $500. A Contract
Owner may, at any time within 10 days of delivery of a Contract sold hereunder,
return the Contract to ILA at its Home Office and the value of the Contract
(without deduction for any charges normally assessed thereunder) will be
refunded. The Contract Owner bears only the investment risk during the period
prior to the Company's receipt of request for cancellation, except for Contract
Owners in Georgia, North Carolina, South Carolina, Washington, West Virginia,
Utah, and other states where required by law who will be refunded the premiums
(see "Right to Cancel Period," page ____).
WHO MAY PURCHASE THE CONTRACT?
Any individual or group may purchase the Contracts, including any trustee or
custodian for a retirement plan which qualifies for special Federal tax
treatment under the Internal Revenue Code ("Qualified Contracts"). These
Contracts are also available for IRA's. (See "Federal Tax Considerations"
commencing on page ____ and Appendix I commencing on page ____.
WHAT TYPES OF INVESTMENTS ARE AVAILABLE UNDER THE CONTRACT?
The underlying investments for the Contract are shares of The Woodward Variable
Annuity Fund and the Putnam Capital Manager Trust, open-end diversified series
investment companies with multiple portfolios ("Funds") as follows: the
Woodward Balanced Fund, Woodward Growth/Value Fund, Woodward Opportunity Fund,
Woodward Capital Growth Fund and Woodward Money Market Fund of The Woodward
Variable Annuity Fund; the PCM Global Growth Fund, PCM Global Asset Allocation
Fund, PCM Diversified Income Fund and PCM U.S. Government and High Quality Bond
Fund of the Putnam Capital Manager Trust; and such other Funds as shall be
offered from time to time, and the Fixed Account, or a combination of the Funds
and the Fixed Account. (See "The Funds" commencing on page ____ and "The Fixed
Account" commencing on page ____.
<PAGE>
-16-
WHAT ARE THE CHARGES UNDER THE CONTRACTS?
SALES EXPENSES
There is no deduction for sales expenses from Premium Payments when made.
However, a contingent deferred sales charge may be assessed against Contract
Values when they are surrendered. (See "Contingent Deferred Sales Charges"
commencing on page ____.
The length of time from receipt of a Premium Payment to the time of surrender
determines the contingent deferred sales charge. For this purpose, Premium
Payments will be deemed to be surrendered in the order in which they are
received and all surrenders will be first from Premium Payments and then from
other Contract values. The charge is a percentage of the amount withdrawn (not
to exceed the aggregate amount of the Premium Payments made). The charge is as
follows:
<TABLE>
<CAPTION>
Length of Time
Charge from Premium Payment
------ --------------------
(Number of Years)
<S> <C>
6% 1
6% 2
5% 3
5% 4
4% 5
3% 6
2% 7
0% 8 or more
</TABLE>
No contingent deferred sales charge will be assessed in the event of death of
the Annuitant or Contract Owner, or upon the exercise of the withdrawal
privilege or if Contract Values are applied to an Annuity option provided for
under the Contract (except that a surrender out of Annuity Option Four will be
subject to a contingent deferred sales charge where applicable). (See
"Contingent Deferred Sales Charges" commencing on page ____.)
FREE WITHDRAWAL PRIVILEGE. Withdrawals of up to 10% per Contract Year, on a
noncumulative basis, of the Premium Payments made to a Contract may be made
without the imposition of the contingent deferred sales charge during the first
seven contract years. (See "Contingent Deferred Sales Charges" commencing on
page ____). Certain plans or programs may have different withdrawal privileges.
MORTALITY AND EXPENSE RISKS
For assuming the mortality and expense risks under the Contract, ILA will impose
a 1.25% per annum charge against all Contract Values held in the Sub-Accounts,
(see "Mortality and Expense Risk Charge," page ____).
<PAGE>
-17-
ANNUAL ADMINISTRATION AND MAINTENANCE FEE
The Contract provides for administration and Contract maintenance charges. For
administration, the charge is 0.15% per annum against all Contract Values held
in the Separate Account. For Contract maintenance, the charge is $30 annually.
(See "Administration and Maintenance Fees," page ____). Contracts with a
Contract value of $50,000 or more at time of Contract Anniversary will not be
assessed this fee.
PREMIUM TAXES
A deduction will be made for Premium Taxes for Contracts sold in certain states.
(See "Premium Taxes," page ____.)
CHARGES BY THE FUNDS
The Funds are subject to certain fees, charges and expenses. (See the
Prospectuses for The Woodward Variable Annuity Fund and the Putnam Capital
Manager Trust accompanying this Prospectus.)
CAN I GET MY MONEY IF I NEED IT?
Subject to any applicable charges, the Contract may be surrendered, or portions
of the value of such Contract may be withdrawn, at any time prior to the Annuity
Commencement Date. However, if less than $500 remains in a Contract as a result
of a withdrawal, ILA may terminate the Contract in its entirety. (See
"Redemption/Surrender of a Contract," page ____; see also "Federal Tax
Considerations," page ____, for a discussion of federal tax consequences,
including a 10% penalty tax that may apply upon surrender or withdrawal.)
DOES THE CONTRACT PAY ANY DEATH BENEFITS?
A minimum death benefit is provided in the event of death of the Annuitant or
Contract Owner or Joint Contract Owner prior to the Annuitant's, Contract
Owner's or Joint Contract Owner's 90th birthday. (See "Death Benefit,"
page ____.)
WHAT ARE THE AVAILABLE ANNUITY OPTIONS UNDER THE CONTRACT?
There are four available Annuity options under the Contract which are described
on page ____. The Annuity Commencement Date may not be deferred beyond the
Annuitant's 90th birthday in most states except Pennsylvania where the Annuity
Commencement Date may not be deferred beyond the Annuitant's 85th birthday. If
a Contract Owner does not elect otherwise, the Contract Value less applicable
premium taxes will be applied on the Annuity Commencement Date under the second
option to provide a life annuity with 120 monthly payments certain.
<PAGE>
-18-
DOES THE CONTRACT OWNER HAVE ANY VOTING RIGHTS UNDER THE CONTRACT?
Contract Owners will have the right to vote on matters affecting an Fund to the
extent that proxies are solicited by such Fund. If a Contract Owner does not
vote, ILA shall vote such interests in the same proportion as shares of the Fund
for which instructions have been received by ILA. (See "Voting Rights,"
page ____.)
PERFORMANCE RELATED INFORMATION
The Separate Account may advertise certain performance related information
concerning its Sub-Accounts. Performance information about a Sub-Account is
based on the Sub-Account's past performance only and is no indication of future
performance.
Each Fund may include total return in advertisements or other sales material.
When a Sub-Account advertises its total return, it will usually be calculated
for one year, five years, and ten years or some other relevant periods if the
Sub-Account has not been in existence for at least ten years. Total return is
measured by comparing the value of an investment in the Sub-Account at the
beginning of the relevant period to the value of the investment at the end of
the period (assuming the deduction of any contingent deferred sales charge which
would be payable if the investment were redeemed at the end of the period).
The PCM Diversified Income Fund and the PCM U.S. Government and High Quality
Bond Fund Sub-Accounts may advertise yield in addition to total return. The
yield will be computed in the following manner: The net investment income per
unit earned during a recent one month period is divided by the unit value on the
last day of the period. This figure reflects the recurring charges at the
Separate Account level including the Contract Maintenance Fee.
The Woodward Money Market Fund Sub-Account may advertise yield and effective
yield. The yield of a Sub-Account is based upon the income earned by the
Sub-Account over a seven-day period and then annualized, i.e. the income earned
in the period is assumed to be earned every seven days over a 52-week period and
stated as a percentage of the investment. Effective yield is calculated
similarly but when annualized, the income earned by the investment is assumed to
be reinvested in Sub-Account units and thus compounded in the course of a
52-week period. Yield reflect the recurring charges at the Separate Account
level including the Contract Maintenance Fee.
Total return at the Separate Account level includes all Contract charges: sales
charges, mortality and expense risk charges, and the Contract maintenance fee,
and is therefore lower than total return at the Fund level, with no comparable
charges. Likewise, yield at the Separate Account level includes all recurring
charges (except sales charges), and is therefore lower than yield at the Fund
level, with no comparable charges.
<PAGE>
-19-
ILA may provide information on various topics to Contract Owners and prospective
Contract Owners in advertising, sales literature or other materials. These
topics may include the relationship between sectors of the economy and the
economy as a whole and its effect on various securities markets, investment
strategies and techniques (such as value investing, dollar cost averaging and
asset allocation), the advantages and disadvantages of investing in tax-
advantaged and taxable instruments, customer profiles and hypothetical purchase
scenarios, financial management and tax and retirement planning, and other
investment alternatives, including comparisons between the Contracts and the
characteristics of and market for such alternatives.
INTRODUCTION
This Prospectus has been designed to provide you with the necessary information
to make a decision on purchasing a tax deferred Variable Annuity Contract
offered by ILA and funded by the Fixed Account and/or a series of the Separate
Account. Please read the Glossary of Special Terms on pages ____ and ____
prior to reading this Prospectus to familiarize yourself with the terms being
used.
THE CONTRACT
The Woodward Variable Annuity is a tax deferred Variable Annuity Contract.
Payments for the Contract will be held in the Fixed Account and/or a series of
the Separate Account. Initially there are no deductions from your Premium
Payments (except for Premium Taxes, if applicable) so your entire Premium
Payment is put to work in the investment Sub-Account(s) of your choice or the
Fixed Account. Each Sub-Account invests in a different Fund with its own
distinct investment objectives. You pick the Sub-Account(s) with the investment
objectives that meet your needs. You may select one or more Sub-Accounts and/or
the Fixed Account and determine the percentage of your Premium Payment that is
put into a Sub-Account or the Fixed Account. You may also transfer assets among
the Sub-Accounts and the Fixed Account so that your investment program meets
your specific needs over time. There are minimum requirements for investing in
each Sub-Account and the Fixed Account which are described later in this
Prospectus. In addition, there are certain other limitations on withdrawals and
transfers of amounts in the Sub-Accounts and the Fixed Account as described in
this Prospectus. See "Charges Under the Contract" for a description of the
charges for redeeming a Contract and other charges made under the Contract.
Generally, the Contract contains the four optional forms of Annuity described
later in this Prospectus. Options 2 and 4 are available with respect to Tax
Qualified Plans only if the guaranteed payment period is less than the life
expectancy of the Annuitant at the time the option becomes effective. Such life
expectancy shall be computed on the basis of the mortality table prescribed by
the IRS, or if none is prescribed, the mortality table then in use by ILA.
<PAGE>
-20-
The Contract Owner may select an Annuity Commencement Date and an Annuity option
which may be on a fixed or variable basis, or a combination thereof. The
Annuity Commencement Date may not be deferred beyond the Annuitant's 90th
birthday in most states except Pennsylvania where the Annuity Commencement Date
may not be deferred beyond the Annuitant's 85th birthday.
The Annuity Commencement Date and/or the Annuity option may be changed from time
to time, but any such change must be made at least 30 days prior to the date on
which payments are scheduled to begin. If you do not elect otherwise, payments
will begin at the Annuitant's age 90 under Option 2 with 120 monthly payments
certain (Option 1 for contracts issued in Texas).
When an Annuity is effected under a Contract, unless otherwise specified,
Contract Values held in the Sub-Accounts will be applied to provide a Variable
Annuity based on the pro rata amount in the various Sub-Accounts. Fixed Account
Contract Values will be applied to provide a Fixed Annuity. Variable Annuity
payments will vary in accordance with the investment performance of the
Sub-Accounts you have selected. The Contract allows the Contract Owner to
change the Sub-Accounts on which variable payments are based after payments have
commenced once every three (3) months. Any Fixed Annuity allocation may not be
changed.
The Contract offered under this Prospectus may be purchased by any individual
("Non-Qualified Contract") or by an individual, trustee or custodian for a
retirement plan qualified under Sections 401(a) or 403(a) of the Internal
Revenue Code; annuity purchase plans adopted by public school systems and
certain tax-exempt organizations according to Section 403(b) of the Internal
Revenue Code; Individual Retirement Annuities adopted according to Section 408
of the Internal Revenue Code; employee pension plans established for employees
by a state, a political subdivision of a state, or an agency or instrumentality
of either a state or a political subdivision of a state, and certain eligible
deferred compensation plans as defined in Section 457 of the Internal Revenue
Code ("Qualified Contracts").
RIGHT TO CANCEL PERIOD
If you are not satisfied with your purchase you may surrender the Contract by
returning it within ten days after you receive it. A written request for
cancellation must accompany the Contract. In such event, ILA will, without
deduction for any charges normally assessed thereunder, pay you an amount equal
to the sum of (i) the difference between the Premium Payment and the amounts
allocated to the Sub-Account(s) and/or the Fixed Account under the Contract and
(ii) the Contract Value on the date of surrender attributable to the amounts so
allocated. You bear only the investment risk during the period prior to the
Company's receipt of request for cancellation. In Georgia, North Carolina,
South Carolina, Washington, West Virginia, Utah and other states where required
by law, ILA will refund the premium paid only.
<PAGE>
-21-
THE SEPARATE ACCOUNT
The Separate Account was established on October 28, 1994, in accordance with
authorization by the Board of Directors of ILA. It is the Separate Account in
which ILA sets aside and invests the assets attributable to variable annuity
contracts, including the contracts sold under this Prospectus. Although the
Separate Account is an integral part of ILA, it is registered as a unit
investment trust under the Investment Company Act of 1940. This registration
does not, however, involve supervision by the Commission of the management or
the investment practices or policies of the Separate Account or ILA.
Under Connecticut law, the assets of the Separate Account attributable to the
Contracts offered under this Prospectus are held for the benefit of the owners
of, and the persons entitled to payments under, those Contracts. Income, gains,
and losses, whether or not realized, from assets allocated to the Separate
Account, are, in accordance with the Contracts, credited to or charged against
the Separate Account. Also, the assets in the Separate Account are not
chargeable with liabilities arising out of any other business ILA may conduct.
So Contract Values allocated to the Sub-Accounts will not be affected by the
rate of return of ILA's General Account, nor by the investment performance of
any of ILA's other separate accounts. However, the obligations arising under
the Contracts are general obligations of ILA.
Your investment in the Separate Account is allocated to one or more Sub-Accounts
as per your specifications. Each Sub-Account is invested exclusively in the
shares of one Fund. Net Premium Payments and proceeds of transfers between
Funds are applied to purchase shares in the appropriate Fund at net asset value
determined as of the end of the Valuation Period during which the payments were
received or the transfer made. All distributions from the Funds are reinvested
at net asset value. The value of your investment will therefore vary in
accordance with the net income and the market value of the portfolios of the
Funds. During the Variable Annuity payout period, both your Annuity payments
and reserve values will vary in accordance with these factors.
ILA does not guarantee the investment results of the Funds or any of the
underlying investments. There is no assurance that the value of a Contract
during the years prior to retirement or the aggregate amount of the Variable
Annuity payments will equal the total of Premium Payments made under the
Contract. Since each Fund has different investment objectives and policies,
each is subject to different risks. These risks are more fully described in the
accompanying Prospectuses for the Woodward Variable Annuity and the Putnam
Capital Manager Trust.
ILA reserves the right, subject to compliance with the law, to substitute the
shares of any other registered investment company for the shares of any Fund
held by the Separate Account. Substitution may occur only if shares of the
Fund(s) become unavailable or if there are changes in applicable law or
interpretations of law. Current law requires notification to you of any such
substitution and approval of the Commission.
The Separate Account may be subject to liabilities arising from a Series of the
Separate Account
<PAGE>
-22-
whose assets are attributable to other variable annuity contracts or variable
life insurance policies offered by the Separate Account which are not described
in this Prospectus.
THE FIXED ACCOUNT
THAT PORTION OF THE CONTRACT RELATING TO THE FIXED ACCOUNT IS NOT REGISTERED
UNDER THE SECURITIES ACT OF 1933 ("1933 ACT") AND THE FIXED ACCOUNT IS NOT
REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940
("1940 ACT"). ACCORDINGLY, NEITHER THE FIXED ACCOUNT NOR ANY INTERESTS THEREIN
ARE SUBJECT TO THE PROVISIONS OR RESTRICTIONS OF THE 1933 ACT OR THE 1940 ACT,
AND THE DISCLOSURE REGARDING THE FIXED ACCOUNT HAS NOT BEEN REVIEWED BY
THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION. THE FOLLOWING DISCLOSURE
ABOUT THE FIXED ACCOUNT MAY BE SUBJECT TO CERTAIN GENERALLY APPLICABLE
PROVISIONS OF THE FEDERAL SECURITIES LAWS REGARDING THE ACCURACY AND
COMPLETENESS OF DISCLOSURE.
Premium Payments and Contract Values allocated to the Fixed Account become a
part of the general assets of ILA. ILA invests the assets of the General
Account in accordance with applicable laws governing investments of Insurance
Company General Accounts.
Currently, ILA guarantees that it will credit interest at a rate of not less
than 3% per year, compounded annually, to amounts allocated to the Fixed Account
under the Contracts. However, ILA reserves the right to change the rate
according to state insurance law. ILA may credit interest at a rate in excess
of 3% per year; however, ILA is not obligated to credit any interest in excess
of 3% per year. There is no specific formula for the determination of excess
interest credits. Some of the factors that the Company may consider in
determining whether to credit excess interest to amounts allocated to the Fixed
Account and the amount thereof, are general economic trends, rates of return
currently available and anticipated on the Company's investments, regulatory and
tax requirements and competitive factors. ANY INTEREST CREDITED TO AMOUNTS
ALLOCATED TO THE FIXED ACCOUNT IN EXCESS OF 3% PER YEAR WILL BE DETERMINED IN
THE SOLE DISCRETION OF THE COMPANY. THE OWNER ASSUMES THE RISK THAT INTEREST
CREDITED TO FIXED ACCOUNT ALLOCATIONS MAY NOT EXCEED THE MINIMUM GUARANTEE OF 3%
FOR ANY GIVEN YEAR.
THE COMPANY
ITT Hartford Life and Annuity Insurance Company, formerly ITT Hartford Insurance
Corporation, is domiciled in the State of Wisconsin at Suite 2100, 111 East
Wisconsin Avenue, Milwaukee, Wisconsin 53202 and with its principal office at
505 Highway 169 North, Minneapolis, Minnesota 55441; however, its mailing
address is P.O. Box 2999, Hartford Connecticut 06104-2999; Attn: Individual
Annuity Operations.
<PAGE>
-23-
ILA was incorporated on January 9, 1956 and commenced business July 1, 1965.
It is a stock life insurance company engaged in the business of writing
both individual and group life insurance and annuities in all states including
the District of Columbia, except New York.
ILA is a wholly owned subsidiary of Hartford Life Insurance Company.
ILA Hartford is ultimately 100% owned by Hartford Fire Company, one of the
largest multiple lines insurance carriers in the United States.
ILA is rated A++ (superior) by A.M. Best and Company, Inc. on the basis of its
financial soundness and operating performance. ILA has an AA+ rating from
Standard & Poor's and Duff and Phelps highest rating (AAA) on the basis of its
claims paying ability.
These ratings do not apply to the performance of the Separate Account. However,
the contractual obligations under this variable annuity are the general
corporate obligations of ILA. These ratings do apply to ILA's ability to meet
its insurance obligations under the contract.
THE FUNDS
The underlying investments for the Contracts are shares of The Woodward Variable
Annuity Fund and the Putnam Capital Manager Trust, open-end diversified series
investment companies with multiple portfolios. Each Fund corresponding to each
Sub-Account and its investment objective is described below. ILA reserves the
right, subject to compliance with the law, to offer additional portfolios with
differing investment objectives.
WOODWARD BALANCED FUND
Seeks to achieve long-term total return through a combination of capital
appreciation and current income by investing primarily in the three major asset
groups of equity securities, fixed income securities and cash equivalent
securities.
WOODWARD GROWTH/VALUE FUND
Seeks to achieve long-term capital appreciation and, secondarily, to produce
current income approximating that prevailing within the general equity market by
investing primarily in equity securities of relatively large companies.
WOODWARD OPPORTUNITY FUND
Seeks to achieve long-term capital appreciation and, secondarily, to maintain a
moderate level of dividend income, by investing primarily in equity securities
of companies with small to intermediate market capitalization.
<PAGE>
-24-
WOODWARD CAPITAL GROWTH FUND
Seeks to maximize long-term capital appreciation (with current income not a
significant consideration) by investing primarily in equity securities of
companies with a market capitalization of at least $1 billion.
WOODWARD MONEY MARKET FUND
Seeks to provide a high level of current income consistent with the preservation
of capital and liquidity, by investing in high quality "money market"
instruments.
PCM GLOBAL GROWTH FUND
Seeks capital appreciation through a globally diversified common stock
portfolio.
PCM GLOBAL ASSET ALLOCATION FUND
Seeks a high level of long-term total return consistent with preservation of
capital by investing in U.S. equities, international equities, U.S. Fixed
Income, and International Fixed Income.
PCM DIVERSIFIED INCOME FUND
Seeks high current income consistent with capital preservation by investing in
the following three sections of the fixed income securities markets: U.S.
Government Sector, High Yield Sector, and International Sector.
PCM U.S. GOVERNMENT AND HIGH QUALITY BOND FUND
Seeks current income consistent with preservation of capital through investment
in securities issued or guaranteed as to principal and interest by the U.S.
Government or by its agencies or instrumentalities and in other debt obligations
rated at least A by Standard & Poor's or Moody's or, if not rated, determined by
Putnam Management to be of comparable quality.
The Funds are available only to serve as the underlying investment for variable
annuity contracts. A full description of the Funds, their investment
objectives, policies and restrictions, risks, charges and expenses and other
aspects of their operation is contained in the accompanying Prospectuses for The
Woodward Variable Annuity Fund and the Putnam Capital Manager Trust, which
should be read in conjunction with this Prospectus before investing. Statements
of Additional Information may also be ordered without charge from The Woodward
Variable Annuity Fund and Putnam Capital Manager Trust.
The Funds are generally managed in styles similar to other open-end investment
companies which are managed by the same investment advisers and whose shares
are generally offered to the public. These other funds may, however, employ
different investment practices and may
<PAGE>
-25-
invest in securities different from those in which their counterpart Funds
invest, and consequently will not have identical portfolios or experience
identical investment results.
NBD Bank ("NBD"), a wholly owned subsidiary of NBD Bankcorp, Inc., a bank
holding company serves as investment adviser for The Woodward Variable Annuity
Fund. NBD has offices at 611 Woodward Avenue, Detroit, Michigan 48226. As of
December 31, 1994, NBD was providing investment management and advisory services
for accounts aggregating approximately $17 billion. NBD has been in the
business of providing such services since 1933. Included among NBD's accounts
are pension and profit sharing funds for major corporations and state and local
governments, commingled trust funds and a variety of institutional and personal
advisory accounts, estates and trusts. NBD also acts as investment adviser for
other registered investment company portfolios. NBD provides investment
advisory and certain administrative services to The Woodward Variable Annuity
Fund pursuant to an Advisory Agreement. Subject to the overall supervision of
the Board of Trustees of The Woodward Variable Annuity Fund, NBD makes
investment decisions for each of the Woodward Funds. For its services under the
Advisory Agreement, NBD is entitled to receive an advisory fee, computed daily
and payable monthly. See the accompanying Prospectus of The Woodward Variable
Annuity Fund for a more complete description of NBD and the respective fees of
the Woodward Funds.
The Putnam Management Company, Inc. ("Putnam Management"), One Post Office
Square, Boston, Massachusetts, 02109, serves as the investment manager for the
Funds of the Putnam Capital Manager Trust. Two affiliates, The Putnam Advisory
Company, Inc. and Putnam Capital Management, Inc., manage domestic and foreign
institutional accounts and mutual funds. Putnam Management and its affiliates
are wholly-owned subsidiaries of Marsh & McLennan Companies, Inc., a publicly
owned holding company whose principal businesses are international insurance
brokerage and employee benefit consulting.
Subject to the general oversight of the Board of the Putnam Capital Management
Trust, Putnam Management manages the Funds of the Putnam Capital Manager Trust
in accordance with their stated investment objectives and policies, makes
investment decisions for the Funds, places orders to purchase and sell
securities on behalf of the Funds, and administers the affairs of the Funds.
For its services, the Funds of the Putnam Capital Manager Trust pay Putnam
Management a quarterly fee. See the accompanying Putnam Capital Manager Trust
Prospectus for a more complete description of Putnam Management and the
respective fees of the Putnam Funds.
OPERATION OF THE CONTRACT/ACCUMULATION PERIOD
PREMIUM PAYMENTS
The balance of each initial Premium Payment remaining after the deduction of any
applicable Premium Tax is credited to your Contract within two business days of
receipt of a properly completed application or an order to purchase a Contract
and the initial Premium Payment by ILA at its Home Office, P.O. Box 2999,
Hartford, CT 06104-2999. It will be credited to the
<PAGE>
-26-
Sub-Account(s) and/or the Fixed Account in accordance with your election. If
the application or other information is incomplete when received, the balance of
each initial Premium Payment, after deduction of any applicable Premium Tax,
will be credited to the Sub-Account(s) or the Fixed Account within five business
days of receipt or the entire Premium Payment will be immediately returned
unless you have been informed of the delay and request that the Premium Payment
not be returned.
Subsequent Premium Payments are priced on the Valuation Day received by ILA in
its Home Office or other designated administrative office.
The number of Accumulation Units in each Sub-Account to be credited to a
Contract will be determined by dividing the portion of the Premium Payment being
credited to each Sub-Account by the value of an Accumulation Unit in that
Sub-Account on that date.
The minimum initial Premium Payment is $1,000. Subsequent Premium Payments, if
made, must be a minimum of $500. Certain plans may make smaller initial and
subsequent periodic payments. Each Premium Payment may be split among the
various Sub-Accounts and the Fixed Account subject to minimum amounts then in
effect.
VALUE OF ACCUMULATION UNITS
The Accumulation Unit value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund and will be determined on each
Valuation Day by multiplying the Accumulation Unit value of the particular
Sub-Account on the preceding Valuation Day by a "Net Investment Factor" for that
Sub-Account for the Valuation Period then ended. The "Net Investment Factor"
for each of the Sub-Accounts is equal to the net asset value per share of the
corresponding Fund at the end of the Valuation Period (plus the per share amount
of any dividends or capital gains distributed by that Fund if the ex-dividend
date occurs in the Valuation Period then ended) divided by the net asset value
per share of the corresponding Fund at the beginning of the Valuation Period and
subtracting from that amount the amount of any mortality and expense risk and
administration charges assessed during the Valuation Period then ending. You
should refer to the Fund Prospectus which accompanies this Prospectus for a
description of how the assets of each Fund are valued since each determination
has a direct bearing on the Accumulation Unit value of the Sub-Account and
therefore the value of a Contract. The Accumulation Unit value is affected by
the performance of the Fund(s), expenses and deduction of the charges described
in this Prospectus.
The shares of the Fund are valued at net asset value on each Valuation Day. A
description of the valuation methods used in valuing Fund shares may be found in
the accompanying Prospectus of the Fund.
VALUE OF THE FIXED ACCOUNT
ILA will determine the value of the Fixed Account by crediting interest to
amounts allocated to
<PAGE>
-27-
the Fixed Account. The minimum Fixed Account interest rate is 3%, compounded
annually. ILA may credit a lower minimum interest rate according to state law.
ILA also may credit interest at rates greater than the minimum Fixed Account
interest rate.
VALUE OF THE CONTRACT
The value of the Sub-Account investments under your Contract at any time prior
to the commencement of Annuity payments can be determined by multiplying the
total number of Accumulation Units credited to your Contract in each Sub-Account
by the then current Accumulation Unit values for the applicable Sub-Account.
The value of the Fixed Account under your Contract will be the amount allocated
to the Fixed Account plus interest credited. You will be advised at least
semi-annually of the number of Accumulation Units credited to each Sub-Account,
the current Accumulation Unit values, the Fixed Account Value, and the total
value of your Contract.
TRANSFERS AMONG SUB-ACCOUNTS
You may transfer the values of your Sub-Account allocations from one or more
Sub-Accounts to another free of charge. Transfers by telephone may be made by
the agent of record or by the attorney-in-fact pursuant to a power of attorney
by calling (800) 521-0538. Telephone transfers may not be permitted by some
states for their residents who purchase variable annuities. The policy of ILA
and its agents and affiliates is that they will not be responsible for losses
resulting from acting upon telephone requests reasonably believed to be genuine.
ILA will employ reasonable procedures to confirm that instructions communicated
by telephone are genuine; otherwise, ILA may be liable for any losses due to
unauthorized or fraudulent instructions. The procedures ILA follows for
transactions initiated by telephone include requirements that callers on behalf
of a Contract Owner identify themselves and the Contract Owner by name and
social security number. All transfer instructions by telephone are tape
recorded.
ILA reserves the right to limit the number of transfers to twelve (12) per
Contract Year, with no two (2) transfers occurring on consecutive Valuation
Days. ILA may permit the Contract Owner to preauthorize transfers between the
Sub-Accounts and the Fixed Account under certain circumstances.
The right to reallocate Contract Values between the Sub-Accounts is subject to
modification if ILA determines, in its sole discretion, that the exercise of
that right by one or more Contract Owners is, or would be, to the disadvantage
of other Contract Owners. Any modification could be applied to transfers to or
from some or all of the Sub-Accounts and could include, but not be limited to,
the requirement of a minimum time period between each transfer, not accepting
transfer requests of an agent acting under a power of attorney on behalf of more
than one Contract Owner, or limiting the dollar amount that may be transferred
between the Sub-Accounts and the Fixed Account by a Contract Owner at any one
time. Such restrictions may be applied in any manner reasonably designed to
prevent any use of the transfer right which is considered by ILA to be to the
disadvantage of other Contract Owners.
<PAGE>
-28-
Transfers between the Sub-Accounts may be made both before and after Annuity
payments commence (limited to once a quarter) provided that the minimum
allocation to any Sub-Account may not be less than $500. No minimum balance is
presently required in any Sub-Account.
TRANSFERS BETWEEN THE FIXED ACCOUNT AND THE SUB-ACCOUNTS
Subject to the restrictions set forth above, transfers from the Fixed Account
into a Sub-Account may be made at any time during the Contract Year. The
maximum amount which may be transferred from the Fixed Account during any
Contract Year is the greater of 30% of the Fixed Account balance as of the last
Contract Anniversary or the greatest amount of any prior transfer from the Fixed
Account. If ILA permits preauthorized transfers from the Fixed Account to the
Sub-Accounts, this restriction is inapplicable. However, if any interest rate
is renewed at a rate at least one percentage point less than the previous rate,
the Contract Owner may elect to transfer up to 100% of the Funds receiving the
reduced rate within sixty days of notification of the interest rate decrease.
Generally, transfers may not be made from any Sub-Account into the Fixed Account
for the six-month period following any transfer from the Fixed Account into one
or more of the Sub-Accounts. ILA reserves the right to defer transfers from the
Fixed Account for up to six months from the date of request.
REDEMPTION/SURRENDER OF A CONTRACT
At any time prior to the Annuity Commencement Date, you have the right, subject
to any IRS provisions applicable thereto, to surrender the value of the Contract
in whole or in part. Surrenders are not permitted after Annuity payments
commence EXCEPT that a full surrender is allowed when payments for a designated
period (Option 4) are selected as the Annuity option.
FULL SURRENDERS. At any time prior to the Annuity Commencement Date (and after
the Annuity Commencement Date with respect to values applied to Option 4), the
Contract Owner has the right to terminate the Contract. In such event, the
Termination Value of the Contract may be taken in the form of a lump sum cash
settlement. The Termination Value of the Contract is equal to the Contract
Value less any applicable Premium Taxes, the Contract Maintenance Fee, if
applicable, and any applicable contingent deferred sales charges. The
Termination Value may be more or less than the amount of the Premium Payments
made to a Contract.
PARTIAL SURRENDERS. The Contract Owner may make a partial surrender of Contract
Values at any time prior to the Annuity Commencement Date so long as the amount
surrendered is at least equal to the minimum amount rules then in effect.
Currently, there is no minimum amount rule in effect. However, ILA may
institute minimum amount rules at some future time. Additionally, if the
remaining Contract Value following a surrender is less than $500 (and, for Texas
contracts, there were no Premium Payments made during the preceding two contract
years), ILA may terminate the Contract and pay the Termination Value.
Certain plans or programs may have different withdrawal privileges. ILA may
permit the Contract Owner to preauthorize partial surrenders subject to certain
limitations then in effect.
<PAGE>
-29-
THERE ARE CERTAIN RESTRICTIONS ON SECTION 403(B) TAX SHELTERED ANNUITIES. AS OF
DECEMBER 31, 1988, ALL SECTION 403(B) ANNUITIES HAVE LIMITS ON FULL AND PARTIAL
SURRENDERS. CONTRIBUTIONS TO THE CONTRACT MADE AFTER DECEMBER 31, 1988 AND ANY
INCREASES IN CASH VALUE AFTER DECEMBER 31, 1988 MAY NOT BE DISTRIBUTED UNLESS
THE CONTRACT OWNER/EMPLOYEE HAS A) ATTAINED AGE 59-1/2, B) TERMINATED
EMPLOYMENT, C) DIED, D) BECOME DISABLED OR E) EXPERIENCED FINANCIAL HARDSHIP.
DISTRIBUTIONS DUE TO FINANCIAL HARDSHIP OR SEPARATION FROM SERVICE MAY STILL BE
SUBJECT TO A PENALTY TAX OF 10%.
ILA WILL NOT ASSUME ANY RESPONSIBILITY IN DETERMINING WHETHER A WITHDRAWAL IS
PERMISSIBLE, WITH OR WITHOUT TAX PENALTY, IN ANY PARTICULAR SITUATION; OR IN
MONITORING WITHDRAWAL REQUESTS REGARDING PRE OR POST JANUARY 1, 1989 ACCOUNT
VALUES.
ANY SUCH FULL OR PARTIAL SURRENDER DESCRIBED ABOVE MAY RESULT IN ADVERSE TAX
CONSEQUENCES TO THE CONTRACT OWNER. THE CONTRACT OWNER, THEREFORE, SHOULD
CONSULT WITH HIS TAX ADVISER BEFORE UNDERTAKING ANY SUCH SURRENDER. (SEE
"FEDERAL TAX CONSIDERATIONS" COMMENCING ON PAGE ____.)
Payment on any request for a full or partial surrender from the Sub-Accounts
and/or the Fixed Account will be made as soon as possible and in any event no
later than seven days after the written request is received by ILA at its Home
Office, Attn: Individual Annuity Operations, P.O. Box 2999, Hartford, CT
06104-2999. ILA may defer payment of any amounts from the Fixed Account for up
to six months from the date of the request for surrender. If ILA defers payment
for more than 30 days, ILA will pay interest of at least 3% per annum on the
amount deferred. In requesting a partial withdrawal you should specify the
Fixed Account and/or the Sub-Account(s) from which the partial withdrawal is to
be taken. Otherwise, such withdrawal and any applicable contingent deferred
sales charges will be effected on a pro rata basis according to the value in the
Fixed Account and each Sub-Account under a Contract. Within this context, the
contingent deferred sales charges are taken from the Premium Payments in the
order in which they were received: from the earliest Premium Payments to the
latest Premium Payments. (See "Contingent Deferred Sales Charges," page ____.)
DEATH BENEFIT
The Contracts provide that in the event the Annuitant dies before the Annuity
Commencement Date, the Contingent Annuitant will become the Annuitant. If the
Annuitant dies before the Annuity Commencement Date and there is no designated
Contingent Annuitant, or the Contingent Annuitant predeceases the Annuitant, or
if the Contract Owner dies before the Annuity Commencement Date, the Beneficiary
as determined under the Contract Control
<PAGE>
-30-
Provisions will receive Minimum Death Benefit as determined on the date of
receipt of due proof of death by ILA in its Home Office. With regard to Joint
Contract Owners, after the death of a joint Contract Owner prior to the Annuity
Commencement Date, the Beneficiary will be the surviving Contract Owner
notwithstanding that the beneficiary designation may be different.
GUARANTEED DEATH BENEFIT - If upon death prior to the Annuity Commencement Date,
the Annuitant or Contract Owner, as applicable, had not attained his 90th
birthday, the Beneficiary will receive the greatest of (a) the Contract Value
determined as of the day written proof of death of such person is received by
ILA, or (b) 100% of the total Premium Payments made to such contract, reduced by
any prior surrenders, or (c) the Maximum Anniversary Value immediately preceding
the date of death.
The Maximum Anniversary Value is equal to the greatest Anniversary Value
attained from the following:
As of the date of death, the Company will calculate an Anniversary Value for
each Contract Anniversary prior to the deceased's attained age 81. The
Anniversary Value is equal to the Contract Value on a Contract Anniversary,
increased by the dollar amount of any premium payment made since that
anniversary and reduced by the dollar amount of any partial surrenders since
that anniversary.
If the deceased, the Annuitant or Contract Owner, as applicable, had attained
age 90, then the Death Benefit will equal the Contract Value.
PAYMENT OF DEATH BENEFIT -- The death benefit may be taken in one sum or under
any of the settlement options then being offered by the Company provided,
however, that, in the event of a Contract Owner's death, any settlement option
must provide that any amount payable as a death benefit will commence within
five years of the date of death, or, if the benefit is payable over a period not
extending beyond the life expectancy of the Beneficiary or over the life of the
Beneficiary, such distribution must commence within one year of the date of
death. Death Benefit proceeds deferred by a Beneficiary will remain invested in
the Separate Account in accordance with the allocation instructions given by the
Contract Owner until new instructions are given by the Beneficiary.
Notwithstanding the foregoing, in the event of the Contract Owner's death where
the sole Beneficiary is the spouse of the Contract Owner and the Annuitant or
Contingent Annuitant is living, such spouse may elect, in lieu of receiving the
death benefit, to be treated as the Contract Owner. The proceeds due on the
death may be applied to provide variable payments, fixed payments, or a
combination of variable and fixed payments.
There may be postponement in the payment of Death Benefits whenever (a) the New
York Stock Exchange is closed, except for holidays or weekends, or trading on
the New York Stock Exchange is restricted as determined by the Securities and
Exchange Commission; (b) the Securities and Exchange Commission permits
postponement and so orders; or (c) the Securities and Exchange Commission
determines that an emergency exists making valuation of the amounts or disposal
of securities not reasonably practicable.
<PAGE>
-31-
GROUP UNALLOCATED CONTRACTS - For Group Unallocated Contracts ILA requires that
detailed accounting of cumulative purchase payments, cumulative gross
surrenders, and current Contract Value attached to each Plan Participant be
submitted on an annual basis by the Contract Owner. Failure to submit accurate
data satisfactory to ILA will give ILA the right to terminate this extension of
benefits.
CHARGES UNDER THE CONTRACT
CONTINGENT DEFERRED SALES CHARGES
There is no deduction for sales expenses from Premium Payments when made.
However, a contingent deferred sales charge may be assessed against Contract
Values when they are surrendered.
The length of time from receipt of a Premium Payment to the time of surrender
determines the contingent deferred sales charge. Premium payments will be
deemed to be surrendered in the order in which they were received.
DURING THE FIRST SEVEN CONTRACT YEARS
During the first seven contract years, all surrenders will be first from Premium
Payments and then from other Contract Values. If an amount equal to all premium
payments has been surrendered, a contingent deferred sales charge will not be
assessed against the surrender of the remaining Contract Value.
AFTER THE SEVENTH CONTRACT YEAR
After the seventh contract year, all surrenders will first be from earnings and
then from premium payments. A contingent deferred sales charge will not be
assessed against the surrender of earnings. If an amount equal to all earnings
has been surrendered, a contingent deferred sales charge will not be assessed
against premium payments received more than seven years prior to surrender, but
will be assessed against premium payments received less than seven years prior
to surrender. The charge is a percentage of the amount withdrawn (not to exceed
the aggregate amount of the Premium Payments made) and equals:
<TABLE>
<CAPTION>
Charge Length of Time From Premium Payment
------ -----------------------------------
(Number of Years)
<S> <C>
6% 1
6% 2
5% 3
5% 4
4% 5
<PAGE>
-32-
3% 6
2% 7
0% 8 or more
</TABLE>
The contingent deferred sales charges are used to cover expenses relating to the
sale and distribution of the Contracts, including commissions paid to any
distribution organization and its sales personnel, the cost of preparing sales
literature and other promotional activities. To the extent that these charges
do not cover such distribution expenses, the expenses will be borne by ILA from
its general assets, including surplus. The surplus might include profits
resulting from unused mortality and expense risk charges.
During the first seven Contract Years, on a non-cumulative basis, a Contract
Owner may make a partial surrender of Contract Values of up to 10% of the
aggregate Premium Payments made to the contract (as determined on the date of
the requested withdrawal) without the application of the contingent deferred
sales charge. After the seventh Contract year, the Contract Owner may make a
partial surrender of the greater of 10% of premium payments made during the
seven years prior to the surrender or 100% of the Contract Value less the
premium payments made during the seven years prior to the surrender. The
amounts not subject to sales charges are known as the Annual Withdrawal Amount.
The Annual Withdrawal Amount is the amount which can be withdrawn in any
Contract Year prior to incurring surrender charges.
The contingent deferred sales charges which cover expenses relating to the sale
and distribution of the Contracts may be reduced for certain sales of the
Contracts under circumstances which may result in savings of such sales and
distribution expenses. Therefore, the contingent deferred sales charges may be
reduced if the Contracts are sold to certain employee and professional groups.
In addition, there may be other circumstances of which ILA is not presently
aware which could result in reduced sales or distribution expenses. Reductions
in these charges will not be unfairly discriminatory against any Contract Owner.
ILA may offer certain employer sponsored savings plans in its discretion reduced
fees and charges including, but not limited to, the contingent deferred sales
charges, the mortality and expense risk charge and the maintenance fee for
certain sales under circumstances which may result in savings of certain costs
and expenses. Reductions in these fees and charges will not be unfairly
discriminatory against any Contract Owner.
MORTALITY AND EXPENSE RISK CHARGE
Although Variable Annuity payments made under the Contracts will vary in
accordance with the investment performance of the Fund shares held in the
Sub-Account(s), the payments will not be affected by (a) ILA's actual mortality
experience among Annuitants before or after the Annuity Commencement Date or (b)
ILA's actual expenses, if greater than the deductions provided for in the
Contracts because of the expense and mortality undertakings by ILA.
<PAGE>
-33-
For assuming these risks under the Contracts, ILA will make a daily charge at
the rate of 1.25% per annum against all Contract Values held in the Sub-Accounts
during the life of the Contract, including the payout period, (estimated at .90%
for mortality and .35% for expense).
The mortality undertaking provided by ILA under the Contracts, assuming the
selection of one of the forms of life Annuities, is to make monthly Annuity
payments (determined in accordance with the 1983(a) Individual Annuity Mortality
Table and other provisions contained in the Contract) to Annuitants regardless
of how long an Annuitant may live, and regardless of how long all Annuitants as
a group may live. ILA also assumes the liability for payment of a minimum death
benefit under the Contract.
The mortality undertakings are based on ILA's determination of expected
mortality rates among all Annuitants. If actual experience among Annuitants
during the Annuity payment period deviates from ILA's actuarial determination of
expected mortality rates among Annuitants because, as a group, their longevity
is longer than anticipated, ILA must provide amounts from
its general funds to fulfill its Contract obligations. In that event, a loss
will fall on ILA. Also, in the event of the death of an Annuitant or Contract
Owner prior to age 85 or the commencement of Annuity payments, whichever is
earlier, ILA can, in periods of declining value, experience a loss resulting
from the assumption of the mortality risk relative to the minimum death benefit.
In providing an expense undertaking, ILA assumes the risk that the contingent
deferred sales charges and the Administration and Maintenance Fees for
maintaining the Contracts prior to the Annuity Commencement Date may be
insufficient to cover the actual cost of providing such items.
ADMINISTRATION AND MAINTENANCE FEES
ILA will deduct certain fees from Contract Values to reimburse it for expenses
relating to the administration and maintenance of the Contract and the Fixed
Account. For Contract maintenance, ILA will deduct an annual fee of $30 on each
Contract Anniversary on or before the Annuity Commencement Date. The deduction
will be made pro rata according to the value in each Sub-Account and the Fixed
Account under a Contract. If during a Contract Year the Contract is surrendered
for its full value, ILA will deduct the Contract Maintenance Fee at the time of
such surrender. For administration, ILA makes a daily charge at the rate of
.15% per annum against all Contract Values held in the Separate Account during
both the accumulation and annuity phases of the Contract. There is not
necessarily a relationship between the amount of administrative charge imposed
on a given Contract and the amount of expenses that may be attributable to that
Contract; expenses may be more or less than the charge.
The types of expenses incurred by the Separate Account include, but are not
limited to, expenses of issuing the Contract and expenses for confirmations,
Contract quarterly statements, processing of transfers and surrenders,
responding to Contract Holder inquiries, reconciling and depositing cash
receipts, calculation and monitoring daily Sub-Account unit values, Separate
Account reporting, including semiannual and annual reports and mailing and
tabulation of shareholder proxy solicitations.
<PAGE>
-34-
You should refer to the Prospectuses for The Woodward Variable Annuity Fund and
the Putnam Capital Manager Trust for a description of deductions and expenses
paid out of the assets of the respective Funds.
PREMIUM TAXES
A deduction is also made for Premium Tax, if applicable, imposed by a state or
other governmental entity. Certain states impose a Premium Tax, currently
ranging up to 3.5%. Some states assess the tax at the time purchase payments
are made; others assess the tax at the time of annuitization. ILA will pay
Premium Taxes at the time imposed under applicable law. At its sole discretion,
ILA may deduct Premium Taxes at the time the taxes are paid, the Contract is
surrendered, or the Contract annuitizes.
ANNUITY BENEFITS
You select an Annuity Commencement Date and an Annuity option which may be on a
fixed or variable basis, or a combination thereof. The Annuity Commencement
Date will not be deferred beyond the Annuitant's 90th birthday except for
certain states where deferral past age 85 is not permitted. The Annuity
Commencement Date and/or the Annuity option may be changed from time to time,
but any change must be at least 30 days prior to the date on which Annuity
payments are scheduled to begin. The contract allows the Contract Owner to
change the Sub-Accounts on which variable payments are based after payments have
commenced once every three (3) months. Any Fixed Annuity allocation may not be
changed.
ANNUITY OPTIONS
The contract contains the four optional Annuity forms described below. Options
2 and 4 are available to Qualified Plans only if the guaranteed payment period
is less than the life expectancy of the Annuitant at the time the option becomes
effective. Such life expectancy shall be computed on the basis of the mortality
table prescribed by the IRS, or if none is prescribed, the mortality table then
in use by the ILA. With respect to Non-Qualified Contracts, if you do not elect
otherwise, payments in most states will automatically begin at the Annuitant's
age 90 (with the exception of states that do not allow deferral past age 85)
under Option 2 with 120 monthly payments certain. For Qualified Contracts and
contracts issued in Texas, if you do not elect otherwise, payments will begin
automatically at the Annuitant's age 90 under Option 1 to provide a life
Annuity.
Under any of the Annuity options excluding Options 4 and 5, no surrenders are
permitted after Annuity payments commence. Only full surrenders are allowed out
of Option 4 and any such surrender will be subject to contingent deferred sales
charges, if applicable. Full or partial withdrawals may be made from Option 5
at any time and contingent deferred sales charges will not be applied.
<PAGE>
-35-
Option 1: Life Annuity
A life Annuity is an Annuity payable during the lifetime of the Annuitant and
terminating with the last payment preceding the death of the Annuitant. This
option offers the largest payment amount of any of the life Annuity options
since there is no guarantee of a minimum number of payments nor a provision for
a death benefit payable to a Beneficiary.
It would be possible under this option for an Annuitant to receive only one
Annuity payment if he died prior to the due date of the second Annuity payment,
two if he died before the date of the third Annuity payment, etc.
Option 2: Life Annuity with 120, 180 or 240 Monthly Payments Certain
This Annuity option is an Annuity payable monthly during the lifetime of an
Annuitant with the provision that payments will be made for a minimum of 120,
180 or 240 months, as elected. If, at the death of the Annuitant, payments have
been made for less than the minimum elected number of months, then the present
value as of the date of the Annuitant's death, of any remaining guaranteed
payments will be paid in one sum to the Beneficiary or Beneficiaries designated
unless other provisions have been made and approved by the company. If the
Annuitant was also the Contract Owner, any method of distribution must provide
that any amount payable as a death benefit will be distributed at least as
rapidly as under the method of distribution in effect at the Contract Owner's
death.
Option 3: Joint and Last Survivor Annuity
An Annuity payable monthly during the joint lifetime of the Annuitant and a
designated second person, and thereafter during the remaining lifetime of the
survivor, ceasing with the last payment prior to the death of the survivor.
Based on the options currently offered by ILA, the Annuitant may elect that the
payment to the survivor be less than the payment made during the joint lifetime
of the Annuitant and a designated second person.
It would be possible under this option for an Annuitant and designated second
person to receive only one payment in the event of the common or simultaneous
death of the parties prior to the due date for the second payment and so on.
Option 4: Payments for a Designated Period
An amount payable monthly for the number of years selected which may be from 5
to 30 years. Under this option, you may, at any time, surrender the contract
and receive, within seven days, the Termination Value of the Contract as
determined by ILA.
In the event of the Annuitant's death prior to the end of the designated period,
the present value as of the date of the Annuitant's death, of any remaining
guaranteed payments will be paid in one sum to the Beneficiary or Beneficiaries
designated unless other provisions have been made and
<PAGE>
-36-
approved by the Company. If the Annuitant was also the Contract Owner, any
method of distribution must provide that any amount payable as a death benefit
will be distributed at least as rapidly as under the method of distribution in
effect at the Contract Owner's death.
Option 4 is an option that does not involve life contingencies and thus no
mortality guarantee. Charges made for the mortality undertaking under the
contracts thus provide no real benefit to a Contract Owner.
Option 5: Death Benefit Remaining with ILA
Proceeds from the Death Benefit left with ILA for a period not to exceed five
years from the date of the Contract Owner's death prior to the Annuity
Commencement Date. These proceeds will remain in the Sub-Account(s) to which
they were allocated at the time of death unless the Beneficiary elects to
reallocate them. Full or partial withdrawals may be made at any time. In the
event of withdrawals, the remaining value will equal the Contract Value of the
proceeds left with ILA, minus any withdrawals.
ILA may offer other annuity options from time to time.
THE ANNUITY UNIT AND VALUATION
The value of the Annuity Unit for each Sub-Account in the Separate Account for
any day is determined by multiplying the value for the preceding day by the
product of (1) the net investment factor (See "Valuation of Accumulation Units,"
commencing on page ____) for the day for which the Annuity Unit value is being
calculated and (2) a factor to neutralize the assumed investment rate of 5.00%
per annum discussed below.
DETERMINATION OF PAYMENT AMOUNT
When Annuity payments are to commence, the value of the Contract is determined
as the sum of the value of the Fixed Account no earlier than the close of
business on the fifth Valuation Day preceding the date the first Annuity payment
is due plus the product of the value of the Accumulation Unit of each
Sub-Account on that same day, and the number of Accumulation Units credited to
each Sub-Account as of the date the Annuity is to commence.
The Contract contains tables indicating the minimum dollar amount of the first
monthly payment under the optional forms of Annuity for each $1,000 of value of
a Sub-Account under a Contract. The first monthly payment varies according to
the form and type of Annuity selected. The Contract contains 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 3% per annum for the
Fixed Annuity and 5% per annum for the Variable Annuity.
The total first monthly Variable Annuity payment is determined by multiplying
the value (expressed in thousands of dollars) of a Sub-Account (less any
applicable Premium Taxes) by the
<PAGE>
-37-
amount of the first monthly payment per $1,000 of value obtained from the tables
in the Contracts.
Fixed Annuity payments are determined at annuitization by multiplying the values
allocated to the Fixed Account (less applicable Premium Taxes) by a rate to be
determined by ILA which is no less than the rate specified in the Annuity tables
in the Contract. The Annuity payment will remain level for the duration of the
Annuity.
The amount of the first monthly Variable Annuity payment, determined as
described above, 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 in order to determine the number
of Annuity Units represented by the first payment. This number of Annuity Units
remains fixed during the Annuity payment period, and in each subsequent month
the dollar amount of the Variable Annuity payment is determined by multiplying
this fixed number of Annuity Units by the then current Annuity Unit value.
THE A.I.R. ASSUMED IN THE MORTALITY TABLES WOULD PRODUCE LEVEL VARIABLE ANNUITY
PAYMENTS IF THE INVESTMENT RATE REMAINED CONSTANT. IN FACT, PAYMENTS WILL VARY
UP OR DOWN AS THE INVESTMENT RATE VARIES UP OR DOWN FROM THE A.I.R.
The Annuity Unit value used in calculating the amount of the Variable Annuity
payments will be based on an Annuity Unit value determined as of the close of
business on a day no earlier than the fifth Valuation Day preceding the date of
the Annuity payment.
FEDERAL TAX CONSIDERATIONS
What are some of the Federal tax consequences which affect these Contracts?
A. GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING TO
THE ACTUAL STATUS OF THE CONTRACT OWNER INVOLVED AND THE TYPE OF PLAN UNDER
WHICH THE CONTRACT IS PURCHASED, LEGAL AND TAX ADVICE MAY BE NEEDED BY A PERSON,
TRUSTEE OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF A CONTRACT DESCRIBED
HEREIN.
It should be understood that any detailed description of the Federal income tax
consequences regarding the purchase of these Contracts cannot be made in this
Prospectus and that special tax rules may be applicable with respect to certain
purchase situations not discussed herein. In addition, no attempt is made here
to consider any applicable state or other tax laws. For detailed information, a
qualified tax adviser should always be consulted. The discussion here and in
Appendix I, commencing on page ____, is based on ILA's understanding of current
Federal income tax laws as they are currently interpreted.
<PAGE>
-38-
B. TAXATION OF ILA AND THE SEPARATE ACCOUNT
The Separate Account is taxed as part of ILA which is taxed as a life
insurance company in accordance with the Internal Revenue Code (the
"Code"). Accordingly, the Separate Account will not be taxed as a
"regulated investment company" under subchapter M of the Code. Investment
income and any realized capital gains on the assets of the Separate Account
are reinvested and are taken into account in determining the value of the
Accumulation and Annuity Units (See "How is the Accumulation Unit value
determined?" commencing on page ____). As a result, such investment income
and realized capital gains are automatically applied to increase reserves
under the Contract.
No taxes are due on interest, dividends and short-term or long-term capital
gains earned by the Separate Account with respect to qualified or
non-qualified Contracts.
C. TAXATION OF ANNUITIES IN GENERAL -- NON-TAX QUALIFIED PURCHASERS
1. GENERAL
Section 72 of the Internal Revenue Code governs the taxation of
annuities in general. Section 72 contains provisions for
Contract Owners which are non-natural persons. Non-natural
persons include corporations, trusts, and partnerships unless
such entities held the annuity Contract as an agent for a natural
person.
2. NON-NATURAL PERSONS, CORPORATIONS, ETC.
The annual increase in the value of the Contract is currently
includable in the gross income of a non-natural person unless the
non-natural person holds the Contract as an agent for a natural
person. There is an exception for annuities held by structured
settlement companies and annuities held by an employer with
respect to a terminated pension plan. A non-natural person which
is a tax-exempt entity for Federal tax purposes will not be
subject to income tax as a result of this provision.
3. OTHER CONTRACT OWNERS (NATURAL PERSONS)
A Contract Owner is not taxed on increases in the value of the
Contract until distribution occurs, either in the form of a lump
sum payment (full or partial value of a contract) or as Annuity
payments under the settlement option elected. The provisions of
Section 72 of the Code concerning distributions are summarized
briefly below. Also summarized are special rules affecting
distributions from Contracts obtained in a tax-free exchange for
other annuity Contracts or life insurance contracts which were
purchased prior to August 14, 1982.
a. Distributions Prior to the Annuity Commencement Date.
<PAGE>
-39-
i. Total premium payments less prior withdrawals which were
not included in taxable income equals the "investment in
the Contract" under Section 72 of the Code.
ii. When the value of the Contract exceeds the "investment
in the Contract," any amount surrendered which is less
than or equal to the difference between the value of the
Contract and the "investment in the Contract" will be
included in taxable income.
iii. When the value of the Contract is less than or equal to
the "investment in the Contract," any amount surrendered
which is less than or equal to the "investment in the
Contract" shall be treated as a return of "investment in
the Contract" and not be included in taxable income.
iv. An assignment or pledge of any portion of the value of
the Contract shall be treated as an amount surrendered
which will be covered by the provisions in Subparagraph
ii. or iii. above.
b. Distributions After Annuity Commencement Date.
Annuity payments made after the Annuity Commencement Date are
includable in taxable income to the extent the payments exceed
the amount determined by the application of the ratio of the
"investment in the Contract" to the total amount of the
payments to be made after the Annuity Commencement Date (the
"exclusion ratio").
i. When the total of amounts excluded from income by
application of the exclusion ratio is equal to the
investment in the Contract as of the Annuity
Commencement Date, any additional annuity payments will
be entirely includable in income.
ii. If the annuity payments cease by reason of the death of
the annuitant and, as of the date of death, the amount
of annuity payments excluded from taxable income by the
exclusion ratio does not exceed the investment in the
Contract as of the Annuity Commencement Date, then the
remaining portion of unrecovered investment shall be
allowed as a deduction for the last taxable year of the
Annuitant.
c. Required Distributions in the Event of Contract Holder's
Death- Applicable to Contracts issued after January 18, 1985.
In order for a Contract to be treated as an Annuity, it must
provide the following:
i. If any Contract Holder (owner) dies before the Annuity
Commencement Date,
<PAGE>
-40
the entire interest must be distributed within five
years of the date of death; however, a portion or all of
such interest may be payable to a designated Beneficiary
over the life of such Beneficiary or for a period not
extending beyond the life expectancy of such Beneficiary
with payments starting within one year of the date of
death.
ii. If the Contract Holder dies on or after the Annuity
Commencement Date and before the entire interest in the
Contract has been distributed, the remaining portion of
such interest must be distributed at least as rapidly as
under the method of distribution in effect at the
Contract Holder's death.
iii. If a spouse is designated as a Beneficiary at the time
of the Contract Holder's death and there is a surviving
Annuitant or Contingent Annuitant, then such spouse will
be treated as the Contract Holder under subparagraphs i.
and ii. above.
iv. If the holder is not an individual, the primary
annuitant shall be treated as the holder under
subparagraphs i. and ii. and if there is a change in the
primary Annuitant, such change shall be treated as the
death of the holder.
d. Penalty - Applicable to Certain Withdrawals and Annuity
Payments.
i. If any amount is surrendered prior to the Annuity
Commencement Date, or if any amount is surrendered or
paid out after the Annuity Commencement Date, the Code
applies a penalty equal to ten percent of the portion of
the amount includable in gross income unless an
exception applies.
ii. The penalty will not apply to the following (exceptions
vary based upon the precise plan involved):
1. Distributions made on or after the date the
recipient has attained the age of 59 1/2.
2. Distributions made on or after the death of the
holder or where the holder is not an individual, the
death of the primary Annuitant.
3. Distributions attributable to a recipient's becoming
disabled.
4. A distribution that is part of a scheduled series of
substantially equal periodic payments for the life
(or life expectancy) of the recipient (or the joint
lives of the recipient and the recipient's
Beneficiary).
5. Distributions of amounts which are allocable to
"investments in the Contract" made prior to August
14, 1982.
<PAGE>
-41-
e. Special Provisions Affecting Contracts Obtained through a
Tax-Free Exchange of Other Annuity or Life Insurance Contracts
Purchased Prior to August 14, 1982.
If the Contract was obtained by a tax-free exchange of a life
insurance or annuity Contract purchased prior to August 14,
1982, then any amount surrendered prior to the Annuity
Commencement Date which does not exceed the portion of the
"investment in the Contract" (payments made into the other
Contract, less prior surrenders) prior to August 14, 1982,
shall not be included in taxable income. In all other
respects, the general provisions apply to distributions from
such Contracts.
4. DIVERSIFICATION REQUIREMENTS
Section 817 of the Code provides that a variable annuity contract
(other than a pension plan contract) will not be treated as an
annuity for any period during which the investments made by the
separate account or underlying fund are not adequately
diversified in accordance with regulations prescribed by the
Treasury. If a contract is not treated as an annuity, the
Contract Owner will be subject to income tax on the annual
increases in cash value. The Treasury has issued diversification
regulations which, among other things, require that no more than
55% of the assets of a mutual fund underlying a variable annuity
contract (such as the ILA mutual funds), be invested in any one
investment. In determining whether the diversification standards
are met, each United States Government Agency or instrumentality
shall be treated as a separate issuer. If the diversification
standards are not met, non-pension Contract Owners will be
subject to current tax on the increase in cash value in the
Contract.
D. FEDERAL INCOME TAX WITHHOLDING
The portion of a distribution which is taxable income to the recipient
will be subject to Federal income tax withholding, pursuant to Section
3405 of the Internal Revenue Code. The application of this provision
is summarized below:
1. Non-Periodic Distributions
The portion of a non-periodic distribution which constitutes
taxable income will be subject to Federal income tax withholding
unless the recipient elects not to have taxes withheld. If an
election not to have taxes withheld is not provided, 20% of the
taxable distribution will be withheld as Federal income tax.
Election forms will be provided at the time distributions are
requested. If the necessary election forms are not submitted to
ILA, ILA will automatically withhold 20% of the taxable
distribution.
2. Periodic Distributions (distributions payable over a period
greater than one year)
<PAGE>
-42-
The portion of a periodic distribution which constitutes taxable
income will be subject to Federal income tax withholding as if
the recipient were married claiming three exemptions. A
recipient may elect not to have income taxes withheld or have
income taxes withheld at a different rate by providing a
completed election form. Election forms will be provided at the
time distributions are requested.
E. GENERAL PROVISIONS AFFECTING TAX QUALIFIED PLANS
The Contract may be used for a number of qualified plans. If the
Contract is being purchased with respect to some form of Qualified
Plan, please refer to Appendix I commencing on page ____ for
information relative to the types of plans for which it may be used
and the general explanation of the tax features of such plans.
F. AGGREGATION OF TWO OR MORE ANNUITY CONTRACTS
Under recently enacted amendments to the Code, Contracts issued after
October 21, 1988 by the same insurer (or affiliated insurer) to the
same Contract Owner within the same calendar year will be treated as
one annuity contract for the purpose of determining the taxation of
distributions prior to the Annuity Commencement Date. An annuity
issued in a tax-free exchange for another annuity may be treated as a
new contract for this purpose. ILA believes that for any annuities
subject to aggregation, the values under the Contracts and the
investment in the Contracts will be added together todetermine the
taxation of distributions prior to the Annuity Commencement Date.
Withdrawals will first be treated as withdrawals of income until all
of the income from all such Contracts is withdrawn. As of the date of
this Prospectus, there are no regulations interpreting this new
provision.
GENERAL MATTERS
ASSIGNMENT
Ownership of a Contract described herein is generally assignable. However, if
the Contracts are issued pursuant to some form of Qualified Plan, it is possible
that the ownership of the Contracts may not be transferred or assigned depending
on the type of qualified retirement plan involved. An assignment of a
Non-Qualified Contract may subject the assignment proceeds to income taxes and
certain penalty taxes. (See "Taxation of Annuities in General - Non-Tax
Qualified Purchasers," page ____.)
MODIFICATION
ILA reserves the right to modify the Contract, but only if such modification:
(i) is necessary to make the Contract or the Separate Account comply with any
law or regulation issued by a governmental agency to which ILA is subject; or
(ii) is necessary to assure continued
<PAGE>
-43-
qualification of the Contract under the Code or other federal or state laws
relating to retirement annuities or annuity Contracts; or (iii) is necessary to
reflect a change in the operation of the Separate Account or the Sub-Account(s)
or (iv) provides additional Separate Account options or (v) withdraws Separate
Account options. In the event of any such modification ILA will provide notice
to the Contract Owner or to the payee(s) during the Annuity period. ILA may
also make appropriate endorsement in the Contract to reflect such modification.
DELAY OF PAYMENTS
There may be postponement of a surrender payment or death benefit whenever (a)
the New York Stock Exchange is closed, except for holidays or weekends, or
trading on the New York Stock Exchange is restricted as determined by the
Commission; (b) the Commission permits postponement and so orders; or (c) the
Commission determines that an emergency exists making valuation or disposal of
securities not reasonably practicable.
VOTING RIGHTS
ILA will notify you of any Fund shareholders' meeting if the shares held for
your account may be voted at such meetings. ILA will also send proxy materials
and a form of instruction by means of which you can instruct ILA with respect to
the voting of the Fund shares held for your account.
In connection with the voting of Fund shares held by it, ILA will arrange for
the handling and tallying of voting instructions received from Contract Owners.
ILA as such, shall have no right, except as hereinafter provided, to vote any
Fund shares held by it hereunder which may be registered in its name or the
names of its nominees. ILA will, however, vote the Fund shares held by it in
accordance with the instructions received from the Contract Owners for whose
accounts the Fund shares are held. If a Contract Owner desires to attend any
meeting at which shares held for the Contract Owner's benefit may be voted, the
Contract Owner may request ILA to furnish a proxy or otherwise arrange for the
exercise of voting rights with respect to the Fund shares held for such Contract
Owner's account. In the event that the Contract Owner gives no instructions or
leaves the manner of voting discretionary, ILA will vote such shares of the
appropriate Fund in the same proportion as shares of that Fund for which
instructions have been received. During the Annuity period under a Contract the
number of votes will decrease as the assets held to Fund Annuity benefits
decrease.
DISTRIBUTION OF THE CONTRACTS
Hartford Equity Sales Company, Inc. ("HESCO") currently serves as Principal
Underwriter for the securities issued with respect to the Separate Account.
Hartford Securities Distribution Company, Inc. ("HSD") will replace HESCO
as principal underwriter upon approval by the Commission, the National
Association of Securities Dealers, Inc. ("NASD") and applicable state
regulatory authorities.
The securities will be sold by salespersons of HESCO, and subsequently, HSD,
who represent ILA as insurance and Variable Annuity agents and who
are registered representatives or Broker-Dealers who have entered into
distribution agreements with HESCO, and subsequently HSD.
HESCO is registered with the Commission under the Securities Exchange Act of
1934 as a Broker-Dealer and is a member of the NASD. HSD will be registered with
the Commission under the Securities Exchange Act of 1934 as a Broker-Dealer and
will become a member of the NASD.
<PAGE>
-44-
Commissions will be paid by ILA and will not be more than 6% of Premium
Payments.
From time to time, ILA may pay or permit other promotional incentives, in cash
or credit or other compensation.
OTHER CONTRACTS OFFERED
In addition to the Contracts described in this Prospectus, it is contemplated
that other forms of group or individual Variable Annuities may be sold providing
benefits which vary in accordance with the investment experience of the Separate
Account.
CUSTODIAN OF SEPARATE ACCOUNT ASSETS
The assets of the Separate Account are held by ILA under a safekeeping
arrangement.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Separate Account is a party or to
which the assets of the Separate Account are subject. ILA is engaged in various
matters of routine litigation which in its judgment are not of material
importance in relation to its respective total assets.
LEGAL COUNSEL
Counsel with respect to Federal laws and regulations applicable to the issue and
sale of the Contracts and with respect to Connecticut law is Bruce D. Gardner,
Esquire, General Counsel and Corporate Secretary, Hartford Life Companies, P.O.
Box 2999, Hartford, Connecticut 06104-2999.
EXPERTS
The financial statements and schedules included in this prospectus and
elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with
respect thereto, and are included herein in reliance upon the authority
of said firm as experts in accounting and auditing.
<PAGE>
-45-
ADDITIONAL INFORMATION
Inquiries will be answered by calling your representative or by writing:
ITT Hartford Life and Annuity Insurance Company
Attn: Individual Annuity Operations
P.O. Box 2999
Hartford, CT 06104-2999
Telephone: (800) 862-6668
<PAGE>
-46-
APPENDIX I
INFORMATION REGARDING TAX QUALIFIED PLANS
THE TAX REFORM ACT OF 1986 AND THE TECHNICAL AND MISCELLANEOUS REVENUE ACT OF
1988 HAVE MADE SUBSTANTIAL CHANGES TO QUALIFIED PLANS. YOU SHOULD CONSULT YOUR
TAX ADVISER TO FULLY ADDRESS ALL CHANGES OCCURRING AS A RESULT OF THE TAX REFORM
ACT AND THE TECHNICAL AND MISCELLANEOUS REVENUE ACT OF 1988 AND THEIR EFFECT ON
QUALIFIED PLANS.
A. Contributions
1. Pension, Profit Sharing and Simplified Employee Pension Plans
Contributions to pension or profit-sharing plans (described in Section 401(a)
and 401(k), if applicable, and exempt from taxation under Section 501(a) of the
Code), and Simplified Employee Pension Plans (described in Section 408(k)),
which do not exceed certain limitations prescribed in the Code are fully tax
deductible to the employer. Such contributions are not currently taxable to the
covered employees, and increases in the value of Contracts purchased with such
contributions are not subject to taxation until received by the covered
employees or their beneficiaries in the form of Annuity payments or other
distributions.
2. Tax Deferred Annuity Plans for Public School Teachers and Employers and
Employees of Certain Tax-Exempt Organizations
Contributions to tax deferred annuity plans (described in Section 403(a) and
403(b) of the Code) by employers are not includable within the employee's income
to the extent those contributions do not exceed the lesser of $9,500 or the
exclusion allowance. Generally, the exclusion allowance is equal to 20% of the
employee's includable compensation for his most recent full year of employment
multiplied by the number of years of his service, less the aggregate amount
contributed by the employer for Annuity Contracts which were not included within
the gross income of the employee for any prior taxable year. There are special
provisions which may allow an employee of an educational institution, a hospital
or a home health service agency to elect an overall limitation different from
the limitation described above.
3. Deferred Compensation Plans for Tax-Exempt Organizations and State and
Local Governments
Employees may contribute on a before tax basis to The Deferred Compensation Plan
of their employer in accordance with The employer's Plan and Section 457 of the
Code. Section 457 places limitations on contributions to Deferred Compensation
Plans maintained by a State
<PAGE>
-47-
("State" means a State, a political sub-division of a State, and an agency or
instrumentality of a State or political sub-division of a State) or other
tax-exempt organization. Generally, the limitation is 33-1/3% of includable
compensation (25% of gross compensation) or $7,500, whichever is less. The plan
may also provide for additional contributions during the three taxable years
ending before normal retirement age of a Participant for a total of up to
$15,000 per year for such three years.
An employee electing to participate in a plan should understand that his rights
and benefits are governed strictly by the terms of the plan, that he is in fact
a general creditor of the employer under the terms of the plan, that the
employer is legal owner of any Contract issued with respect to the plan and that
the employer as owner of the Contract(s) retains all voting and redemption
rights which may accrue to the Contract(s) issued with respect to the plan. The
participating employee should look to the terms of his plan for any charges in
regard to participating therein other than those disclosed in this Prospectus.
4. Individual Retirement Annuities ("IRA's")
Individuals may contribute and deduct the lesser of $2,000 or 100 percent of
their compensation to an IRA. In the case of a spousal IRA, the maximum
deduction is the lesser of $2,250 or 100 percent of compensation. The deduction
for contributions is phased out between $40,000 and $50,000 of adjusted gross
income (AGI) for a married individual (and between $25,000 and $35,000 for
single individuals) if either the individual or his or her spouse is an active
participant in any Section 401(a), 403(a), 403(b) or 408(k) plan regardless of
whether the individual's interest is vested.
To the extent deductible contributions are not allowed, individuals may make
designated nondeductible contributions to an IRA.
B. Distributions
1. Pension and Profit Sharing Plans, Tax Sheltered Annuities, Individual
Retirement Annuities.
Annuity payments made under the Contracts are taxable under Section 72 of the
Code as ordinary income, in the year of receipt, to the extent that they exceed
the "excludable amount." The investment in the Contract is normally the
aggregate amount of the contributions made by or on behalf of an employee which
were included as a part of his taxable income. The employee's investment in the
Contract is divided by the expected number of payments to be made under the
Contract. The amount so computed constitutes the "excludable amount," which is
the amount of each annuity payment considered a return of investment in each
year and, therefore, not taxable. Once the employee's investment in the
Contract is recouped, the full amount of each payment will be fully taxable. If
the employee dies prior to recouping his or her investment in the Contract, a
deduction is allowed for the last taxable year. The rules for determining the
excludable amount are contained in Section 72 of the Code.
<PAGE>
-48-
Generally, distributions or withdrawals prior to age 59 1/2 may be subject to an
additional income tax of 10% of the amount includable in income. This
additional tax does not apply to distributions made after the employee's death,
on account of disability or separation from service at or after age 55, certain
distributions for eligible medical expenses and distributions in the form of
life annuity after a separation from service. A life annuity is defined as a
scheduled series of substantially equal periodic payments for the life of the
participant (or the joint lives of the Participant and beneficiary). The
taxation of withdrawals and other distributions varies depending on the type of
distribution and the type of plan from which the distribution is made. With
respect to tax-deferred annuity Contracts under Section 403(b) contributions to
the Contract made after December 31, 1988 and any increases in cash value, after
that date may not be distributed prior to attaining age 59-1/2, termination
employment, death or disability. Contributions (but not earnings) made after
December 31, 1988 may also be distributed by reason of financial hardship.
Upon receipt of any monies pursuant to the terms of the plan such monies are
taxable to such employees as ordinary income in the year in which received.
Generally, in order to avoid a penalty tax, annuity payments, periodic payments
or annual distributions MUST commence by April 1 of the calendar year following
the year in which the Participant attains age 70-1/2. The entire interest of
the Participant must be distributed beginning no later than this required
beginning date over a period which may not extend beyond a maximum of the life
expectancy of the Participant and a designated beneficiary. Each annual
distribution must equal or exceed a "minimum distribution amount" which is
determined by dividing the account balance by the applicable life expectancy.
With respect to a section 403(b) plan, this account balance is based upon
earnings and contributions after December 31, 1986. In addition, minimum
distribution incidental benefit rules may require a larger annual distribution
based upon dividing the entire account balance as of the close of business on
the last day of the previous calendar year by a factor promulgated by the
Internal Revenue Service which ranges from 26.2 (at age 70) to 1.8 (at age 115).
Special rules apply to require that distributions be made to beneficiaries after
the death of the Participant. A penalty tax of up to 50% of the amount which
should be distributed may be imposed by the Internal Revenue Service for failure
to make a distribution.
2. Deferred Compensation Plans for Tax-Exempt Organizations and State and
Local Governments
Generally, in order to avoid a penalty tax, annuity payments, periodic payments
or annual distributions must commence by April 1 of the calendar year following
the year in which the Participant attains age 70-1/2. Minimum distributions
under a Section 457 Deferred Compensation Plan may be further deferred if the
Participant remains employed. The entire interest of the Participant must be
distributed beginning no later than this required beginning date over a period
which may not extend beyond a maximum of the life expectancy of the Participant
and a designated beneficiary. Each annual distribution must equal or exceed a
"minimum distribution amount" which is determined by dividing the account
balance by the applicable life
<PAGE>
-49-
expectancy. This account balance is generally based upon the account value as
of the close of business on the last day of the previous calendar year. In
addition, minimum distribution incidental benefit rules may require a larger
annual distribution based upon dividing the account balance by a factor
promulgated by the Internal Revenue Service which ranges from 26.2 (at age 70)
to 1.8 (at age 115). Special rules apply to require that distributions be made
to beneficiaries after the death of the Participant. A penalty tax of up to 50%
of the amount which should be distributed may be imposed by the Internal Revenue
Service for failure to make a distribution.
Upon receipt of any monies pursuant to the terms of a Deferred Compensation
Plans for a tax-exempt organization, state or local government under Section 457
of the Code, such monies are taxable to such employee as ordinary income in the
year in which received.
C. Federal Income Tax Withholding
The portion of a distribution which is taxable income to the recipient will be
subject to Federal income tax withholding, pursuant to Section 3405 of the
Internal Revenue Code. The application of this provision is summarized below:
1. Eligible Rollover Distributions
a. The Unemployment Compensation Amendments Act of 1992 requires
that federal income taxes be withheld from certain distributions
from tax-qualified retirement plans and from tax-sheltered
annuities under Section 403(b). These provisions DO NOT APPLY to
distributions from individual retirement annuities under section
408(b) or from deferred compensation programs under section 457.
b. If any portion of a distribution is an "eligible rollover
distribution", the law requires that 20% of that amount be
withheld. This amount is sent to the IRS as withheld income
taxes. The following types of payments DO NOT constitute an
eligible rollover distribution (and, therefore, the mandatory
withholding rules will not apply):
- the non-taxable portion of the distribution;
- distributions which are part of a series of equal (or
substantially equal) payments made at least annually for your
lifetime (or your life expectancy), or your lifetime and your
beneficiary's lifetime (or life expectancies), or for a period of
ten years or more.
- required minimum distributions made pursuant to section 401(a)(9)
of the IRC.
c. However, these mandatory withholding requirements do not apply in the
event that all or a portion of any eligible rollover distribution is
paid in a "direct rollover". A direct rollover is the direct payment
of an eligible rollover distribution or portion thereof to an
individual retirement arrangement or annuity (IRA) or to another
qualified employer plan. IF A DIRECT ROLLOVER IS ELECTED, NO INCOME
TAX WILL BE WITHHELD.
<PAGE>
-50-
d. If any portion of a distribution is not an eligible rollover
distribution but is taxable, the mandatory withholding rules described
above do not apply. In this case, the voluntary withholding rules
described below apply.
2. Non-Eligible Rollover Distributions
a. Non-Periodic Distributions
The portion of a non-periodic distribution which constitutes
taxable income will be subject to Federal income tax withholding
unless the recipient elects not to have taxes withheld. If an
election not to have taxes withheld is not provided, 10% of the
taxable distribution will be withheld as Federal income tax.
Election forms will be provided at the time distributions are
requested.
b. Periodic Distributions (distributions payable over a period
greater than one year)
The portion of a periodic distribution which constitutes taxable
income will be subject to Federal income tax withholding as if
the recipient were married claiming three exemptions. A
recipient may elect not to have income taxes withheld or have
income taxes withheld at a different rate by providing a
completed election form. Election forms will be provided at the
time distributions are requested.
D. Any distribution from plans described in A.3 on page ____ is subject to the
regular wage withholding rules.
<PAGE>
-51-
THIS FORM MUST BE COMPLETED FOR ALL TAX SHELTERED ANNUITIES.
SECTION 403(B)(11) ACKNOWLEDGMENT FORM
The Hartford Variable Annuity Contract which you have recently purchased is
subject to certain restrictions imposed by the Tax Reform Act of 1986.
Contributions to the Contract after December 31, 1989 and any increases in cash
value after December 31, 1988 may not be distributed to you unless you have:
a. attained age 59-1/2
b. terminated employment
c. died, or
d. become disabled.
Distributions of post December 31, 1988 contributions may also be made if you
have experienced a financial hardship.
Also, there may be a 10% penalty tax for distributions made because of financial
hardship or separation from service.
Also, please be aware that your 403(b) Plan may also offer other financial
alternatives other than the Hartford Variable Annuity. Please refer to your
Plan.
Please complete the following and return to:
ITT Hartford Life and Annuity Insurance Company
Individual Annuity Operations
P.O. Box 2999
Hartford, CT 06104-2999
- -----------------------------------------------------
Name of Contract Owner/Participant
Address
City or Plan/School District
Date:
<PAGE>
-52-
TABLE OF CONTENTS TO
STATEMENT OF ADDITIONAL INFORMATION
Section Page No.
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . .
DESCRIPTION OF ITT HARTFORD LIFE AND
ANNUITY INSURANCE COMPANY. . . . . . . . . . . . . . . . . . . .
SAFEKEEPING OF ASSETS. . . . . . . . . . . . . . . . . . . . . . .
INDEPENDENT PUBLIC ACCOUNTANTS . . . . . . . . . . . . . . . . . .
DISTRIBUTION OF CONTRACTS. . . . . . . . . . . . . . . . . . . . .
ANNUITY/PAYOUT PERIOD . . . . . . . . . . . . . . . . . . . . . .
Annuity Payments . . . . . . . . . . . . . . . . . . . . . .
The Annuity Unit and Valuation . . . . . . . . . . . . . . .
Determination of Payment Amount. . . . . . . . . . . . . . .
CALCULATION OF YIELD AND RETURN. . . . . . . . . . . . . . . . . .
PERFORMANCE COMPARISONS. . . . . . . . . . . . . . . . . . . . . .
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
-53-
------------------------
To Obtain a Statement of Additional Information, please complete the form below
and mail to:
ITT Hartford Life and Annuity Insurance Company
Attn: Individual Annuity Operations
P.O. Box 2999
Hartford, CT 06104-2999
Please send a Statement of Additional Information for Separate Account Six to me
at the following address:
- ------------------------------
Name
- ------------------------------
Street
- --------------------------------------
City/State Zip Code
------------------------
<PAGE>
PART B
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
ITT Hartford Life and Annuity Insurance Company -
SEPARATE ACCOUNT SIX
This Statement of Additional Information is not a Prospectus. The information
contained herein should be read in conjunction with the Prospectus.
To obtain a Prospectus, send a written request to ITT Hartford Life and Annuity
Insurance Company, Attn: Individual Annuity Operations, P.O. Box 2999,
Hartford, CT 06104-2999.
Date of Prospectus: May 1, 1995
Date of Statement of Additional Information: May 1, 1995
<PAGE>
TABLE OF CONTENTS
SECTION PAGE NO.
- ------- --------
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . .
DESCRIPTION OF ITT HARTFORD LIFE
AND ANNUITY INSURANCE COMPANY. . . . . . . . . . . . . . . . .
SAFEKEEPING OF ASSETS. . . . . . . . . . . . . . . . . . . . . .
INDEPENDENT PUBLIC ACCOUNTANTS . . . . . . . . . . . . . . . . .
DISTRIBUTION OF CONTRACTS. . . . . . . . . . . . . . . . . . . .
ANNUITY/PAYOUT PERIOD. . . . . . . . . . . . . . . . . . . . . .
Annuity Payments. . . . . . . . . . . . . . . . . . . . . .
The Annuity Unit and Valuation. . . . . . . . . . . . . . .
Determination of Payment Amount . . . . . . . . . . . . . .
CALCULATION OF YIELD AND RETURN. . . . . . . . . . . . . . . . .
PERFORMANCE COMPARISONS. . . . . . . . . . . . . . . . . . . . .
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
INTRODUCTION
The tax deferred Woodward Variable Annuity Contracts described in the prospectus
are designed to provide Annuity benefits to individuals who have established or
wish to establish retirement programs which may or may not qualify for special
Federal income tax treatment. The Annuitant under these Contracts may receive
Annuity benefits in accordance with the Annuity option selected and the
retirement program, if any, under which the Contracts have been purchased.
Annuity payments under a Contract will begin on a particular future date which
may be selected at any time under the Contract or automatically when the
Annuitant reaches age 90. There are several alternative annuity payment options
available under the Contract (see "Optional Forms of Annuity," page ____ of the
prospectus).
The Premium Payments under a Contract, less any applicable Premium Taxes, will
be applied to the Separate Account and/or the Fixed Account. Accordingly, the
net Premium Payment under the Contract will be applied to purchase interests in
one or more of the following nine Portfolios of the Woodward Variable Annuity
Fund and the Putnam Manager Capital Trust, open-end diversified series
investment companies: Woodward Growth/Value Fund, Woodward Opportunity Fund,
Woodward Balanced Fund, Woodward Capital Growth and Woodward Money Market Fund
of the Woodward Variable Annuity Fund; and the PCM Global Growth Fund, PCM
Global Asset Allocation Fund, PCM Diversified Income Fund and PCM U.S.
Government and High Quality Bond Fund of the Putnam Capital Manager Trust.
Shares of the Portfolios are purchased by the Separate Account without the
imposition of any additional sales charge. The value of a Contract depends on
the value of the shares of the Portfolio held by the Separate Account pursuant
to that Contract. As a result, the Contract Owner bears the investment risk
since market value of the shares may increase or decrease.
The Contracts provide that in the event the Annuitant dies before the selected
Annuity Commencement Date, the Contingent Annuitant will become the Annuitant.
If the Annuitant dies before the Annuity Commencement Date and there is no
designated Contingent Annuitant, or the Contingent Annuitant predeceases the
Annuitant, or if the Contract Owner dies before the Annuity Commencement Date,
the Beneficiary will receive the Contract Value determined on the date of
receipt of due proof of death by ILA in its Home Office. However, if, upon
death prior to the Annuity Commencement Date, the Annuitant or Contract Owner,
as applicable, had not attained his 90th birthday, the Beneficiary will receive
the greater of (a) the Contract Value determined as of the day written proof of
death of such person is received by ILA, or (b) 100% of the total Premium
Payments made to such Contract, reduced by any prior surrenders, or (c) the
Contract Value on the Specified Contract Anniversary immediately preceding the
date of death, increased by the dollar amount of any Premium Payments made and
reduced by the dollar amount of any partial terminations since the immediately
preceding Specified Contract Anniversary.
<PAGE>
5
DESCRIPTION OF ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
ITT Hartford Life and Annuity Insurance Company, ("ILA"), formerly ITT Life
Insurance Corporation, is domiciled in the State of Wisconsin at Suite 2100, 111
East Wisconsin Avenue, Milwaukee, Wisconsin 53202 and with its principal office
at 505 Highway 169 North, Minneapolis, Minnesota 55441; however, its mailing
address is P.O. Box 2999, Hartford Connecticut 06104-2999; Attn: Individual
Annuity Operations.
ILA was incorporated in January 9, 1956 and commenced business July 1, 1965.
It is a stock life insurance company engaged in the business of writing both
individual and group life insurance and annuities in all states including the
District of Columbia, except New York.
ILA is a wholly owned subsidiary of Hartford Life Insurance Company. ILA is
ultimately 100% owned by Hartford Fire Company, one of the largest multiple
lines insurance carriers in the United States.
ILA is rated A++ (superior) by A.M. Best and Company, Inc. on the basis of its
financial soundness and operating performance. ILA has an AA+ rating from
Standard and Poor's and Duff and Phelps' highest rating (AAA) on the basis of
its claims-paying ability.
These ratings do not apply to the performance of the Separate Account. However,
the contractual obligations under this variable annuity are the general
corporate obligations of ILA. These ratings do apply to ILA's ability to meet
its insurance obligations under the contract.
SAFEKEEPING OF ASSETS
The assets of the Separate Account are held by ILA under a safekeeping
arrangement.
INDEPENDENT PUBLIC ACCOUNTANTS
The financial statements and schedules included in this prospectus and
elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with
respect thereto, and are included herein in reliance upon the authority of
said firm as experts in accounting and auditing.
<PAGE>
6
DISTRIBUTION OF CONTRACTS
Hartford Equity Sales, Inc. ("HESCO") serves as Principal Underwriter for the
securities issued with respect to the Separate Account. Hartford Securities
Distribution Company, Inc. ("HSD") will replace HESCO as principal underwriter
upon approval by the Commission, the National Association of Securities
Dealers, Inc. ("NASD") and applicable state regulatory authorities.
The securities will be sold by insurance and Variable Annuity agents of ILA who
are registered representatives of independent Broker-Dealers. These
Broker-Dealers are registered with the Commission under the Securities Exchange
Act of 1934 as Broker-Dealers and are members of the National Association of
Securities Dealers, Inc.
The offering of the Separate Account Contracts is continuous.
ANNUITY/PAYOUT PERIOD
ANNUITY PAYMENTS
Variable Annuity payments are determined on the basis of (1) a mortality table
set forth in the Contracts and the type of Annuity payment option selected, and
(2) the investment performance of the investment medium selected. Fixed Annuity
payments are based on the Annuity tables contained in the Contracts, and will
remain level for the duration of the Annuity.
The amount of the Annuity payments will not be affected by adverse mortality
experience or by an increase in expenses in excess of the expense deduction for
which provision has been made (see "Mortality and Expense Risk Charge,"
page ____ of the prospectus).
For a Variable Annuity, the Annuitant will be paid the value of a fixed number
of Annuity Units each month. The value of such units and the amounts of the
monthly Variable Annuity payments will, however, reflect investment income
occurring after retirement, and thus the Variable Annuity payments will vary
with the investment experience of the Portfolio shares selected.
THE ANNUITY UNIT AND VALUATION
The value of the Annuity Unit for each Sub-Account in the Separate Account for
any day is determined by multiplying the value for the preceding day by the
product of (1) the net investment factor (see "Valuation of Accumulation Units,"
page ____ of the prospectus) for the day for which the Annuity Unit value is
being calculated, and (2) a factor to neutralize the assumed investment rate
discussed below.
<PAGE>
7
ILLUSTRATION OF CALCULATION OF ANNUITY UNIT VALUE
1. Net Investment Factor for period . . . . . . . . . . . . . . . 1.011225
2. Adjustment for 4% Assumed Investment Rate. . . . . . . . . . . .999892
3. 2x1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.011116
4. Annuity Unit value, beginning of period. . . . . . . . . . . . .995995
5. Annuity Unit value, end of period (3x4). . . . . . . . . . . . 1.007066
DETERMINATION OF PAYMENT AMOUNT
When Annuity payments are to commence, the value of the Contract is determined
as the sum of the value of the Fixed Account no earlier than the close of
business on the fifth Valuation Day preceding the date the first Annuity payment
is due plus the product of the value of the Accumulation Unit of each
Sub-Account on that same day, and the number of Accumulation Units credited to
each Sub-Account as of the date the Annuity is to commence.
The Contract contains tables indicating the minimum dollar amount of the first
monthly payment under the optional forms of Annuity for each $1,000 of value of
a Sub-Account under a Contract. The first monthly payment varies according to
the form and type of Annuity selected. The Contracts contain Annuity tables
derived from the 1983(a) Individual Annuity Mortality Table with ages set back
one year with an assumed investment rate ("A.I.R.") of 3.00% per annum for a
Fixed Annuity and 5.00% per annum for a Variable Annuity. The total first
monthly Variable Annuity payment is determined by multiplying the value
(expressed in thousands of dollars) of a Sub-Account (less any applicable
Premium Taxes) by the amount of the first monthly payment per $1,000 of value
obtained from the tables in the Contracts.
Fixed Annuity payments are determined at annuitization by multiplying the values
allocated to the Fixed Account by a rate to be determined by ILA which is no
less than the rate specified in the Annuity tables in the Contract. The Annuity
payment will remain level for the duration of the Annuity.
The amount of the first monthly Variable Annuity payment, determined as
described
<PAGE>
8
above, 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 in order to determine the number
of Annuity Units represented by the first payment. This number of Annuity Units
remains fixed during the Annuity 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 then current Annuity Unit value.
The A.I.R. assumed in the mortality tables would produce level Variable Annuity
payments if the investment rate remained constant. In fact, payments will vary
up or down as the investment rate varies up or down from the A.I.R.
The Annuity payments will be made on the fifteenth day of each month following
selection. The Annuity Unit value used in calculating the amount of the
Variable Annuity payments will be based on an Annuity Unit value determined as
of the close of business on a day no earlier than the fifth Valuation Day
preceding the date of the Annuity payment.
CALCULATION OF YIELD AND RETURN
YIELD OF THE WOODWARD MONEY MARKET FUND SUB-ACCOUNT. As summarized in the
Prospectus under the heading "Performance Related Information," the yield of the
Woodward Money Market Fund Sub-Account for a seven-day period (the "base
period") will be computed by determining the "net change in value" of a
hypothetical account having a balance of one unit at the beginning of the
period, dividing the net change in account value by the value of the account at
the beginning of the base period to obtain the base period return, and
multiplying the base period return by 365/7 with the resulting yield figure
carried to the nearest hundredth of one percent. Net changes in value of a
hypothetical account will include net investment income of the account (accrued
dividends as declared by the underlying funds, less expense and Contract charges
of the account) for the period, but will not include realized gains or losses or
unrealized appreciation or depreciation on the underlying fund shares.
The effective yield is calculated by compounding the base period return by
adding 1, raising the sum to a power equal to 365/7 and subtracting 1 from the
result, according to the following formula:
Effective Yield = [(Base Period Return + 1) (365/7)] - 1
The Woodward Money Market Fund Sub-Account's yield and effective yield will vary
in
<PAGE>
9
response to fluctuations in interest rates and in the expenses of the
Sub-Account.
The PCM Diversified Income Fund and the PCM U.S. Government and High Quality
Bond Fund may advertise yield in addition to total return. The yield will be
computed in the following manner: The net investment income per unit earned
during a recent one month period is divided by the unit value on the first day
of the period. This figure reflects the recurring charges at the Separate
Account level including the Contract Maintenance Fee.
CALCULATION OF TOTAL RETURN. As summarized in the Prospectus under the heading
"Performance Related Information", total return is a measure of the change in
value of an investment in a Sub-Account over the period covered. The formula
for total return used herein includes three steps: (1) calculating the value of
the hypothetical initial investment of $1,000 as of the end of the period by
multiplying the total number of units owned at the end of the period by the unit
value per unit on the last trading day of the period; (2) assuming redemption at
the end of the period and deducting any applicable contingent deferred sales
charge and (3) dividing this account value for the hypothetical investor by the
initial $1,000 investment and annualizing the result for periods of less than
one year. Total return will be calculated for one year, five years, and ten
years or some other relevant periods if a Sub-Account has not been in existence
for at least ten years.
At any time in the future, yields and total return may be higher or lower than
past yields and there can be no assurance that any historical results will
continue.
PERFORMANCE COMPARISONS
YIELD AND TOTAL RETURN. The total return and yield may also be used to compare
the performance of the Sub-Accounts against certain widely acknowledged outside
standards or indices for stock and bond market performance. Index performance
is not representative of the performance of the Sub-Account to which it is
compared and is not adjusted for commissions and other costs. Portfolio
holdings of the Sub-Account will differ from those of the index to which it is
compared. Performance comparison indices include the following:
The Consumer Price Index, prepared by the U.S. Bureau of Labor Statistics, is a
commonly used measure of the rate of inflation. The index shows the average
change in the cost of selected consumer goods and services and does not
represent a return on an investment vehicle.
The Dow Jones Industrial Average is an unmanaged list of 30 common stocks
frequently used as a general measure of stock market performance. Its
performance figures reflect
<PAGE>
10
changes of market prices and reinvestment of all distributions.
Lehman Brothers Corporate Bond Index is an unmanaged list of publicly issued,
fixed-rate, non-convertible investment-grade domestic corporate debt securities
frequently used as a general measure of the performance of fixed-income
securities. The average quality of bonds included in the index may be higher
than the average quality of those bonds in which High Yield Fund customarily
invests. The index does not include bonds in certain of the lower rating
classifications in which the Fund may invest. The performance figures of the
index reflect changes in market prices and reinvestment of all interest
payments.
The Lehman Brothers Government Bond Index (the "SL Government Index") is a
measure of the market value of all public obligations of the U.S. Treasury; all
publicly issued debt of all agencies of the U.S. Government and all
quasi-federal corporations; and all corporate debt guaranteed by the U.S.
Government. Mortgage-backed securities, flower bonds and foreign targeted
issues are not included in the SL Government Index.
The Lehman Brothers Government/Corporate Bond Index (the "SL
Government/Corporate Index") is a measure of the market value of approximately
5,300 bonds with a face value currently in excess of $1.3 trillion. To be
included in the SL Government/Corporate Index, an issue must have amounts
outstanding in excess of $1 million, have at least one year to maturity and be
rated "Baa" or higher ("investment grade") by a nationally recognized rating
agency. The index does not include bonds in certain of the lower-rating
classifications in which High Yield Fund invests. Its performance figures
reflect changes in market prices and reinvestment of all interest payments.
Morgan Stanley Capital International World Index is an unmanaged list of
approximately 1,450 equity securities listed on the stock exchanges of the
United States, Europe, Canada, Australia, New Zealand and the Far East, with all
values expressed in U.S. dollars. Performance figures reflect changes in market
prices and reinvestment of distributions net of withholding taxes. The
securities in the index change over time to maintain representativeness.
The NASDAQ-OTC Industrial Average (The "NASDAQ Index") is a market
value-weighted and unmanaged index showing the changes in the aggregate market
value of approximately 3,500 stocks relative to the base measure of 100.00 on
February 5, 1971. The NASDAQ Index is composed entirely of common stocks of
companies traded over-the-counter and often through the National Association of
Securities Dealers Automated Quotations ("NASDAQ") system. Only those
over-the-counter stocks having only one market maker or traded on exchanges are
excluded. Its performance figures reflect changes of market prices but do not
reflect reinvestment of cash dividends.
<PAGE>
11
Salomon Brothers Long-Term High-Grade Corporate Bond Index is an unmanaged list
of publicly traded corporate bonds having a rating of at least AA by Standard &
Poor's or Aa by Moody's and is frequently used as general measure of the
performance of fixed-income securities. The average quality of bonds included
in the index may be higher than the average quality of those bonds in which a
Fund may customarily invests. The index does not include bonds in certain of
the lower rating classifications in which the Fund may invest. Performance
figures for the index reflect changes of market prices and reinvestment of all
distributions.
The Salomon Brothers 7-10 Year Government Bond Index is an unmanaged list of
U.S. Government and government agency securities with maturities of 7 to 10
years. Performance figures for the index reflect changes of market prices and
reinvestment of all interest payments.
The Standard & Poor's Composite Index of 500 stocks (the "S&P 500") a market
value-weighted and unmanaged index showing changes in the aggregate market value
of 500 stocks relative to the base period 1941-43. The S&P 500 is composed
almost entirely of common stocks of companies listed on the New York Stock
Exchange, although the common stocks of a few companies listed on the American
Stock Exchange or traded over-the-counter are included. The 500 companies
represented include 400 industrial, 60 transportation and 40 financial services
concerns. The S&P 500 represents about 80% of the market value of all issues
traded on the New York Stock Exchange. Its performance figures reflect changes
of market prices and reinvestment of all regular cash dividends.
The Standard & Poor's 40 Utilities Index is unmanaged list of 40 utility stocks.
The Index assumes reinvestment of all distributions and reflects changes in
market prices but does not take into account brokerage commissions or other
fees.
The manner in which total return and yield will be calculated for public use is
described above.
<PAGE>
12
FINANCIAL STATEMENTS
(TO BE PROVIDED TO AMENDMENT)
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY-BASIS FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1994 AND 1993
TOGETHER WITH
AUDITORS' REPORT
<PAGE>
[ARTHUR ANDERSEN LLP LETTERHEAD]
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
ITT Hartford Life and Annuity Insurance Company:
We have audited the accompanying statutory-basis balance sheets of ITT Hartford
Life and Annuity Insurance Company (Wisconsin corporation and wholly-owned
subsidiary of Hartford Life Insurance Company) (the Company) as of December 31,
1994 and 1993, and the related statutory-basis statements of income, changes in
capital and surplus and cash flows for each of the three years in the period
ended December 31, 1994. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
statutory-basis financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
The Company presents its financial statements in conformity with statutory
accounting practices as described in Note 1. When statutory-basis financial
statements are presented for purposes other than for filing with a regulatory
agency, generally accepted auditing standards require that an auditor's report
on them state whether they are presented in conformity with generally accepted
accounting principles. The accounting practices used by the Company vary from
generally accepted accounting principles as explained and quantified in Note 1.
In our opinion, because the differences in accounting practices as described in
Note 1 are material, the statutory-basis financial statements referred to above
do not present fairly, in accordance with generally accepted accounting
principles, the financial position of the Company as of December 31, 1994 and
1993, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1994.
<PAGE>
-2-
However, in our opinion, the statutory-basis financial statements referred to
above present fairly, in all material respects, the financial position of the
Company as of December 31, 1994 and 1993, and the results of its operations and
its cash flows for each of the three years in the period ended December 31, 1994
in conformity with statutory accounting practices as described in Note 1.
Hartford, Connecticut
January 30, 1995
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY BALANCE SHEETS
($000)
<TABLE>
<CAPTION>
December 31,
--------------------------------------
1994 1993
---------- ----------
<S> <C> <C>
ASSETS
Bonds $ 798,501 $ 294,338
Common Stocks 2,275 1,599
Policy Loans 20,145 1,859
Cash & Short-Term Investments 84,312 33,232
Other Invested Assets 2,519 458
---------- ----------
Total Cash & Invested Assets 907,752 331,486
---------- ----------
Investment Income Due & Accrued 12,757 4,426
Premium Balances Receivable 467 46
Receivables from Affiliates 2,861 4,320
Other Assets 13,749 17,254
Separate Account Assets 3,588,077 2,053,775
---------- ----------
Total Assets $ 4,525,663 $ 2,411,307
---------- ----------
---------- ----------
LIABILITIES
Aggregate Reserves for Future Benefits $ 447,284 $ 41,195
Policy & Contract Claims 9,902 740
Liability for Premium & Other Deposit Funds 479,202 284,159
Asset Valuation Reserve 2,422 1,066
Payable to Affiliates 7,840 13,618
Other Liabilities (100,349) (71,939)
Separate Account Liabilities 3,588,077 2,053,775
---------- ----------
Total Liabilities 4,434,378 2,322,614
---------- ----------
---------- ----------
CAPITAL AND SURPLUS
Common Stock 2,500 2,500
Gross Paid-In & Contributed Surplus 114,109 114,109
Unassigned Funds (25,324) (27,916)
---------- ----------
Total Capital and Surplus 91,285 88,693
---------- ----------
TOTAL LIABILITIES AND CAPITAL AND SURPLUS $ 4,525,663 $ 2,411,307
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of
these financial statements.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY STATEMENTS OF INCOME
($000)
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------------------
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
REVENUES
Premiums & Annuity Considerations $ 442,173 $ 14,281 $ 9,974
Annuity & Other Fund Deposits 608,685 1,986,140 1,292
Net Investment Income 29,012 7,970 5,666
Commissions & Expense Allowances on Reinsurance Ceded 154,527 60,700 50,209
Reserve Adjustment on Reinsurance Ceded 1,266,926 0 0
Other Revenues 41,857 369,598 (231)
---------- ---------- ----------
Total Revenues 2,543,180 2,438,689 66,910
---------- ---------- ----------
BENEFITS AND EXPENSES
Death and Annuity Benefits 7,948 3,192 2,822
Surrenders and Other Benefit Payments 181,749 4,955 1,836
Commissions and Other Expenses 186,303 132,169 57,360
Increase in Reserves for Future Benefits 416,748 5,120 3,765
Increase in Liability for Premium
and Other Deposit Funds 182,934 281,024 887
Net transfers to Separate Accounts 1,541,419 2,013,183 0
---------- ---------- ----------
Total Benefits and Expenses 2,517,101 2,439,643 66,670
---------- ---------- ----------
NET GAIN (LOSS) FROM OPERATIONS
BEFORE FEDERAL INCOME TAXES 26,079 (954) 240
Federal Income Taxes 24,038 11,270 1,561
---------- ---------- ----------
NET GAIN (LOSS) FROM OPERATIONS 2,041 (12,224) (1,321)
Net Realized Capital Gains (2) 877 120
---------- ---------- ----------
NET INCOME (LOSS) $ 2,039 $ (11,347) $ (1,201)
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of
these financial statements.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS
($000)
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
CAPITAL & SURPLUS - BEGINNING OF YEAR $ 88,693 $ 30,027 $ 41,227
--------- --------- ---------
Net Income (Loss) 2,039 (11,347) (1,201)
Net Unrealized Gains (Losses) on Investments (133) (1,198) 527
Change in Asset Valuation Reserve (1,356) 135 (655)
Change in Non-Admitted Assets (8,599) 1,076 (7,671)
Change in Reserve (valuation basis) 10,659 0 0
Aggregate write-ins for surplus (18) 0 0
Dividends to Stockholder 0 0 (2,200)
Paid In Capital 0 70,000 0
--------- --------- ---------
Change in Capital and Surplus 2,592 58,666 (11,200)
--------- --------- ---------
CAPITAL & SURPLUS - END OF YEAR $ 91,285 $ 88,693 $ 30,027
--------- --------- ---------
--------- --------- ---------
</TABLE>
The accompanying notes are an integral part of
these financial statements.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY STATEMENTS OF CASH FLOW
($000)
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------
1994 1993 1992
--------- ---------- ----------
<S> <C> <C> <C>
OPERATIONS
Premiums, Annuity Considerations & Fund Deposits $ 1,050,493 $ 2,000,492 $ 11,262
Investment Income 24,519 5,594 5,578
Other Income 1,515,700 434,851 53,635
--------- ---------- ----------
Total Income 2,590,712 2,440,937 70,475
--------- ---------- ----------
Benefits Paid 181,205 8,215 4,789
Federal Income Taxes Paid on Operations 20,634 9,666 44
Other Expenses 1,832,905 2,231,477 57,383
--------- ---------- ----------
Total Benefits & Expenses 2,034,744 2,249,358 62,216
--------- ---------- ----------
NET CASH FROM OPERATIONS 555,968 191,579 8,259
--------- ---------- ----------
PROCEEDS FROM INVESTMENTS
Bonds 87,747 88,334 71,668
Common Stocks 0 0 102
Other 40 23,638 88
--------- ---------- ----------
NET INVESTMENT PROCEEDS 87,787 111,972 71,858
--------- ---------- ----------
Tax on Capital Gains (96) 376 (119)
Paid In Surplus 0 70,000 0
Other Cash Provided 30,554 0 6,028
--------- ---------- ----------
TOTAL PROCEEDS 674,405 373,175 86,264
--------- ---------- ----------
COST OF INVESTMENTS ACQUIRED
Bonds 595,181 314,933 80,174
Common Stocks 808 567 625
Miscellaneous Applications 2,523 0 0
--------- ---------- ----------
TOTAL INVESTMENTS ACQUIRED 598,512 315,500 80,799
--------- ---------- ----------
OTHER CASH APPLIED
Dividends Paid to Stockholder 0 0 2,200
Other 24,813 24,626 13,725
--------- ---------- ----------
TOTAL OTHER CASH APPLIED 24,813 24,626 15,925
--------- ---------- ----------
TOTAL APPLICATIONS 623,325 340,126 96,724
--------- ---------- ----------
NET CHANGE IN CASH & SHORT-TERM INVESTMENTS 51,080 33,049 (10,460)
CASH & SHORT-TERM INVESTMENTS, BEGINNING OF YEAR 33,232 183 10,643
--------- ---------- ----------
CASH & SHORT-TERM INVESTMENTS, END OF YEAR $ 84,312 $ 33,232 $ 183
--------- ---------- ----------
--------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of
these financial statements.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
(AMOUNTS IN THOUSANDS UNLESS OTHERWISE STATED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION
ITT Hartford Life and Annuity Insurance Company (ILA or the Company),
formerly known as ITT Life Insurance Corporation, is a wholly owned
subsidiary of Hartford Life Insurance Company (HLIC), which is an
indirect subsidiary of the ITT Hartford Insurance Group, Inc. (ITT
Hartford), a wholly owned subsidiary of ITT Corporation (ITT).
ILA offers a complete line of ordinary and universal life insurance,
individual annuities and certain supplemental accident and health benefit
coverages.
BASIS OF PRESENTATION
The accompanying ILA statutory basis financial statements were prepared in
conformity with statutory accounting practices prescribed or permitted by
the National Association of Insurance Commissioners (NAIC) and the
Insurance Department of the State of Wisconsin.
Statutory accounting practices and generally accepted accounting principles
(GAAP) differ in certain significant respects. These differences
principally involve:
(1) treatment of policy acquisition costs (commissions, underwriting
and selling expenses, premium taxes, etc.) which are charged to
expense when incurred for statutory purposes rather than on a pro-rata
basis over the expected life of the policy;
(2) recognition of premium revenues, which for statutory purposes are
generally recorded as collected or when due during the premium paying
period of the contract. For GAAP purposes, revenues for universal life
policies and investment products consist of policy charges for the
cost of insurance, policy administration and surrender charges
assessed to policy account balances. Premiums for traditional life
insurance policies are recognized as revenues when they are due from
policyholders. The retrospective deposit method is used in accounting
for universal life and other types of contracts where the payment
pattern is irregular or surrender charges are a significant source of
profit. The prospective deposit method is used where investment
margins are the primary source of profit;
(3) development of liabilities for future policy benefits, which for
statutory purposes predominantly use interest rate and mortality
assumptions prescribed by the National Association of Insurance
Commissioners (NAIC) which may vary considerably from interest and
mortality used for GAAP financial reporting;
(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 statement and tax reporting purposes;
(5) excluding certain assets designated as non-admitted assets (past
due agent's balances, furniture and equipment, etc.) from the balance
sheet for statutory purposes by directly charging surplus;
(6) establishing accruals for post-retirement and post-employment
health care benefits on an optional basis, immediate recognition or a
twenty year phase-in approach, whereas GAAP liabilities were
established at date of adoption. For statutory reporting purposes the
Company established accruals utilizing the twenty year phase-in
approach;
<PAGE>
-2-
(7) establishing a formula reserve for realized and unrealized losses
due to default and equity risk associated with certain invested assets
(Asset Valuation Reserve); as well as the deferral and amortization of
realized gains and losses, resulting from changes in interest rates
during the period the asset is held, into income over the remaining
life of the asset sold (Interest Maintenance Reserve); whereas on a
GAAP basis, no such formula reserve is required and realized gains and
losses are recognized in the period the asset is sold;
(8) the reporting of reserves and benefits net of reinsurance ceded,
where risk transfer has taken place. On a GAAP basis reserves are
reported gross of reinsurance with reserve credits presented as
recoverable assets.
(9) the reporting of fixed maturities at amortized cost, where GAAP
requires that fixed maturities be classified as "held-to-maturity",
"available-for-sale" or "trading", based on the Company's intentions
with respect to the ultimate disposition of the security and its
ability to effect those intentions. The Company's fixed maturities
were classified on a GAAP basis as "available-for-sale" and
accordingly, these investments were reflected at fair value with the
corresponding impact included as a component of Stockholder's Equity
designated as "Unrealized Loss on Securities, Net of Tax"
As of December 31, 1994, 1993 and 1992, the significant differences between
statutory and GAAP basis net income and capital and surplus for the Company are
summarized as follows:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
GAAP Net Income: $ 23,295 $ 6,071 $ 7,034
Deferred acquisition costs (117,863) (147,700) (17,434)
Benefit reserve adjustment 30,912 14,059 (1,833)
Deferred taxes (9,267) (7,123) 769
Separate accounts 75,941 110,547 0
Coinsurance 3,472 11,578 8,005
Other, net (4,451) 1,221 2,258
--------- --------- ---------
Statutory Net Income (Loss) $ 2,039 $ (11,347) $ (1,201)
--------- --------- ---------
--------- --------- ---------
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
GAAP Capital and Surplus $ 199,785 $ 198,408 $ 122,504
Deferred acquisition costs (422,201) (304,338) (156,638)
Benefit reserve adjustment 85,191 43,621 29,562
Deferred taxes 13,257 13,706 20,829
Separate accounts 18,488 110,547 0
Asset valuation reserve (2,422) (1,066) (1,201)
Coinsurance 0 22,642 9,442
Unrealized (Gain) Loss on Bonds 21,918 0 0
Other, net 9,269 5,173 5,529
-------- -------- --------
Statutory Capital and Surplus $ 91,285 $ 88,693 $ 30,027
-------- -------- --------
-------- -------- --------
</TABLE>
<PAGE>
-3-
AGGREGATE RESERVES AND LIABILITIES FOR PREMIUM AND OTHER DEPOSIT FUNDS:
Aggregate reserves for payment of future life, health and annuity benefits
were computed in accordance with presently accepted actuarial standards.
Reserves for life insurance policies are generally based on the 1958 and
1980 Commissioner's Standard Ordinary Mortality Tables at various rates
ranging from 2.5% to 5.5%. Accumulation and on-benefit annuity reserves are
based principally on Individual Annuity tables at various rates ranging from
2.5% to 8.75% and using the Commissioner's Annuity Reserve Valuation Method
(CARVM). Accident and health reserves are established using a two year
preliminary term method and morbidity tables based on company experience.
ILA has established separate accounts to segregate the assets and
liabilities of certain annuity contracts that must be segregated from the
Company's general assets under the terms of the contracts. The assets
consist primarily of marketable securities reported at market value.
Premiums, benefits and expenses of these contracts are reported in the
Statutory Statement of Income.
During 1994, the Company changed the valuation method on life policies and
contracts resulting in a $10.9 million increase in surplus. The new
valuation method is in accordance with presently accepted actuarial
standards.
INVESTMENTS:
Investments in bonds are carried at amortized cost. Bonds which are deemed
ineligible to be held at amortized cost by the National Association of
Insurance Commissioners (NAIC) Securities Valuation Office (SVO) are carried
at the appropriate SVO published value. When apermanent reduction in the
value of publicly traded securities occurs, the decrease is reported as a
realized loss and the carrying value is adjusted accordingly. Common stocks
are carried at market value with the difference from cost reflected in
surplus. Other invested assets are generally recorded at fair value.
Changes in unrealized capital gains and losses on common stock are reported
as additions to or reductions of surplus. The Asset Valuation Reserve,
which replaced the Mandatory Securities Valuation Reserve used in 1991, is
designed to provide a standardized reserve process for realized and
unrealized losses due to the default and equity risks associated with
invested assets. The reserve increased by $1,356 in 1994, decreased by $135
in 1993 and increased by $655 in 1992. Additionally, the Interest
Maintenance Reserve (IMR) captures net realized capital gains and losses,
net of applicable income taxes, resulting from changes in interest rates and
amortizes these gains or losses into income over the remaining life of the
mortgage loan or bond sold. Realized capital gains and losses not included
in IMR are reported in the Statement of Income net of taxes. Realized
investment gains and losses are determined on a specific identification
basis. The amount of net capital losses reclassified from the IMR was $67
and $264 in 1994 and 1993, respectively and the amount of the net capital
gains transferred to the IMR was $348 in 1992. The amount of income
amortized was $114 in 1994, $178 in 1993 and $114 in 1992.
OTHER LIABILITIES:
The amount reflected in other liabilities includes a receivable from the
separate accounts of $186.5 million and $98.2 million in 1994 and 1993,
respectively. The balances are classified in accordance with NAIC
accounting practices.
2. INVESTMENTS
(a) COMPONENTS OF NET INVESTMENT INCOME:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Interest income from fixed maturity securities $ 29,493 $ 7,975 $ 5,985
Interest income from policy loans 454 124 115
Interest and dividends from other investments (89) 47 31
--------- --------- ---------
Gross investment income 29,858 8,146 6,131
Less: investment expenses 846 176 465
--------- --------- ---------
Net investment income $ 29,012 $ 7,970 $ 5,666
--------- --------- ---------
--------- --------- ---------
</TABLE>
<PAGE>
-4-
(b) UNREALIZED GAINS (LOSSES) ON STOCK:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Gross unrealized gains $ 75 $ 148 $ 93
Gross unrealized losses (60) 0 0
-------- -------- --------
Net unrealized gains 15 148 93
Balance at beginning of year 148 93 111
-------- -------- --------
Change in net unrealized gains on common stock $ (133) $ 55 $ (18)
-------- -------- --------
-------- -------- --------
</TABLE>
(c) UNREALIZED GAINS (LOSSES) ON BONDS AND SHORT-TERM INVESTMENTS:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Gross unrealized gains $ 986 $ 5,916 $ 2,430
Gross unrealized losses (34,718) (684) (143)
------- ------- -------
Net unrealized (losses) gains after tax (33,732) 5,232 2,287
Balance at beginning of year 5,232 2,287 2,760
------- ------- -------
Change in net unrealized (losses) gains on
bonds and short-term investments $ (38,964) $ 2,945 $ (473)
------- ------- -------
------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
(d) COMPONENTS OF NET REALIZED GAINS:
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Bonds $ (101) $ (316) $ 665
Stocks 0 0 4
Real estate and other 34 1,316 88
------- ------- -------
Realized (losses) gains (67) 1,000 757
Capital gains taxes 2 386 289
------- ------- -------
Net realized gains (69) 614 468
Less: IMR Capital Gains (Losses) (67) (263) 348
------- ------- -------
Capital Gains Net of IMR $ (2) $ 877 $ 120
------- ------- -------
------- ------- -------
</TABLE>
<PAGE>
-5-
(e) OFF-BALANCE SHEET INVESTMENTS
The Company had no significant financial instruments with off-balance sheet
risk as of December 31, 1994, 1993 and 1992.
(f) CONCENTRATION OF CREDIT RISK:
Excluding U.S. government and government agency investments, the Company is
not exposed to any significant concentration of credit risk.
(g) BONDS, SHORT-TERM AND UNAFFILIATED STOCK INVESTMENTS:
<TABLE>
<CAPTION>
1994
------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
----------- ---------- ---------- ----------
U.S. government and government agencies and
authorities:
<S> <C> <C> <C> <C>
- guaranteed and sponsored $175,925 $0 $(12,059) $163,866
- guaranteed and sponsored - asset backed 142,318 382 (4,911) 137,789
States, municipalities and political subdivisions 10,409 0 (603) 9,806
International governments 2,248 0 (69) 2,179
Public utilities 29,509 31 (1,271) 28,269
All other corporate 257,301 246 (9,452) 248,095
All other corporate - asset backed 112,390 327 (4,066) 108,651
Short-term investments 56,365 0 0 56,365
Certificates of deposit 68,401 0 (2,287) 66,114
--------- -------- --------- ----------
Total $854,866 $986 $(34,718) $821,134
--------- -------- --------- ----------
--------- -------- --------- ----------
<CAPTION>
1994
------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Common Stock $2,260 $75 $(60) $2,275
--------- -------- --------- ----------
--------- -------- --------- ----------
</TABLE>
<PAGE>
-6-
(G) BONDS, SHORT-TERM AND UNAFFILIATED STOCK INVESTMENTS: (CONTINUED)
<TABLE>
<CAPTION>
1993
------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. government and government agencies and authorities:
- guaranteed and sponsored $88,485 $157 $(290) $88,352
- guaranteed and sponsored - asset backed 103,264 4,019 (346) 106,937
States, municipalities and political subdivisions 410 0 0 410
International governments 0 0 0 0
Public utilities 7,545 201 0 7,746
All other corporate 76,397 1,504 (16) 77,885
All other corporate - asset backed 15,237 35 (20) 15,252
Short-term investments 8,176 0 0 8,176
Certificates of deposit 3,000 0 (12) 2,988
--------- -------- --------- ---------
Total $302,514 $5,916 $(684) $307,746
--------- -------- --------- ---------
--------- -------- --------- ---------
<CAPTION>
1993
------------------------------------------------
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Common Stock $1,452 $148 $0 $1,600
--------- -------- --------- ---------
--------- -------- --------- ---------
</TABLE>
The amortized cost and estimated market value of bonds and short-term
investments at December 31, 1994 by management's anticipated maturity are
shown below. Asset backed securities are distributed to maturity year
based on ILA's estimate of the rate of future prepayments of principal over
the remaining life of the securities. Expected maturities differ from
contractual maturities reflecting borrowers' rights to call or prepay their
obligations.
<TABLE>
<CAPTION>
Estimated
Amortized Fair
Maturity Cost Value
-------- --------- ---------
<S> <C> <C>
Due in one year or less $130,299 $128,300
Due after one year through five years 606,859 579,771
Due after five years through ten years 110,444 104,107
Due after ten years 7,264 8,957
--------- ---------
Total $854,866 $821,135
--------- ---------
--------- ---------
</TABLE>
<PAGE>
-7-
Proceeds from sales of investments in bonds and short-term investments
during 1994, 1993 and 1992 were $117,912, $333,023 and $219,356 resulting
in gross realized gains of $518, $937 and $968 and gross realized losses of
$624, $1,255 and $269 before transfers to IMR. The Company has no realized
gains for common stock.
(h) FAIR VALUE OF INVESTMENT-RELATED FINANCIAL INSTRUMENTS NOT DISCLOSED
ELSEWHERE:
BALANCE SHEET ITEMS: (IN MILLIONS)
<TABLE>
<CAPTION>
1994 1993
----------------- -------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- ------- -------- --------
<S> <C> <C> <C> <C>
ASSETS
Policy loans $20 $20 $2 $2
LIABILITIES
Liabilities on investment contracts $534 $526 $289 $287
</TABLE>
The carrying amounts for policy loans approximates fair value. The
liabilities are determined by forecasting future cash flows discounted at
current market rates.
3. RELATED PARTY TRANSACTIONS:
Transactions between the Company and its affiliates within ITT Hartford
relate principally to tax settlements, reinsurance, service fees, capital
contributions and payments of dividends.
For additional information, see Footnote 5,6 and 7.
4. FEDERAL INCOME TAXES:
The Company is included in the consolidated Federal income tax return of
ITT Hartford which is ultimately included in the income tax return of ITT.
Allocation of taxes is based primarily upon separate company tax return
calculations with current credit for net losses used in consolidation
except that increases resulting from consolidation are allocated in
proportion to separate return amounts. Intercompany Federal income tax
balances are generally settled quarterly with Hartford Fire. Federal income
taxes paid by the Company were $20,538, $10,042 and $(75) in 1994, 1993 and
1992, respectively.
5. CAPITAL AND SURPLUS AND SHAREHOLDER DIVIDEND RESTRICTIONS:
The maximum amount of dividends which can be paid, without prior approval,
by State of Wisconsin insurance companies to shareholders is subject to
restrictions relating to statutory surplus. Dividends are paid as
determined by the Board of Directors and are not cumulative. Dividends of
$2,200 were paid by ILA to its parent, HLIC, in 1992. There were dividends
paid by ILA to its parent, HLIC, in 1994 and 1993.
6. PENSION PLANS AND OTHER POST-RETIREMENT AND POST-EMPLOYMENT BENEFITS:
The Company's employees are included in ITT's non-contributory defined
benefit pension plans. These plans provide pension benefits that are based
on years of service and the employee's compensation during the last ten
years of employment. The Company's funding policy is to contribute
annually an amount between the minimum funding requirements set forth in
the Employee Retirement Income Security Act of 1974 and the maximum amount
that can be deducted for Federal income tax purposes. Generally, pension
costs are funded through the purchase of HLIC's group pension contracts.
Pension expense was $1,211, $765 and $734 in 1994, 1993 and 1992,
respectively. Liabilities for the plan are held by ITT.
The Company also participates in ITT's Investment and Savings Plan, which
includes a deferred compensation option under IRC section 401(k) and an
ESOP allocation under IRC section 404(k). The liabilities for these plans
are included in the financial statements of ITT Corporation.
<PAGE>
-8-
6. PENSION PLANS AND OTHER POST RETIREMENT BENEFITS: (CONTINUED)
The Company's employees are included in Hartford Fire's contributory
defined health care and life insurance benefit plans. These plans provide
health care and life insurance benefits for retired employees.
Substantially all employees may become eligible for those benefits if they
reach normal or early retirement age while still working for the Company.
The Company has prefunded a portion of the health care and life insurance
obligations through trust funds where such prefunding can be accomplished
on a tax effective basis. Post-retirement health care and life insurance
benefits expense (not including provisions for accrual of post-retirement
benefit obligations), allocated by Hartford Fire, was $54, $34 and $113 for
1994, 1993 and 1992, respectively.
The assumed rate of future increases in the per capita cost of health care
(the health care trend rate) was 11% for 1994, decreasing ratably to 6% in
the year 2001. Increasing the health care trend rates by one percent per
year would have an immaterial impact on the accumulated post-retirement
benefit obligation and the annual expense.
Post-employment benefits are primarily comprised of obligations to provide
medical and life insurance to employees on long term disability.
Post-employment benefits expense was not considered material in 1994, 1993
and 1992.
7. REINSURANCE
In December 1994 the Company ceded, on a modified coinsurance basis, 80% of
the variable annuity business written in 1994 to ITT Lyndon Life Insurance
Company, an affiliate. The ceded business includes both general and
separate account liabilities. As a result of the agreement ILA transferred
approximately $1,352 million in assets and liabilities to ITT Lyndon Life
Insurance Company. The financial impact of the cession was an increase of
approximately $15 million to net income and surplus.
In November 1994 the Company ceded, on a modified coinsurance basis, 30%
of the separate account variable annuity business distributed by Paine
Webber to Paine Webber Life Insurance Company (PWLIC). As a result of the
agreement ILA transferred approximately $24 million in assets and
liabilities to PWLIC. The financial impact of the cession was an increase
of approximately $765 thousand to net income and surplus.
In October 1994, the agreement, effective December 1990, which required
ILA to coinsure 90% of all existing and new business, excluding variable
annuity business. written by the Company to HLIC, was terminated. As a
result of the termination, ILA received approximately $430 million in
assets and liabilities from HLIC. The income statement impact of the
transaction was a decrease of approximately $15 million to net income and
surplus.
In November 1993, ILA acquired, through an assumption reinsurance
transaction, substantially all of the individual fixed and variable annuity
business of HLA. As a result of this transaction, the assets and
liabilities of the company increased approximately $1 billion. The impact
on consolidated net income was not significant.
8. COMMITMENTS AND CONTINGENCIES:
The Company has no material contingent liabilities, nor has the Company
committed any surplus funds for any contingent liabilities or arrangements.
The Company is involved in various legal actions which have arisen in the
course normal of its business. In the opinion of management, the
ultimate liability with respect to such lawsuits as well as other
contingencies is not considered to be material in relation to the results
of operations and financial position of the Company.
9. SUBSEQUENT EVENTS:
None.
<PAGE>
PART C
<PAGE>
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) All financial statements are included in Part A and Part B of the
Registration Statement.
(b) (1) Resolution of Board of Directors of the Company authorizing
the Separate Account is filed herewith as Exhibit 1.
(2) Not applicable.
(3) Exhibits (3), 6(a) and 6(b) are filed herewith.
(4) A copy of the form of Individual Flexible Premium Variable
Annuity contract is filed herewith.
(5) The form of Application is filed herewith.
(7) Not applicable.
(8) Not applicable.
(9) Not applicable
(10) Consent of Arthur Andersen is filed herewith
(11) Not applicable.
(12) Form of Share Purchase Agreement by the registrant and
Woodward Variable Annuity Fund is filed herewith.
(13) Not applicable.
(14) Not applicable.
<PAGE>
1
Item 25. Directors and Officers of the Depositor
Joan M. Andrew Vice President
Paul J.Boldischar,Jr. Senior Vice President
Francis I. Condon, Jr. Vice President
Peter W. Cummins Vice President
Ann M. deRaismes Vice President
James R. Dooley Vice President
Bruce D. Gardner General Counsel and Corporate Secretary
Joseph H. Gareau Executive Vice President and
Chief Investment Officer
Donald J. Gillette Vice President
Lois W. Grady Vice President
David A. Hall Senior Vice President and
Actuary
Joseph Kanarek Vice President
LaVern L. Kohlof Vice President and Secretary
Thomas M. Marra Senior Vice President and
Actuary
James G. Masica Vice President and Chief Actuary
Steven L. Mattiesen Vice President
David T. Schrandt Vice President, Treasuer and Controller
Lowndes A. Smith President and Chief Executive Officer
<PAGE>
2
Lizabeth H. Zlatkus Vice President
Donald J. Znamierowski Vice President
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford, CT 01604-2999.
Item 26. Persons Controlled By or Under Common Control with the Depositor or
Registrant
Exhibit 26 is incorporated by reference to Part C of the Registration
Statement filed on June 28, 1988.
Item 27. Number of Contract Owners as of ___________________, there were no
contract owners.
Item 28. Indemnification.
The directors and officers of HL and HESCO are covered under a
directors and officers liability insurance policy issued to ITT
Corporation and its subsidiaries. Such policy will reimburse the
Registrant for any payments that it shall make to directors and
officers pursuant to law and will, subject to certain exclusions
contained in the policy, further pay any other costs, charges and
expenses and settlements and judgments arising from any proceeding
involving any director or officer of the Registrant in his past or
present capacity as such, and for which he may be liable, except as to
any liabilities arising from acts that are deemed to be uninsurable.
The Registrant hereby undertakes that insofar as indemnification for
liabilities arising under the Securities Act of 1933 (the "Act") may
be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
<PAGE>
3
opinion of its counsel the matter has been settled by controlling
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.
Item 29. Principal Underwriters
(a) HESCO acts as principal underwriter for the following investment
companies:
Hartford Life Insurance Company -
DC Variable Account I
<PAGE>
5
Hartford Life Insurance Company -
Separate Account Two (DC Variable Account II)
Hartford Life Insurance Company -
Separate Account Two (Variable Account "A")
Hartford Life Insurance Company -
Separate Account Two (QP Variable Account)
Hartford Life Insurance Company -
Separate Account Two (NQ Variable Account)
Hartford Life Insurance Company -
Separate Account One
ITT Hartford Life and Annuity Insurance Company -
Separate Account Two (Director)
Hartford Money Market Fund, Inc.
ITT Hartford Life and Annuity Insurance Company -
Separate Account Three
ITT Hartford Life and Annuity Insurance Company -
Separate Account Five
(b) Directors and Officers of HESCO
Name and Principal Positions and Offices
Business Address With Underwriter
------------------ ---------------------
Donald E. Waggaman, Jr. Treasurer
Bruce D. Gardner Secretary
George R. Jay Controller
Lowndes A. Smith President
Item 30. Location of Accounts and Records
Accounts and records are maintained by ILA.
<PAGE>
Item 31. Management Services
None
Item 32. Undertakings
(a) The Registrant hereby undertakes to file a post-effective
amendment to this registration statement as frequently as is
necessary to ensure that the audited financial statements in the
registration statement are never more than 16 months old so long
as payments under the Variable Annuity Contracts may be
accepted.
(b) The Registrant hereby undertakes to include either (1) as part
of any application to purchase a Contract offered by the
Prospectus, a space that an applicant can check to request a
Statement of Additional Information, or (2) a post card or
similar written communication affixed to or included in the
Prospectus that the applicant can remove to send for a Statement
of Additional Information.
(c) The Registrant hereby undertakes to deliver any Statement of
Additional Information and any financial statements required to
be made available under this Form promptly upon written or oral
request.
The Registrant is relying on the no-action letter issued by the Division of
Investment Management to American Council of Life Insurance, Ref. No. IP-6-88,
November 28, 1988. The Registrant has complied with the four provisions of the
no-action letter.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets all the requirements for
effectiveness of this Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and duly caused this Registration Statement to be signed
on its behalf, in the City of Hartford, and State of Connecticut on this 27th
day of April, 1995.
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY -
SEPARATE ACCOUNT SIX
(Registrant)
*By:
---------------------------------------
Thomas M. Marra, Senior Vice President
ITT HARTFORD LIFE AND ANNUITY *By: /s/ Rodney J.Vessels
INSURANCE COMPANY ------------------------
(Depositor) Rodney J.Vessels
Attorney-in-Fact
*By:
---------------------------------------
Thomas M. Marra, Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons and in the capacities and on
the dates indicated.
Donald R. Frahm, Chairman and
Chief Executive Officer, Director *
Bruce D. Gardner, General Counsel
Corporate Secretary, Director *
Joseph H. Gareau, Executive Vice
President and Chief Investment
Officer, Director *
John P. Ginnetti, Senior Vice
President, Director *
Thomas M. Marra, Senior Vice By: /s/ Rodney J. Vessels
President, Director * -------------------------
Leonard E. Odell, Jr., Senior Rodney J. Vessels
Vice President, Director * Attorney-In-Fact
Lowndes A. Smith, President,
Chief Operating Officer, Dated: April 27, 1995
Director * ----------------------
Raymond P. Welnicki, Senior Vice
President, Director *
Lizabeth H. Zlatkus, Vice President
Director *
Donald J. Znamierowski, Vice President
Comptroller, Director *
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
CONSENT OF DIRECTORS
The undersigned, being all of the Directors of ITT Hartford Life and Annuity
Insurance Company, hereby consent to the following action, such action to have
the same force and effect as if taken at a meeting duly called and held for such
purpose.
ESTABLISHMENT OF SEPARATE ACCOUNTS
RESOLVED, that the Company is hereby authorized to establish a new separate
account designated Separate Account Six, herein referred to as the "Account."
RESOLVED, that the Officers of the Company are hereby authorized and directed to
take all actions necessary to:
1. Designate or redesignate the Account as such Officers deem appropriate;
2. Comply with applicable state and federal laws and regulations applicable to
the establishment and operation of the Account; including filing all
necessary registrations and application for exemptive relief under the
federal securities law.
3. Establish, from time to time, the terms and conditions pursuant to which
interests in the Account will be sold to contract owners;
4. Establish all procedures, standards and arrangements necessary or
appropriate for the operation of the Account.
/s/ Bruce D. Gardner /s/ Lowndes A. Smith
-------------------------- ---------------------------
Bruce D. Gardner Lowndes A. Smith
/s/ Joseph H. Gareau /s/ Lizabeth H. Zlatkus
-------------------------- ---------------------------
Joseph H. Gareau Lizabeth H. Zlatkus
/s/ Joseph Kanarek /s/ Donald J. Znamierowski
-------------------------- ---------------------------
Joseph Kanarek Donald J. Znamierowski
/s/ Thomas M. Marra
--------------------------
Thomas M. Marra
Dated: November 11, 1994
---------------
<PAGE>
PRINCIPAL UNDERWRITER AGREEMENT
THIS AGREEMENT, dated as of the _____________________ ,1995, made by and between
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("ILA" or the "Sponsor"), a
corporation organized and existing under the laws of the State of Connecticut,
and HARTFORD EQUITY SALES COMPANY, INC. ("HESCO"), a corporation organized and
existing under the laws of the State of Connecticut,
WITNESSETH:
WHEREAS, the Board of Directors of ILA has made provision for the establishment
of a separate account within ILA in accordance with the laws of the State of
Connecticut, which separate account was organized and is established and
registered as a unit trust type investment company with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended, and
which is designated Separate Account Six of ITT Hartford Life and Annuity
Insurance Company (referred to as the "Unit Trust"); and
WHEREAS, HESCO offers to the public a certain Group Flexible Premium Variable
Annuity Insurance Policy (the "Policy") issued by ILA with respect to the Unit
Trust units of interest thereunder which are registered under the Securities Act
of 1933, as amended; and
WHEREAS, HESCO has previously agreed to act as distributor in connection with
offers and sales of the Policy under the terms and conditions set forth in this
Distribution Agreement.
NOW THEREFORE, in consideration of the mutual agreements made herein, the
Sponsor and HESCO agree as follows:
I.
HESCO'S DUTIES
1. HESCO, as principal underwriter for the Policy, will use its best efforts
to effect offers and sales of the Policy through broker-dealers that are
members of the National Association of Securities Dealers, Inc. and whose
registered representatives are duly licensed as insurance agents of ILA.
HESCO is responsible for compliance with all applicable requirements of the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, and the Investment Company Act of 1940, as amended, and the rules
and regulations relating to the sales and distribution of the Policy, the
need for which arises out of its duties as principal underwriter of said
Policy and relating to the creation of the Unit Trust.
2. HESCO agrees that it will not use any prospectus, sales literature, or any
other printed matter or material or offer for sale or sell the Policy if
any of the foregoing in any way represent the duties, obligations, or
liabilities of ILA as being greater than, or different
<PAGE>
from, such duties, obligations and liabilities as are set forth in this
Agreement, as it may be amended from time to time.
3. HESCO agrees that it will utilize the then currently effective prospectus
relating to the Unit Trust's Policies in connection with its selling
efforts.
As to the other types of sales materials, HESCO agrees that it will use
only sales materials which conform to the requirements of federal and state
insurance laws and regulations and which have been filed, where necessary,
with the appropriate regulatory authorities.
4. HESCO agrees that it or its duly designed agent shall maintain records of
the name and address of, and the securities issued by the Unit Trust and
held by, every holder of any security issued pursuant to this Agreement, as
required by the Section 26(a)(4) of the Investment Company Act of 1940, as
amended.
5. HESCO's services pursuant to this Agreement shall not be deemed to be
exclusive, and it may render similar services and act as an underwriter,
distributor, or dealer for other investment companies in the offering of
their shares.
6. In the absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations and duties hereunder on the part of
HESCO, HESCO shall not be subject to liability under a Policy for any act
or omission in the course, or connected with, rendering services hereunder.
II.
1. The Unit Trust reserves the right at any time to suspend or limit the
public offering of the Policies upon 30 days' written notice to HESCO,
except where the notice period may be shortened because of legal action
taken by any regulatory agency.
2. The Unit Trust agrees to advice HESCO immediately:
(a) Of any request by the Securities and Exchange Commission for amendment
of its Securities Act registration statement or for additional
information;
(b) Of the issuance by the Securities and Exchange Commission of any stop
order
2
<PAGE>
suspending the effectiveness of the Securities Act registration
statement relating to units of interest issued with respect to the
Unit Trust or of the initiation of any proceedings for that purpose;
(c) Of the happening of any material event, if known, which makes untrue
any statement in said Securities Act registration statement or which
requires change therein in order to make any statement therein not
misleading.
ILA will furnish to HESCO such information with respect to the Unit Trust
and the Policies in such from and signed by such of its officers and
directors and HESCO may reasonable request and will warrant that the
statements therein contained when so signed will be trust and correct. ILA
will also furnish, from time to time, such additional information regarding
the Unit Trust's financial condition as HESCO may reasonably request.
III.
COMPENSATION
For providing the principal underwriting functions on behalf of the Unit Trust,
HESCO shall be entitled to receive compensation as agreed upon from time to time
by ILA and HESCO.
IV.
RESIGNATION AND REMOVAL OF PRINCIPAL UNDERWRITER
HESCO may resign as a Principal Underwriter hereunder, upon 120 days' prior
written notice to ILA. However, such registration shall not become effective
until either the Unit Trust has been completely liquidated and the proceeds of
the liquidation distributed through ILA to the Policy Owners or a successor
Principal Underwriter has been designated and has accepted its duties.
V.
MISCELLANEOUS
1. This Agreement may not be assigned by any of the parties hereto without the
written consent of the other party.
3
<PAGE>
2. All notices and other communications provided for hereunder shall be in
writing and shall be delivered by hand or mailed first class, postage
prepaid, addressed as follows:
(a) If to ILA - ITT Hartford Life and Annuity Insurance Company, Inc.
P.O. Box 2999, Hartford, Connecticut 06104.
(b) If to HESCO - Hartford Equity Sales Company, Inc., P.O. Box 2999,
Hartford, Connecticut 06104.
or to such other address as HESCO or the Sponsor shall designate by written
notice to the other.
3. This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original and all of which shall be deemed one
instrument, and an executed copy of this Agreement and all amendments
hereto shall be kept on file by the Sponsor and shall be open to inspection
any time during the business hours of the Sponsor.
4. This Agreement shall inure to the benefit of and be binding upon the
successor of the parties hereto.
5. This Agreement shall be construed and governed by and according to the laws
of the State of Connecticut.
6. This Agreement may be amended from time to time by the mutual agreement and
consent of the parties hereto.
7. (a) This Agreement shall become effective 1995 and shall
continue in effect for a period of two years from that date and,
unless sooner terminated in accordance with 7(b) below, shall continue
in effect from year to year thereafter provided that its continuance
is specifically approved at least annually by a majority of the
members of the Board of Directors of ILA.
(b) This Agreement (1) may be terminated at any time, without the payment
of any penalty, either by a vote of a majority of the members of the
Board of Directors of ILA on 60 days' prior written notice to HESCO;
(2) shall immediately terminate in the event of its assignment and (3)
may be terminated by HESCO on 60 days' prior written notice to ILA,
but such termination will not be effective until ILA shall have
4
<PAGE>
policy with one or more persons to act as principal underwriter of the
Policies. HESCO hereby agrees that it will continue to act as
principal underwriter until its successor or successors assume such
undertaking.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
(Seal) ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
BY:
------------------------------
Thomas M. Marra
Senior Vice President
Attest: HARTFORD EQUITY SALES COMPANY, INC.
BY:
- ------------------------------ -------------------------------
Lynda Godkin Peter Cummins
Secretary Vice President
5
<PAGE>
INDIVIDUAL FLEXIBLE PREMIUM
VARIABLE ANNUITY CONTRACT
ITT Hartford Life and Annuity Insurance Company
P.O. Box 2999
Hartford, Connecticut 06104-2999
(a stock life insurance company, herein called the Company)
Unless otherwise directed by the Contract Owner, the Company agrees to pay the
named Annuitant, on the Annuity Commencement Date, if the Annuitant and Contract
Owner are then living, the first of a series of annuity payments the frequency,
period and dollar amounts of which shall be determined on the basis as set forth
herein, in accordance with the Annuity Option selected.
This contract is issued in consideration of the payment of the initial premium
payment.
This contract is subject to the laws of the jurisdiction where it is delivered.
The Contract Specifications on Page 3 and the conditions and provisions on this
and the following pages are part of the contract.
RIGHT TO EXAMINE CONTRACT
We want you to be satisfied with the contract you have purchased. We urge you to
closely examine its provisions. If for any reason you are not satisfied with
your purchase you may surrender the contract by returning the contract within
ten days after you receive it. A written request for cancellation must accompany
the contract. In such event, we will pay to the Contract Owner an amount equal
to the sum of (i) the difference between the premiums paid and the amounts
allocated to any Account under the contract and (ii) the Contract Value on the
date of surrender. The Contract Owner bears only the investment risk during the
period prior to the Company's receipt of request for cancellation.
Signed for the Company
/s/ Bruce D. Gardner /s/ Lowndes A. Smith
BRUCE D. GARDNER, SECRETARY LOWNDES A. SMITH, PRESIDENT
PREMIUM PAYMENTS ARE FLEXIBLE AS DESCRIBED HEREIN.
NONPARTICIPATING
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SUB-ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED
DOLLAR AMOUNT. DETAILS OF THE VARIABLE PROVISIONS ARE DESCRIBED UNDER VALUATION
PROVISIONS, PAGES 9 AND 10.
[ITT HARTFORD LOGO]
<PAGE>
TABLE OF CONTENTS
Page
Contract Specifications 3
Definition of Certain Terms 4
Premium Payments Provision 5
Contract Control Provisions 6
General Provisions 7
Valuation Provisions 9
Termination Provisions 10
Settlement Provisions 12
Annuity Tables 15
Page 2
<PAGE>
CONTRACT SPECIFICATIONS
CONTRACT NUMBER [SPECIMEN] CONTRACT DATE [FEBRUARY 8, 1994]
NAME OF ANNUITANT [JAMES SCOTT] DATE OF ISSUE [FEBRUARY 8, 1994]
AGE OF ANNUITANT [35] ANNUITY COMMENCEMENT
DATE [JANUARY 1, 2024]
SEX OF ANNUITANT [MALE] INITIAL PREMIUM PAYMENT [$20,000]
MINIMUM SUBSEQUENT
PAYMENT 500
MINIMUM FIXED ACCOUNT
INTEREST RATE 3%
CONTINGENT
ANNUITANT [PAUL SCOTT]
DESIGNATED
BENEFICIARY [ANN SCOTT] CONTRACT OWNER [SAME]
(IF OTHER THAN ANNUITANT)
- --------------------------------------------------------------------------------
DESCRIPTION OF BENEFITS
INDIVIDUAL FLEXIBLE VARIABLE ANNUITY CONTRACT
ANNUAL WITHDRAWAL AMOUNT: CONTRACT YEARS 1-7
------------------
10% OF PREMIUM PAYMENTS
AFTER CONTRACT YEAR 7
---------------------
THE GREATER OF:
100% OF THE CONTRACT VALUE REDUCED BY THE
TOTAL OF ANY PREMIUM PAYMENTS MADE DURING
THE 7 YEARS PRIOR TO WITHDRAWAL; OR
10% OF PREMIUM PAYMENTS MADE DURING THE 7
YEARS PRIOR TO WITHDRAWAL.
ANNUAL CONTRACT MAINTENANCE FEE: $0 IF THE CONTRACT VALUE IS $50,000 OR MORE
ON THE CONTRACT ANNIVERSARY.
$30 IF THE CONTRACT VALUE IS LESS THAN
$50,000 ON THE CONTRACT ANNIVERSARY.
MORTALITY AND EXPENSE RISK CHARGE: 1.25% PER ANNUM OF THE AVERAGE DAILY
CONTRACT VALUE.
ADMINISTRATION CHARGE: .15% PER ANNUM OF THE AVERAGE DAILY CONTRACT
VALUE. THIS CHARGE WILL NOT BE ASSESSED
AGAINST FIXED ACCOUNT VALUES.
Page 3
<PAGE>
CONTINGENT DEFERRED SALES CHARGES:
SUBJECT TO THE ANNUAL WITHDRAWAL AMOUNT, SURRENDERS OF CONTRACT VALUES
ATTRIBUTABLE TO PREMIUM PAYMENTS MAY BE SUBJECT TO A CONTINGENT DEFERRED SALES
CHARGE ("CHARGE"). THE LENGTH OF TIME FROM RECEIPT OF THE PREMIUM PAYMENT TO THE
TIME OF SURRENDER DETERMINES THE CHARGES.
DURING THE FIRST SEVEN CONTRACT YEARS, ALL SURRENDERS WILL BE FIRST FROM PREMIUM
PAYMENTS AND THEN FROM EARNINGS. IF AN AMOUNT EQUAL TO ALL PREMIUM PAYMENTS HAS
BEEN SURRENDERED, A CHARGE WILL NOT BE ASSESSED AGAINST THE SURRENDER OF THE
REMAINING CONTRACT VALUE.
AFTER THE SEVENTH CONTRACT YEAR, ALL SURRENDERS WILL FIRST BE FROM EARNINGS AND
THEN FROM PREMIUM PAYMENTS. A CHARGE WILL NOT BE ASSESSED AGAINST THE SURRENDER
OF EARNINGS. IF AN AMOUNT EQUAL TO ALL EARNINGS HAS BEEN SURRENDERED, A CHARGE
WILL NOT BE ASSESSED AGAINST PREMIUM PAYMENTS RECEIVED MORE THAN SEVEN YEARS
PRIOR TO SURRENDER, BUT WILL BE ASSESSED AGAINST PREMIUM PAYMENTS RECEIVED LESS
THAN SEVEN YEARS PRIOR TO SURRENDER. FOR THIS PURPOSE, PREMIUM PAYMENTS WILL BE
DEEMED TO BE SURRENDERED IN THE ORDER IN WHICH THEY WERE RECEIVED.
THE CHARGE IS A PERCENTAGE OF THE AMOUNT SURRENDERED (NOT TO EXCEED THE
AGGREGATE AMOUNT OF THE PREMIUM PAYMENTS MADE) AND EQUALS:
LENGTH OF TIME FROM PREMIUM PAYMENT
CHARGE (NUMBER OF YEARS)
6% 1
6% 2
5% 3
5% 4
4% 5
3% 6
2% 7
0% 8 AND THEREAFTER
NO CONTINGENT DEFERRED SALES CHARGES WILL BE ASSESSED IN THE EVENT THE CONTRACT
TERMINATES DUE TO THE DEATH OF THE ANNUITANT OR CONTRACT OWNER (AS APPLICABLE),
OR IF CONTRACT VALUES ARE APPLIED TO AN ANNUITY OPTION PROVIDED FOR UNDER THIS
CONTRACT (PROVIDED HOWEVER, ANY SURRENDER OUT OF OPTION 4 WILL BE SUBJECT TO
CONTINGENT DEFERRED SALES CHARGES, IF APPLICABLE) OR UPON THE EXERCISE OF THE
ANNUAL WITHDRAWAL AMOUNT.
Page 3 (Continued)
<PAGE>
FUND OPTIONS
THE INITIAL PREMIUM PAYMENT WILL BE ALLOCATED AS SPECIFIED IN YOUR APPLICATION.
THE SAME ALLOCATION WILL BE MADE FOR SUBSEQUENT PREMIUM PAYMENTS UNLESS YOU
CHANGE THE ALLOCATION OR, AT THE TIME OF A PREMIUM PAYMENT, YOU INSTRUCT US TO
ALLOCATE THAT PAYMENT DIFFERENTLY.
SEPARATE ACCOUNT: PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT TWO
- -----------------
SUB-ACCOUNT BASED ON:
PCM VOYAGER FUND PCM VOYAGER FUND
PCM GLOBAL GROWTH FUND PCM GLOBAL GROWTH FUND
PCM GLOBAL ASSET ALLOCATION FUND PCM GLOBAL ASSET ALLOCATION FUND
PCM GROWTH & INCOME FUND PCM GROWTH & INCOME FUND
PCM UTILITIES GROWTH & INCOME FUND PCM UTILITIES GROWTH & INCOME FUND
PCM HIGH YIELD FUND PCM HIGH YIELD FUND
PCM DIVERSIFIED INCOME FUND PCM DIVERSIFIED INCOME FUND
PCM U.S. GOVERNMENT & HIGH PCM U.S. GOVERNMENT &
QUALITY BOND FUND HIGH QUALITY BOND FUND
PCM MONEY MARKET FUND PCM MONEY MARKET FUND
OR OTHER FUNDS AS MAY BE MADE AVAILABLE FROM TIME TO TIME.
Page 3 (Continued)
<PAGE>
DEFINITION OF ACCOUNT - Any of the Sub-Accounts or the Fixed Account.
CERTAIN TERMS
ACCUMULATION UNIT - An accounting unit of measure used to
calculate the value of a Sub-Account of this contract before
annuity payments begin.
ADMINISTRATIVE OFFICE OF THE COMPANY - Currently located at
200 Hopmeadow St., Simsbury, Ct. All correspondence concerning
this contract should be sent to our mailing address at P.O.
Box 2999, Attn: Individual Annuity Operations, Hartford, CT
06104-2999.
ANNUAL WITHDRAWAL AMOUNT - The amount that can be withdrawn in
any Contract Year prior to incurring surrender charges.
ANNUITANT - The person on whose life this contract is issued.
ANNUITY COMMENCEMENT DATE - The date on which annuity payments
are to begin as described under Settlement Provisions in this
contract.
ANNUITY UNIT - An accounting unit of measure used to calculate
the amount of annuity payments under the variable annuity
option.
BENEFICIARY - The person entitled to receive benefits as per
the terms of the contract in case of the death of the Contract
Owner or Annuitant, as applicable.
COMPANY - The ITT Hartford Life and Annuity Insurance Company.
CONTINGENT ANNUITANT - The person so designated by the
Contract Owner who, upon the Annuitant's death, prior to the
Annuity Commencement Date, becomes the Annuitant.
CONTRACT ANNIVERSARY - An anniversary of the Contract Date.
Similarly, Contract Years are measured from the Contract Date.
The Contract Date is shown on Page 3.
CONTRACT MAINTENANCE FEE - An amount which is deducted from
the value of the contract at the end of the Contract Year or
on the date of surrender of this contract, if earlier.
CONTRACT OWNER - The owner(s) of the contract.
CONTRACT VALUE - The value of the Sub-Accounts plus the value
of the Fixed Account on any day.
DATE OF ISSUE - The date on which an Account is established
for the Contract Owner by the Company.
DOLLAR COST AVERAGING - Contract Owner initiated systematic
transfers from one or more Accounts to any other available
Sub-Accounts.
DUE PROOF OF DEATH - A certified copy of the death
certificate, an order of a court of competent jurisdiction, a
statement from a physician who attended the deceased, or any
other proof acceptable to the Company.
FIXED ACCOUNT - Part of the Company's General Account to which
all or a portion of the Contract Value may be allocated.
Page 4
<PAGE>
DEFINITION OF FUND(S) - Currently the Funds specified on Page 3 or any other
CERTAIN TERMS Fund(s) that may be added by the Company.
(CONTINUED)
GENERAL ACCOUNT - All assets of the Company other than those
allocated to the Separate Accounts of the Company.
MAXIMUM ANNIVERSARY VALUE - A value used in determining the
death benefit. It is based on a series of calculations of
Account Values on Contract Anniversaries, premium payments and
partial surrenders.
As of the date of death, the Company will calculate an
Anniversary Value for each Contract Anniversary prior to the
deceased's attained age 81. The Anniversary Value is equal to
the Account Value on a Contract Anniversary, increased by the
dollar amount of any premium payments made since that
anniversary and reduced by the dollar amount of any partial
surrenders since that anniversary. The Maximum Anniversary
Value is equal to the greatest Anniversary Value attained from
this series of calculations.
PREMIUM TAX - The amount of tax, if any, charged by a federal,
state or municipal entity on premium payments or Contract
Values.
SEPARATE ACCOUNT - An Account established by the Company to
separate the assets funding the variable benefits for the
class of contracts to which this contract belongs from the
other assets of the Company. The assets in the Separate
Account are not chargeable with liabilities arising out of any
other business the Company may conduct. The Separate Account
and the Funds, which are the underlying securities of the
Separate Account, are listed on the Contract Specifications on
Page 3 of this contract.
SUB-ACCOUNT - The subdivisions of the Separate Account which
are used to determine how the Contract Owner's Account is
allocated between the Funds.
TERMINATION VALUE - The value of the contract upon
termination, as described in the section of the contract
captioned "Termination Provisions."
VALUATION DAY - Every day the New York Stock Exchange is open
for trading.
PREMIUM PREMIUM PAYMENTS
PAYMENTS
Premium payments are payable at the Administrative Office of
the Company. Payments may be made by check payable to
ITT Hartford Life and Annuity Insurance Company or by any
other method which the Company deems acceptable.
The Initial Premium Payment is shown on Page 3. This is a
flexible premium annuity. Additional payments may be accepted
by the Company. The additional payments must be at least equal
to the minimum subsequent premium payment shown on Page 3.
ALLOCATION OF PREMIUM PAYMENTS
The Contract Owner shall specify that portion of any premium
payment to be allocated to each Account, provided, however,
that the minimum allocation to any Account may not be less
than the Company's minimum amount then in effect.
Page 5
<PAGE>
PREMIUM The Contract Owner may transfer Contract Values held in the
PAYMENTS Accounts into other Accounts; however, the Company reserves
(CONTINUED) the right to limit the number of transfers to no more
frequently than 12 per Contract Year with no two transfers
being made on consecutive Valuation Days. Subject to the
following two paragraphs, any such limitations will apply to
all Contract Owners.
The right to reallocate Contract Values between the Accounts
is subject to modification if the Company determines, in its
sole opinion, that the exercise of that right by one or more
Contract Owners is, or would be, to the disadvantage of other
Contract Owners. Any modification could be applied to
transfers to or from some or all of the Accounts and could
include, but not be limited to, the requirement of a minimum
time period between each transfer, not accepting transfer
requests of an agent acting under a power of attorney on
behalf of more than one Contract Owner, or limiting the dollar
amount that may be transferred between the Accounts by a
Contract Owner at any one time. Such restrictions may be
applied in any manner reasonably designed to prevent any use
of the transfer right which is considered by the Company to be
to the disadvantage of other Contract Owners.
The maximum amount transferable from the Fixed Account during
any Contract Year is the greater of 30% of the Fixed Account
balance as of the last Contract Anniversary or the greatest of
any prior transfer from the Fixed Account. This limitation
does not apply to Dollar Cost Averaging. However, if any
interest rate is renewed at a rate at least one percentage
point less than the previous rate, the Contract Owner may
elect to transfer up to 100% of the Funds receiving that
reduced rate within 60 days of notification of the interest
rate decrease. Transfers may not be made from the Sub-Accounts
into the Fixed Account for the six-month period following any
transfer from the Fixed Account into the other Sub-Accounts.
The Company reserves the right to defer transfers from the
Fixed Account for up to six months from the date of request.
CONTRACT ANNUITANT, CONTINGENT ANNUITANT, CONTRACT OWNER
CONTROL
PROVISIONS The Annuitant may not be changed.
The designations of Contract Owner and Contingent Annuitant
will remain in effect until changed by the Contract Owner.
Changes in the designation of the Contract Owner may be made
during the lifetime of the Annuitant by written notice to the
Company. Changes in the designation of Contingent Annuitant
may be made at any time prior to the Annuity Commencement Date
by written notice to the Company. Notwithstanding the
foregoing, if no Contingent Annuitant has been named and the
Contract Owner/Annuitant's spouse is the Beneficiary, it will
be assumed that the Contract Owner/Annuitant's spouse is the
Contingent Annuitant.
The Contract Owner has the sole power to exercise all the
rights, options and privileges granted by this contract or
permitted by the Company and to agree with the Company to any
change in or amendment to the contract. The rights of the
Contract Owner shall be subject to the rights of any assignee
of record with the Company and of any irrevocably designated
Beneficiary. In the case of joint Contract Owners, each
Contract Owner alone may exercise all rights, options and
privileges, except with respect to the Termination and Partial
Surrender/Annual Withdrawal Amount Provisions and change of
ownership.
Page 6
<PAGE>
CONTRACT BENEFICIARY
CONTROL
PROVISIONS The Designated Beneficiary will remain in effect until
(CONTINUED) changed by the Contract Owner. Changes in the Designated
Beneficiary may be made during the lifetime of the
Annuitant by written notice to the Administrative Office of
the Company. If the Designated Beneficiary has been designated
irrevocably, however, such designation cannot be changed or
revoked without such Beneficiary's written consent. Upon
receipt of such notice and written consent, if required, at
the Administrative Office of the Company, the new designation
will take effect as of the date the notice is signed, whether
or not the Annuitant or Contract Owner is alive at the time of
receipt of such notice. The change will be subject to any
payments made or other action taken by the Company before the
receipt of the notice.
In the event of the death of the Annuitant when there is no
surviving Contingent Annuitant, the Beneficiary will be as
follows. If the death of the Annuitant occurs prior to the
Annuity Commencement Date, the Beneficiary shall be the
surviving Contract Owner, or joint Contract Owners, if
applicable, notwithstanding that the Designated Beneficiary
may be different. Otherwise, the Beneficiary will be the
Designated Beneficiary then in effect. If the Annuitant is the
sole Contract Owner and there is no Designated Beneficiary in
effect, the Annuitant's estate will be the Beneficiary.
In the event of the death of a Contract Owner prior to the
Annuity Commencement Date, the Beneficiary will be as follows.
If the owner was the sole Contract Owner, the Beneficiary
shall be the Designated Beneficiary then in effect. If no
Beneficiary designation is in effect or if the Designated
Beneficiary has predeceased the Contract Owner, the Contract
Owner's estate shall be the Beneficiary. At the first death of
a joint Contract Owner prior to the Annuity Commencement Date,
the Beneficiary shall be the surviving Contract Owner
notwithstanding that the Designated Beneficiary may be
different.
GENERAL THE CONTRACT
PROVISIONS
This contract constitutes the entire contract.
MODIFICATION
No modification of this contract shall be made except over the
signature of the President, a Vice President, a Secretary or
an Assistant Secretary of the Company.
The Company reserves the right to modify the contract, but
only if such modification: (i) is necessary to make the
contract or the Separate Account comply with any law or
regulation issued by a governmental agency to which the
Company is subject; (ii) is necessary to assure continued
qualification of the contract under the Internal Revenue Code
or other federal or state laws relating to retirement
annuities or annuity contracts; (iii) is necessary to reflect
a change in the operation of the Separate Account or the Sub-
Account(s); (iv) provides additional Account options; or (v)
withdraws Account options. In the event of any such
modification, the Company will provide notice to the Contract
Owner, or to the payee(s) during the annuity period. The
Company may also make appropriate endorsement in the Contract
to reflect such modification.
Page 7
<PAGE>
GENERAL MINIMUM VALUE STATEMENT
PROVISIONS
(CONTINUED) Any Termination Values, death benefits or settlement
provisions available under this contract equal or exceed those
required by the state in which the contract is delivered.
NON-PARTICIPATION
This contract does not share in the surplus earnings of the
Company. That portion of the assets of the Separate Account
equal to the reserves and other contract liabilities of the
Separate Account shall not be chargeable with liabilities
arising out of any other business the Company may conduct.
MISSTATEMENT OF AGE AND SEX
If the age or sex of the Annuitant has been misstated, the
amount of the annuity payable by the Company shall be that
provided by that portion of the amounts allocated to effect
such annuity on the basis of the corrected information without
changing the date of the first payment of such annuity. Any
underpayments by the Company shall be made up immediately and
any overpayments shall be charged against future amounts
becoming payable.
If the age of the Annuitant or Contract Owner has been
misstated, the amount of any death benefit payable shall be
determined based upon the correct age of the Annuitant or
Contract Owner.
INCONTESTABILITY
We cannot contest this Contract.
REPORTS TO THE CONTRACT OWNER
There shall be furnished to each Contract Owner copies of any
shareholder reports of the Funds and of any other notices,
reports or documents required by law to be delivered to
Contract Owners. Annually, a statement of the Contract Value
is sent to the Contract Owner.
VOTING RIGHTS
The Company shall notify the Contract Owner of any Fund
shareholder's meetings at which the shares held for the
Contract Owner's Account may be voted and shall also send
proxy materials and a form of instruction by means of which
the Contract Owner can instruct the Company with respect to
the voting of the shares held for the Contract Owner's
Account. In connection with the voting of Fund shares held by
it, the Company shall arrange for the handling and tallying of
proxies received from Contract Owners. The Company will vote
the Fund shares held by it in accordance with the instructions
received from the Contract Owners having the right to give
voting instructions. If a Contract Owner desires to attend any
meeting which shares held for the Contract Owner's benefit may
be voted, the Contract Owner may request the Company to
furnish a proxy or otherwise arrange for the exercise of
voting rights with respect to the Fund shares held for such
Contract Owner's Account.
Page 8
<PAGE>
GENERAL In the event that the Contract Owner gives no
PROVISIONS instructions or leaves the manner of voting
(CONTINUED) discretionary, the Company will vote such shares of the
appropriate Fund in the same proportion as shares of that Fund
for which instructions have been received. Also, the Company
will vote the Fund Shares in this proportionate manner which
are held by the Company for its own Account. During the
annuity period under a contract the number of votes will
decrease as the assets held to fund annuity benefits decrease.
SUBSTITUTION
The Company reserves the right to substitute the shares of any
other registered investment company for the shares of any Fund
already purchased or to be purchased in the future by the
Separate Account provided that the substitution has been
approved by the Securities and Exchange Commission.
CHANGE IN THE OPERATION OF THE SEPARATE ACCOUNT
At the Company's election and subject to any necessary vote by
persons having the right to give instructions with respect to
the voting of the Fund shares held by the Sub-Accounts, the
Variable Account may be operated as a management company under
the Investment Company Act of 1940 or it may be deregistered
under the Investment Company Act of 1940 in the event
registration is no longer required. Deregistration of the
Variable Account requires an order by the Securities and
Exchange Commission.
PROOF OF SURVIVAL
The payment of any annuity benefit will be subject to evidence
that the Annuitant is alive on the date such payment is
otherwise due.
VALUATION NET PREMIUM PAYMENTS
PROVISIONS
The net premium payment is equal to the premium payment minus
any applicable Premium Taxes. The net premium payment is
applied to provide Fixed Account values or Sub-Account
Accumulation Units with respect to the Sub-Account(s) selected
by the Contract Owner.
The number of Accumulation Units credited to each Sub-Account
is determined by dividing the net premium payment allocated to
a Sub-Account by the dollar value of one Accumulation Unit for
such Sub-Account, next computed after the receipt of a premium
payment by the Company. The number of Accumulation Units so
determined will not be affected by any subsequent change in
the value of such Accumulation Units. The Accumulation Unit
value in any Sub-Account may increase or decrease from day to
day as described below.
The Company will determine the value of the Fixed Account by
crediting interest to amounts allocated to the Fixed Account.
The minimum Fixed Account interest rate is the rate shown on
Page 3, compounded annually. The Company, at its discretion,
may credit interest rates greater than the minimum Fixed
Account interest rate.
Page 9
<PAGE>
VALUATION NET INVESTMENT FACTOR
PROVISIONS
(CONTINUED) The net investment factor for each of the Sub-Accounts is
equal to the net asset value per share of the corresponding
Fund at the end of the valuation period (plus the per share
amount of any unpaid dividends or capital gains by that Fund)
divided by the net asset value per share of the corresponding
Fund at the beginning of the valuation period and subtracting
from that amount the mortality and expense risk charge and the
administration charge shown on Page 3. The General Account net
investment factor is guaranteed to be equal to the Minimum
Fixed Account Interest Rate shown on Page 3.
ACCUMULATION UNIT VALUE
The Accumulation Unit Value for each Sub-Account will vary to
reflect the investment experience of the applicable Fund and
will be determined on each Valuation Day by multiplying the
Accumulation Unit Value of the particular Sub-Account on the
preceding Valuation Day by the net investment factor for that
Sub-Account for the valuation period then ended. The value of
the Sub-Account on each Valuation Day is then determined by
multiplying the number of Accumulation Units in that Sub-
Account by the Accumulation Unit Value on that Valuation Day.
ANNUITY UNIT VALUE
The value of an Annuity Unit for each Sub-Account of the
Separate Account will vary to reflect the investment
experience of the applicable Funds and will be determined by
multiplying the value of the Annuity Unit for that Sub-Account
on the preceding day by the product of (a) the net investment
factor for that Sub-Account for the day for which the Annuity
Unit value is being calculated, and (b) 0.999866, which is a
factor that neutralizes an assumed interest rate of 5%.
CONTRACT MAINTENANCE FEE
During each year that this contract is in force prior to the
Annuity Commencement Date, a fee will be deducted from the
contract at the end of the Contract Year or on the date of
surrender of this contract, if earlier. The fee will be
charged against the Contract Value by reducing the Fixed
Account value and, with respect to the Sub-Accounts, the
number of Accumulation Units held on that date on a pro-rata
basis with respect to each active Account.
The number of Accumulation Units deducted from the Sub-Account
is determined by dividing the pro-rata portion of the Contract
Maintenance Fee applicable to that Sub-Account, by the value
of an Accumulation Unit for the Sub-Account at the end of the
Contract Year, or on the date of surrender, as applicable.
TERMINATION TERMINATION PRIOR TO THE ANNUITY COMMENCEMENT DATE
PROVISIONS
FULL SURRENDER
At any time prior to the Annuity Commencement Date, the
Contract Owner has the right to terminate the contract by
submitting a written request to the Administrative Office of
the Company. In such event, the Termination Value of the
contract may be taken in the form of a cash settlement.
Page 10
<PAGE>
TERMINATION The Termination Value of the contract is equal
PROVISIONS to the Contract Value less:
(CONTINUED)
(a) any applicable Premium Taxes not previously deducted;
(b) the Contract Maintenance Fee as specified on Page 3; and
(c) any applicable contingent deferred sales charges as
specified on Page 3.
The Termination Value provided by the contract is not less
than the minimum values required by the insurance laws of the
state in which this contract is issued.
PARTIAL SURRENDERS/ANNUAL WITHDRAWAL AMOUNT
The Contract Owner may request, in writing, a partial
surrender of Contract Values at any time prior to the Annuity
Commencement Date provided the Contract Value remaining after
the surrender is at least equal to the Company's minimum
amount rules then in effect. If the remaining Contract Value
following such surrender is less than the Company's minimum
amount rules, the Company will terminate the contract and pay
the Termination Value.
The contingent deferred sales charge will be assessed against
any Contract Values surrendered as described on Page 3.
However, on a noncumulative basis, the Contract Owner may make
partial surrenders during any Contract Year, up to the Annual
Withdrawal Amount shown on Page 3 and the contingent deferred
sales charge will not be assessed against such amounts.
Surrender of Contract Values in excess of the Withdrawal
Amount and additional surrenders made in any Contract Year
will be subject to the contingent deferred sales charge, as
described on Page 3, if applicable.
For Federal tax purposes, any surrenders will be deemed to be
first from earnings, to the extent that they exist, and then
from the premium payments.
TERMINATION AFTER THE ANNUITY COMMENCEMENT DATE
This contract may not be surrendered for its Termination Value
after the commencement of annuity payments, except with
respect to Options Four and Five.
PAYMENT ON SURRENDER - DEFERRAL OF PAYMENT
Payment on any request for surrender will be made as soon as
possible and, with respect to the Contract Values in the Sub-
Accounts, no later than seven days after the written request
is received by the Company. However, such payment may be
subject to postponement:
(a) for any period during which the New York Stock Exchange
is closed or during which trading on the New York Stock
Exchange is restricted;
(b) for any period during which an emergency exists as a
result of which (i) disposal of the securities held in
the Sub-Accounts is not reasonably practicable, or (ii)
it is not reasonably practicable for the value of the net
assets of the Separate Account to be fairly determined;
and
(c) for such other periods as the Securities and Exchange
Commission may, by order, permit for the protection of
the Contract Owners. The conditions under which trading
shall be deemed to be restricted or any emergency shall
be deemed to exist shall be determined by rules and
regulations of the Securities and Exchange Commission.
Page 11
<PAGE>
TERMINATION The Company may defer payment of any amounts from the Fixed
PROVISIONS Account for up to six months from the date of the request to
(CONTINUED) surrender. If the Company defers payment for more than 30 days,
the Company will pay interest of at least 3% per annum on the
amount deferred.
DEATH BENEFIT
If the Annuitant dies before the Annuity Commencement Date and
there is no designated Contingent Annuitant surviving, or if
the Contract Owner dies before the Annuity Commencement Date,
the Death Benefit will be payable as determined under the
Contract Control Provisions. The Death Benefit is calculated
as of the date the Company receives written notification of
Due Proof of Death at the Administrative Office of the
Company.
The Death Benefit will be the greatest of:
(a) The Contract Value on the date of receipt of Due Proof of
Death at the Administrative Office of the Company; or
(b) The Maximum Anniversary Value as described on Page 5 of
this Contract; or
(c) 100% of all premium payments made under the Contract,
reduced by the dollar amount of any partial surrenders
since the Date of Issue.
The Death Benefit may be taken in one sum or under any of the
settlement options then being offered by the Company provided,
however, that, in the event of a Contract Owner's death, any
settlement option must provide that any amount payable as a
death benefit will commence upon notification of Due Proof of
Death and be completed within five years of the date of death
or, if the benefit is payable over a period not extending
beyond the life expectancy of the Beneficiary or over the life
of the Beneficiary, such distribution must commence within one
year of the date of death. Notwithstanding the foregoing, in
the event of the Contract Owner's death where the sole
Beneficiary is the spouse of the Contract Owner and the
Annuitant or Contingent Annuitant is living, such spouse may
elect, in lieu of receiving the death benefit, to be treated
as the Contract Owner.
SETTLEMENT When payment is taken in one sum, payment will be made within
PROVISIONS 7 days after the date Due Proof of Death is received, except
when the Company is permitted to defer such payment under the
Investment Company Act of 1940.
ANNUITY COMMENCEMENT DATE
The Annuity Commencement Date is shown on Page 3. This date
may be changed by the Contract Owner with 30 days advance
written notification, and may be the fifteenth day of any month
before or including the month of the Annuitant's 90th
birthday. In the event the Contingent Annuitant becomes the
Annuitant and in the absence of a written election to the
contrary, the Annuity Commencement Date will be the fifteenth
day of the month coincident with or next following the
Annuitant's 90th birthday.
Page 12
<PAGE>
SETTLEMENT ELECTION OF ANNUITY OPTION
PROVISIONS
(CONTINUED) The Contract Owner may elect to have the Termination Value,
without deduction for any contingent deferred sales charge,
applied on the Annuity Commencement Date under any one of the
annuity options described below except the fifth option or
under any of the settlement options then being offered by the
Company. The Termination Value is determined on the basis of
the Accumulation Unit value of each Sub-Account and the value
of the Fixed Account no later than the fifth Valuation Day
preceding the date annuity payments are to commence.
DATE OF PAYMENT
The first payment under any option shall be made on the
fifteenth day of the month immediately following approval of
claim for settlement. Subsequent payments shall be made on the
fifteenth day of each subsequent month in accordance with the
manner of payment selected.
DEATH OF THE ANNUITANT
In the event of the death of the Annuitant while receiving
annuity payments, the present value of any remaining payments
will be paid in one sum to the Beneficiary unless other
provisions shall have been made and approved by the Company.
If the Annuitant was also the Contract Owner, any method of
distribution must provide that any amount payable as a death
benefit will be distributed at least as rapidly as under the
method of distribution in effect at the Contract Owner's
death. In the case of the Separate Account calculations, for
such present value of the remaining payments the Company will
assume a net investment rate of 5% per annum. The Annuity Unit
value on the date of receipt of Due Proof of Death shall be
used for the purpose of determining such present value. In the
case of the General Account the net investment rate assumed
will be the rate used by the Company to determine the amount
of each certain payment.
ALLOCATION OF ANNUITY
The person electing an annuity option may further elect to
have the value of the contract applied to provide a variable
annuity, a fixed dollar annuity a or combination of both. Once
very 3 months, following the commencement of annuity payments,
the Contract Owner may elect, in writing, to transfer among
any Sub-Account(s) on which variable annuity payments are
based. No transfers may be made between the Sub-Accounts and
the General Account.
If no election is made to the contrary, the value of each Sub-
Account shall be applied to provide a variable annuity based
thereon, and the value of the Fixed Account shall be applied
to provide a fixed dollar annuity.
VARIABLE ANNUITY AND FIXED DOLLAR ANNUITY
VARIABLE ANNUITY - A variable annuity is an annuity with
payments increasing or decreasing in amount in accordance
with the net investment results of the Sub-Account(s) of the
Separate Account (as described in the Valuation Provisions).
After the first monthly payment for a variable annuity has
been determined in accordance with the provisions of this
contract, a number of Sub-Account Annuity Units is determined
by dividing that first monthly payment by the appropriate Sub-
Account Annuity Unit value on the effective date of the
annuity payments.
Page 13
<PAGE>
SETTLEMENT Once variable annuity payments have begun, the number
PROVISIONS of Annuity Units remains fixed with respect to a particular
(CONTINUED) Sub-Account. If the Contract Owner elects that continuing
annuity payments be based on a different Sub-Account, the
number will change effective with that election but will
remain fixed in number following such election. The method of
calculating the unit value is described under Valuation
Provisions.
The dollar amount of the second and subsequent variable
annuity payments is not predetermined and may increase or
decrease from month to month. The actual amount of each
variable annuity payment after the first is determined by
multiplying the number of Sub-Account Annuity Units by the
Sub-Account Annuity Unit value as described in the Valuation
Provisions. The Sub-Account Annuity Unit value will be
determined no earlier than the fifth Valuation Day preceding
the date the annuity payment is due.
The Company guarantees that the dollar amount of variable
annuity payments will not be adversely affected by variations
in the expense results and in the actual mortality experience
of payees from the mortality assumptions, including any age
adjustment, used in determining the first monthly payment.
Fixed Dollar Annuity - A fixed dollar annuity is an annuity
with payments which remain fixed as to dollar amount
throughout the payment period.
ANNUITY OPTIONS
FIRST OPTION - Life Annuity - An annuity payable monthly
during the lifetime of the payee, ceasing with the last
payment due prior to the death of the payee.
SECOND OPTION - Life Annuity with 120, 180 or 240 Monthly
Payments Certain - An annuity providing monthly income to the
payee for a fixed period of 120 months, 180 months, or 240
months (as selected), and for as long thereafter as the
payee shall live.
THIRD OPTION - Joint and Last Survivor Life Annuity - An
annuity payable monthly during the joint lifetime of the payee
and a secondary payee, and thereafter during the remaining
lifetime of the survivor, ceasing with the last payment prior
to the death of the survivor.
FOURTH OPTION - Payment for a Designated Period - An amount
payable monthly for the number of years selected which may be
from 5 to 30 years. The remaining balance of proceeds in the
General Account or the Separate Account for any day is equal
to the balance on the previous day decreased by the amount of
any installment paid on that day and the remainder multiplied
by the applicable net investment factor for the day as
described in the valuation provisions. Any surrender out of
this option will be subject to contingent deferred sales
charges, as described on Page 3.
If this contract is issued to qualify under Section 401, 403,
or 408 of the Internal Revenue Code of 1954 as amended, the
fourth option shall be available only if the guaranteed
payment period is less than the life expectancy of the
Annuitant at the time the option becomes effective. Such life
expectancy will be computed under the mortality table then in
use by the Company.
Page 14
<PAGE>
SETTLEMENT FIFTH OPTION - Death Benefit Remaining with the Company -
PROVISIONS Proceeds from the Death Benefit left with the Company for a
(CONTINUED) period not to exceed five years from the date of the Contract
Owner's death prior to the Annuity Commencement Date. The
proceeds will remain in the Sub-Account(s) to which they were
allocated at the time of death unless the Beneficiary elects
to reallocate them. Full or partial withdrawals may be made at
any time. In the event of withdrawals, the remaining value will
equal the Contract Value of the proceeds left with the Company,
minus any withdrawals.
In the absence of an election by the Contract Owner, the
Termination Value, without deduction for any contingent
deferred sales charge, will be applied on the Annuity
Commencement Date under the second option to provide a life
annuity with 120 monthly payments certain.
ANNUITY TABLES DESCRIPTION OF TABLES
The attached tables show the minimum dollar amount of the
first monthly payments for each $1,000 applied under the
options. Under the First or Second Options, the amount of each
payment will depend upon the age and sex of the payee at the
time the first payment is due. Under the Third Option, the
amount of each payment will depend upon the sex of both payees
and their ages at the time the first payment is due.
The variable payment annuity tables for the First, Second and
Third Options are based on the 1983a Individual Annuity
Mortality Table with ages set back one year and an interest
rate of 5% per annum. The table for the Fourth Option is based
on an interest rate of 5% per annum.
The fixed annuity payment tables for the First, Second and
Third Options are based on the 1983a Individual Annuity
Mortality Table with ages set back one year and an interest
rate of 3% per annum. The table for the Fourth Option
is based on an interest rate of 3% per annum.
Once the Contract Owner has elected an annuity option, that
election may not be changed with respect to any Annuitant
following the commencement of annuity payments.
MINIMUM PAYMENT
No election of any options or combination of options may be
made under this contract unless the first payment for each
affected Account would be at least equal to the minimum
payment amount according to Company rules then in effect. If
at any time, payments to be made to any payee from each
Account are or become less than the minimum payment amount,
the Company shall have the right to change the frequency of
payment to such intervals as will result in a payment at least
equal to the minimum. If any amount due would be less than the
minimum payment amount per annum, the Company may make such
other settlement as may be equitable to the payee.
Page 15
<PAGE>
VARIABLE PAYMENT ANNUITY TABLES
AMOUNT OF FIRST MONTHLY PAYMENT
FOR EACH $1,000 APPLIED TO
VARIABLE PAYMENT ANNUITIES
Second and subsequent annuity payments, when based on the investment experience
of a Separate Account, are variable and are not guaranteed as to fixed dollar
amount.
SINGLE LIFE ANNUITIES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
Age Male Payee Female Payee
--------------------------------------------------------------------------
Monthly Payments Guaranteed Monthly Payments Guaranteed
-------------------------------- --------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
None 120 180 240 None 120 180 240
35 $4.68 $4.67 $4.66 $4.64 $4.52 $4.52 $4.51 $4.50
40 4.86 4.85 4.82 4.79 4.65 4.65 4.64 4.62
45 5.10 5.07 5.03 4.97 4.83 4.82 4.80 4.77
50 5.41 5.35 5.28 5.20 5.06 5.04 5.01 4.97
51 5.48 5.41 5.34 5.24 5.12 5.09 5.06 5.01
52 5.55 5.48 5.40 5.30 5.17 5.14 5.11 5.05
53 5.63 5.55 5.46 5.35 5.23 5.20 5.16 5.10
54 5.71 5.63 5.53 5.40 5.30 5.26 5.22 5.15
55 5.80 5.70 5.60 5.45 5.37 5.33 5.28 5.20
56 5.89 5.79 5.67 5.51 5.44 5.40 5.34 5.26
57 5.99 5.88 5.74 5.57 5.52 5.47 5.40 5.31
58 6.10 5.97 5.82 5.62 5.60 5.54 5.47 5.37
59 6.21 6.07 5.90 5.68 5.69 5.62 5.54 5.43
60 6.33 6.17 5.98 5.74 5.79 5.71 5.62 5.49
61 6.46 6.28 6.07 5.80 5.89 5.80 5.70 5.55
62 6.60 6.40 6.16 5.86 6.00 5.90 5.78 5.61
63 6.75 6.52 6.25 5.91 6.11 6.00 5.86 5.67
64 6.91 6.64 6.34 5.97 6.23 6.11 5.95 5.74
65 7.09 6.78 6.43 6.02 6.37 6.22 6.04 5.80
66 7.27 6.91 6.52 6.08 6.51 6.34 6.14 5.87
67 7.47 7.06 6.62 6.12 6.66 6.47 6.24 5.93
68 7.68 7.21 6.71 6.17 6.82 6.60 6.34 5.99
69 7.91 7.36 6.81 6.22 7.00 6.74 6.44 6.05
70 8.15 7.52 6.90 6.26 7.19 6.89 6.54 6.11
75 9.65 8.35 7.30 6.41 8.41 7.74 7.06 6.34
80 11.78 9.16 7.59 6.48 10.24 8.70 7.46 6.46
85 14.73 9.80 7.74 6.51 13.00 9.55 7.69 6.50
90 18.62 10.21 7.80 6.51 17.00 10.10 7.79 6.51
</TABLE>
JOINT AND LAST SURVIVOR ANNUITY
<TABLE>
<CAPTION>
Age of Age of Female Payee
Male
Payee 35 40 45 50 55 60 65 70 75 80 85 90
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $4.38 $4.42 $4.47 $4.52 $4.56 $4.59 $4.62 $4.64 $4.65 $4.66 $4.67 $4.68
40 4.41 4.47 4.54 4.60 4.66 4.71 4.75 4.79 4.81 4.83 4.85 4.85
45 4.43 4.51 4.60 4.68 4.77 4.85 4.91 4.97 5.01 5.05 5.07 5.08
50 4.45 4.55 4.65 4.76 4.88 5.00 5.10 5.19 5.26 5.31 5.35 5.37
55 4.47 4.57 4.70 4.84 4.99 5.15 5.30 5.44 5.56 5.65 5.71 5.75
60 4.49 4.60 4.73 4.90 5.09 5.30 5.52 5.73 5.92 6.07 6.17 6.24
65 4.50 4.61 4.76 4.95 5.17 5.43 5.73 6.04 6.34 6.59 6.79 6.91
70 4.50 4.63 4.78 4.98 5.23 5.54 5.92 6.34 6.79 7.21 7.55 7.80
75 4.51 4.64 4.80 5.01 5.28 5.63 6.07 6.60 7.22 7.87 8.46 8.91
80 4.51 4.64 4.81 5.03 5.31 5.69 6.18 6.81 7.60 8.52 9.45 10.24
85 4.52 4.65 4.82 5.04 5.34 5.73 6.25 6.96 7.89 9.07 10.40 11.67
90 4.52 4.65 4.82 5.05 5.35 5.75 6.30 7.05 8.09 9.49 11.21 13.03
</TABLE>
PAYMENTS FOR A DESIGNATED PERIOD
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Amount Amount Amount Amount Amount Amount
No. of No. of No. of No. of No. of No. of
of Monthly of Monthly of Monthly of Monthly of Monthly of Monthly
Years Payments Years Payments Years Payments Years Payments Years Payments Years Payments
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5 $18.74 10 $10.51 15 $7.82 20 $6.51 25 $5.76 30 $5.28
6 15.99 11 9.77 16 7.49 21 6.33 26 5.65
7 14.02 12 9.16 17 7.20 22 6.17 27 5.54
8 12.56 13 8.64 18 6.94 23 6.02 28 5.45
9 11.42 14 8.20 19 6.71 24 5.88 29 5.36
</TABLE>
The monthly payment for any combination of ages not shown will be quoted upon
request.
Page 16
<PAGE>
FIXED PAYMENT ANNUITY TABLES
AMOUNT OF MONTHLY PAYMENTS
FOR EACH $1,000 APPLIED TO
FIXED PAYMENT ANNUITIES
Payments are fixed and are guaranteed as to fixed dollar amount.
FIRST AND SECOND OPTIONS - SINGLE LIFE ANNUITIES WITH:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
Age Male Payee Female Payee
--------------------------------------------------------------------------
Monthly Payments Guaranteed Monthly Payments Guaranteed
-------------------------------- --------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
None 120 180 240 None 120 180 240
35 $3.41 $3.40 $3.39 $3.38 $3.23 $3.23 $3.22 $3.22
40 3.61 3.60 3.58 3.56 3.39 3.38 3.38 3.37
45 3.87 3.85 3.82 3.77 3.59 3.58 3.57 3.55
50 4.19 4.15 4.10 4.03 3.84 3.83 3.81 3.77
51 4.27 4.22 4.17 4.08 3.90 3.89 3.86 3.82
52 4.34 4.29 4.23 4.14 3.97 3.95 3.92 3.88
53 4.43 4.37 4.30 4.20 4.03 4.01 3.98 3.93
54 4.51 4.45 4.37 4.26 4.10 4.08 4.04 3.99
55 4.60 4.54 4.45 4.32 4.18 4.15 4.11 4.04
56 4.70 4.62 4.53 4.39 4.25 4.22 4.18 4.11
57 4.80 4.72 4.61 4.45 4.34 4.30 4.25 4.17
58 4.91 4.82 4.69 4.51 4.42 4.38 4.32 4.23
59 5.03 4.92 4.78 4.58 4.52 4.47 4.40 4.30
60 5.15 5.03 4.87 4.64 4.61 4.56 4.48 4.37
61 5.28 5.14 4.96 4.71 4.72 4.66 4.57 4.44
62 5.42 5.26 5.06 4.78 4.83 4.76 4.66 4.51
63 5.57 5.39 5.16 4.84 4.95 4.86 4.75 4.58
64 5.74 5.52 5.26 4.90 5.07 4.98 4.85 4.65
65 5.91 5.66 5.36 4.96 5.21 5.10 4.95 4.72
66 6.10 5.81 5.46 5.02 5.35 5.22 5.05 4.79
67 6.29 5.96 5.56 5.08 5.51 5.36 5.16 4.86
68 6.50 6.11 5.66 5.13 5.67 5.50 5.26 4.93
69 6.73 6.28 5.76 5.18 5.85 5.65 5.37 5.00
70 6.97 6.44 5.86 5.23 6.04 5.80 5.49 5.06
75 8.45 7.32 6.31 5.40 7.26 6.69 6.04 5.32
80 10.55 8.17 6.62 5.48 9.07 7.69 6.48 5.45
</TABLE>
THIRD OPTION - JOINT AND LAST SURVIVOR ANNUITY
<TABLE>
<CAPTION>
Age of Age of Female Payee
Male
Payee 35 40 45 50 55 60 65 70 75 80
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.07 $3.14 $3.20 $3.25 $3.30 $3.33 $3.35 $3.37 $3.39 $3.40
40 3.11 3.20 3.28 3.36 3.42 3.48 3.52 3.55 3.57 3.59
45 3.15 3.25 3.36 3.46 3.56 3.64 3.71 3.76 3.80 3.83
50 3.17 3.29 3.42 3.56 3.69 3.82 3.92 4.01 4.08 4.12
55 3.19 3.32 3.47 3.64 3.81 3.99 4.16 4.29 4.40 4.48
60 3.20 3.34 3.51 3.70 3.92 4.15 4.39 4.61 4.79 4.93
65 3.21 3.36 3.54 3.75 4.00 4.29 4.61 4.94 5.24 5.48
70 3.22 3.37 3.56 3.78 4.05 4.40 4.80 5.25 5.70 6.12
75 3.22 3.38 3.57 3.81 4.11 4.48 4.95 5.51 6.15 6.80
80 3.23 3.38 3.58 3.82 4.14 4.54 5.05 5.71 6.52 7.45
</TABLE>
FOURTH OPTION - PAYMENTS FOR A DESIGNATED PERIOD
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Amount Amount Amount Amount Amount Amount
No. of No. of No. of No. of No. of No. of
of Monthly of Monthly of Monthly of Monthly of Monthly of Monthly
Years Payments Years Payments Years Payments Years Payments Years Payments Years Payments
- ----- -------- ----- -------- ----- -------- ----- -------- ----- -------- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5 $17.91 10 $9.61 15 $6.87 20 $5.51 25 $4.71 30 $4.18
6 15.14 11 8.86 16 6.53 21 5.32 26 4.59
7 13.16 12 8.24 17 6.23 22 5.15 27 4.47
8 11.68 13 7.71 18 5.96 23 4.99 28 4.37
9 10.53 14 7.26 19 5.73 24 4.84 29 4.27
</TABLE>
The monthly payment for any combination of ages not shown will be quoted upon
request.
Page 17
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
Application for U.S.P.S.-First Class or Express-Mail to: Private Express Mail Carriers-Mail to:
VariableAnnuity Contract ITT Hartford 200 Hopmeadow Street
Attn: IAO-PCM Simsbury, CT 06089
ITT Hartford Life and P.O. Box 2999
Annuity Insurance Company Hartford, CT 06104-2999
[ITT HARTFORD LOGO]
- ------------------------------------------------------------------------------------------------------------------------------------
1. CONTRACT OWNER James Scott
------------------------------------ SS#/TIN / 1 / 2 / 3 / / 4 / 5 / / 6 / 7 / 8 / 9 /
If no Annuitant is Name
specified in Section 3,
the Contract Owner 1 Main Street Date of Birth / 0 / 9 / / 1 / 0 / / 5 / 8 /
will be the Annuitant. ------------------------------------ month day year
Street Address
Hartford CT 06106
------------------------------------
City State Zip /X/ Male / / Female / / Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
2. JOINT CONTRACT
OWNER (if any) ------------------------------------ SS#/TIN / / / / / / / / / / / /
Name
Date of Birth / / / / / / / / /
--------------------------- month day year
Relationship to Contract / / Male / / Female
Owner
- ------------------------------------------------------------------------------------------------------------------------------------
3. ANNUITANT
------------------------------------
Name SS#/TIN / / / / / / / / / / / /
Complete only if
different from the ------------------------------------ Date of Birth / / / / / / / / /
contract owner in Street Address month day year
Section 1.
------------------------------------
City State Zip / / Male / / Female
- ------------------------------------------------------------------------------------------------------------------------------------
4. CONTINGENT ANNUITANT Paul Scott Brother
------------------------------------------------------------------------------------------------------
Name Relationship to Owner
- ------------------------------------------------------------------------------------------------------------------------------------
5. BENEFICIARY (IES) Ann Scott Wife 100%
------------------------------------------------------------------------------------------------------
DESIGNATED Name(s) Relationship to Contract Owner Percentage
------------------------------------------------------------------------------------------------------
CONTINGENT Name(s) Relationship to Contract Owner Percentage
- ------------------------------------------------------------------------------------------------------------------------------------
6. TAX QUALIFIED PLANS A. / / Initial / / Transfer / / Rollover
Check the appropriate B. / / IRA / / 403(b) / / 401(k) / / 401(a) / / SEP-IRA / / Other
box(es) in A, B, and C. --------------------
C. / / Individual Accounts / / Unallocated Plan Account
Tax Year for which initial contribution is being made:
-------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
7. FUND SELECTION Please check selected fund(s) and note whole percentage allocations.
The initial premium /X/ PCM Voyager Fund 50 % / / PCM High Yield Fund %
will be allocated as ---- ----
selected here. If / / PCM Global Growth Fund % / / PCM Diversified Income Fund %
Dollar Cost Averaging, ---- ----
complete the DCA / / PCM Global Asset Allocation Fund % / / PCM U.S. Gov. & High Quality Bond %
enrollment section ---- Fund ----
on the reverse side. / / PCM Growth & Income Fund % / / PCM Money Market Fund %
---- ----
/X/ PCM Utilities Growth & Income Fund 50 % / / PCM Fixed Account %
---- ----
/ / Other %
-------------------- ----
Make checks payable to: ITT Hartford Life Insurance Companies Initial $ 20,000 Total 100 %
--------
Monies remitted via /X/ check / / wire / / 1035 / / Qualified Transfer
- ------------------------------------------------------------------------------------------------------------------------------------
8. SPECIAL REMARKS
- ------------------------------------------------------------------------------------------------------------------------------------
Will the annuity applied for replace one or more existing annuity or life insurance contracts? / / Yes /X/ No (If yes, explain
Have you purchased another ITT Hartford Annuity during the previous 12 months? / / Yes /X/ No in Special
Remarks)
I hereby represent my answers to the above questions to be true and correct to the best of my knowledge and belief. I UNDERSTAND
THAT ANNUITY PAYMENTS OR SURRENDER VALUES, WHEN BASED UPON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND NOT
GUARANTEED AS TO A FIXED DOLLAR AMOUNT.
/X/ RECEIPT OF A VARIABLE ANNUITY AND FUND PROSPECTUS IS HEREBY ACKNOWLEDGED. If not checked, the appropriate prospectus will be
mailed to you.
SIGNED AT Hartford, CT ON 2-4-94 /s/ James Scott
------------------------ ---------- ------------------------------------------------------------------
City, State Date (Contract Owner's signature)
Do you, as Agent, have reason to believe the contract applied
for will replace existing annuities or insurance? / / Yes / / No ------------------------------------------------------------------
(Joint Contract Owner's signature)
LICENSED
AGENT /s/ John Adams Broker/Dealer Paine Webber
--------------------------------- ----------------------------------------------------
(signature)
John Adams Address Financial Plaza, Hartford, CT
--------------------------------- -----------------------------------------------------------
(print)
Telephone # (203) 547-5000
--------------------------------- -------------------------------------------------------
(License I.D. # (Florida Agents Only) Field Office Code 27 Staff Code /1/2/
</TABLE>
<PAGE>
Exhibit 6(a)
RESTATED CERTIFICATE OF INCORPORATION
HARTFORD LIFE INSURANCE COMPANY
This Restated Certificate of Incorporation gives effect to the amendment of
the Certificate of Incorporation of the corporation and otherwise purports
merely to restate all those provisions already in effect. This Restated
Certificate of Incorporation has been adopted by the Board of Directors and by
the sole shareholder.
Section 1. The name of the corporation is Hartford Life Insurance
Company and it shall have all the powers granted by the general
statutes, as now enacted or hereinafter amended to corporations formed
under the Stock Corporation Act.
Section 2. The corporation shall have the purposes and powers to write
any and all forms of insurance which any other corporation now or
hereafter chartered by Connecticut and empowered to do an insurance
business may now or hereafter may lawfully do; to accept and to cede
reinsurance; to issue policies and contracts for any kind or
combinations of kinds of insurance; to issue policies or contracts
either with or without participation in profits; to acquire and hold any
or all of the shares or other securities of any insurance corporation;
and to engage in any lawful act or activity for which corporations may
be formed under the Stock Corporation Act. The corporation is authorized
to exercise the powers herein granted in any state, territory or
jurisdiction of the United States or in any foreign country.
Section 3. The capital with which the corporation shall commence
business shall be an amount not less than one thousand dollars. The
authorized capital shall be two million five hundred thousand dollars
divided into one thousand shares of common capital stock with a par
value of twenty-five hundred dollars each.
We hereby declare, under the penalties of false statement that the
statements made in the foregoing Certificate are true.
Dated: February 10, 1982 HARTFORD LIFE INSURANCE COMPANY
By: /s/ Robert B. Goode, Jr.
--------------------------
Attest:
/s/ Wm. A. McMahon
- --------------------------------------
<PAGE>
BYLAWS
OF THE
HARTFORD LIFE INSURANCE COMPANY
As passed and effective
February 13, 1978
and amended on
July 13, 1978
January 5, 1979
and
February 29, 1984
<PAGE>
ARTICLE I
Name - Home Office
Section 1. This corporation shall be named HARTFORD LIFE
INSURANCE COMPANY.
Section 2. The principal place of business and Home Office
shall be in the City of Hartford, Connecticut.
ARTICLE II
Stockholders' Meetings - Notice - Quorum - Right to Vote
Section 1. All meetings of the Stockholders shall be held
at the principal business office of the Company unless the Directors
shall otherwise provide and direct.
Section 2. The annual meeting of the Stockholders shall be
held on such day and at such hour as the Board of Directors may
decide. For cause the Board of Directors may postpone or adjourn
such annual meeting to any other time during the year.
Section 3. Special meetings of the Stockholders may be
called by the Board of Directors, the Executive Committee, the
Chairman of the Board, the President or any Vice President.
Section 4. Notice of Stockholders' meetings shall be
mailed to each Stockholder, at his address as it appears on the
records of the Company, at least seven days prior to the meeting.
The notice shall state the place, date and time of the meeting and
shall specify all matters proposed to be acted upon at the meeting.
Section 5. At each annual meeting the Stockholders shall
choose Directors as hereinafter provided.
Section 6. Each Stockholder shall be entitled to one vote
for each share of stock held by him at all meetings of the Company.
Proxies may be authorized by written power of attorney.
Section 7. Holders of one-half of the whole amount of the
stock issued and outstanding shall constitute a quorum.
<PAGE>
-2-
Section 8. Each Stockholder shall be entitled to a
certificate of stock which shall be signed by the President or a
Vice President, and either the Treasurer or an Assistant Treasurer
of the Company, and shall bear the seal of the Company, but such
signatures and seal may be facsimile if permitted by the laws of the
State of Connecticut.
ARTICLE III
DIRECTORS - MEETINGS - QUORUM
Section 1. The property, business and affairs of the
Company shall be managed by a board of not less than three nor more
than twenty Directors, who shall be chosen by ballot at each annual
meeting. Vacancies occurring between annual meetings may be filled
by the Board of Directors by election. Each Director shall hold
office until the next annual meeting of Stockholders and until his
successor is chosen and qualified.
Section 2. Meetings of the Board of Directors may be
called by the direction of the Chairman of the Board, the President,
or any three Directors.
Section 3. Three days' notice of meetings of the Board of
Directors shall be given to each Director, either personally or by
mail or telegraph, at his residence or usual place of business, but
notice may be waived, at any time, in writing.
Section 4. One third of the number of existing
directorships, but not less than two Directors, shall constitute a
quorum.
ARTICLE IV
ELECTION OF OFFICERS - DUTIES OF BOARD OF
DIRECTORS AND EXECUTIVE COMMITTEE
Section 1. The President shall be elected by the Board of
Directors. The Board of Directors may also elect one of its members
to serve as Chairman of the Board of Directors. The Chairman of the
Board, or an individual appointed by him, shall have authority to
appoint all other officers, except as stated herein, including one
or more Vice Presidents and Assistant Vice Presidents, the Treasurer
<PAGE>
-3-
and one or more Associate or Assistant Treasurers, one or more
Secretaries and Assistant Secretaries and such other Officers as the
Chairman of the Board may from time to time designate. All Officers
of the Company shall hold office during the pleasure of the Board of
Directors. The Directors may require any Officer of the Company to
give security for the faithful performance of his duties.
Section 2. The Directors may fill any vacancy among the
officers by election for the unexpired term.
Section 3. The Board of Directors may appoint from its own
number an Executive Committee of not less than five Directors. The
Executive Committee may exercise all powers vested in and conferred
upon the Board of Directors at any time when the Board is not in
session. A majority of the members of said Committee shall
constitute a quorum.
Section 4. Meetings of the Executive Committee shall be
called whenever the Chairman of the Board, the President or a
majority of its members shall request. Forty-eight hours' notice
shall be given of meetings but notice may be waived, at any time, in
writing.
Section 5. The Board of Directors shall annually appoint
from its own number a Finance Committee of not less than three
Directors, whose duties shall be as hereinafter provided.
Section 6. The Board of Directors may, at any time,
appoint such other Committees, not necessarily from its own number,
as it may deem necessary for the proper conduct of the business of
the Company, which Committees shall have only such powers and duties
as are specifically assigned to them by the Board of Directors or
the Executive Committee.
Section 7. The Board of Directors may make contributions,
in such amounts as it determines to be reasonable, for public
welfare or for charitable, scientific or educational purposes,
subject to the limits and restrictions imposed by law and to such
rules and regulations consistent with law as it makes.
ARTICLE V
OFFICERS
Chairman of the Board
Section 1. The Chairman of the Board shall preside at the
meetings of the Board of Directors and the Executive Committee and,
in the absence of the Chairman of the Finance Committee, at the
meetings of the Finance Committee. In the absence or inability of
the Chairman of the Board to so preside, the President shall preside
in his place.
<PAGE>
-4-
President
Section 2. The President, under the supervision and
control of the Chairman of the Board, shall have general charge and
oversight of the business and affairs of the Company. The President
shall preside at the meetings of the Stockholders. He shall be a
member of and shall preside at all meetings of all Committees not
referred to in Section 1 of this ARTICLE except that he may
designate a Chairman for each such other Committee.
Section 3. In the absence or inability of the President to
perform his duties, the Chairman of the Board may designate a Vice
President to exercise the powers and perform the duties of the
President during such absence or inability.
Secretary
Section 4. The Secretary of the Corporation shall keep a
record of all the meetings of the Company, of the Board of Directors
and of the Executive Committee, and he shall discharge all other
duties specifically required of the Secretary by law. The other
Secretaries and Assistant Secretaries shall perform such duties as
may be assigned to them by the Board of Directors or by their senior
officers and any Secretary or Assistant Secretary may affix the seal
of the Company and attest it and the signature of any officer to any
and all instruments.
Treasurer
Section 5. The Treasurer shall keep, or cause to be kept,
full and accurate accounts of the Company. He shall see that the
funds of the Company are disbursed as may be ordered by the Board of
Directors or the Finance Committee. He shall have charge of all
moneys paid to the Company and on deposit to the credit of the
Company or in any other properly authorized name, in such banks or
depositories as may be designated in a manner provided by these
by laws. He shall also discharge all other duties that may be
required of him by law.
Other Officers
Section 6. The other officers shall perform such duties as
may be assigned to them by the President or the Board of Directors.
<PAGE>
-5-
ARTICLE VI
Finance Committee
Section 1. If a Finance Committee is established it shall
be the duty of that committee to supervise the investment of the
funds of the Company in securities in which insurance companies are
permitted by law to invest, and all other matters connected with the
management of investments. If no Finance Committee is established
this duty shall be performed by the Board of Directors.
Section 2. All loans or purchases for the investment and
reinvestment of the funds of the Company shall be submitted for
approval to the Finance Committee, if not specifically approved by
the Board of Directors.
Section 3. Sale or transfer of any stocks or bonds shall
be made upon authorization of the Finance Committee unless
specifically authorized by the Board of Directors.
Section 4. Transfers of stock and registered bonds, deeds,
leases, releases, sales, mortgages chattel or real, assignments or
partial releases of mortgages chattel or real, and in general all
instruments of defeasance of property and all agreements or
contracts affecting the same, except discharges of mortgages and
entries to foreclose the same as hereinafter provided, shall be
authorized by the Finance Committee or the Board of Directors, and
be executed jointly for the Company by two persons, to wit: The
Chairman of the Board, the President or a Vice President, and a
Secretary, the Treasurer or an Assistant Treasurer, but may be
acknowledged and delivered by either one of those executing the
instrument; provided, however, that either a Secretary, the
Treasurer, or an Assistant Treasurer alone, when authorized as
aforesaid, or any person specially authorized by the Finance
Committee as attorney for the Company, may make entry to foreclose
any mortgage, and a Secretary, the Treasurer or an Assistant
Treasurer alone is authorized, without the necessity of further
authority, to discharge by deed or otherwise any mortgage on payment
to the Company of the principal, interest and all charges due.
Section 5. The Finance Committee may fix times and places
for regular meetings. No notice of regular meetings shall be
necessary. Reasonable notice shall be given of special meetings but
the action of a majority of the Finance Committee at any meeting
shall be valid notwithstanding any defect in the notice of such
meeting.
<PAGE>
-6-
Section 6. In the absence of specific authorization from
the Board of Directors or the Finance Committee, the Chairman of the
Board, the President, a Vice President or the Treasurer shall have
the power to vote or execute proxies for voting any shares held by
the Company.
ARTICLE VII
Funds
Section 1. All monies belonging to the Company shall be
deposited to the credit of the Company, or in such other name as the
Finance Committee, the Chairman of the Finance Committee or such
executive officers as are designated by the Board of Directors shall
direct, in such bank or banks as may be designated from time to time
by the Finance Committee, the Chairman of the Finance Committee, or
by such executive officers as are designated by the Board of
Directors. Such monies shall be drawn only on checks or drafts
signed by any two executive officers of the Company, provided that
the Board of Directors may authorize the withdrawal of such monies
by check or draft signed with the facsimile signature of any one or
more executive officers, and provided further, that the Finance
Committee may authorize such alternative methods of withdrawals as
it deems proper.
The Board of Directors, the President, the Chairman of the
Finance Committee, a Vice President, or such executive officers as
are designated by the Board of Directors may authorize withdrawal of
funds by checks or drafts drawn at offices of the Company to be
signed by Managers, General Agents or employees of the Company,
provided that all such checks or drafts shall be signed by two such
authorized persons, except checks or drafts used for the payment of
claims or losses which need be signed by only one such authorized
person, and provided further that the Board of Directors of the
Company or executive officers designated by the Board of Directors
may impose such limitations or restrictions upon the withdrawal of
such funds as it deems proper.
<PAGE>
-7-
ARTICLE VIII
Indemnity of Directors and Officers
Section 1. The Company shall indemnify and hold harmless
each Director and officer now or hereafter serving the Company,
whether or not then in office, from and against any and all claims
and liabilities to which he may be or become subject by reason of
his being or having been a Director or officer of the Company, or of
any other company which he serves as a Director or officer at the
request of the Company, to the extent such is consistent with the
statutory provisions pertaining to indemnification, and shall
provide such further indemnification for legal and/or all other
expenses reasonably incurred in connection with defending against
such claims and liabilities as is consistent with statutory
requirements.
ARTICLE IX
AMENDMENT OF BYLAWS
Section 1. The Directors shall have power to adopt, amend
and repeal such bylaws as may be deemed necessary or appropriate for
the management of the property and affairs of the Company.
Section 2. The Stockholders at any annual or special
meeting may amend or repeal these bylaws or adopt new ones if the
notice of such meeting contains a statement of the proposed
alteration, amendment, repeal or adoption, or the substance thereof.
<PAGE>
Arthur Andersen LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of
this Registration Statement File No. 33-86330 on Form N-4 for Hartford
Life and Annuity Insurance Company.
Hartford, Connecticut
April 21, 1995
<PAGE>
Exhibit 12
PARTICIPATION AGREEMENT
AMONG
THE WOODWARD VARIABLE ANNUITY FUND,
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
AND
HARTFORD LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into this 30th day of March, 1995 by
THE WOODWARD VARIABLE ANNUITY FUND, a business trust organized under the laws
of Delaware (the "Fund"), ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY,
A Wisconsin corporation ("ITT"), and HARTFORD LIFE INSURANCE COMPANY, a
Connecticut corporation ("Hartford") (each, a "Company" and collectively,
the "Companies"), on their own behalf and on behalf of each separate
account of the Companies named in Schedule 1 to this Agreement as in effect
at the time this Agreement is executed and such other separate accounts that
may be added to Schedule 1 from time to time in accordance with the
provisions of Article XI of this Agreement (each such account referred to as
the "Account").
WHEREAS, the Fund is engaged in business as an open-end management
investment company and was established for the purpose of serving as the
investment vehicle for separate accounts established for variable life insurance
policies and variable annuity contracts (collectively referred to as "Variable
Insurance Products") to be offered by insurance companies which have entered
into participation agreements with the Fund ("Participating Insurance
Companies"); and
WHEREAS, the Fund's Board of Trustees has duly authorized the division
of the Fund's shares of beneficial interest (the "Fund shares") into five
separate series (each, a "Series") representing interests in five separate
series (each, a "Series") representing interests in five separate investment
portfolios ("Series shares"); and
WHEREAS, the Fund has filed a registration statement on Form N-1A
(referred to herein as the "Fund Registration Statement" and the prospectus
contained therein, or filed pursuant to Rule 497 under the Securities Act of
1933, as amended (the "1933 Act"), referred to herein as the "Fund
Prospectus") with the Securities and Exchange Commission (the "SEC") to
<PAGE>
register itself as an open-end management investment company (File No.
811-8854) under the Investment Company Act of 1940, as amended (the "1940
Act"), and the Fund shares (File No. 33-86186) under the Act; and
WHEREAS, ITT has filed a registration statement with the SEC to
register under the 1933 Act certain variable annuity contracts described in
Schedule 2 to this Agreement as in effect at the time this Agreement is executed
and in the form attached as an exhibit to Schedule 2 at the time this Agreement
is executed, and such other variable annuity contracts and variable life
insurance policies which may be added to Schedule 2 from time to time in
accordance with Article XI of this Agreement (such policies and contracts
shall be referred to herein collectively as the "Contracts," each such
registration statement for a class or classes of contracts listed on Schedule
2 and attached as an exhibit thereto being referred to as the "Contracts
Registration Statement," the prospectus for each such class or classes being
referred to herein as the "Contracts Prospectus," and the owners of such
contracts being referred to as "Contract Owners"); and
WHEREAS, the Account, a validly existing separate account, duly
authorized by consent of the Board of Directors of the Companies on the date
set forth on Schedule 1, sets aside and invests assets attributable to the
Contracts; and
WHEREAS, the Companies have registered the Account with the SEC as
a unit investment trust under the 1940 Act; and
WHEREAS, NBD Bank, a Michigan banking corporation (the "Investment
Adviser"), serves as an investment manager to the Fund pursuant to one or
more investment advisory agreements; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Companies intend to purchase Series shares on behalf of the
Account to fund the Contracts and the Fund is authorized to sell such Series
shares to unit investment trusts such as the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the
Companies and the Fund agree as follows:
ARTICLE I. SALE OF FUND SHARES
1.1. The Fund shall sell to the Companies shares of those Series
listed on Schedule 3 to this Agreement which the Companies order on behalf of
the Account, executing such orders on a daily basis in accordance with Section
1.4 of this Agreement. Additional Series may be added to Schedule 3 from
-2-
<PAGE>
time to time only as the Fund and the Companies may agree pursuant to Article
XI hereof.
1.2. The Fund shall make the shares of its Series available for
purchase by the Companies on behalf of the Account at the then applicable net
asset value per share on Business Days as defined in Section 1.4 of this
Agreement, and the Fund shall use reasonable efforts to calculate such net
asset value on each such Business Day. Notwithstanding any other provision in
this Agreement to the contrary, the Board of Trustees of the Fund (the "Fund
Board") may suspend or terminate the offering of Fund shares of any Series,
if such action is required by law or by regulatory authorities having
jurisdiction or if, in the sole discretion of the Fund Board acting in good
faith and in light of its fiduciary duties under federal and any applicable
state laws, suspension or termination is necessary and in the best interests
of the shareholders of any Series (it being understood that "shareholders"
for this purpose shall mean Contract Owners).
1.3. The Fund shall redeem, at the Companies' request, any full or
fractional shares of the Fund held by the Account or the Companies, executing
such requests at the net asset value on a daily basis in accordance with
Section 1.4 of this Agreement and the applicable provisions of the 1940 Act.
Notwithstanding the foregoing, (i) the Companies shall not redeem Fund shares
attributable to Contract Owners except in the circumstances permitted in
Section 1.8 of this Agreement; and (ii) the Fund may delay redemption of Fund
shares of any Series to the extent permitted by the 1940 Act, or any rules,
regulations or orders thereunder.
1.4.
(a) The Fund hereby appoints the Companies as the designees of the
Fund for the limited purpose of receiving redemption and purchase requests
from the Account (or the Companies) based on transactions in the Account's
securities or units. Receipt of any such request on any Business Day by the
Companies as such limited designees of the Fund prior to the time
prescribed in the then current Fund Prospectus (which as of the date of
this Agreement is 4:00 p.m. Eastern time) shall constitute receipt by the
Fund on that same Business Day, provided that the Fund receives notice of
such redemption or purchase request by 10:00 a.m. Eastern Time on the next
following Business Day. For purposes of this Agreement, "Business Day"
shall mean any day on which both the New York Stock Exchange and the
Investment Adviser are open for trading, or as otherwise provided in the
then currently effective Fund Prospectus.
(b) The Companies shall pay for shares of each Series on the same
day that they notify the Fund of a purchase
-3-
<PAGE>
request for such Series shares. Payment for Series shares will be made in
Federal Funds transmitted to the Fund by wire as soon as practicable
following such notification.
(c) Payment for Series shares redeemed by the Account or the
Companies shall be made in Federal Funds transmitted to the Companies or
any other designated person by wire on the same Business Day the Fund is
properly notified of the redemption request regarding Series shares (unless
redemption proceeds are to be applied to the purchase of shares of other
Series in accordance with Section 1.4(b) of this Agreement), except that
the Fund reserves the right to delay payment of redemption proceeds to the
extent permitted under Section 22(e) of the 1940 Act. The Fund shall not
bear any responsibility whatsoever for the proper disbursement or crediting
of redemption proceeds; the Companies alone shall be responsible for such
action.
1.5. Issuance and transfer of Fund shares shall be by book entry
only. Stock certificates will not be issued to the Companies or the Account.
Purchase and redemption orders for Fund shares will be recorded in an
appropriate ledger for the Account or the appropriate subaccount of the
Account.
1.6. The Fund shall use its best efforts to notify the Companies of
any income dividends and capital gain distributions payable on any Series
shares by 6:00 p.m. Eastern Time on each Business Day or as soon as
reasonably practicable. The Companies, on their behalf and on behalf of the
Account, hereby elect to receive all such dividends and distributions as are
payable on any Series shares in the form of additional shares of that Series.
The Companies reserve the right, on their behalf and on behalf of the
Account, to revoke this election and to receive all such dividends in cash.
The Fund shall notify the Companies promptly of the number of Series shares
so issued as payment of such dividends and distributions.
1.7. The Fund shall use its best efforts to make the net asset value
per share for each Series available to the Companies by 6:00 p.m. Eastern
Time each Business Day, and in any event, as soon as reasonably practicable
after the net asset value per share for such Series is calculated, and shall
calculate such net asset value in accordance with the then currently
effective Fund Prospectus. Neither the Fund, any Series, nor any of their
affiliates shall be liable for any information provided to the Companies
pursuant to this Agreement which information is based on incorrect
information supplied by the Companies or any other Participating Insurance
Companies to the Fund.
-4-
<PAGE>
1.8.
(a) The Companies shall invest all amounts available for investment
under the Contracts only in the Companies' general account and/or the
Account. Amounts invested in the Account shall be invested, as directed by
Contract Owners, in portfolios of open-end management investment companies
registered under the 1940 Act, one of which is the Fund consisting of the
Series listed on Schedule 3 to this Agreement. Series may be added to, or
deleted from, Schedule 3 only upon prior written agreement of the Companies
and the Fund.
(b) To the extent permitted by applicable law, for so long as
Contracts funded by Series shares are outstanding, the Companies shall not,
without the Fund's prior written consent, (i) attempt to substitute shares
of any mutual funds of which the Companies or any of their affiliates serve
as investment adviser or principal underwriter, or of the mutual funds of a
third party, for Series shares, or (ii) attempt to make systematic exchange
offers or solicitations to Contract Owners for other products, or (iii)
otherwise intentionally take actions having the effect of causing the
Account or the Contract Owners to replace the Fund or to cease to invest in
the Fund, while advised in whole or in part by NBD Bank or an affiliated
investment adviser of NBD Bank, unless the Companies are compelled to do so
by action or threat of impending action of a federal agency or state
insurance department having jurisdiction over the regulation of insurance
products in any state in which Contracts have been sold, or by court order,
or unless absent such action, the Contracts' federal tax advantages
existing on the date of this Agreement will be lost. In no event shall the
Companies take any action set forth in this subsection without prior
written notice to the Fund and obtaining approval, if required by law, of
the SEC under Section 26(b) of the 1940 Act.
(c) The Companies shall not, without the prior written consent of the
Fund (unless otherwise required by applicable law), take any action to
operate the Account as a management investment company under the 1940 Act.
(d) The Companies shall not, without the prior written consent of the
Fund (unless otherwise required by federal and/or state laws or regulations
or judicial or other legal precedent of general application): (i) solicit,
induce or encourage Contract Owners to change or modify the Fund or change
the Fund's service providers; or (ii) modify the Contracts. The Companies
shall notify the Fund promptly in writing upon the occurrence of any event
that the Companies believe may necessitate any modification of the
Contracts.
-5-
<PAGE>
(e) Prior to taking any action described in Section 1.8(b), 1.8(c) or
1.8(d), the Companies shall provide the Fund with an opinion of counsel
satisfactory to the Fund regarding the reasons therefor.
1.9. The Fund shall sell Series shares only to Participating
Insurance Companies and their separate accounts. The Fund shall not sell Fund
shares to any insurance company or separate account unless an agreement
complying with Article VII of this Agreement is in effect to govern such sales.
No Series shares shall be sold to the general public. Unless the Companies give
prior written consent, other insurance companies may not become Participating
Insurance Companies for the purpose of offering variable annuity products
where any of the Series funding such products would be managed by NBD Bank or
an investment adviser affiliated with NBD.
1.10. The Companies will forward to the Fund a list of names and
specimen signatures of persons authorized to act on the Companies' behalf.
The Fund shall not accept orders given on behalf of the Companies by persons
not on such list. The Companies agree to promptly notify the Fund in writing
of any additions, deletions or other modifications to such list. Until so
notified of such modifications, the Fund shall have no liability as a result
of the execution of orders given by a person previously identified on the list
as authorized.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1 Each Company represents and warrants that: (i) the Company is an
insurance company duly organized and in good standing under applicable law;
(ii) the Account is a validly existing separate account, duly established and
maintained in accordance with applicable law; (iii) a registration statement
for the Account as a unit investment trust under the 1940 Act has been filed
with the SEC in accordance with the provisions of the 1940 Act and the
Account is duly registered as a unit investment trust thereunder; (iv) the
registration statement relating to the registration of the Contracts under
the 1933 Act has been declared effective by the SEC; (v) the Contracts will
be issued in compliance in all material respects with all applicable federal
and state laws; and (vi) the Contracts currently are and at the time of
issuance will be treated as annuity contracts or life insurance policies,
whichever is appropriate, under applicable provisions of the Internal Revenue
Code of 1986, as amended (the "Code").
2.2. The Fund represents and warrants that: (i) the Fund is a
Delaware business trust duly formed under Delaware law; (ii) a registration
statement for the Fund as an open-end management investment company under the
1940 Act has been filed
-6-
<PAGE>
with the SEC in accordance with the provisions of the
1940 Act and the Fund is duly registered as an open-end management investment
company thereunder; (iii) the registration statement relating to the
registration of shares of the Fund under the 1933 Act has been declared
effective by the SEC; (iv) Fund shares sold pursuant to this Agreement have
been duly authorized for issuance in accordance with applicable law; and
(v) the Fund's investment policies are in material compliance with any
investment restrictions set forth on Schedule 4 to this Agreement. The Fund
intends that each Series shall qualify as a "regulated investment company"
under Part I, Subchapter M, Chapter 1, Subtitle A of the Code and that each
Series shall comply with Section 817(h) of the Code and regulations thereunder.
The Fund, however, makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) otherwise complies with the insurance laws or regulations of any
state.
2.3. Each party represents that the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have
been duly authorized by all necessary corporate or trust action by such
party, and, when so executed and delivered, this Agreement will be the valid
and binding obligation of such party enforceable in accordance with its terms.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; SALES MATERIAL
AND OTHER INFORMATION
3.1. The Fund shall amend its registration statement from time to time
as required in order to effect the continuous offering of Fund shares and to
maintain the Fund's registration under the 1940 Act for so long as Fund
shares are sold.
3.2. The Fund Prospectus shall state that the Statement of Additional
Information for the Fund is available from the administrator of the Fund (the
"Administrator"), or in the Fund's discretion, from the Fund, and the
Administrator (or the Fund) shall provide such Statement of Additional
Information free of charge to the Companies and to any outstanding or
prospective Contract Owner who requests such Statement of Additional
Information.
3.3. The Companies shall amend the registration statement relating to
the Contracts and the Account's registration statement under the 1940 Act
from time to time as required in order to effect the continuous offering of
the Contracts or as may otherwise be required by applicable law, but in any
event shall maintain a currently effective registration statement for the
Contracts under the 1933 Act and for the Account under the 1940 Act for so
long as the Contracts are
-7-
<PAGE>
outstanding, unless: (a) a no-action letter from the SEC has been obtained by
the Companies to the effect that such registration statement need no longer be
maintained; or (b) the Companies have supplied the Fund with an opinion of
counsel satisfactory to the Fund to the effect that maintaining such
registration statement is no longer required; or (c) the Companies have notified
the Fund in writing that, with respect to such registration statement, the
Companies meet the terms and conditions of, and is relying on, GREAT WEST LIFE
& ANNUITY INSURANCE COMPANY (pub. avail. Oct. 23, 1990), and any subsequent
no-action letter released by the staff of the SEC addressing the same subject
matter. The Companies shall ensure that any Contracts Prospectus for a life
insurance contract, where it is reasonably probable that such Contract would be
a "modified endowment contract," as that term is defined in Section 7702A of
the Code, will identify such Contract as a modified endowment contract (or
policy). The Companies shall file, register, qualify and obtain approval of
the Contracts for sale to the extent required by applicable insurance and
securities laws of the various states.
3.4. The Companies shall inform the Fund of any investment
restrictions imposed by state insurance law that may become applicable to the
Fund or a particular Series from time to time as a result of the Account's
investment therein (including, but not limited to, restrictions with respect
to fees and expenses and investment policies), other than those set forth on
Schedule 4 to this Agreement. Upon receipt of information from the Companies
pursuant to Section 3.6(b), the Fund shall determine whether it is in the
best interests of shareholders to comply with any such restrictions. If the
Fund determines that it is not in the best interests of shareholders (it
being understood that "shareholders" for this purpose shall mean Contract
Owners), the Fund shall so inform the Companies, and the Fund and the
Companies shall discuss alternative accommodations in the circumstances. if
the Fund determines that it is in the best interests of shareholders to
comply with such restrictions, the Fund and the Companies shall amend
Schedule 4 to this Agreement to reflect such restrictions. The Fund makes no
representation or warranty as to whether any aspect of its operations
complies with the insurance law of any state.
3.5. The Fund shall provide to the Companies at least one complete
copy of all Fund Registration Statements, Fund Prospectuses, Statements of
Additional Information, annual and semi-annual reports and other reports,
proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all
amendments or supplements to any of the above, that relate to the Fund or
Fund shares, promptly after the filing of such document with the SEC or other
regulatory authorities.
-8-
<PAGE>
3.6. The Companies shall provide to the Fund at least one complete
copy of all Contracts Registration Statements, Contracts Prospectuses,
Statements of Additional Information, reports, solicitations for voting
instructions, sales literature and other promotional materials, applications
for exemptions, requests for no-action letters, and all amendments or
supplements to any of the above, that relate to the Contracts or those
Sub-Accounts of the Account to which Contract purchase payments and value are
allocable, promptly after the filing of such document with the SEC or other
regulatory authorities. The Companies agree that to the extent required by
applicable law, regulation, or rules of any self-regulatory organization, sales
literature and advertising relating to the Contracts will be filed with relevant
regulatory agencies and/or self-regulatory organizations.
3.7. Each party will provide to the other parties upon request copies
of draft versions of any registration statements, prospectuses, statements of
additional information, reports, proxy statements, solicitations for voting
instructions, sales literature and other promotional materials, applications
for exemptions, requests for no-action letters, and all amendments or
supplements to any of the above, to the extent that the other parties
reasonably need such information for purposes of preparing a report or other
filing to be filed with or submitted to a regulatory agency. If a party
requests any such information before it has been filed, the other parties
will provide the requested information if then available and in the version
then available at the time of such request.
3.8. Each party hereto shall cooperate with the other parties and all
appropriate governmental authorities (including without limitation the SEC,
the NASD and state insurance regulators) and shall permit each other party
and such authorities reasonable access to its books and records in connection
with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby. However, such access shall not extend to
attorney-client privileged information.
3.9. For purposes of this Article III, the phrase "sales literature
or other promotional material" includes, but is not limited to, any material
constituting sales literature or advertising under the NASD rules, the 1940
Act or the 1933 Act.
ARTICLE IV. VOTING
With respect to any matter put to vote by the holders of Fund shares
or Series shares ("Voting Shares"), the Companies shall, to the extent required
by securities laws or regulations:
-9-
<PAGE>
(a) solicit voting instructions from Contract Owners to which Voting
Shares are attributable;
(b) vote Voting Shares of each Series attributable to Contract Owners
in accordance with instructions or proxies timely received from such
Contract Owners;
(c) vote Voting Shares of each Series attributable to Contract Owners
for which no instructions have been received in the same proportion as
Voting Shares of such Series for which instructions have been timely
received; and
(d) vote Voting Shares of each Series held by the Company on its own
behalf or on behalf of the Account that are not attributable to
Contract Owners in the same proportion as Voting Shares of such Series for
which instructions have been timely received.
The Companies shall be responsible for assuring that voting privileges for
the Account are calculated in a manner consistent with the provisions set
forth above.
ARTICLE V. FEES AND EXPENSES
5.1. Subject to the provisions of Sections 5.2 and 5.3 below, all
expenses incident to each party's performance under this Agreement shall be
paid by such party to the extent permitted by law.
5.2. Expenses assumed by the Fund, or by one or more of its service
providers on its behalf, include, but are not limited to, the costs of:
registration and qualification of Fund shares under the federal securities
laws; preparation and filing with the SEC of the Fund Prospectus, Fund
Registration Statement, Fund proxy materials and shareholder reports; the
printing and mailing of all Fund Prospectuses and Statements of Additional
Information, proxy statements, periodic reports, and other printed materials
required to be provided by the Fund to its then-current shareholders;
preparation of all statements and notices required by any federal or state
securities law; and all taxes on the issuance or transfer of Fund shares. The
Fund shall not pay any fee or other compensation to the Companies under this
Agreement, and shall not bear any costs of preparing, printing, recording,
taping or disseminating sales literature or other promotional material or the
costs of printing and mailing to prospective Contract Owners copies of the
Fund Prospectus, Fund Statement of Additional Information, notices, proxy
statements, periodic reports, or other printed materials.
5.3. Expenses assumed by the Companies include, but are not limited
to, the costs of: regulation and qualification
-10-
<PAGE>
of the Contracts under the federal securities laws; and preparation and filing
with the SEC of the Contracts Prospectus, Contracts Registration Statement, and
Contract Owner reports.
ARTICLE VI. COMPLIANCE WITH THE CODE
6.1. The Fund undertakes to comply with Section 817(h) of the Code,
and all regulations issued thereunder.
6.2. The Fund undertakes to ensure that each Series shall qualify as
and maintain its qualification as a regulated investment company under Part I,
Subchapter M, Chapter 1, Subtitle A of the Code or any successor or similar
provision, and undertakes to notify the Companies immediately upon having a
reasonable basis for believing that any Series has ceased to so qualify
or might not so qualify in the future.
6.3. The Companies undertake to maintain the treatment of the
Contracts as annuity contracts or life insurance policies, whichever is
appropriate, under applicable provisions of the Code and shall notify the Fund
immediately upon having a reasonable basis for believing that the Contracts
have ceased to be so treated or that they might not be so treated in the future.
ARTICLE VII. POTENTIAL CONFLICTS
7.1. The parties to this Agreement acknowledge that the Fund may in
the future file an application with the SEC to request an order granting relief
from various provisions of the 1940 Act and the rules thereunder to the
extent necessary to permit Fund shares to be sold to and held by variable
annuity and variable life insurance separate accounts of both affiliated and
unaffiliated Participating Insurance Companies. Any conditions or
undertakings that may be imposed on the Companies and the Fund by virtue of
such order (or by any SEC rule, regulation, or order that may be adopted or
issued after the date hereof regarding the sale of Fund shares to and
holding of Fund shares by both variable annuity and variable life insurance
separate accounts) shall be incorporated herein by this reference, as of the
date such order is granted, as though set forth herein in full, and the
parties to this Agreement shall comply with such conditions and undertakings
to the extent applicable to each such party. The Fund will not enter into a
participation agreement with any other Participating Insurance Company unless
it imposes the same conditions and undertakings incorporated by reference
herein on the parties to such agreement.
-11-
<PAGE>
7.2.
(a) The Companies will report any potential or existing conflicts
between the interests of the Contract Owners of all separate accounts
investing in the Fund of which they are aware to the Fund Board and will
assist the Fund Board in carrying out its responsibilities under this
section by providing the Fund Board with all information reasonably
necessary for the Fund Board to consider any issues raised.
(b) The Fund Board will monitor the operations of the Fund for the
existence of any material irreconcilable conflict between the interests of
the Contract Owners of all separate accounts investing in the Fund. An
irreconcilable material conflict may arise for a variety of reasons,
including: (i) an action by any state insurance regulatory authority; (ii)
a change in applicable federal or state insurance, tax, or securities laws
or regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar action by insurance, tax, or
securities regulatory authorities; (iii) an administrative or judicial
decision in any relevant proceeding; (iv) the manner in which the
investments of any Series of the Fund are being managed; or (v) a
difference in voting instructions given by variable annuity contract
and variable life insurance contract owners.
(c) If it is determined by a majority of the Fund Board or a majority
of the disinterested Trustees that a material irreconcilable conflict
exists, the Companies shall, at their expense and to the extent reasonably
practicable (as determined by a majority of the disinterested Trustees),
take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, up to and including: (i) withdrawing
the assets allocable to the Account from the Fund or any Series and
reinvesting such assets in a different investment medium, including (but
not limited to) another Series of the Fund, or submitting the question
whether such segregation should be implemented to a vote of all affected
Contract Owners and, as appropriate, segregate the assets of life
insurance contract owners invested in the Account from those of owners of
variable annuity contracts issued by other life insurance companies, if
such life insurance contract owners shall vote in favor of such
segregation, or offering to the life insurance contract owners the option
of making such a change; and (ii) establishing a new registered management
investment company or managed separate account.
(d) If a material irreconcilable conflict arises because of a
decision by the Companies to disregard Contract
-12-
<PAGE>
Owner voting instructions and that decision represents a minority position
or would preclude a majority vote, the Companies may be required, at the
Fund's election, to withdraw the Account's investment in the Fund and
terminate this Agreement; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing
material irreconcilable conflict as determined by a majority of the
disinterested Trustees. Any such withdrawal and termination must take
place within six (6) months after the Fund gives written notice that this
provision is being implemented, and until the end of that six month period
the Fund shall continue to accept and implement orders by the Companies
for the purchase and redemption of shares of the Fund.
(e) If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Companies conflicts
with the majority of other state regulators, then the Companies will
withdraw the Account's investment in the Fund and terminate this Agreement
within six (6) months after the Fund Board informs the Companies in
writing that is has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal
and termination shall be limited to the extent required by the foregoing
material irreconcilable conflict as determined by a majority of the
disinterested Trustees. Until the end of any such six month period, the
Fund shall continue to accept and implement orders by the Companies for
the purchase and redemption of shares of the Fund.
(f) For purposes of sub-sections (c) through (f) of this section, a
majority of the disinterested Trustees shall determine whether or not any
proposed action adequately remedies any irreconcilable material conflict,
but in no event will the Fund be required to establish a new funding
medium for the Contracts. The Companies shall not be required by
sub-section (c) to establish a new funding medium for their Contract if an
offer to do so has been declined by vote of a majority of Contract Owners
materially adversely affected by the irreconcilable material conflict. In
the event that the Fund Board determines that any proposed action does not
adequately remedy any irreconcilable material conflict, then the Companies
will withdraw their Account's investment in the Fund and terminate tSShis
Agreement within six (6) months after the Fund Board informs the Companies
in writing of the foregoing determination, provided, however, that such
withdrawal and termination shall be limited to the extent required by any
such material irreconcilable conflict as determined by a majority of the
disinterested Trustees.
-13-
<PAGE>
ARTICLE VIII. INDEMNIFICATION
8.1. The Companies shall indemnify and hold harmless the Fund and
each of its Trustees against any and all losses, claims, damages or liabilities,
joint or several (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amounts paid in settlement
of, any action, suit or proceeding or any claim asserted), to which they or
any of them may become subject under any statute or regulation, at common law
or otherwise, insofar as such losses, claims, damages or liabilities:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Contracts
Registration Statement, Contracts Prospectus, sales literature or other
promotional material for the Contracts or the Contracts themselves (or any
amendment or supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances in which
they were made; provided that this obligation to indemnify shall not apply
if such statement or mission or such alleged statement or alleged omission
was made in reliance upon and in conformity with information furnished in
writing to the Companies by the Fund for use in the Contracts Registration
Statement, Contracts Prospectus or in the Contracts or sales literature or
promotional material for the Contracts (or any amendment or supplement to
any of the foregoing) or otherwise for use in connection with the sale of
the Contracts of Fund shares; or
(b) arise out of any untrue statement or alleged untrue statement of
a material fact contained in the Fund Registration Statement, Fund
Prospectus or sales literature or other promotional material of the Fund
(or any amendment or supplement to any of the foregoing), or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in light
of the circumstances in which they were made, if such statement or omission
was made in reliance upon and in conformity with information furnished in
writing to the Fund by or on behalf of the Companies; or
(c) arise out of or are based upon any wrongful conduct of the
Companies or persons under their control (or subject to their authorization
or supervision) with respect to the sale or distribution of the Contracts
or Fund shares; or
-14-
<PAGE>
(d) arise as a result of any failure by the Companies to perform
their obligations under the terms of this Agreement (including a failure
to comply with the undertaking specified in Article VI of this Agreement,
unless such failure is a result of the Fund's material breach of this
Agreement); or
(e) arise out of any material breach by the Companies of this
Agreement, including but not limited to any failure to transmit a request
for redemption or purchase of Fund shares on a timely basis in accordance
with the procedures set forth in Article II.
This indemnification will be in addition to any liability that the Companies
may otherwise have; provided, however, that no person otherwise entitled to
indemnification pursuant to this Section 8.1 shall be entitled to
indemnification is such loss, claim, damage or liability is due to the wilful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
person seeking indemnification.
8.2. The Fund shall indemnify and hold harmless the Companies and
each of their directors against any and all losses, claims, damages or
liabilities, joint or several (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amounts paid in
settlement of, any action, suit or proceeding or any claim asserted), to which
they or any of them may become subject under any statute or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Fund Registration
Statement, Fund Prospectus or sales literature or other promotional
material of the Fund (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances in which they were made; provided that this obligation to
indemnify shall not apply if such statement or omission or such alleged
statement or alleged omission was made in reliance upon and in conformity
with information furnished in writing by the Companies to the Fund for use
in the Fund Registration Statement, Fund Prospectus or sales literature or
promotional material for the Fund (or any amendment or supplement to any of
the foregoing); or
(b) arise out of any untrue statement or alleged untrue statement of
a material fact contained in the Contracts Registration Statement,
Contracts Prospectus or
-15-
<PAGE>
sales literature or other promotional material for the Contracts (or any
amendment or supplement to any of the foregoing), or the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances in which they were made, if such statement or
omission was made in reliance upon information furnished in writing by or
on behalf of the Fund to the Companies; or
(c) arise out of or are based upon wrongful conduct of the Fund with
respect to the sale of Fund shares; or
(d) arise as a result of any failure by the Fund to perform its
obligations under the terms of this Agreement (including a failure to
comply with the undertakings specified in Article VI of this Agreement,
unless such failure is a result of the Companies' material breach of this
Agreement); or
(e) arise out of any material breach by the Fund of this Agreement,
including, but not limited to, a failure of the Fund to comply with
Section 817(h) of the Code and with Part I, Subchapter M, Chapter 1,
Subtitle A of the Code.
This indemnification will be in addition to any liability that the Fund may
otherwise have; provided, however, that no person otherwise entitled to
indemnification pursuant to this Section 8.2 shall be entitled to
indemnification if such loss, claim, damage or liability is due to the wilful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
person seeking indemnification.
8.3. After receipt by a party entitled to indemnification
("indemnified party") under this Article VIII of notice of the commencement of
any action, if a claim in respect thereof is to be made by the indemnified party
against any person obligated to provide indemnification under this Article VIII
("indemnifying party"), such indemnified party will notify the indemnifying
party in writing of the commencement thereof as soon as practicable
thereafter, provided that the failure to so notify the indemnifying party will
not relieve the indemnifying party from any liability under this Article
VIII, except to the extent that the omission results in a failure of actual
notice to the indemnifying party and such indemnifying party is damaged
solely as a result of the failure to give such notice. The indemnifying
party, upon the request of the indemnifying party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnifying party shall have the
right to
-16-
<PAGE>
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel
or (ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent but if settled with such consent, or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnifying party from and against any loss or liability by reason of such
settlement or judgment.
A successor by law of the parties to this Agreement shall be entitled
to the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Michigan,
without giving effect to the principles of conflicts of laws.
9.2. This Agreement shall be subject to the provisions of the 1933
Act, the Securities Exchange Act of 1934, as amended, and the 1940 Act, and the
rules and regulations and rulings thereunder, including such exemptions from
those statutes, rules and regulations as the SEC may grant, and the terms
hereof shall be limited, interpreted and construed in accordance therewith.
ARTICLE X. DURATION OF AGREEMENT AND TERMINATION
10.1. This Agreement shall become effective as of the date first
above written. Subject to the following, this Agreement shall remain in force
until April 30, 1997 and shall be renewed annually thereafter, without further
action by the Fund, ITT or Hartford, unless one of them notifies the others
no later than 90 days before the close of the initial term or any anniversary
thereof of its intent to terminate this Agreement. In the event that the NBD
Bank Agreement, effective March 30, 1995, among NBD Bank, ITT and Hartford
("NBD Bank Agreement") is terminated in accordance with Section 9 of such
agreement, this Agreement shall also terminate with such termination being
subject to the provisions of that Section, unless the parties hereto agree in
writing to waive such termination. Certain
-17-
<PAGE>
obligations of, or restrictions on, the parties to this Agreement may terminate
as provided in Sections 10.2, 10.3, and 10.4 of this Agreement, and the
Companies may be required to redeem Series shares pursuant to Section 10.4 of
this Agreement. However, to the extent that the provisions of Section 10.2, 10.3
or 10.4 are contrary to, conflict with or are otherwise inconsistent with
Section 9 of the NBD Bank Agreement, the provisions of Section 9 of the NBD
Bank Agreement shall govern.
10.2 The obligation of the Fund to sell shares to the Companies
pursuant to Article I of this Agreement shall terminate at the option of the
Fund upon six months notice to the Companies:
(a) upon institution of formal proceedings against the Companies by
the NASD, the SEC, the insurance commission of any state or any other
regulatory body regarding the Companies' duties under this Agreement or
related to the sale of the Contracts, the operation of the Account, the
administration of the Contracts or the purchase of Fund shares, or an
anticipated ruling, judgment or outcome which would, in the Fund's
reasonable judgment, materially impair the Companies' ability to meet and
perform the Companies' obligations and duties hereunder;
(b) in the event any of the Contracts are not registered, issued or
sold in accordance with applicable federal and/or state law;
(c) if the Fund shall determine, in its sole judgment exercised in
good faith, that either (1) the Companies shall have suffered a material
adverse change in their business or financial condition or (2) the
Companies shall have been the subject of material adverse publicity which
is likely to have a material adverse impact upon the business and
operations of the Fund;
(d) upon the Companies' assignment of this Agreement (including,
without limitation, any transfer of the Contracts or the Account to
another insurance company pursuant to an assumption reinsurance agreement)
unless the Fund consents thereto; or
(e) upon termination pursuant to Section 10.1 or notice from the
Companies pursuant to Section 10.3.
In exercising its option to terminate its obligation to sell shares to the
Companies, the Fund may elect to continue to make Fund shares available to
the extent necessary to permit owners of Contracts in effect on the effective
date of such termination (hereinafter referred to as "Existing Contracts") to
reallocate investments in the Fund, redeem investments in the Fund and/or
-18-
<PAGE>
invest in the Fund upon the making of additional purchase payments under the
Existing Contracts. The Fund shall promptly notify the Companies whether the
Fund is electing to make Fund shares available after termination.
10.3.
(a) The restrictions on the Companies under Section 1.8 of this
Agreement shall terminate at the option of the Companies upon six months
notice to the Fund upon institution of formal proceedings against the Fund
by the NASD, the SEC or any state securities or insurance commission or
any other regulatory body with jurisdiction over the Fund;
(b) The restrictions on the Companies under Section 1.8 of this
Agreement shall terminate with respect to a particular Series at the
option of the Companies upon six months notice to the Fund:
(1) if shares of the Series are not reasonably available to meet
the requirements of the Contracts as determined by the Companies, and
the Fund, after receiving written notice from the Companies of such
non-availability, fails to make available a sufficient number of Fund
shares to meet the requirements of the Contracts within four months
after receipt thereof;
(2) if the Series ceases to qualify as a regulated investment
company under Part I, Subchapter M, Chapter 1, Subtitle A of the Code
or under any successor or similar provision, or if the Companies
reasonably believe based on an opinion of counsel satisfactory to the
Fund that the Series may fail to so qualify, and the Fund, upon
written request, fails to provide reasonable assurance that it will
take action to cure or correct such failure;
(3) if the Series fails to meet the diversification requirements
specified in Section 817(h) of the Code and any regulations
thereunder and the Fund, upon written request, fails to provide
reasonable assurance that it will take action to cure or correct such
failure; or
(4) if the Fund informs the Companies pursuant to Section 3.6
that the Fund will not comply with investment restrictions for a
Series as requested by the Companies and the Fund and the Companies
are unable to agree upon any reasonable alternative accommodations.
-19-
<PAGE>
10.4.
(a) The parties to this Agreement understand and acknowledge that it
is essential for compliance with Section 817(h) of the Code that the
Contracts qualify as annuity contracts or life insurance policies, as
applicable, under the Code. Accordingly, if any of the Contracts cease to
qualify as annuity contracts or life insurance policies, as applicable,
under the Code, or if the Fund reasonably believes that any such Contracts
may fail to so qualify, then (i) notwithstanding the provisions of Section
10.2 above, the obligation of the Fund to sell shares of the affected
Series to the Companies pursuant to Article I of this Agreement shall
terminate at the option of the Fund upon notice to the Companies; and
(ii) the Fund shall have the right to require the Companies to redeem
Series shares attributable to such Contracts upon notice to the Companies,
and the Companies shall redeem such Series shares, in order to ensure that
each Series complies with the provisions of Section 817(h) of the Code
applicable to ownership of Series shares. Notice to the Companies pursuant
to Section 10.4(a)(ii) shall specify the period of time the Companies have
to redeem such shares or to make other arrangements satisfactory to the
Fund and its counsel, such period of time to be determined with reference
to the requirements of Section 817(h) of the Code.
(b) In addition, the Fund may be required to terminate sales of shares
to the Companies, and the Companies may be required to redeem Fund shares,
pursuant to action taken or request made by the Fund Board in accordance
with an order of the SEC described in Article VII, any conditions or
undertakings incorporated by reference in Article VII, or any SEC rule,
regulation, or order that may be adopted or issued after the date hereof
regarding the sale of Fund shares to and holding of Fund shares by both
variable annuity and variable life insurance separate accounts. In the
event that the Fund Board takes any action or makes any request as
described in Article VII, then (i) notwithstanding the provisions of
Section 10.2 above, the obligation of the Fund to sell shares to the
Companies pursuant to Article I of this Agreement shall terminate in
accordance with the provisions set forth in such order or incorporated by
reference therein, and in accordance with the action taken or request made
by the Fund Board as described above; and (ii) the Companies shall redeem
Fund shares in accordance with the provisions set forth in such order or
incorporated by reference therein, and in accordance with the action
taken or request made by the Fund Board as described above.
-20-
<PAGE>
ARTICLE XI. APPLICABILITY TO NEW ACCOUNTS AND NEW CONTRACTS
The parties to this Agreement may amend the schedules to this
Agreement from time to time to reflect, as appropriate, changes in or
relating to the Contracts or Series, or additions of new classes of
Contracts to be issued by the Companies through separate accounts
investing in the Fund. The provisions of this Agreement shall be equally
applicable to each such class of Contracts, Series and Accounts, effective
as of the date of amendment of such Schedule, unless the context otherwise
requires.
ARTICLE XII. Notices
Any notice shall be sufficiently given when sent by registered or
certified mail to the other parties at the address of such parties set forth
below or at such other address as such parties may from time to time specify
in writing to the other parties.
If to the Fund:
The Woodward Variable Annuity Fund
c/o NBD Bank, Transfer Agent
P.O. Box 7058
Troy, Michigan 48007-7058
Attn: Dane Criger, Vice President
with copy to:
W. Bruce McConnel, III
Drinker Biddle & Reath
1345 Chestnut Street
Philadelphia, PA 19107
-21-
<PAGE>
If to the Companies:
ITT Hartford Life and Annuity Insurance Company
P.O. Box 2999
Hartford, Connecticut 06104-2999
Attn: Stephen T. Joyce, Director
Bank and Thrifty Sales
with copy to:
Rodney J. Vessels, Counsel
ITT Hartford Life Insurance Companies
P.O. Box 2999
Hartford, Connecticut 06104-2999
- or -
200 Hopmeadow Street
Simsbury, Connecticut 06089
ARTICLE XIII. MISCELLANEOUS
13.1. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
13.2. This Agreement may be executed simultaneously in two or more
counterparts, each of which together shall constitute one and the same
instrument.
-22-
<PAGE>
13.3. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and behalf by its duly authorized officer.
ITT HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY
By: /s/ Peter W. Cummins
--------------------------
Name: Peter W. Cummins
Title: Vice President
HARTFORD LIFE INSURANCE COMPANY
By: /s/ Peter W. Cummins
--------------------------
Name: Peter W. Cummins
Title: Vice President
THE WOODWARD VARIABLE ANNUITY FUND
By: /s/ Earl I. Heenan, Jr.
--------------------------
Name: Earl I. Heenan, Jr.
Title: President
-23-
<PAGE>
ITT HARTFORD LIFE INSURANCE COMPANIES AUTHORIZATION LIST
The following list of names are authorized to act on behalf of the ITT
Hartford Life Insurance Companies for the purpose of executing purchase and
sale orders in the Woodward Variable Annuity Funds.
JODY RAYMOND /s/ Jody Raymond
-------------------------
JOHN LADD /s/ John Ladd
-------------------------
ROBERT ROCCO /s/ Robert Ricco
-------------------------
GREG BUBNASH /s/ Greg Bubnash
-------------------------
GEORGE JAY /s/ George Jay
-------------------------
<PAGE>
SCHEDULE 1
Accounts of the Company
Investing in the Fund
Effective as of the date the Agreement was executed, the following separate
accounts are subject to the Agreement:
Name of Account Date Established by SEC 1940 Act Type of Product
and Subaccounts Board of Directors Registration Number Supported by
of the Companies Account
- --------------------------------------------------------------------------------
Separate October 28, 1994 33-86330 Variable annuity
Account Six
Effective as of ________________, the following separate accounts are hereby
added to this Schedule 1 and made subject to the Agreement:
Name of Account Date Established by SEC 1940 Act Type of Product
and Subaccounts Board of Directors Registration Number Supported by
of the Companies Account
- --------------------------------------------------------------------------------
IN WITNESS WHEREOF, the Fund and the Companies hereby amend this Schedule 1
in accordance with Article XI of the Agreement.
__________________________________ ______________________________
The Woodward Variable Annuity Fund ITT Hartford Life and Annuity
Insurance Company
_______________________________
Hartford Life Insurance Company
