<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY-
SEPARATE ACCOUNT SIX
P. O. Box 5085 PEGASUS PATHMAKER VARIABLE ANNUITY
Hartford, Connecticut 06102-5085
Telephone: 1-800-862-6668 (Contract Owners)
1-800-862-7155 (Investment Representatives)
- --------------------------------------------------------------------------------
This Prospectus describes the Pegasus Pathmaker Variable Annuity Contract
("Contract"), a flexible premium tax deferred variable annuity issued by
Hartford Life and Annuity Insurance Company ("Hartford"). Payments for the
Contract will be held in the Fixed Account and/or a series of Sub-Accounts of
Hartford Life and Annuity Insurance Company Separate Account Six ("Separate
Account").
The following Sub-Accounts are available under the Contracts. Opposite each
Sub-Account is the name of the underlying investment for that Sub-Account.
<TABLE>
<S> <C>
Pegasus Mid-Cap Opportunity Fund Sub-Account - shares of the Mid-Cap Opportunity Fund of the
Pegasus Variable Funds ("Pegasus Mid-Cap Opportunity
Fund")
Pegasus Growth Fund Sub-Account - shares of the Growth Fund of the Pegasus Variable Funds
("Pegasus Growth Fund")
Pegasus Growth and Value Fund Sub-Account - shares of the Growth and Value Fund of the Pegasus
Variable Funds ("Pegasus Growth and Value Fund")
Pegasus Intrinsic Value Fund Sub-Account - shares of the Intrinsic Value Fund of the Pegasus
Variable Funds ("Pegasus Intrinsic Value Fund")
Pegasus Bond Fund Sub-Account - shares of the Bond Fund of the Pegasus Variable Funds
("Pegasus Bond Fund")
Putnam New Opportunities Sub-Account - shares of Class IA of the Putnam VT New Opportunities
Fund of Putnam Variable Trust ("Putnam VT New Opportunities
Fund")
Putnam International Growth Sub-Account - shares of Class IA of the Putnam VT International
Growth Fund of Putnam Variable Trust ("Putnam VT
International Growth Fund")
Putnam Global Growth Sub-Account - shares of Class IA of the Putnam VT Global Growth Fund
of Putnam Variable Trust ("Putnam VT Global Growth Fund")
Putnam Global Asset Allocation Sub-Account - shares of Class IA of the Putnam VT Global Asset
Allocation Fund of Putnam Variable Trust ("Putnam VT
Global Asset Allocation Fund")
Putnam Growth and Income Sub-Account - shares of Class IA of the Putnam VT Growth and Income
Fund of Putnam Variable Trust ("Putnam VT Growth and Income
Fund")
Putnam Diversified Income Sub-Account - shares of Class IA of the Putnam VT Diversified
Income Fund of Putnam Variable Trust ("Putnam VT Diversified
Income Fund")
Putnam U.S. Government and High Quality Bond - shares of Class IA of the Putnam VT U.S. Government and
Sub-Account High Quality Bond Fund of Putnam Variable Trust ("Putnam
VT U.S. Government and High Quality Bond Fund")
Putnam Money Market Fund Sub-Account - shares of Class IA of the Putnam VT Money Market Fund of
Putnam Variable Trust ("Putnam VT Money Market Fund")
</TABLE>
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 write or call Hartford,
Attn.: Annuity Individual Services, P.O. Box 5085, Hartford, CT 06102-5085.
The Table of Contents for the Statement of Additional Information may be
found on page 38 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.
VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED
OR GUARANTEED BY, ANY BANK, NOR ARE THEY FEDERALLY INSURED OR OTHERWISE
PROTECTED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY; THEY ARE SUBJECT TO INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
THIS PROSPECTUS IS ACCOMPANIED BY CURRENT PROSPECTUSES FOR THE PEGASUS
VARIABLE FUNDS AND PUTNAM VARIABLE TRUST AND IS VALID ONLY WHEN SO
ACCOMPANIED.
Prospectus Dated: May 1, 1998
Statement of Additional Information Dated: May 1, 1998
<PAGE>
TABLE OF CONTENTS
Page
GLOSSARY OF SPECIAL TERMS....................................... 3
FEE TABLE....................................................... 5
SUMMARY......................................................... 9
PERFORMANCE RELATED INFORMATION................................. 11
INTRODUCTION.................................................... 12
THE CONTRACT.................................................... 12
Right to Cancel Period..................................... 13
THE SEPARATE ACCOUNT............................................ 13
THE FIXED ACCOUNT............................................... 14
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY..................... 15
THE FUNDS....................................................... 15
OPERATION OF THE CONTRACT/ACCUMULATION PERIOD................... 17
Premium Payments........................................... 17
Value of Accumulation Units................................ 18
Value of the Fixed Account................................. 18
Value of the Contract...................................... 18
Transfers Among Sub-Accounts............................... 18
Transfers Between the Fixed Account and the Sub-Accounts... 19
Redemption/Surrender of a Contract......................... 19
DEATH BENEFIT................................................... 20
Guaranteed Death Benefit................................... 21
Payment of Death Benefit................................... 21
Group Unallocated Contracts................................ 21
CHARGES UNDER THE CONTRACT...................................... 22
Contingent Deferred Sales Charges.......................... 22
Payments Not Subject to Sales Charges...................... 23
Waivers of Sales Charges................................... 23
Mortality and Expense Risk Charge.......................... 23
Administrative Charge...................................... 24
Annual Maintenance Fees................................... 24
Premium Taxes.............................................. 24
Exceptions to Charges Under the Contracts.................. 24
SETTLEMENT PROVISIONS........................................... 25
Annuity Proceeds Settlement Option......................... 26
The Annuity Unit and Valuation............................. 26
Determination of Payment Amount............................ 26
FEDERAL TAX CONSIDERATIONS...................................... 27
General.................................................... 27
Taxation of Hartford and the Separate Account.............. 27
Taxation of Annuities -- General Provisions
Affecting Purchasers Other Than Qualified
Retirement Plans......................................... 27
Federal Income Tax Withholding............................. 31
General Provisions Affecting Qualified Retirement Plans.... 32
Annuity Purchases by Nonresident Aliens and
Foreign Corporations..................................... 32
GENERAL MATTERS................................................. 32
Assignment................................................. 32
Modification............................................... 32
Delay of Payments.......................................... 32
Voting Rights.............................................. 32
Distribution of the Contracts.............................. 33
Other Contracts Offered.................................... 33
Custodian of Separate Account Assets....................... 33
Legal Proceedings.......................................... 33
2
<PAGE>
Legal Counsel.............................................. 33
Experts.................................................... 33
Additional Information..................................... 34
APPENDIX I...................................................... 35
TABLE OF CONTENTS TO STATEMENT OF ADDITIONAL INFORMATION........ 38
<PAGE>
GLOSSARY OF SPECIAL TERMS
ACCUMULATION UNIT: An accounting unit of measure used to calculate values
before Annuity payments begin.
ADMINISTRATIVE OFFICE OF HARTFORD: Currently located at 200 Hopmeadow Street,
Simsbury, CT. All correspondence concerning this Contract should be sent to
P.O. Box 5085, Hartford, CT 06102-5085, Attn.: Individual Annuity Services,
except for overnight or express mail packages, which should be sent to: 200
Hopmeadow Street, Simsbury, CT 06089.
ANNUAL MAINTENANCE FEE: An annual $30 charge on a Contract having a Contract
Value of less than $50,000, as determined on the most recent Contract
Anniversary or upon full surrender of the Contract. The charge is deducted
proportionately from the investment options in use at the time of such
deduction.
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 Contract issued by an insurance company that provides, in
exchange for Premium Payments, a series of income payments. This Prospectus
describes a deferred annuity Contract in which Premium Payments accumulate
tax-deferred until a partial or full surrender is taken or until the Annuity
Commencement Date. Annuity payments under the Contract will begin as of the
Annuity Commencement Date in accordance with the Annuity payment option
selected.
ANNUITY COMMENCEMENT DATE: The date on which Annuity payments are to
commence. Under a group unallocated Contract, 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: For an Annuity issued to an individual, the Contract is the
individual Annuity and any endorsements or riders. For a group Annuity, the
Contract is a certificate evidencing a participatory interest in a group
Annuity and any endorsements or riders. Any reference in this Prospectus to
a Contract includes the certificate.
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.
3
<PAGE>
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.
DUE PROOF OF DEATH: A certified copy of a 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 Hartford.
FIXED ACCOUNT: Part of the General Account of Hartford to which a Contract
Owner may allocate all or a portion of his Premium Payment or Contract Value.
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.
FUNDS: Currently, the portfolios of the Pegasus Variable Funds and Putnam
Variable Trust described on page 15 of this Prospectus.
GENERAL ACCOUNT: The General Account of Hartford which consists of all
assets of Hartford other than those allocated to the separate accounts of
Hartford.
HARTFORD: Hartford Life and Annuity Insurance Company. Effective January
1, 1998, ITT Hartford Life and Annuity Insurance Company's changed its name
to Hartford Life and Annuity Insurance Company.
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 21.
NON-QUALIFIED CONTRACT: A Contract which is not classified as a
tax-qualified retirement plan using pre-tax dollars under the Code.
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 Code.
PREMIUM PAYMENT: A payment made to Hartford pursuant to the terms of the
Contract.
PREMIUM TAX: A tax charged by a state or municipality on Premium Payments or
Contract Values.
QUALIFIED CONTRACT: A Contract which qualifies as a tax-qualified retirement
plan using pre-tax dollars under the Code, such as an employer-sponsored
Section 401(k) plan or an Individual Retirement Annuity (IRA).
SEPARATE ACCOUNT: Hartford separate account entitled "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 (generally 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.
4
<PAGE>
FEE TABLE
SUMMARY
CONTRACT OWNER TRANSACTION EXPENSES (ALL SUB-ACCOUNTS)
<TABLE>
<S> <C>
Sales Load Imposed on Purchases
(as a percentage of premium payments).................. None
Exchange Fee........................................... $ 0
Deferred Sales Load
(as a percentage of amounts withdrawn)
First Year (1).................................... 6%
Second Year....................................... 6%
Third Year........................................ 5%
Fourth Year....................................... 5%
Fifth Year........................................ 4%
Sixth Year........................................ 3%
Seventh Year...................................... 2%
Eighth Year....................................... 0%
Annual Maintenance Fee (2)............................ $30
Annual Expenses-Separate Account
(as percentage of average account value)
Mortality and Expense Risk........................ 1.250%
Administrative Fees............................... 0.150%
Total............................................. 1.400%
</TABLE>
(1) Length of time from Premium Payment.
(2) The Annual Maintenance Fee is a single $30 charge on a Contract. It is
deducted proportionally from the investment options in use at the time
of the charge. Pursuant to requirements of the Investment Company Act
of 1940, the Annual Maintenance Fee have been reflected in the Examples
by a method intended to show the average impact of the Annual
Maintenance Fee on an investment in the Separate Account. The Annual
Maintenance Fee is deducted only when the accumulated value is less than
$50,000. In the Example, the Annual Maintenance Fee is approximated
as a 0.08% annual asset charge based on the experience of the Contracts.
5
<PAGE>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
MANAGEMENT OTHER TOTAL FUND
FEES EXPENSES OPERATING
(AFTER ANY (AFTER ANY EXPENSES
FEE EXPENSE (AFTER ANY
WAIVERS) REIMBURSEMENTS) FEE WAIVERS
AND EXPENSE
REIMBURSEMENTS)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pegasus Mid-Cap Opportunity Fund (1) 0.600% 0.350% 0.950%
Pegasus Growth Fund (1) 0.600% 0.350% 0.950%
Pegasus Growth and Value Fund (1) 0.600% 0.350% 0.950%
Pegasus Intrinsic Value Fund (1) 0.600% 0.350% 0.950%
Pegasus Bond Fund (1) 0.400% 0.350% 0.750%
Putnam VT New Opportunities Fund 0.580% 0.050% 0.630%
Putnam VT International Growth Fund 0.730% 0.470% 1.200%
(2)
Putnam VT Global Growth Fund 0.600% 0.150% 0.750%
Putnam VT Global Asset Allocation Fund 0.660% 0.110% 0.770%
Putnam VT Growth and Income Fund 0.470% 0.040% 0.510%
Putnam VT Diversified Income Fund 0.690% 0.110% 0.800%
Putnam VT U.S. Government and High 0.610% 0.080% 0.690%
Quality Bond Fund
Putnam VT Money Market Fund 0.450% 0.090% 0.540%
- -------------------------------------------------------------------------------------
</TABLE>
1. Operating expenses of these Funds of the Pegasus Variable Funds
reflect the management fee schedule that will be in effect for future
periods combined with the historic expense levels for the Funds. The
Investment Adviser has agreed to waive portions of the management fee in
order to keep total Fund operating expenses at the level shown in the
table.
2. In order to limit the expenses of Putnam VT International Growth Fund,
during its start-up period, Putnam Management has agreed to limit its
compensation (and, to the extent necessary, bear other expenses of the
funds) through December 31, 1998, to the extent that expenses of the fund
(exclusive of brokerage, interest, taxes, deferred organizational and
extraordinary expenses, and payments under the funds' distribution plan
with respect to class IA shares) would exceed the annual rate of 1.20% of
the fund's average net assets.
3. The Management Fees and Other Expenses shown in the table above reflect
an expense limitation. In the absence of an expense limitation, Management
Fees, Other Expenses, and Total Fund Operating Expenses would have been:
<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT FEES OTHER EXPENSES OPERATING EXPENSES
<S> <C> <C> <C>
Putnam VT International 0.80 0.47 1.27
Growth Fund
* Estimated Managment Fees, Other Expenses, and Total Fund Operating Expenses.
</TABLE>
6
<PAGE>
EXAMPLE
<TABLE>
<CAPTION>
If you surrender your Contract If you annuitize your Contract If you do not surrender your
at the end of the applicable at the end of the applicable Contract, you would pay the
time period, you would pay the time period, you would pay the following expenses on a $1,000
following expenses on a $1,000 following expenses on a $1,000 investment, assuming a 5%
investment, assuming a 5% investment, assuming a 5% annual return on Assets:
annual return on assets: annual return on assets:
SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------- ------ ------- ------- -------- ------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pegasus Mid-Cap Opportunity $78 $122 $166 $269 $23 $71 $122 $261 $24 $74 $126 $269
Pegasus Growth Fund 78 122 166 269 23 71 122 261 24 74 126 269
Pegasus Growth and Value Fund 78 122 166 269 23 71 122 261 24 74 126 269
Pegasus Intrinsic Value Fund 78 122 166 269 23 71 122 261 24 74 126 269
Pegasus Bond Fund 76 115 155 248 21 65 111 240 22 67 115 248
Putnam New Opportunities 77 118 159 255 22 67 115 247 23 70 119 255
Putnam International Growth 79 125 171 280 24 74 127 272 25 77 131 280
Putnam Global Growth 77 119 161 260 22 68 117 251 23 71 121 260
Putnam Global Asset Allocation 78 121 165 267 23 70 121 254 24 73 125 267
Putnam Growth and Income 80 113 148 233 20 62 107 232 20 63 108 233
Putnam Diversified Income 78 121 165 267 23 70 121 259 24 73 125 267
Putnam U.S. Government and
High Quality Bond 76 117 158 252 21 66 113 244 22 69 118 252
Putnam Money Market 75 112 150 238 20 62 106 229 21 64 110 238
</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 underlying
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.
7
<PAGE>
ACCUMULATION UNIT VALUES
(For an accumulation unit outstanding throughout the period)
The following information has been derived from the audited financial
statements of the separate account, which have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report
with respect thereto, and should be read in conjunction with those statements
which are included in the Statement of Additional Information, which is
incorporated by reference in this Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
PEGASUS MID-CAP OPPORTUNITY FUND SUB-ACCOUNT
(INCEPTION DATE FEBRUARY 15, 1995)
Accumulation unit value at beginning of period . . . . $ 13.485 $ 10.983 $ 10.000
Accumulation unit value at end of period . . . . . . . $ 16.841 $ 13.485 $ 10.983
Number accumulation units outstanding at
end of period (in thousands) . . . . . . . . . . . . . 641 632 402,309
PEGASUS GROWTH FUND SUB-ACCOUNT
(INCEPTION DATE FEBRUARY 15, 1995)
Accumulation unit value at beginning of period . . . . $ 13.243 $ 11.430 $ 10.000
Accumulation unit value at end of period . . . . . . . $ 16.381 $ 13.243 $ 11.430
Number accumulation units outstanding at
end of period (in thousands) . . . . . . . . . . . . . 916 821 512,959
PEGASUS GROWTH AND VALUE FUND SUB-ACCOUNT
(INCEPTION DATE FEBRUARY 15, 1995)
Accumulation unit value at beginning of period . . . . $ 13.702 $ 11,700 $ 10.000
Accumulation unit value at end of period . . . . . . . $ 17.128 $ 13,702 $ 11.700
Number accumulation units outstanding at
end of period (in thousands) . . . . . . . . . . . . . 2,207 577 270,551
PUTNAM GLOBAL GROWTH SUB-ACCOUNT
(INCEPTION DATE FEBRUARY 15, 1995)
Accumulation unit value at beginning of period . . . . $ 13.607 $ 11.773 $ 10.000
Accumulation unit value at end of period . . . . . . . $ 15.341 $ 13.607 $ 11.773
Number accumulation units outstanding at
end of period (in thousands) . . . . . . . . . . . . . 49 37 21,336
PUTNAM GLOBAL ASSET ALLOCATION SUB-ACCOUNT
(INCEPTION DATE FEBRUARY 15, 1995)
Accumulation unit value at beginning of period . . . . $ 13.330 $ 11.692 $ 10.000
Accumulation unit value at end of period . . . . . . . $ 15.731 $ 13.330 $ 11.692
Number accumulation units outstanding at
end of period (in thousands) . . . . . . . . . . . . . 115 554 332,770
PUTNAM DIVERSIFIED INCOME SUB-ACCOUNT
(INCEPTION DATE FEBRUARY 15, 1995)
Accumulation unit value at beginning of period . . . . $ 12.000 $ 11.184 $ 10.000
Accumulation unit value at end of period . . . . . . . $ 12.706 $ 12.000 $ 11.184
Number accumulation units outstanding at
end of period (in thousands) . . . . . . . . . . . . . 64 255 91,387
PUTNAM U.S. GOVERNMENT AND HIGH QUALITY
BOND SUB-ACCOUNT
(INCEPTION DATE FEBRUARY 15, 1995)
Accumulation unit value at beginning of period . . . . $ 11.453 $ 11.341 $ 10.000
Accumulation unit value at end of period . . . . . . . $ 12.270 $ 11.453 $ 11.341
Number accumulation units outstanding at
end of period (in thousands) . . . . . . . . . . . . . 215 115,951
PEGASUS INTRINSIC VALUE FUND SUB-ACCOUNT
(INCEPTION DATE MAY 1, 1997)
Accumulation unit value at beginning of period . . . . $ 10.000
Accumulation unit value at end of period . . . . . . . $ 11.588
Number accumulation units outstanding at
end of period (in thousands) . . . . . . . . . . . . . 1,151
PEGASUS BOND FUND SUB-ACCOUNT
(INCEPTION DATE MAY 1, 1997)
Accumulation unit value at beginning of period . . . . $ 10.000
Accumulation unit value at end of period . . . . . . . $ 10.725
Number accumulation units outstanding at
end of period (in thousands) . . . . . . . . . . . . . 2,990
PUTNAM NEW OPPORTUNITIES SUB-ACCOUNT
(INCEPTION DATE MAY 1, 1997)
Accumulation unit value at beginning of period . . . . $ 10.000
Accumulation unit value at end of period . . . . . . . $ 12.739
Number accumulation units outstanding at
end of period (in thousands) . . . . . . . . . . . . . 373
PUTNAM INTERNATIONAL GROWTH SUB-ACCOUNT
(INCEPTION DATE MAY 1, 1997)
Accumulation unit value at beginning of period . . . . $10.000
Accumulation unit value at end of period . . . . . . . $ 10.988
Number accumulation units outstanding at
end of period (in thousands) . . . . . . . . . . . . . 1,191
PUTNAM GROWTH AND INCOME SUB-ACCOUNT
(INCEPTION DATE MAY 1, 1997)
Accumulation unit value at beginning of period . . . . $10.000
Accumulation unit value at end of period . . . . . . . $ 11.632
Number accumulation units outstanding at
end of period (in thousands) . . . . . . . . . . . . . 109
PUTNAM MONEY MARKET SUB-ACCOUNT
(INCEPTION DATE MAY 1, 1997)
Accumulation unit value at beginning of period . . . . $ 1.000
Accumulation unit value at end of period . . . . . . . $ 1.025
Number accumulation units outstanding at
end of period (in thousands) . . . . . . . . . . . . . 752
</TABLE>
8
<PAGE>
SUMMARY
WHAT IS THE CONTRACT AND HOW MAY I PURCHASE ONE?
The Contract offered is a tax deferred Variable Annuity Contract
("Contract") (see Taxation of Annuities in General, page 27). Generally, the
Contract is purchased by completing and submitting an application or an order
to purchase , along with the initial Premium Payments, to Hartford 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, except if you are in the InvestEase Program the
minimum is $50. Generally, a Contract Owner may exercise the right to cancel
the Contract within 10 days of receipt of the Contract by returning the
Contract to Hartford at its Administrative Office. If the Contract Owner
exercises the right to cancel, Hartford will return either the Contract Value
or the original Premium Payments to the Contract Owner. The duration of the
right to cancel period and Hartford's obligation to either return the
Contract Value or the original Premium will depend on state law (see "Right
to Cancel Period, page 13").
WHO MAY PURCHASE THE CONTRACT?
Any individual or group may purchase the Contract, including any trustee
or custodian for a retirement plan which qualifies for special Federal tax
treatment under the Code ("Qualified Contract"). The Contract is also
available for IRAs. (See "Federal Tax Considerations", page 27 and Appendix
I , page 35).
WHAT TYPES OF INVESTMENTS ARE AVAILABLE UNDER THE CONTRACT?
The underlying investments for the Contract are shares of the Pegasus
Variable Funds and Putnam Variable Trust, open-end diversified series
investment companies with multiple portfolios ("Funds") as follows: Pegasus
Mid-Cap Opportunity Fund, Pegasus Growth Fund, Pegasus Growth and Value Fund,
Pegasus Intrinsic Value Fund and Pegasus Bond Fund of the Pegasus Variable
Funds; and Putnam VT New Opportunities Fund, Putnam VT International Growth
Fund, Putnam VT Global Growth Fund, Putnam VT Global Asset Allocation Fund,
Putnam VT Growth and Income Fund, Putnam VT Diversified Income Fund , Putnam
VT U.S. Government and High Quality Bond Fund and Putnam VT Money Market
Fund of Putnam Variable 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", page 15 and "The Fixed Account", page 14).
WHAT ARE THE CHARGES UNDER THE CONTRACTS?
CONTINGENT DEFERRED SALES CHARGE
There is no deduction for sales expenses from Premium Payments when made.
However, a contingent deferred sales charge may be assessed against Contract
Value when the Contract is surrendered. (See "Contingent Deferred Sales
Charges", page 22).
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:
Length of Time
Charge from Premium Payment
------ --------------------
(Number of Years)
6% 1
6% 2
5% 3
5% 4
4% 5
3% 6
2% 7
0% 8 or more
9
<PAGE>
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 Value is 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", page 22).
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", page 22). Certain plans or
programs may have different withdrawal privileges.
MORTALITY AND EXPENSE RISKS
For assuming the mortality and expense risks under the Contract, Hartford
will impose a 1.25% per annum charge against Contract Value held in the
Sub-Accounts, (see "Mortality and Expense Risk Charge," page 23).
ADMINISTRATION AND MAINTENANCE FEES
The Contract provides for administration and Annual Maintenance Fee
charges. For administration, the charge is 0.15% per annum against Contract
Value held in the Separate Account. For the Annual Maintenance Fee, the
charge is $30 annually. (See "Administrative Charge" and "Annual Maintenance
Fees," page 24). Contracts with a Contract Value of $50,000 or more at time
of Contract Anniversary will not be assessed this charge. Hartford reserves
the right to waive the Annual Maintenance Fee under certain circumstances.
PREMIUM TAXES
A deduction will be made for Premium Taxes for a Contract sold in certain
states. (See "Premium Taxes," page 24).
CHARGES BY THE FUNDS
The Funds are subject to certain fees, charges and expenses. (See the
prospectuses for the Pegasus Variable Funds and Putnam Variable 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, Hartford may terminate the Contract in
its entirety. (See "Redemption/Surrender of a Contract," page 19; see
also "Federal Tax Considerations", page 27 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 Death Benefit is provided in the event of death of the Annuitant or
Contract Owner or Joint Contract Owner before Annuity payments have
commenced. (See "Death Benefit," page 20.)
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WHAT ARE THE AVAILABLE ANNUITY OPTIONS UNDER THE CONTRACT?
There are four available Annuity options under the Contract (See
"Settlement Provisions" on page 25.) The Annuity Commencement Date may not be
deferred beyond the Annuitant's 90th birthday (85th birthday in some states,
100th birthday if sold as a charitable remainder trust). 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.
DOES THE CONTRACT OWNER HAVE ANY VOTING RIGHTS UNDER THE CONTRACT?
Contract Owners will have the right to vote on matters affecting an
underlying Fund to the extent that proxies are solicited by such Fund. If a
Contract Owner does not vote, Hartford shall vote such interests in the same
proportion as shares of the Fund for which instructions have been received by
Hartford. (See "Voting Rights," page 32.)
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 its 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 Pegasus Bond Fund Sub-Account, Putnam Diversified Income Sub-Account,
Putnam Global Asset Allocation Sub-Account, Putnam Growth and Income
Sub-Account and Putnam U.S. Government and High Quality Bond Sub-Account
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 Annual Maintenance Fee.
The Putnam Money Market 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 reflects the recurring charges at the
Separate Account level including the Annual Maintenance Fee.
Total return at the Separate Account level includes all Contract charges:
sales charges, mortality and expense risk charges, and the Annual
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.
Hartford 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 Contract and the characteristics of and market for such alternatives.
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INTRODUCTION
This Prospectus has been designed to provide you with the necessary
information to make a decision on purchasing a flexible premium tax deferred
Variable Annuity contract offered by Hartford and funded by the Fixed Account
and/or the Funds offered through the Separate Account. Please read the
Glossary of Special Terms on pages 3 and 4 prior to reading this
Prospectus to familiarize yourself with the terms being used.
THE CONTRACT
The Pegasus Pathmaker Variable Annuity is a flexible premium tax deferred
Variable Annuity contract (the "Contract"). Payments for the Contract will
be held in the Fixed Account and/or a Sub-Account 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 Annuity Options 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 Hartford.
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).
After the Annuity Commencement Date, 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 Annuity 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 Code; annuity purchase plans adopted by public school systems and
certain tax-exempt organizations according to Section 403(b) of the Code;
Individual Retirement Annuities adopted according to Section 408 of the
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 Code ("Qualified
Contracts").
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RIGHT TO CANCEL PERIOD
If you are not satisfied with your purchase you may cancel the Contract
by returning it within ten days (or longer in some states) of the date you
received it. A written request for cancellation must accompany the Contract.
In such event, Hartford 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 Hartford's receipt of
request for cancellation. Hartford will refund the premium paid only for
individual retirement annuities (if returned within seven days of receipt)
and in those states where required by law.
THE SEPARATE ACCOUNT
The Separate Account was established on October 28, 1994, in accordance
with authorization by the Board of Directors of Hartford. It is the Separate
Account in which Hartford sets aside and invests the assets attributable to
Variable Annuity contracts, including the contracts sold through this
Prospectus. Although the Separate Account is an integral part of Hartford, 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 Hartford. The Separate Account meets the definition of
"separate account" under Federal Securities law.
Under Connecticut law, the assets of the Separate Account attributable to
the Contract offered through 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 Contract, 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
Hartford may conduct. So Contract Value allocated to the Sub-Accounts will
not be affected by the rate of return of Hartford's General Account, nor by
the investment performance of any of Hartford's other separate accounts.
However, the obligations arising under the Contract are general obligations
of Hartford.
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.
Hartford 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 Pegasus Variable Funds
and Putnam Variable Trust.
Hartford 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
SUB-ACCOUNT OF THE SEPARATE ACCOUNT 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.
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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 Value allocated to the Fixed Account become
a part of the general assets of Hartford. Hartford invests the assets of the
General Account in accordance with applicable laws governing investments of
insurance company General Accounts.
Currently, Hartford 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 Contract. However, Hartford reserves the right to
change the rate according to state insurance law. Hartford may credit
interest at a rate in excess of 3% per year; however, Hartford is not
obligated to credit any interest in excess of 3% per year. There is no
specific formula for the determination of excess interest credit. Some of
the factors that Hartford 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 Hartford'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 HARTFORD. THE
OWNER ASSUMES THE RISK THAT INTEREST CREDITED TO FIXED ACCOUNT ALLOCATIONS
MAY NOT EXCEED THE MINIMUM GUARANTEE OF 3% FOR ANY GIVEN YEAR.
From time to time, Hartford may credit increased interest rates to
Contract Owners under certain programs established at the discretion of
Hartford. Contract Owners may enroll in a special pre-authorized transfer
program known as Hartford's Dollar Cost Averaging Bonus Program (the
"Program"). Under this Program, Contract Owners who enroll may allocate a
minimum of $5,000 of their Premium Payment into the Program (Hartford may
allow a lower minimum Premium Payment for qualified plan transfers or
rollovers, including IRAs) and pre-authorize transfers to any of the
Sub-Accounts under either the 6 Month Transfer Program or 12 Month Transfer
Program. The 6 Month Transfer Program and the 12 Month Transfer Program will
generally have different credited interest rates. Under the 6 Month Transfer
Program, the interest rate can accrue up to 6 months and all Premium Payments
and accrued interest must be transferred to the selected Sub-Accounts in 3 to
6 months. Under the 12 Month Transfer Program, the interest rate can accrue
up to 12 months and all Premium Payments and accrued interest must be
transferred to the selected Sub-Accounts in 7 to 12 months. This will be
accomplished by monthly transfers for the period selected and a final
transfer of the entire amount remaining in the Program.
The pre-authorized transfers will begin within 15 days after the
initial Program Premium Payment and complete enrollment instructions are
received by Hartford. If complete Program enrollment instructions are not
received by Hartford within 15 days of receipt of the initial Program Premium
Payment, the Program will be voided and the entire balance in the Program
will be credited with the non-Program interest rate then in effect for the
Fixed Account.
Any subsequent Premium Payments received by Hartford within the Program
period selected will be allocated to the Sub-Accounts over the remainder of
that Program transfer period, unless otherwise directed by the Contract Owner.
A Contract Owner may only have one dollar cost averaging program in
place at one time, this means one standard dollar cost averaging plan or one
Dollar Cost Averaging Bonus Program.
Contract Owners may elect to terminate the pre-authorized transfers by
calling or writing Hartford of their intent to cancel their enrollment in the
Program. Upon cancellation of enrollment in the Program, Contract Owners will
no longer receive the increased interest rate. Hartford reserves the right to
discontinue, modify or amend the Program or any other interest rate program
established by Hartford. Any change to the Program will not affect Contract
Owners currently enrolled in the Program. This Program may not be available
in all states; please contact Hartford to determine if it is available in
your state.
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
Hartford Life and Annuity Insurance Company is a stock life insurance
company engaged in the business of writing life insurance and annuities, both
individual and group, in all states of the United States and the District of
Columbia, except New York. Effective on January 1, 1998, Hartford's name
changed from ITT Hartford Life and Annuity Insurance Company to Hartford Life
and Annuity Insurance Company. Hartford was originally incorporated under
the laws of Wisconsin on January 9, 1956, and was subsequently redomiciled to
Connecticut. Its offices are located in Simsbury, Connecticut; however, its
mailing address is P.O. Box 2999, Hartford, CT 06104-2999. Hartford is a
subsidiary of Hartford Fire Insurance Company, one of the largest multiple
lines insurance carriers in the United States. Hartford is ultimately
controlled by The Hartford Financial Services Group, Inc., one of the largest
financial service providers in the United States.
HARTFORD RATINGS
RATING AGENCY EFFECTIVE RATING BASIS OF RATING
------------- --------- ------ ---------------
A.M. Best and Company, 9/9/97 A+ Financial soundness and operating
performance
Standard & Poor's 1/23/98 AA Claims paying ability
Duff & Phelps 1/23/98 AA+ Claims paying ability
THE FUNDS
The underlying investments for the Contracts are shares of the Pegasus
Variable Funds and Putnam Variable Trust, open-end diversified series
investment companies with multiple portfolios. Each Fund and its investment
objective is described below. Hartford reserves the right, subject to
compliance with the law, to offer additional portfolios with differing
investment objectives. The Funds may not be available in all states.
PEGASUS MID-CAP OPPORTUNITY FUND
Seeks long-term capital appreciation. Pegasus Mid-Cap Opportunity Fund
seeks to achieve this objective by investing primarily in equity securities
of companies with intermediate market capitalizations.
PEGASUS GROWTH FUND
Seeks long-term capital appreciation. Pegasus Growth Fund seeks to
achieve this objective by investing primarily in equity securities of
domestic issuers believed by its investment adviser to have above-average
growth characteristics.
PEGASUS GROWTH AND VALUE FUND
Seeks long-term capital growth, with income a secondary consideration.
Pegasus Growth and Value Fund seeks to achieve this objective by investing
primarily in equity securities of larger companies that are attractively
priced relative to their growth potential.
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PEGASUS INTRINSIC VALUE FUND
Seeks to provide long-term capital appreciation. Pegasus Intrinsic Value
Fund seeks to achieve this objective by investing primarily in equity
securities believed by its investment adviser to represent a value or
potential worth which is not fully recognized by prevailing market prices.
PEGASUS BOND FUND
Seeks to maximize total rate of return by investing predominantly in
intermediate and long-term debt securities.
PUTNAM VT NEW OPPORTUNITIES FUND
Seeks long-term capital appreciation by investing principally in common
stocks of companies in sectors of the economy which Putnam Investment
Management, Inc. ("Putnam Management") believes possess above-average
long-term growth potential.
PUTNAM VT INTERNATIONAL GROWTH FUND
Seeks capital appreciation by investing primarily in equity securities of
companies located in a country other than the United States.
PUTNAM VT GLOBAL GROWTH FUND
Seeks capital appreciation through a globally diversified portfolio of
common stocks.
PUTNAM VT GLOBAL ASSET ALLOCATION FUND
Seeks a high level of long-term total return consistent with preservation
of capital by investing in U.S. equities, international equities, U.S. fixed
income securities, and international fixed income securities.
PUTNAM VT GROWTH AND INCOME FUND
Seeks capital growth and current income by investing primarily in common
stocks that offer potential for capital growth, current income, or both.
PUTNAM VT DIVERSIFIED INCOME FUND
Seeks high current income consistent with capital preservation by
investing in the following three sectors of the fixed income securities
markets: a U.S. Government and Investment Grade Sector, a High Yield Sector
(which invests primarily in securities commonly known as "junk bonds"), and
an International Sector. See the special considerations for investments in
high yield securities described in the Fund prospectus.
PUTNAM VT U.S. GOVERNMENT AND HIGH QUALITY BOND FUND
Seeks current income consistent with preservation of capital by investing
primarily in securities issued or guaranteed as to principal and interest by
the U.S. Government or by its agencies or instrumentalities and in other debt
obligations rated at least A by a nationally recognized securities rating
agency such as Standard & Poor's or Moody's Investor Service, Inc. or, if
not rated, determined by Putnam Management to be of comparable quality.
PUTNAM VT MONEY MARKET FUND
Seeks as high a rate of current income as Putnam Management believes is
consistent with preservation of capital and maintenance of liquidity by
investing in high-quality money market instruments.
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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 Pegasus Variable Funds and Putnam Variable Trust,
which should be read in conjunction with this Prospectus before investing.
Not all funds described in the Putnam Variable Trust Prospectus are available
in this Contract. Statements of Additional Information may also be ordered,
without charge, from the Pegasus Variable Funds and Putnam Variable Trust.
The Funds are generally managed in styles similar to the funds of 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 invest in
securities different from those in which their counterpart Funds invest, and
consequently will not have identical portfolios or experience identical
investment results.
First Chicago NBD Investment Management Company ("FCNIMCO"), located at
Three First National Plaza, Chicago, Illinois 60670, is the investment
adviser to Pegasus Variable Funds. FCNIMCO is a wholly-owned subsidiary of
The First National Bank of Chicago, which, in turn, is a wholly-owned
subsidiary of First Chicago NBD Corporation, a registered bank holding
company . Included among FCNIMCO'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. FCNIMCO also acts as investment adviser for other
registered investment companies and investment company portfolios.
Putnam Management, One Post Office Square, Boston, MA, 02109, serves as
the investment manager for the Funds of Putnam Variable Trust. An
affiliate, The Putnam Advisory Company, Inc., manages domestic and foreign
institutional accounts and mutual funds. Another affiliate, Putnam Fiduciary
Trust Company, provides investment advice to institutional clients under its
banking and fiduciary policies. Putnam Management and its affiliates are
wholly-owned subsidiaries of Marsh & McLennan Companies, Inc., a publicly
owned holding company whose principal businesses are international insurance
brokerage and employee benefit consulting.
Subject to the general oversight of the Trustees of Putnam Variable Trust,
Putnam Management manages the Funds of Putnam Variable 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 Putnam Variable Trust pay Putnam Management a
quarterly fee. See the accompanying Putnam Variable 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 the 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 Hartford at its
Administrative Office, P.O. Box 5085, Hartford, CT 06102-5085. It will be
credited to the 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
Hartford in its 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.
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Generally, the minimum initial Premium Payment is $1,000; the minimum
subsequent payments is $500, if you are in the InvestEase program the minimum
subsequent payment is $50. 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
Hartford 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 3%, compounded annually. Hartford may credit a
lower minimum interest rate according to state law. Hartford 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. However, Hartford 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. Transfers by
telephone may be made by a Contract Owner or by the attorney-in-fact pursuant
to a power of attorney by calling (800) 862-6668 or by the agent of record by
calling (800) 862-7155. Telephone transfers may not be permitted by some
states for their residents who purchase variable annuities.
The policy of Hartford and its agents and affiliates is that they will not
be responsible for losses resulting from acting upon telephone requests
reasonably believed to be genuine. Hartford will employ reasonable
procedures to confirm that instructions communicated by telephone are
genuine; otherwise, Hartford may be liable for any losses due to unauthorized
or fraudulent instructions. The procedures Hartford follows for transactions
initiated by telephone include requirements that callers provide certain
information for identification purposes. All transfer instructions by
telephone are tape recorded.
Hartford may permit the Contract Owner to pre-authorize transfers between
the Sub-Accounts and the Fixed Account under certain circumstances.
Transfers between the Sub-Accounts may be made both before and after Annuity
payments
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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.
It is the responsibility of the Contract Owner to verify the accuracy of
all confirmations of transfers and to promptly advise Hartford of any
inaccuracies within 30 days of receipt of the confirmation. Hartford will
send the Contract Owner a confirmation of transfer within 5 days of the date
of any instruction.
The right to reallocate Contract Values between the Sub-Accounts is
subject to modification if Hartford 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 Hartford to be to the disadvantage of other Contract Owners.
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 Hartford permits pre-authorized 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. Hartford reserves the right to modify the limitations on
transfers from the Fixed Account and 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 (Annuity 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
Annuity Option 4 or the Annuity Proceeds Settlement Option), 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,
Hartford 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), Hartford may terminate the Contract
and pay the Termination Value.
Certain plans or programs may have different withdrawal privileges.
Hartford may permit the Contract Owner to pre-authorize partial surrenders
subject to certain limitations then in effect.
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TELEPHONE SURRENDER PRIVILEGES. Hartford permits partial surrenders by
telephone subject to dollar amount limitations in effect at the time a
Contract Owner requests the surrender. To request partial surrenders by
telephone, a Contract Owner must have completed and returned to Hartford a
Telephone Redemption Program Enrollment Form authorizing telephone
surrenders. If there are joint Contract Owners, both must authorize Hartford
to accept telephone instructions and agree that Hartford may accept telephone
instructions for partial surrenders from either Contract Owner. Partial
surrender requests will not be honored until Hartford receives all required
documents in proper form.
Telephone authorization will remain valid until (a) Hartford receives
written notice of revocation by a Contract Owner, or, in the case of joint
Contract Owners, written notice from either Contract Owner; (b) Hartford
discontinues the privilege; or (c) Hartford has reason to believe that a
Contract Owner has entered into a market timing agreement with an investment
adviser and/or broker/dealer.
Hartford may record any telephone calls to verify data concerning
transactions and may adopt other procedures to confirm that telephone
instructions are genuine. Hartford will not be liable for losses or expenses
arising out of telephone instructions reasonably believed to be genuine.
In order to obtain that day's unit values on surrender, Hartford must
receive telephone surrender instructions prior to the close of trading on the
New York Stock Exchange (generally 4:00 p.m.).
Hartford may modify, suspend, or terminate telephone transaction
privileges at any time.
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%.
HARTFORD 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 27.)
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
Hartford at its Administrative Office. Hartford may defer payment of any
amounts from the Fixed Account for up to six months from the date of the
request for surrender. If Hartford defers payment for more than 30 days,
Hartford 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
22.)
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 any Contract Owner dies
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before the Annuity Commencement Date, the Beneficiary as determined under the
Contract Control Provisions will receive the Death Benefit as determined on
the date of receipt of due proof of death by Hartford in its Administrative
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 Hartford, 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 receipt of Due Proof of Death, Hartford 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 calculated Death Benefit will remain invested in the Separate Account in
accordance with the allocation instructions given by the Contract Owner until
the proceeds are paid or Hartford receives new instructions from the
Beneficiary. During the time period between Hartford's receipt of written
notification of Due Proof of Death and Hartford's receipt of the completed
settlement instructions, the calculated Death Benefit will remain invested in
the Sub-Account(s) previously elected by the Contract Owner and will be
subject to market fluctuations. The Death Benefit may be taken in one sum,
payable within 7 days after the date Due Proof of Death is received, or under
any of the settlement options then being offered by Hartford provided,
however, that: (a) in the event of the death of any Contract Owner prior to
the Annuity Commencement Date, the entire interest in the Contract will be
distributed within 5 years after the death of the Contract Owner and (b) in
the event of the death of any Contract Owner or Annuitant which occurs on or
after the Annuity Commencement Date, any remaining interest in the Contract
will be paid at least as rapidly as under the method of distribution in
effect at the time 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. The proceeds due on the death may be applied to provide variable
payments, fixed payments, or a combination of variable and fixed payments.
However, 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 Contract Value
and the Maximum Anniversary Value of the Contract will be unaffected by
treating the spouse as the Contract Owner.
If the Contract is owned by a corporation or other non-individual, the
Death Benefit payable upon the death of the Annuitant prior to the Annuity
Commencement Date will be payable only as one sum or under the same
settlement options and in the same manner as if an individual Contract Owner
died on the date of the Annuitant's death.
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.
GROUP UNALLOCATED CONTRACTS
For Group Unallocated Contracts Hartford 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
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the Contract Owner. Failure to submit accurate data satisfactory to Hartford
will give Hartford the right to terminate this extension of benefits.
CHARGES UNDER THE CONTRACT
CONTINGENT DEFERRED SALES CHARGES ("SALES CHARGES")
PURPOSE OF SALES CHARGES - Sales Charges cover expenses relating to
the sale and distribution of the Contracts, including commissions paid to
distributing organizations and its sales personnel, the cost of preparing
sales literature and other promotional activities. If these charges are not
sufficient to cover sales and distribution expenses, Hartford will pay them
from its general assets, including surplus. Surplus might include profits
resulting from unused mortality and expense risk charges.
ASSESSMENT OF SALES CHARGES - There is no deduction for sales expenses
from Premium Payments when made, however, a Sales Charge may be assessed
against Premium Payments when surrendered. The length of time from receipt of
a Premium Payment to the time of surrender determines the percentage of the
Sales Charge. Premium payments are deemed to be surrendered in the order in
which they were received.
During the first seven years from each Premium Payment, a Sales Charge
will be assessed against the surrender of Premium Payments. During this
time, all surrenders in excess of the Annual Withdrawal Amount will be
first from Premium Payments and then from earnings. The Annual Withdrawal
Amount is first from earnings and then from Premium Payments. After the
seventh Contract Year, all surrenders will first be taken from earnings and
then from Premium Payments and a Sales Charge will not be assessed against
the surrender of earnings. If an amount equal to all earnings has been
surrendered, a 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.
For additional information, see Federal Tax Considerations, page 27.
Upon receipt of a request for a full surrender, Hartford will assess
any applicable Sales Charge against the surrender proceeds representing the
lesser of: (1) aggregate Premium Payments not previously withdrawn or (2)
the Contract Value, less the Annual Withdrawal Amount available at the time
of the full surrender, less the Annual Maintenance Fee, if applicable. Taking
the Annual Withdrawal Amount prior to the full surrender may, depending upon
the amount of investment gain experienced, reduce the amount of any Sales
Charge paid.
The Sales Charge is a percentage of the amount surrendered (not to
exceed the aggregate amount of the Premium Payments made) and equals:
CHARGE LENGTH OF TIME FROM
PREMIUM PAYMENT
(NUMBER OF YEARS)
6% 1
6% 2
5% 3
5% 4
4% 5
3% 6
2% 7
0% 8 or more
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PAYMENTS NOT SUBJECT TO SALES CHARGES
ANNUAL WITHDRAWAL AMOUNT - During the first seven years from each
Premium Payment, 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, as determined on the date of the requested surrender, without the
application of the Sales Charge. After the seventh year from each Premium
Payment, also on a non-cumulative basis, the Contract Owner may make a
partial surrender of 10% of Premium Payments made during the seven years
prior to the surrender and 100% of the Contract Value less the Premium
Payments made during the seven years prior to the surrender.
EXTENDED WITHDRAWAL PRIVILEGE - This privilege allows Annuitants who
attain age 701/2 with a Contract held under an Individual Retirement Account
or 403(b) plan to surrender an amount equal to the required minimum
distribution for the stated Contract without incurring a Sales Charge or not
subject to a Sales Charge.
WAIVERS OF SALES CHARGES
CONFINEMENT IN A HOSPITAL, LONG TERM CARE FACILITY OR NURSING HOME
- - Hartford will waive any Sales Charge applicable to a partial or full
surrender if the Annuitant is confined, at the recommendation of a physician
for medically necessary reasons, for at least 180 calendar days to: a
hospital recognized as a general hospital by the proper authority of the
state in which it is located; or a hospital recognized as a general hospital
by the Joint Commission on the Accreditation of Hospitals; or a facility
certified as a hospital or long-term care facility; or a nursing home
licensed by the state in which it is located and offers the services of a
registered nurse 24 hours a day.
The Annuitant cannot be confined at the time the Contract was purchased
in order to receive this waiver and the Contract Owner(s) must have been the
Contract Owner(s) continuously since the Contract issue date; must provide
written proof of confinement satisfactory to Hartford; and must request the
partial or full surrender within 91 calendar days of the last day of
confinement.
This waiver may not be available in all states. Please contact your
registered representative or Hartford to determine availability.
DEATH OF THE ANNUITANT OR CONTRACT OWNER OR PAYMENTS UNDER AN ANNUITY
OPTION - No Sales Charge otherwise applicable will be assessed in the event
of death of the Annuitant, death of the Contract Owner or if payments are
made under an Annuity option (other than a surrender out of Annuity Option 4)
provided for under the Contract.
OTHER PLANS OR PROGRAMS - Certain plans or programs established by
Hartford from time to time may have different surrender privileges.
MORTALITY AND EXPENSE RISK CHARGE
For assuming these risks under the Contracts, Hartford 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 (estimated at .90% for mortality
and .35% for expense). Although Variable Annuity payments made under the
Contracts will vary in accordance with the investment performance of the
underlying Fund shares held in the Sub-Account(s), the payments will not be
affected by (a) Hartford's actual mortality experience among Annuitants
before or after the Annuity Commencement Date or (b) Hartford's actual
expenses, if greater than the deductions provided for in the Contracts
because of the expense and mortality undertakings by Hartford.
There are two types of mortality undertakings: those made during the
accumulation or deferral phase and those made during the annuity payout
phase. The mortality undertaking made by Hartford in the accumulation phase
is that Hartford may experience a loss resulting from the assumption of the
mortality risk relative to the guaranteed death benefit in event of the death
of an Annuitant or Contract Owner before commencement of Annuity payments, in
periods of declining value or in periods where the contingent deferred sales
charges would have been applicable. The mortality undertakings provided by
Hartford during the annuity payout phase are to make monthly Annuity payments
(determined in accordance with the 1983a 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. Hartford also assumes the liability for payment of a
minimum death benefit under the Contract. These mortality undertakings are
based on Hartford's determination of expected mortality rates among all
Annuitants. If actual experience among Annuitants during the Annuity payment
period deviates from Hartford's
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actuarial determination of expected mortality rates among Annuitants because,
as a group, their longevity is longer than anticipated, Hartford must provide
amounts from its general funds to fulfill its contractual obligations.
Hartford will bear the loss in such a situation.
During the accumulation phase, Hartford also provides an expense
undertaking. Hartford assumes the risk that the contingent deferred sales
charges and the Annual Maintenance Fee for maintaining the Contracts prior
to the Annuity Commencement Date may be insufficient to cover the actual cost
of providing such items.
ADMINISTRATION CHARGE
For administration, Hartford 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.
You should refer to the Prospectuses for the Pegasus Variable Funds and
Putnam Variable Trust for a description of deductions and expenses paid out
of the assets of the respective Funds.
ANNUAL MAINTENANCE FEE
Each year, on each Contract Anniversary on or before the Annuity
Commencement Date, Hartford will deduct an Annual Maintenance Fee, if
applicable, from Contract Values to reimburse it for expenses relating to the
maintenance of the Contract, the Fixed Account, and the Sub-Account(s)
thereunder. If during a Contract Year the Contract is surrendered for its
full value, Hartford will deduct the Annual Maintenance Fee at the time of
such surrender. The fee is a flat fee which will be due in the full amount
regardless of the time of the Contract Year that Contract Values are
surrendered. The Annual Maintenance Fee is $30.00 per Contract Year for
Contracts with less than $50,000 Contract Value on the Contract Anniversary.
Fees will be deducted on a pro rata basis according to the value in each
Sub-Account and the Fixed Account under a Contract.
WAIVERS OF THE ANNUAL MAINTENANCE FEE - Annual Maintenance Fees are waived
for Contracts with Contract Value equal to or greater than $50,000. In
addition, Hartford will waive one Annual Maintenance Fee for Contract Owners
who own one or more Contracts with a combined Contract Value of $50,000 up to
$100,000. If the Contract Owner has multiple contracts with a combined
Contract Value of $100,000 or greater, Hartford will waive the Annual
Maintenance Fee on all Contracts. However, Hartford reserves the right to
limit the number of Annual Maintenance Fee waivers to a total of six
Contracts.
Hartford reserves the right to waive the Annual Maintenance Fee under
other conditions.
PREMIUM TAXES
Charges are also deducted for premium tax, if applicable, imposed by
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.
Hartford will pay Premium Taxes at the time imposed under applicable law. At
its sole discretion, Hartford may deduct Premium Taxes at the time Hartford
pays such taxes to the applicable taxing authorities, at the time the
Contract is surrendered, at the time a death benefit is paid, or at the time
the Contract annuitizes.
EXCEPTIONS TO CHARGES UNDER THE CONTRACTS
Hartford may offer, at 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 (including employer
sponsored savings plans)
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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.
SETTLEMENT PROVISIONS
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.
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.
The contract contains the four Annuity payment options and the Annuity
Proceeds Settlement Option. Annuity Options 2 and 4 and the Annuity Proceeds
Settlement Option 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 Hartford. 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 Annuity 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 Annuity Option 1 to provide a life Annuity.
Under any of the Annuity options excluding Annuity Option 4 and the
Annuity Proceeds Settlement Option, no surrenders are permitted after Annuity
payments commence. Only full surrenders are allowed out of Annuity Option 4
and any such surrender will be subject to contingent deferred sales charges,
if applicable. Full or partial withdrawals may be made from the Annuity
Proceeds Settlement Option at any time and Contingent Deferred Sales
Charges will not be applied.
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 Hartford. 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 Hartford, 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.
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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 Hartford.
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 approved
by Hartford. 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.
Annuity 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.
ANNUITY PROCEEDS SETTLEMENT OPTION
Proceeds from the Death Benefit left with Hartford 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 Hartford, minus any withdrawals.
Hartford may offer other annuity and settlement 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,", page 18) 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 1983a 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 amount of the first monthly
payment per $1,000 of value obtained from the tables in the Contracts.
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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 Hartford 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 35, is based on
Hartford's understanding of existing federal income tax laws as they are
currently interpreted.
B. TAXATION OF HARTFORD AND THE SEPARATE ACCOUNT
The Separate Account is taxed as part of Hartford which is taxed as a life
insurance company in accordance with the Internal Revenue Code of 1986, as
amended (the "Code"). Accordingly, the Separate Account will not be taxed as
a "regulated investment company" under subchapter M of Chapter 1 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 "Value of Accumulation
Units" commencing on page 18). 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 -- GENERAL PROVISIONS AFFECTING PURCHASERS OTHER
THAN QUALIFIED RETIREMENT PLANS
Section 72 of the Code governs the taxation of annuities in general.
1. NON-NATURAL PERSONS, CORPORATIONS, ETC. Section 72 contains provisions
for Contract Owners which are non-natural persons. Non-natural
persons include corporations, trusts, limited liability companies and
partnerships. The
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annual net 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 are additional exceptions from current
inclusion for (i) certain annuities held by structured settlement
companies, (ii) certain annuities held by an employer with respect to
a terminated qualified retirement plan and (iii) certain immediate
annuities. 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.
If the Contract Owner is not an individual, the primary Annuitant
shall be treated as the Contract Owner for purposes of making
distributions which are required to be made upon the death of the
Contract Owner. If there is a change in the primary Annuitant, such
change shall be treated as the death of the Contract Owner.
2. OTHER CONTRACT OWNERS (NATURAL PERSONS). A Contract Owner is not
taxed on increases in the value of the Contract until an amount is
received or deemed received, e.g., 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.
i. Total premium payments less amounts received which were not
includable in gross income equal the "investment in the
contract" under Section 72 of the Code.
ii. To the extent that the value of the Contract (ignoring any
surrender charges except on a full surrender) exceeds the
"investment in the contract," such excess constitutes the
"income on the contract."
iii. Any amount received or deemed received prior to the Annuity
Commencement Date (e.g., upon a partial surrender) is deemed
to come first from any such "income on the Contract" and
then from "investment in the Contract," and for these
purposes such "income on the Contract" shall be computed by
reference to any aggregation rule in subparagraph 2.c.
below. As a result, any such amount received or deemed
received (1) shall be includable in gross income to the
extent that such amount does not exceed any such "income on
the contract," and (2) shall not be includable in gross
income to the extent that such amount does exceed any such
"income on the contract." If at the time that any amount is
received or deemed received there is no "income on the
Contract" (e.g., because the gross value of the Contract
does not exceed the "investment in the contract" and no
aggregation rule applies), then such amount received or
deemed received will not be includable in gross income, and
will simply reduce the "investment in the Contract."
iv. The receipt of any amount as a loan under the Contract or
the assignment or pledge of any portion of the value of the
Contract shall be treated as an amount received for purposes
of this subparagraph a. and the next subparagraph b.
v. In general, the transfer of the Contract, without full and
adequate consideration, will be treated as an amount
received for purposes of this subparagraph a. and the next
subparagraph b. This transfer rule does not apply, however,
to certain transfers of property between spouses or incident
to divorce.
b. DISTRIBUTIONS AFTER ANNUITY COMMENCEMENT DATE. Annuity payments
made periodically after the Annuity Commencement Date are
includable in gross 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 payments (including surrenders) will be
entirely includable in gross income.
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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 gross 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.
iii. Generally, nonperiodic amounts received or deemed received
after the Annuity Commencement Date are not entitled to any
exclusion ratio and shall be fully includable in gross
income. However, upon a full surrender after such date,
only the excess of the amount received (after any surrender
charge) over the remaining "investment in the contract"
shall be includable in gross income (except to the extent
that the aggregation rule referred to in the next
subparagraph c. may apply).
c. AGGREGATION OF TWO OR MORE ANNUITY CONTRACTS. Contracts issued
after October 21, 1988 by the same insurer (or affiliated
insurer) to the same Contract Owner within the same calendar year
(other than certain contracts held in connection with a tax-
qualified retirement arrangement) will be treated as one annuity
Contract for the purpose of determining the taxation of
distributions prior to the Annuity Commencement Date. An
annuity contract received in a tax-free exchange for another
annuity contract or life insurance contract may be treated
as a new Contract for this purpose. Hartford believes that
for any annuity subject to such aggregation, the values under
the Contracts and the investment in the contracts will be added
together to determine the taxation under subparagraph 2.a.,
above, of amounts received or deemed received 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 provision.
d. 10% PENALTY TAX -- APPLICABLE TO CERTAIN WITHDRAWALS AND ANNUITY
PAYMENTS.
i. If any amount is received or deemed received on the Contract
(before or after the Annuity Commencement Date), the Code
applies a penalty tax equal to ten percent of the portion
of the amount includable in gross income, unless an
exception applies.
ii. The 10% penalty tax will not apply to the following
distributions (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
or life expectancies of the recipient and the
recipient's Beneficiary).
5. Distributions of amounts which are allocable to
the "investment in the contract" prior to August
14, 1982 (see next subparagraph e.).
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 received or deemed received
prior to the Annuity Commencement Date shall be deemed
to come (1) first from the amount of the "investment in
the contract" prior to August 14, 1982 ("pre-8/14/82
investment") carried over from the prior Contract, (2)
then from the portion of the "income on the contract"
(carried over to, as well as accumulating in, the
successor Contract) that is attributable to such
pre-8/14/82 investment, (3) then from the remaining "income
on the contract" and (4) last from the remaining
"investment in the contract." As a result,
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to the extent that such amount received or deemed received
does not exceed such pre-8/14/82 investment, such
amount is not includable in gross income., In
addition, to the extent that such amount received or
deemed received does not exceed the sum of (a) such
pre-8/14/82 investment and (b) the "income on the
contract" attributable thereto, such amount is not
subject to the 10% penalty tax. In all other respects,
amounts received or deemed received from such post-exchange
Contracts are generally subject to the rules
described in this subparagraph 3.
f. REQUIRED DISTRIBUTIONS
i. Death of Contract Owner or Primary Annuitant
Subject to the alternative election or spouse
beneficiary provisions in ii or iii below:
1. If any Contract Owner 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 shall be distributed at least as
rapidly as under the method of distribution
being used as of the date of such death;
2. If any Contract Owner dies before the Annuity
Commencement Date, the entire interest in the
Contract will be distributed within 5 years
after such death; and
3. If the Contract Owner is not an individual,
then for purposes of 1. or 2. above, the
primary annuitant under the Contract shall be
treated as the Contract Owner, and any change
in the primary annuitant shall be treated as
the death of the Contract Owner. The primary
annuitant is the individual, the events in
the life of whom are of primary importance in
affecting the timing or amount of the payout
under the Contract.
ii. Alternative Election to Satisfy Distribution Requirements
If any portion of the interest of a Contract
Owner described in i. above is payable to or for
the benefit of a designated beneficiary, such
beneficiary may elect to have the portion
distributed over a period that does not extend
beyond the life or life expectancy of the
beneficiary. The election and payments must begin
within a year of the death.
iii. Spouse Beneficiary
If any portion of the interest of a Contract Owner
is payable to or for the benefit of his or her
spouse, and the Annuitant or Contingent Annuitant
is living, such spouse shall be treated as the
Contract Owner of such portion for purposes of
section i. above.
3. DIVERSIFICATION REQUIREMENTS. Section 817 of the Code provides
that a variable annuity contract will not be treated as an
annuity contract for any period during which the investments made
by the separate account or underlying fund are not adequately
diversified in accordance with regulations prescribed by the
Treasury Department. If a Contract is not treated as an annuity
contract, the Contract Owner will be subject to income tax on the
annual increases in cash value.
The Treasury Department has issued diversification regulations
which generally require, among other things, that no more than
55% of the value of the total assets of the segregated asset
account underlying a variable contract is represented by any one
investment, no more than 70% is represented by any two
investments, no more than 80% is represented by any three
investments, and no more than 90% is represented by any four
investments. In determining whether the diversification
standards are met, all securities of the same issuer, all
interests in the same real property project, and all interests in
the same commodity are each treated as a single investment. In
addition, in the case of government securities, each government
agency or instrumentality shall be treated as a separate issuer.
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A separate account must be in compliance with the diversification
standards on the last day of each calendar quarter or within 30
days after the quarter ends. If an insurance company
inadvertently fails to meet the diversification requirements,
Hartford may comply within a reasonable period and avoid the
taxation of contract income on an ongoing basis. However, either
Hartford or the Contract Owner must agree to pay the tax due for
the period during which the diversification requirements were not
met.
Hartford monitors the diversification of investments in the
separate accounts and tests for diversification as required
by the Code. Hartford intends to administer all contracts
subject to the diversification requirements in a manner that
will maintain adequate diversification.
4. OWNERSHIP OF THE ASSETS IN THE SEPARATE ACCOUNT. In order for a
variable annuity contract to qualify for tax deferral, assets in
the segregated asset accounts supporting the variable contract
must be considered to be owned by the insurance company and not
by the variable contract owner. The Internal Revenue Service
("IRS") has issued several rulings which discuss investor
control. The IRS has ruled that certain incidents of ownership
by the contract owner, such as the ability to select and control
investments in a separate account, will cause the contract owner
to be treated as the owner of the assets for tax purposes.
Further, in the explanation to the temporary Section 817
diversification regulations, the Treasury Department noted
that the temporary regulations "do not provide guidance
concerning the circumstances in which investor control of
the investments of a segregated asset account may cause the
investor, rather than the insurance company, to be treated
as the owner of the assets in the account." The explanation
further indicates that "the temporary regulations provide
that in appropriate cases a segregated asset account may
include multiple sub-accounts, but do not specify the extent
to which policyholders may direct their investments to
particular sub-accounts without being treated as the owners
of the underlying assets. Guidance on this and other issues
will be provided in regulations or revenue rulings under
Section 817(d), relating to the definition of variable
contract." The final regulations issued under Section 817
did not provide guidance regarding investor control, and as
of the date of this prospectus, no other such guidance has
been issued. Further, Hartford does not know if or in what
form such guidance will be issued. In addition, although
regulations are generally issued with prospective effect, it
is possible that regulations may be issued with retroactive
effect. Due to the lack of specific guidance regarding the
issue of investor control, there is necessarily some
uncertainty regarding whether a Contract Owner could be
considered the owner of the assets for tax purposes.
Hartford reserves the right to modify the contracts, as
necessary, to prevent Contract Owners from being considered
the owners of the assets in the separate accounts.
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 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, 10% 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 Hartford, Hartford will automatically
withhold 10% of the taxable distribution.
2. 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.
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E. GENERAL PROVISIONS AFFECTING QUALIFIED RETIREMENT PLANS
The Contract may be used for a number of qualified retirement plans. If the
Contract is being purchased with respect to some form of qualified retirement
plan, please refer to Appendix I commencing on page 35 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. ANNUITY PURCHASES By NONRESIDENT ALIENS AND FOREIGN CORPORATIONS
The discussion above provides general information regarding U.S. federal
income tax consequences to annuity purchasers that are U.S. citizens or
residents. Purchasers that are not U.S. citizens or residents will generally
be subject to U.S. federal income tax and withholding on annuity
distributions at a 30% rate, unless a lower treaty rate applies. In
addition, purchasers may be subject to state premium tax, other state and/or
municipal taxes, and taxes that may be imposed by the purchaser's country of
citizenship or residence. Prospective purchasers are advised to consult with
a qualified tax adviser regarding U.S., state, and foreign taxation with
respect to an annuity purchase.
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 --
General Provisions Affecting Purchasers Other Than Qualified Retirement
Plans," page 27.)
MODIFICATION
Hartford 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
Hartford is subject; or (ii) is necessary to assure continued 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 Hartford will provide
notice to the Contract Owner or to the payee(s) during the Annuity period.
Hartford 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
Hartford is the legal owner of all Fund shares held in the Separate
Account. As the owner, Hartford has the right to vote at the Funds'
shareholder meetings. However, to the extent required by federal securities
laws or regulations, Hartford will:
1. Vote all Fund shares attributable to a Contract according to
instructions received from the Contract Owner, and
2. Vote shares attributable to a Contract for which no voting
instructions are received in the same proportion as shares for which
instructions are received.
If any federal securities laws or regulations, or their present
interpretation change to permit Hartford to vote Fund shares in its own
right, Hartford may elect to do so.
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Hartford will notify you of any Fund shareholders' meeting if the shares
held for your account may be voted at such meetings. Hartford will also send
proxy materials and a form of instruction by means of which you can instruct
Hartford with respect to the voting of the Fund shares held for your account.
In connection with the voting of Fund shares held by it, Hartford will
arrange for the handling and tallying of voting instructions received from
Contract Owners. Hartford 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. Hartford 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 Hartford 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, Hartford 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 Securities Distribution Company, Inc. ("HSD") serves as Principal
Underwriter for the securities issued with respect to the Separate Account.
HSD is a wholly-owned subsidiary of Hartford Life Insurance Company. HSD is
registered with the Commission under the Securities and Exchange Act of 1934
as a Broker-Dealer and is a member of the National Association of Securities
Dealers, Inc. ("NASD").
The securities will be sold by insurance and variable annuity agents of
Hartford who are registered representatives of independent Broker-Dealers who
have entered into distribution agreements with HSD. These Broker-Dealers are
registered with the Commission under the Securities Exchange Act of 1934 as a
Broker-Dealer and are members of NASD.
Commissions will be paid by Hartford and will not be more than 6% of Premium
Payments. Broker-dealers or financial institutions are compensated according
to a schedule set forth by HSD and any applicable rules or regulations for
variable insurance compensation. Compensation is generally based on premium
payments made by policyholders or contract owners. This compensation is
usually paid from the sales charges described in this Prospectus.
In addition, a broker-dealer or financial institution may also receive
additional compensation for, among other things, training, marketing or other
services provided. HSD, its affiliates or Hartford may also make
compensation arrangements with certain broker-dealers or financial
institutions based on total sales by the broker-dealer or financial
institution of insurance products. These payments, which may be different
for different broker-dealers or financial institutions, will be made by HSD,
its affiliates or Hartford out of their own assets and will not effect the
amounts paid by the policyholders or contract owners to purchase, hold or
surrender variable insurance products.
From time to time, Hartford 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 Hartford under a
safekeeping arrangement.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Separate Account is a party .
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 Lynda
Godkin, Senior Vice President, General Counsel and Corporate Secretary,
Hartford, P. O. Box 2999, Hartford, Connecticut 06104-2999.
EXPERTS
The audited financial statements included in this prospectus and
elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with
respect thereto, and are included
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herein in reliance upon the authority of said firm as experts in giving said
reports. Reference is made to the report on the statutory-basis financial
statements of Hartford Life and Annuity Insurance Company (formerly ITT
Hartford Life and Annuity Insurance Company) which states the statutory-basis
financial statements are presented in accordance with statutory accounting
practices prescribed or permitted by the National Association of Insurance
Commissioners and the State of Connecticut Insurance Department, and are not
presented in accordance with generally accepted accounting principles. The
principal business address of Arthur Andersen LLP is One Financial Plaza,
Hartford, Connecticut 06103.
ADDITIONAL INFORMATION
Inquiries will be answered by calling your representative or by writing:
Hartford Life and Annuity Insurance Company
ATTN: Individual Annuity Services
P. O. Box 508
Hartford, CT 06102-5085
Telephone: (800) 862-6668 (Contract Owners)
(800) 862-7155 (Investment Representatives)
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APPENDIX I
INFORMATION REGARDING TAX-QUALIFIED PLANS
The tax rules applicable to tax-qualified contract owners, including
restrictions on contributions and distributions, taxation of distributions
and tax penalties, vary according to the type of plan as well as the terms
and conditions of the plan itself. Various tax penalties may apply to
contributions in excess of applicable limits, distributions prior to age
59 1/2 (subject to certain exceptions), distributions which do not conform to
applicable commencement and minimum distribution rules, and certain other
transactions with respect to tax-qualified plans. Therefore, this summary
does not attempt to provide more than general information about the tax rules
associated with use of a Contract by a tax-qualified retirement plan.
Contract owners, plan participants and beneficiaries are cautioned that the
rights and benefits of any person to benefits may be controlled by the terms
and conditions of the tax-qualified retirement plan itself, regardless of the
terms and conditions of a Contract, but that Hartford is not bound by the
terms and conditions of such plans to the extent such terms conflict with a
Contract, unless Hartford specifically consents to be bound. Additionally,
some tax-qualified retirement plans are subject to distribution and other
requirements which are not incorporated into Hartford's administrative
procedures. Contract owners, participants and beneficiaries are responsible
for determining that contributions, distributions and other transactions
comply with applicable law. Because of the complexity of these rules, owners,
participants and beneficiaries are encouraged to consult their own tax
advisors as to specific tax consequences.
A. TAX-QUALIFIED PENSION OR PROFIT-SHARING PLANS Provisions of the Code
permit eligible employers to establish tax-qualified 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)). Such plans are
subject to limitations on the amount that may be contributed, the persons
who may be eligible to participate and the time when distributions must
commence. Employers intending to use these contracts in connection with
tax-qualified pension or profit-sharing plans should seek competent tax
and other legal advice.
B. Tax Sheltered Annuities Under Section 403(b) Section 403(b) of the Code
permits public school employees and employees of certain types of
charitable, educational and scientific organizations, as specified in
Section 501(c)(3) of the Code, to purchase annuity contracts, and, subject
to certain limitations, to exclude such contributions from gross income.
Generally, such contributions may not exceed the lesser of $10,000
(indexed) or 20% of an employee's "includable compensation" for such
employee's most recent full year of employment, subject to other
adjustments. Special provisions under the Code may allow some employees to
elect a different overall limitation.
Tax-sheltered annuity programs under Section 403(b) are subject
to a PROHIBITION AGAINST DISTRIBUTIONS FROM THE CONTRACT
ATTRIBUTABLE TO CONTRIBUTIONS MADE PURSUANT TO A SALARY REDUCTION
AGREEMENT, unless such distribution is made:
(1) after the participating employee attains age 59 1/2;
(2) upon separation from service;
(3) upon death or disability; or
(4) in the case of hardship (and in the case of hardship, any
income attributable to such contributions may not be
distributed).
Generally, the above restrictions do not apply to distributions
attributable to cash values or other amounts held under a Section
403(b) contract as of December 31, 1988.
C. DEFERRED COMPENSATION PLANS UNDER SECTION 457 Employees and independent
contractors performing services for eligible employers may have
contributions made to an Eligible 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 Eligible Deferred
Compensation Plans maintained by a State or other tax-exempt organization.
For these purposes, the term "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. Generally, the limitation is 33 1/3% of
includable compensation (typically 25% of gross compensation) or , for
1998, $8,000 (indexed), whichever is less. Such a plan may also provide
for additional "catch-up" deferrals during the three taxable years ending
before a Participant attains normal retirement age.
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An employee electing to participate in an Eligible Deferred
Compensation Plan should understand that his or her rights and
benefits are governed strictly by the terms of the plan and that
the employer is the legal owner of any contract issued with
respect to the plan. 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 or her plan for any
charges in regard to participating therein other than those
disclosed in this Prospectus. Participants should also be aware
that effective August 20, 1996, the Small Business Job Protection
Act of 1996 requires that all assets and income of an Eligible
Deferred Compensation Plan established by a governmental employer
which is a State, a political subdivision of a State, or any
agency or instrumentality of a State or political subdivision of
a State, must be held in trust (or under certain specified
annuity contracts or custodial accounts) for the exclusive
benefit of participants and their beneficiaries. Special
transition rules apply to such Eligible governmental Deferred
Compensation Plans already in existence on August 20, 1996, and
provide that such plans need not establish a trust before January
1, 1999. However, this requirement of a trust does not apply to
amounts under an Eligible Deferred Compensation Plan of a tax-exempt
(non-governmental) organization, and such amounts will be
subject to the claims of such tax-exempt employer's general
creditors.
In general, distributions from an Eligible Deferred Compensation
Plan are prohibited under Section 457 of the Code unless made
after the participating employee attains age 702, separates from
service, dies, or suffers an unforeseeable financial emergency.
Present federal tax law does not allow tax-free transfers or
rollovers for amounts accumulated in a Section 457 plan except
for transfers to other Section 457 plans in limited cases.
D. INDIVIDUAL RETIREMENT ANNUITIES UNDER SECTION 408 Section 408 of the Code
permits eligible individuals to establish individual retirement programs
through the purchase of Individual Retirement Annuities ("IRAs"). IRAs are
subject to limitations on the amount that may be contributed, the
contributions that may be deducted from taxable income, the persons who may
be eligible and the time when distributions may commence. Also,
distributions from certain qualified plans may be "rolled-over" on a tax-
deferred basis into an IRA.
The Contracts may be offered as SIMPLE IRAs in connection with a
SIMPLE IRA plan of an employer. Special rollover rules apply to
SIMPLE IRAs. Amounts can be rolled over from one SIMPLE IRA to
another SIMPLE IRA. However, amounts can be rolled over from a SIMPLE
IRA to a regular IRA only after two years have expired since the
participant first commenced participation in your employer's SIMPLE
IRA plan. Amounts cannot be rolled over to a SIMPLE IRA from a
qualified plan or a regular IRA. Hartford is a non-designated
financial institution.
Beginning in 1998, the Contracts may be offered as ROTH IRAs
under Section 408A of the Code. Contributions to a ROTH IRA are
not deductible. Subject to special limitations, a regular IRA
may be converted into a ROTH IRA or a distribution from a regular
IRA may be rolled over to a ROTH IRA. However, a conversion or a
rollover from a regular IRA to a ROTH IRA is not excludable from
gross income. If certain conditions are met, qualified
distributions from a ROTH IRA are tax-free.
E. Federal Tax Penalties and Withholding Distributions from retirement plans
are generally taxed under Section 72 of the Code. Under these rules, a
portion of each distribution may be excludable from income. The excludable
amount is the portion of the distribution which bears the same ratio as the
after-tax contributions bear to the expected return.
1. PREMATURE DISTRIBUTION Distributions from a tax-qualified
plan before the Participant attains age 59 1/2 are generally
subject to an additional penalty tax equal to 10% of the
taxable portion of the distribution. The 10% penalty does
not apply to distributions made after the employee's death,
on account of disability, for eligible medical expenses and
distributions in the form of a life annuity and, except in
the case of an IRA, certain distributions after separation
from service after age 55. For these purposes, a life
annuity means a scheduled series of substantially equal
periodic payments for the life or life expectancy of the
Participant (or the joint lives or life expectancies of the
Participant and Beneficiary).
In addition, effective for distributions made from an IRA
after December 31, 1997, there is no such penalty tax on
distributions that do not exceed the amount of certain
qualifying higher education expenses, as defined by
36
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Section 72(t)(7) of the Code, or which are qualified first-time home
buyer distributions meeting the requirements of Section
72(t)(8) of the Code.
If you are a participant in a SIMPLE IRA plan, you should be
aware that the 10% penalty tax discussed above is increased
to 25% with respect to non-exempt premature distributions
made from your SIMPLE IRA during the first two years
following the date you first commenced participation in any
SIMPLE IRA plan of your employer.
2. Minimum Distribution Tax If the amount distributed is less than
the minimum required distribution for the year, the Participant
is subject to a 50% tax on the amount that was not properly
distributed.
An individual's interest in a tax-qualified retirement plan
generally must be distributed, or begin to be distributed,
not later than April 1 of the calendar year following the
later of (i) the calendar year in which the individual
attains age 70 1/2 or (ii) the calendar year in which the
individual retires from service with the employer sponsoring
the plan ("required beginning date"). However, the required
beginning date for an individual who is a five (5) percent
owner (as defined in the Code), or who is the owner of an
IRA, is April 1 of the calendar year following the calendar
year in which the individual attains age 70 1/2. The
entire interest of the Participant must be distributed
beginning no later than the 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. 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.
If an individual dies before reaching his or her required
beginning date, the individual's entire interest must
generally be distributed within five years of the
individual's death. However, this rule will be deemed
satisfied, if distributions begin before the close of the
calendar year following the individual's death to a
designated Beneficiary (or over a period not extending
beyond the life expectancy of the beneficiary). If the
Beneficiary is the individual's surviving spouse,
distributions may be delayed until the individual would have
attained age 70 1/2.
If an individual dies after reaching his or her required
beginning date or after distributions have commenced, the
individual's interest must generally be distributed at least
as rapidly as under the method of distribution in effect at
the time of the individual's death.
3. Withholding In general, distributions from IRAs and plans
described in Section 457 of the Code are subject to regular wage
withholding rules. Periodic distributions from other tax-qualified
retirement plans that are made for a specified period
of 10 or more years or for the life or life expectancy of the
participant (or the joint lives or life expectancies of the
participant and beneficiary) are generally subject to federal
income tax withholding as if the recipient were married claiming
three exemptions . The recipient of periodic distributions may
generally elect not to have withholding apply or to have income
taxes withheld at a different rate by providing a completed
election form.
Other distributions from such other tax-qualified
retirement plans are generally subject to mandatory income
tax withholding at the flat rate of 20% unless such
distributions are:
a) the non-taxable portion of the distribution;
b) required minimum distributions; or
c) direct transfer distributions.
Direct transfer distributions are direct payments to an IRA
or to another eligible retirement plan under Code section
401(a)(31).
37
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TABLE OF CONTENTS TO
STATEMENT OF ADDITIONAL INFORMATION
SECTION PAGE
- ------- ----
DESCRIPTION OF HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
SAFEKEEPING OF ASSETS
INDEPENDENT PUBLIC ACCOUNTANTS
DISTRIBUTION OF CONTRACTS
CALCULATION OF YIELD AND RETURN
PERFORMANCE COMPARISONS
FINANCIAL STATEMENTS
38
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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:
Hartford Life and Annuity Insurance Company
Individual Annuity Services
P.O. Box 5085
Hartford, CT 06102-5085
- ----------------------------------------------------
Name of Contract Owner/Participant
Address
City or Plan/School District
Date:
<PAGE>
To obtain a Statement of Additional Information, please complete the form below
and mail to:
Hartford Life and Annuity Insurance Company
Attn: Individual Annuity Services
P.O. Box 5085
Hartford, CT 06102-5085
Please send a Statement of Additional Information for Pegasus Pathmaker
Variable Annuity to me at the following address:
- --------------------------------------
Name
- --------------------------------------
Street
- -------------------------------------------
City/State Zip Code
