<PAGE>
File No. 33-89988
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON
FORM N-8B-2
A. Exact name of trust: Separate Account VL II
B. Name of depositor: ITT Hartford Life and Annuity Insurance Company
C. Complete address of depositor's principal executive offices:
P.O. Box 2999
Hartford, CT 06104-2999
D. Name and complete address of agent for service:
Scott K. Richardson, Esq.
ITT Hartford Life Insurance Companies
P.O. Box 2999
Hartford, CT 06104-2999
It is proposed that this filing will become effective:
_____ immediately upon filing pursuant to paragraph (b) of Rule 485
__X__ on May 1, 1996 pursuant to paragraph (b) of Rule 485
_____ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
_____ on May 1, 1996 pursuant to paragraph (a)(1) of Rule 485
_____ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
E. Title and amount of securities being registered:
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the
Registrant has registered an indefinite amount of securities. The Rule 24f-2
Notice for the Registrant's most recent fiscal year was filed on or about
February 29, 1996.
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F. Proposed maximum aggregate offering price to the public of the securities
being registered:
Not yet determined.
G. Amount of filing fee: Paid
H. Approximate date of proposed public offering:
As soon as practicable after the effective date of this registration
statement.
The registrant hereby represents that it is relying on Section (13)(i)(B) of
Rule 6e-3(T).
<PAGE>
RECONCILIATION AND TIE BETWEEN
FORM N-8B-2 AND PROSPECTUS
Item No. of
Form N-8B-2 CAPTION IN PROSPECTUS
- ----------- ---------------------
1. Cover page
2. Cover page
3. Not applicable
4. The Company; Distribution of the Policies
5. Summary - Separate Account VL II; Separate
Account VL II - General
6. Separate Account VL II - General
7. Not required by Form S-6
8. Not required by Form S-6
9. Legal Proceedings
10. Summary; Separate Account VL II - Funds; Detailed
Description of Policy Benefits and Provisions -
Application for a Policy; Detailed Description of Policy
Benefits and Provisions; Other Matters - Voting Rights,
Dividends
11. Summary; Separate Account VL II - Funds
12. Summary; Separate Account VL II - Funds
13. Deductions and Charges from the Account Value;
Distribution of the Policies; Federal Tax Considerations
14. Detailed Description of Policy Benefits and Provisions -
Application for a Policy
15. Detailed Description of Policy Benefits and Provisions -
Allocation of Premium Payments
16. Separate Account VL II - Funds; Detailed Description of
Policy Benefits and Provisions - Allocation of Premium
Payments
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Item No. of
Form N-8B-2 CAPTION IN PROSPECTUS
- ----------- ---------------------
17. Summary; Detailed Description of Policy Benefits and
Provisions - Cash Value and Amount Payable on Surrender of
the Policy, Right to Examine or Exchange the Policy and
Surrender
18. Separate Account VL II - Funds; Deduction and Charges from
the Account Value; Federal Tax Considerations
19. Other Matters - Statements to Policy Owners
20. Not applicable
21. Detailed Description of Policy Benefits and Provisions -
Policy Loans
22. Not applicable
23. Safekeeping of the Separate Account Assets
24. Other Matters - Assignment
25. The Company
26. Not applicable
27. The Company
28. The Company; Management
29. The Company
30. Not applicable
31. Not applicable
32. Not applicable
33. Not applicable
34. Not applicable
<PAGE>
Item No. of
Form N-8B-2 CAPTION IN PROSPECTUS
- ----------- ---------------------
35. Distribution of the Policies
36. Not required by Form S-6
37. Not applicable
38. Distribution of the Policies
39. The Company; Distribution of the Policies
40. Not applicable
41. The Company; Distribution of the Policies
42. Not applicable
43. Not applicable
44. Detailed Description of Policy Benefits and Provisions -
Allocation of Premium Payments
45. Not applicable
46. Detailed Description of Policy Benefits and Provision -
Cash Value
47. Separate Account VL II - Funds
48. Cover page; The Company
49. Not applicable
50. Separate Account VL II - General
51. Summary; The Company; Detailed Description of Policy
Benefits and Provisions; Other Matters - Beneficiary
52. Separate Account VL II - Funds, Investment Advisers
53. Federal Tax Considerations
54. Not applicable
<PAGE>
Item No. of
Form N-8B-2 CAPTION IN PROSPECTUS
- ----------- ---------------------
55. Not applicable
56. Not required by Form S-6
57. Not required by Form S-6
58. Not required by Form S-6
59. Not required by Form S-6
<PAGE>
ITT HARTFORD
LIFE AND ANNUITY INSURANCE COMPANY
P.O. Box 2999
Hartford, CT 06104-2999
Telephone (800) 231-5453
STAG LAST SURVIVOR
Flexible Premium
Variable Life Insurance Policies
[LOGO]
This Prospectus describes last survivor flexible premium variable life
insurance policies (the "Policies", and each individually a "Policy") offered
by ITT Hartford Life and Annuity Insurance Company ("ITT Hartford") to
applicants generally between ages 20 and 80 respecting both Insureds. For a
given amount of Death Benefit chosen, the Purchaser of the Policy has
considerable flexibility in selecting the timing and amount of premium
payments.
The Policies provide for a Death Benefit payable at the death of the last
surviving Insured. The Policy Owner may select one of three Death Benefit
Options; a level amount equal to the Face Amount ("Option A"), a variable
amount equal to the Face Amount plus the Account Value ("Option B"), or a
variable amount equal to the Face Amount plus a return of premiums ("Option
C"). The required minimum initial (Basic) Face Amount is generally $100,000.
Under all three options, the Policies have Account Values which increase
with the payment of each premium and which decrease to reflect fees and
charges made by ITT Hartford. These fees and charges vary depending on such
factors as the Face Amount, the ages of the Insureds and the level of the
premiums paid. The Account Value of a Policy will also vary up or down to
reflect the investment experience of the Funds to which the premium payment(s)
has been allocated, and the Policy Owner bears the investment risk for all
amounts so allocated.
If a Policy is surrendered during the first two Policy Years, the Policy
Owner may be entitled to a refund of loads in addition to the Cash Surrender
Value.
There is no guaranteed minimum Account Value for a Policy. If the Death
Benefit guarantee is in effect (see "Death Benefit" on page 14), the Policy
will not lapse due to poor investment performance.
The initial premium will be allocated to Hartford Money Market Sub-Account
and after the Right to Examine Period has expired, to one or more of the
Sub-Accounts or to the Fixed Account as specified in the Policy Owner's
application. The Funds underlying the Sub-Accounts presently are: Hartford
Advisers Fund, Inc., Hartford Bond Fund, Inc., Hartford Capital Appreciation
Fund, Inc., Hartford Dividend and Growth Fund, Inc., Hartford Index Fund,
Inc., Hartford International Opportunities Fund, Inc., Hartford Mortgage
Securities Fund, Inc., Hartford Stock Fund, Inc., and HVA Money Market Fund,
Inc. managed by Hartford Investment Management Company (the "Hartford Funds");
PCM Diversified Income Fund, PCM Global Asset Allocation Fund, PCM Global
Growth Fund, PCM Growth and Income Fund, PCM High Yield Fund, PCM Money Market
Fund, PCM New Opportunities Fund, PCM U.S. Government and High Quality Bond
Fund, PCM Utilities Growth and Income Fund, and PCM Voyager Fund managed by
Putnam Investment Management, Inc. (the "Putnam Funds"); and the Equity-Income
Portfolio, Overseas Portfolio and Asset Manager Portfolio (the "Fidelity
Funds") managed by Fidelity Management & Research Company.
These Policies are subject to a Front-End Sales Load which is set forth in
the section entitled "Deductions from the Premium" on page 18.
------------------------------------------------------------------------------
IT MAY NOT BE ADVANTAGEOUS TO PURCHASE FLEXIBLE PREMIUM VARIABLE LIFE
INSURANCE AS A REPLACEMENT FOR YOUR CURRENT LIFE INSURANCE OR IF YOU ALREADY
OWN A FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY.
------------------------------------------------------------------------------
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THIS PROSPECTUS IS VALID ONLY IF ACCOMPANIED BY THE CURRENT PROSPECTUSES OF
THE APPLICABLE ELIGIBLE FUNDS WHICH CONTAIN A FULL DESCRIPTION OF THOSE FUNDS.
ALL PROSPECTUSES SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
------------------------------------------------------------------------------
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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.
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The date of this Prospectus is May 1, 1996.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
SPECIAL TERMS........................................................... 4
SUMMARY................................................................. 6
DETAILED DESCRIPTION OF POLICY BENEFITS AND PROVISIONS.................. 10
General............................................................... 10
Premiums.............................................................. 10
Premium Payment Flexibility......................................... 10
Allocation of Premium Payments...................................... 10
Accumulation Units.................................................. 10
Accumulation Unit Values............................................ 11
Premium Limitation.................................................. 11
Account Values...................................................... 11
Amount Payable on Surrender of the Policy........................... 11
Load Refund......................................................... 11
Partial Withdrawals................................................. 12
Transfers of Account Value............................................ 12
Amount and Frequency of Transfers................................... 12
Transfers to or from Sub-Accounts................................... 12
Transfers from the Fixed Account.................................... 13
Policy Loans.......................................................... 13
Loan Interest....................................................... 13
Credited Interest................................................... 13
Preferred Loan...................................................... 13
Loan Repayments..................................................... 13
Termination Due to Excessive Indebtedness........................... 13
Effect of Loans on Account Value.................................... 13
Death Benefit......................................................... 14
Death Benefit Options............................................... 14
Option Change....................................................... 14
Death Benefit Guarantee............................................. 14
Minimum Death Benefit............................................... 15
Supplemental Face Amount............................................ 15
Unscheduled Increases and Decreases in Face Amount.................. 15
Benefits at Maturity.................................................. 15
Lapse and Reinstatement............................................... 16
Policy Lapse and Grace Period....................................... 16
Death Benefit Guarantee Default and Grace Period.................... 16
Reinstatement....................................................... 16
The Right to Examine or Exchange the Policy........................... 17
Surrender............................................................. 17
Valuation of Payments and Transfers................................... 17
Application for a Policy.............................................. 17
Reduced Charges for Eligible Groups................................... 18
Deductions from the Premium........................................... 18
Premium Processing Charge........................................... 18
Premium Tax Charge and Federal Tax Charge........................... 18
Front End Sales Load................................................ 18
Examples of Front End Sales Loads/Impact of Refund of Load.......... 19
Deductions and Charges from the Account Value......................... 19
Monthly Deduction Amounts........................................... 19
Charges Against the Funds........................................... 21
Taxes............................................................... 22
THE COMPANY............................................................. 22
SEPARATE ACCOUNT VL II.................................................. 23
General............................................................... 23
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
Funds................................................................. 23
Hartford Funds...................................................... 23
Putnam Funds........................................................ 24
Fidelity Funds...................................................... 25
Investment Adviser.................................................... 26
Hartford Funds...................................................... 26
Putnam Funds........................................................ 27
Fidelity Funds...................................................... 27
THE FIXED ACCOUNT....................................................... 27
OTHER MATTERS........................................................... 27
Voting Rights......................................................... 27
Statements to Policy Owners........................................... 28
Limit on Right to Contest............................................. 28
Misstatement as to Age................................................ 28
Payment Options....................................................... 28
Beneficiary........................................................... 29
Assignment............................................................ 29
Dividends............................................................. 29
SUPPLEMENTAL BENEFITS................................................... 29
Last Survivor Exchange Option Rider................................... 29
Estate Protection Rider............................................... 30
Maturity Date Extension Rider......................................... 30
Yearly Renewable Term Life Insurance Rider............................ 30
EXECUTIVE OFFICERS AND DIRECTORS........................................ 31
DISTRIBUTION OF THE POLICIES............................................ 33
SAFEKEEPING OF SEPARATE ACCOUNT VL II'S ASSETS.......................... 33
FEDERAL TAX CONSIDERATIONS.............................................. 33
General............................................................... 33
Taxation of ITT Hartford and the Separate Account..................... 34
Income Taxation of Policy Benefits.................................... 34
Modified Endowment Contracts.......................................... 34
Estate and Generation Skipping Taxes.................................. 35
Diversification Requirements.......................................... 35
Ownership of the Assets in the Separate Account....................... 36
Life Insurance Purchased for Use in Split Dollar Arrangements......... 36
Federal Income Tax Withholding........................................ 36
Non-Individual Ownership of Policies.................................. 36
Other................................................................. 37
Life Insurance Purchases by Nonresident Aliens and Foreign
Corporation.......................................................... 37
LEGAL PROCEEDINGS....................................................... 37
LEGAL MATTERS........................................................... 37
EXPERTS................................................................. 37
REGISTRATION STATEMENT.................................................. 37
APPENDIX A -- ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES AND CASH
SURRENDER VALUES..................................................... 38
FINANCIAL STATEMENTS.................................................... 51
</TABLE>
THE POLICIES MAY NOT BE AVAILABLE IN ALL STATES.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER OR OTHER PERSON IS AUTHORIZED
TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE,
SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED ON.
3
<PAGE>
SPECIAL TERMS
As used in this Prospectus, the following terms have the indicated meanings:
ACCOUNT VALUE: Value used to determine certain Policy benefits and charges.
ACCUMULATION UNIT: An accounting unit of measure used to calculate the value of
a Sub-Account.
ANNUAL DEATH BENEFIT GUARANTEE PREMIUM: An annual amount of premium shown in the
Policy's specifications page required to keep the Death Benefit guarantee in
effect and used to calculate the Cumulative Death Benefit Guarantee Premium.
ATTRIBUTABLE: In calculating the front-end sales load, agent commissions and
mortality and expense risk charge, premiums (in the case of the front-end sales
load or commissions) and Account Value (in the case of the mortality and expense
risk charge) are Attributable to the Basic Face Amount and Supplemental Face
Amount in the same ratio that the initial Basic Face Amount and the initial
Supplemental Face Amount each bear, respectively, to the initial Face Amount.
For example, if 60% of Your initial Face Amount represented Basic Face Amount
and 40% represented Supplemental Face Amount, then 60% of each premium (in the
case of the sales load or commissions) or 60% of Your Account Value (in the case
of the mortality and expense risk charge) is Attributable to Basic Face Amount
and the remaining 40% is Attributable to Supplemental Face Amount.
BASIC FACE AMOUNT: On the Policy Date, the Basic Face Amount equals the initial
Basic Face Amount. Thereafter it may change in accordance with the terms of the
Policy.
CASH SURRENDER VALUE: Account Value less all Indebtedness.
CODE: The Internal Revenue Code of 1986, as amended.
COST OF INSURANCE: An amount deducted as part of the Monthly Deduction Amount to
help cover ITT Hartford's anticipated mortality costs and other expenses.
CUMULATIVE DEATH BENEFIT GUARANTEE PREMIUM: The sum of the number of completed
Policy Years plus the completed portion of the current Policy Year (expressed as
the number of completed months divided by twelve), multiplied by the Annual
Death Benefit Guarantee Premium.
DATE OF ISSUE: The date from which the Suicide and Incontestability provisions
are measured.
DEATH BENEFIT: On the Policy Date, the Death Benefit equals the Face Amount.
Thereafter it may change in accordance with the terms of the Policy.
DEATH BENEFIT OPTION: The Death Benefit Option in effect determines how the
Death Benefit is calculated. The three Death Benefit Options provided are
described in the Death Benefit section of this Prospectus.
DEATH PROCEEDS: The amount which We will pay on the death of the last surviving
Insured. This amount equals the Death Benefit less any Indebtedness and less any
due and unpaid Monthly Deduction Amount occurring during a Grace Period.
FACE AMOUNT: The Basic Face Amount plus the Supplemental Face Amount.
FIXED ACCOUNT: Portion of Account Value invested in the General Account of ITT
Hartford.
FUNDS: The registered open-end management investment companies in which assets
of the Separate Account may be invested.
GENERAL ACCOUNT: All assets of ITT Hartford other than those allocated to its
separate accounts.
GUIDELINE ANNUAL PREMIUM: The level annual premium payment necessary to provide
the future benefits under the Policy through maturity, based on certain
assumptions specified under the Federal Securities laws. These assumptions
include mortality charges based on the 1980 Commissioners' Standard Ordinary
Mortality Smoker or Nonsmoker Table, age last birthday, an assumed annual net
rate of return of 5% per year, and deduction of the guaranteed fees and charges
specified in the Policy. For purposes of the Policy, the Guideline Annual
Premium is used only in limiting front-end sales loads.
ITT HARTFORD: ITT Hartford Life and Annuity Insurance Company.
IN WRITING: In a written form satisfying to Us.
4
<PAGE>
INDEBTEDNESS: The outstanding loan on the Policy, including any interest due or
accrued.
INSUREDS: The two persons on whose lives the Policy is issued.
ISSUE AGE: As of the Policy Date, the age of each Insured on his/her last
birthday.
LOAN ACCOUNT: An account established for any amounts transferred from the Fixed
Account and Sub-Accounts as a result of loans. The account is credited with
interest and is not based on the investment experience of the Separate Account.
MATURITY DATE: The date on which the Policy will mature.
MONTHLY ACTIVITY DATE: The Policy Date and the same date in each succeeding
month as the Policy Date except that whenever the Monthly Activity Date falls on
a date other than a Valuation Day, the Monthly Activity Date will be deemed the
next Valuation Day.
MONTHLY DEDUCTION AMOUNT: The fees and charges deducted from the Account Value
on the Monthly Activity Date.
NATIONAL SERVICE CENTER: Located in Minneapolis, Minnesota.
NET PREMIUM: The amount of premium actually credited to the Account Value.
PLANNED PREMIUMS: The amount of premiums that You intend to pay as indicated on
the application and shown on the Policy's specifications page.
POLICY: A last survivor flexible premium variable life insurance contract issued
by ITT Hartford, as described in this Prospectus.
POLICY ANNIVERSARY: An anniversary of the Policy Date.
POLICY DATE: The date from which Policy Anniversaries and Policy Years are
determined.
POLICY LOAN RATE: The interest rate charged on Policy loans, as shown in the
Policy.
POLICY OWNER: The person having rights to benefits under the Policy during the
lifetime of the two Insureds; the Policy Owner may or may not be one of the
Insureds.
POLICY YEARS: Annual periods computed from the Policy Date.
PRO RATA BASIS: An allocation method based on the proportion of the Account
Value in the Fixed Account and each Sub-Account.
SEPARATE ACCOUNT: An account established by ITT Hartford to separate the assets
funding the Policies from other assets of ITT Hartford; in this case, "Separate
Account VL II."
SUB-ACCOUNT: The subdivisions of the Separate Account.
SUPPLEMENTAL FACE AMOUNT: On the Policy Date, the Supplemental Face Amount is
shown on the Policy's specifications page. Thereafter, the Supplemental Face
Amount may change according to the terms of the Policy.
TARGET PREMIUM: The amount of level premium required to support a whole life
insurance policy with a net interest rate of 5%, assuming that the initial Face
Amount is entirely Basic Face Amount. The Policy charges used in determining the
level premium amount are maximum guaranteed cost of insurance rates for standard
risks, actual premium tax rates, a 1.25% premium charge for processing, a 1.25%
premium charge for federal tax and other maximum policy deductions or charges,
exclusive of any additional rider charges.
VALUATION DAY: Every day the New York Stock Exchange is open for trading. The
value of the Separate Account is determined at the close of the New York Stock
Exchange (currently 4:00 p.m. Eastern Time) on such days.
VALUATION PERIOD: The period between the close of business on successive
Valuation Days.
YOU, YOUR: The Owner of the Policy.
WE, US, OUR: ITT Hartford Life and Annuity Insurance Company.
5
<PAGE>
SUMMARY
THE POLICY
The last survivor flexible premium variable life insurance Policies offered
by this Prospectus are funded by a Fixed Account and Separate Account VL II, a
separate account established by ITT Hartford pursuant to Connecticut insurance
law and organized as a unit investment trust registered under the Investment
Company Act of 1940. Separate Account VL II is presently comprised of twenty-two
sub-accounts (the "Sub-Accounts" and each individually a "Sub-Account"), each of
which invests exclusively in one of the underlying Funds. If an initial premium
is submitted with an application for a Policy, it will be allocated, to the
Hartford Money Market Sub-Account. At a later date, the values in the Hartford
Money Market Sub-Account will be allocated to one or more of the Sub-Accounts or
the Fixed Account as specified in the Policy Owner's application. This later
date is the latest of 45 days after the application is signed, ten days after We
mail or personally delivery a Notice of Withdrawal Right, ten days after We
receive the premium and the date We receive the final requirement to put the
Policy in force. The Policies are credited with units ("Accumulation Units") in
each selected Sub-Account, the assets of which are invested in the applicable
Fund. A Policy Owner may transfer the funds among the Sub-Accounts and the Fixed
Account subject to a transfer charge. See "Transfers of Account Value" of
Detailed Description of Policy Benefits and Provisions, page 10.
The Policies are first and foremost life insurance policies with death
benefits, cash values, and other features traditionally associated with life
insurance. The Policies are called "last survivor" because the Death Proceeds
are paid on the death of the last surviving Insured. The Policies are called
"flexible premium" because, once the desired level and pattern of death benefits
have been determined, a Purchaser has considerable flexibility in choosing the
timing and amount of premium to be paid. The Policies are called "variable"
because, unlike the fixed benefits of an ordinary whole life insurance policy,
the Account Value will, and the Death Benefit may, increase or decrease
depending on the investment experience of the Funds to which the premium
payment(s) has been allocated.
POLICY DESIGN OPTIONS
The options in the Policy are structured to give a Purchaser and his sales
agent the ability to select a Policy tailor-made for the Purchaser's specific
life insurance needs.
The Policy options which give the Purchaser such flexibility fall into three
major categories:
1. Death Benefit Options -- These allow the Purchaser to select various
levels and patterns of Death Benefits.
2. Investment Options -- Currently, the Purchaser has the choice of
allocating the Policy's Account Value among up to nine of the Policy's
twenty-two investment options. (ITT Hartford reserves the right to
increase the number of allocable investment options to more than nine.)
These include the twenty-two variable Sub-Accounts and the Fixed Account.
3. Premium Options -- The Purchaser has the flexibility to choose, within
limits, the amount of the initial premium and the amount and frequency of
subsequent premiums.
DEATH BENEFIT
The Policies provide for three Death Benefit Options. These can be level and
equal to the Face Amount ("Option A"), the Face Amount plus Return of Account
Value ("Option B") or the Face Amount plus Return of Premium ("Option C"). At
the death of the last surviving Insured, We will pay the Death Proceeds to the
Beneficiary. The Death Proceeds equal the Death Benefit less any Indebtedness
under the Policy and less any due and unpaid Monthly Deduction Amount occurring
during a Grace Period. You may also select Supplemental Face Amount coverage in
the application. Scheduled and unscheduled increases in Face Amount may be
requested. See "Detailed Description of Policy Benefits and Provision -- Death
Benefit," page 10.
PREMIUM
You have considerable flexibility as to when and in what amounts You pay
premiums.
Prior to issue, You can choose a Planned Premium, within a range determined
by ITT Hartford based on the Face Amount and each Insured's sex (except where
unisex rates apply), Issue Age and risk classification.
6
<PAGE>
The Policy will not lapse as long as the Cash Surrender Value is sufficient
to cover the Monthly Deduction Amounts or the Death Benefit guarantee is in
effect.
The minimum subsequent premium is $50. We reserve the right to refund the
excess premium payments that would cause the Policy not to meet the tax
qualification guidelines for life insurance under the Internal Revenue Code of
1986, as amended.
There are circumstances, usually if a Policy Owner wants to prefund future
benefits in seven years or less, when the Policy may become a Modified Endowment
Contract under federal tax law. If it does, loans and other pre-death
distributions are includable in gross income on an income-first basis. A 10%
penalty tax may be imposed on income distributed before the Policy Owner attains
age 59 1/2. Prospective Purchasers and Policy Owners are advised to consult a
qualified tax adviser before taking steps that may affect whether the Policy
becomes a Modified Endowment Contract. See "Federal Tax Considerations --
Modified Endowment Contract" for a discussion of the "seven pay test", page 34.
SEPARATE ACCOUNT VL II
Separate Account VL II is a separate account established by ITT Hartford
pursuant to the insurance laws of the State of Connecticut and organized as a
registered unit investment trust under the Investment Company Act of 1940.
Separate Account VL II meets the definition of "separate account" under federal
securities law. Separate Account VL II is comprised of Sub-Accounts, each of
which invests exclusively in one of the Funds. Each ITT Hartford Fund is
organized as a corporation under the laws of the State of Maryland and is a
diversified open-end management investment company registered under the
Investment Company Act of 1940. The Putnam Funds are organized as Putnam Capital
Manager Trust, a Massachusetts business trust organized on September 24, 1987,
and is a open-end, series investment company with multiple portfolios or funds
registered under the Investment Company Act of 1940. The Fidelity Funds involve
two diversified open-end management investment companies, each with multiple
portfolios and organized as a Massachusetts business trust. The Equity-Income
Portfolio and Overseas Portfolio are portfolios of the Variable Insurance
Products Fund, organized on November 13, 1981. The Asset Manager Portfolio is a
portfolio of the Variable Insurance Products Fund II, organized on March 21,
1988. Registration under the Investment Company Act of 1940 does not involve
supervision of the management or investment practices or policies by the
Commission. The shares of the Funds are sold to Separate Account VL II and to
other separate accounts of ITT Hartford or its affiliates which fund similar
annuity or life insurance products.
Currently, the Funds are Hartford Advisers Fund, Inc., Hartford Bond Fund,
Inc., Hartford Capital Appreciation Fund, Inc., Hartford Dividend and Growth
Fund, Inc., Hartford Index Fund, Inc., Hartford International Opportunities
Fund, Inc., Hartford Mortgage Securities Fund, Inc., Hartford Stock Fund, Inc.,
and HVA Money Market Fund, Inc.; PCM Diversified Income Fund, PCM Global Growth
Fund, PCM Growth and Income Fund, PCM High Yield Fund, PCM Money Market Fund,
PCM New Opportunities Fund, PCM Global Asset Allocation Fund, PCM U.S.
Government and High Quality Bond Fund, PCM Utilities Growth and Income Fund, and
PCM Voyager Fund; and the Equity-Income Portfolio, Overseas Portfolio and Asset
Manager Portfolio. Applicants should read the prospectuses for each of the Funds
accompanying this Prospectus in connection with the purchase of a Policy. The
investment objectives of each of the Funds are as set forth in "Separate Account
VL II," page 23.
Total fund operating expenses in 1995, including management fees, were .65%
for Hartford Advisers Fund; .68% for Hartford Capital Appreciation Fund; .53%
for Hartford Bond Fund; .77% for Hartford Dividend and Growth Fund; .39% for
Hartford Index Fund; .86% for Hartford International Opportunities Fund; .47%
for Hartford Mortgage Securities Fund; .48% for Hartford Stock Fund; .45% for
HVA Money Market Fund; .85% for PCM Diversified Income Fund; .84% for PCM Global
Asset Allocation Fund; .75% for PCM Global Growth Fund; .57% for PCM Growth and
Income Fund; .79% for PCM High Yield Fund; .57% for PCM Money Market Fund; .84%
for PCM New Opportunities Fund; .70% for PCM U.S. Government and High Quality
Bond Fund; .78% for PCM Utilities Growth and Income Fund; .68% for PCM Voyager
Fund; .61% for Equity-Income Portfolio; .91% for Overseas Portfolio; and .81%
for Asset Manager Portfolio.
The investment adviser for the Hartford Funds is The Hartford Investment
Management Company, a wholly-owned subsidiary of Hartford Life Insurance
Company. The Hartford Investment Management Company, retains a sub-investment
adviser with respect to some of the Funds. The Putnam Funds are advised by
Putnam Investment Management, Inc., a subsidiary of Putnam Investments, Inc. The
Fidelity Funds are managed by Fidelity Management & Research Company. See
"Separate Account VL II," page 23.
7
<PAGE>
FIXED ACCOUNT
Premium payments and Account Values allocated to the Fixed Account become
part of the general assets of ITT Hartford. ITT Hartford invests the assets of
the General Account in accordance with applicable law governing the investments
of insurance company general accounts.
DEDUCTIONS FROM THE PREMIUM
Before the allocation of the premium to the Account Value, a deduction as a
percentage of premium is made for the premium processing charge, premium tax and
federal tax charge and front-end sales load. The amount of each premium
allocated to the Account Value is Your Net Premium.
PREMIUM PROCESSING CHARGE
A 1.25% charge is deducted from each premium payment for premium collection
costs and premium and Policy processing costs.
PREMIUM TAX CHARGE AND FEDERAL TAX CHARGE
We deduct as a premium tax charge a percentage of each premium to cover
premium-based taxes assessed against ITT Hartford. This percentage will vary by
locale depending on the tax rates in effect there and is based on the actual tax
imposed. The range is generally between 0% and 4%.
We also deduct a current charge of 1.25% of each premium for federal taxes
imposed under Section 848 of the Code.
FRONT-END SALES LOAD
The front-end sales load is a charge deducted from each premium. The current
and maximum front-end sales load for premiums Attributable to the Basic Face
Amount up to the Target Premium is 50% in the first Policy Year, 15% in Policy
Years 2 through 5, 10% in Policy Years 6 through 10, and 2% in Policy Years 11
through 20. After Policy Year 20, the current front-end sales load is 0%, with a
maximum of 2%.
The current and maximum front-end sales load for premiums Attributable to
the Basic Face Amount in excess of the Target Premium is 9% in Policy Year 1, 4%
in Policy Years 2 through 10 and 2% in Policy Years 11 through 20. After Policy
Year 20, the current front-end sales load is 0%, with a maximum of 2%.
The current and maximum front-end sales load for all premiums Attributable
to the Supplemental Face Amount is 4% in Policy Years 1 through 10 and 2% in
Policy Years 11 through 20. After Policy Year 20, the current front-end sales
load is 0%, with a maximum of 2%.
Front-end sales loads which cover expenses relating to the sale and
distribution of the Policies may be reduced for certain sales of the Policies
under circumstances which may result in savings of such sales and distribution
expenses.
DEDUCTIONS AND CHARGES FROM THE ACCOUNT VALUE
We will subtract amounts from Your Account Value to provide for the Monthly
Deduction Amount. These will be taken on a Pro Rata Basis from the Fixed Account
and Sub-Accounts on each Monthly Activity Date.
The Monthly Deduction Amount equals:
(a) the Cost of Insurance; plus
(b) the charges for additional benefits provided by rider, if any; plus
(c) the charges for "special" insurance class rating, if any; plus
(d) the Monthly Administrative Fee and Issue Charge; plus
(e) the Mortality and Expense Risk Charge, plus
(f) any Face Amount increase fee.
ITT Hartford may also set up a provision for income taxes against the assets
of Separate Account VL II. See "Deductions and Charges from the Account Value,"
page 19 and "Federal Tax Considerations," page 33.
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<PAGE>
Applicants should review the prospectuses for the Funds which accompany this
Prospectus for a description of the charges assessed against the assets of each
of the Funds.
ACCOUNT VALUE
As with many other types of insurance policies, each Policy will have a cash
value ("Account Value"). The Account Value of the Policy will increase or
decrease to reflect the interest credited to the Fixed Account and Loan Account,
investment experience of the Sub-Accounts applicable to the Policy and
deductions for the Monthly Deduction Amount. There is no minimum guaranteed
Account Value and the Policy Owner bears the risk of the investment in the
Funds. However, if the Death Benefit guarantee is in effect, the Policy will not
lapse due to poor investment performance. See "Detailed Description of the
Policy Benefits and Provisions -- Account Values," page 11.
POLICY LOAN
A Policy Owner may obtain a cash loan from ITT Hartford. The loan is secured
by the Policy. At the time a loan is requested, the Indebtedness (including the
currently applied for loan) may not exceed 90% of the Account Value. See
"Detailed Description of Policy Benefits and Provisions -- Policy Loans," page
13.
CHARGES AGAINST THE FUNDS
Separate Account VL II purchases shares of the Funds at net asset value. The
net asset value of the Fund shares reflects investment advisory fees and
administrative and other expenses already deducted from the assets of the Funds.
These charges are described herein. See "Charges Against the Funds", page 21.
THE RIGHT TO EXAMINE OR EXCHANGE THE POLICY
An applicant has a limited right to return his or her Policy for
cancellation. If the applicant returns the Policy within ten days after delivery
of the Policy, ten days after We mail or personally deliver a Notice of
Withdrawal Right, or within 45 days after completion of the application,
whichever is latest (subject to applicable state regulation), ITT Hartford will
return to the applicant, within seven days thereafter, the greater of the
premium paid, less any Indebtedness, or the sum of (1) the Account Value, less
any Indebtedness, on the date the returned Policy is received by ITT Hartford or
its agent and (2) any deductions under Policy or by the Funds for taxes, charges
or fees.
In addition, once the Policy is in effect it may be exchanged during the
first 24 months after its Date of Issue for a non-variable last survivor life
insurance policy offered by Us on the life of the Insureds without submitting
proof of insurability.
SURRENDER
At any time prior to the Maturity Date, provided the Policy has a Cash
Surrender Value, You may surrender the Policy. See "Detailed Description of
Policy Benefits and Provisions," and "Surrender", pages 17.
TAX CONSEQUENCES
The current federal tax law generally excludes all death benefit payments
from the gross income of the Policy Beneficiary. See "Federal Tax
Considerations," page 33.
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<PAGE>
DETAILED DESCRIPTION OF POLICY
BENEFITS AND PROVISIONS
GENERAL
This Prospectus describes a last survivor flexible premium variable life
insurance policy where the Purchaser of the Policy has considerable flexibility
in selecting the timing and amount of premium payments.
PREMIUMS
PREMIUM PAYMENT FLEXIBILITY
You have considerable flexibility as to when and in what amounts You pay
premiums.
Prior to issue, You can choose a Planned Premium, within a range determined
by ITT Hartford based on the Face Amount and each Insured's sex (except where
unisex rates apply), Issue Age and risk classification. We will send You premium
notices for Planned Premiums. The notices may be sent at 12, 6, or 3 month
intervals. You may also have premiums automatically deducted monthly from Your
checking account. The Planned Premiums and payment mode You selected are shown
on the Policy's specifications page 10. You may change the Planned Premiums,
subject to Our minimum amount rules then in effect.
The Policy will not lapse as long as the Cash Surrender Value is sufficient
to cover the Monthly Deduction Amounts or the Death Benefit guarantee is in
effect.
See also "Lapse and Reinstatement" on page 16 for more details.
ALLOCATION OF PREMIUM PAYMENTS
The initial Net Premium will be allocated to the Hartford Money Market
Sub-Account on the later of the Policy Date or the date We receive the premium.
The value in this Hartford Money Market Sub-Account will then be allocated
to the Fixed Account and Sub-Accounts according to the premium allocation
specified in the application on the latest of 45 days after the application is
signed, ten days after We receive the premium, ten days after We mail or
personally deliver a Notice of Withdrawal Right and the date We receive the
final requirement to put the Policy in force.
Any additional Net Premiums received by Us prior to such date will be
allocated to the Hartford Money Market Sub-Account.
Upon written request, You may change the premium allocation. Portions
allocated to the Fixed Account and Sub-Accounts must be whole percentages of 10%
or more. Subsequent Net Premiums will be allocated to the Fixed Account and
Sub-Accounts according to Your most recent instructions, subject to the
following. Currently, the Account Value may be allocated to no more than nine
Sub-Accounts. (ITT Hartford reserves the right to increase the number of
allocable investment options beyond nine.) If We receive a premium and Your most
recent allocation instructions would violate this requirement, We will allocate
the Net Premium to the Fixed Account and Sub-Accounts on a Pro Rata Basis.
The Policy Owner receives several different types of notification as to what
his current premium allocation is. The initial allocation chosen by the Policy
Owner is shown in the Policy. And, each transactional confirmation received
after a premium payment will show how that premium has been allocated. In
addition, each quarterly statement summarizes the current premium allocation in
effect for that Policy.
ACCUMULATION UNITS
Net Premiums allocated to the Sub-Accounts are used to credit Accumulation
Units to those Sub-Accounts.
The number of Accumulation Units in each Sub-Account to be credited to a
Policy (including the initial allocation to Hartford Money Market Sub-Account)
and the amount credited to the Fixed Account will be
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<PAGE>
determined first by multiplying the Net Premium by the appropriate allocation
percentage to determine the portion to be invested in the Fixed Account or
Sub-Account. Each portion to be invested in a Sub-Account is then divided by the
Accumulation Unit Value of that particular Sub-Account next computed following
receipt of the payment.
ACCUMULATION UNIT VALUES
The Accumulation Unit Value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund and will be determined on each
Valuation Day by multiplying the Accumulation Unit Value of the particular
Sub-Account on the preceding Valuation Day by a Net Investment Factor for that
Sub-Account for the Valuation Period then ended. The Net Investment Factor for
each 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 dividend or capital gain distributions paid by that Fund 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.
All valuations in connection with a Policy, e.g., with respect to
determining Account Value, in connection with Policy loans, or in calculation of
Death Benefits, or with respect to determining the number of Accumulation Units
to be credited to a Policy with each premium payment, other than the initial
premium payment, will be made on the date the request or payment is received by
ITT Hartford at the National Service Center if such date is a Valuation Day;
otherwise such determination will be made on the next succeeding date which is a
Valuation Day.
PREMIUM LIMITATION
If premiums are received which would cause the Policy to fail to meet the
definition of a life insurance policy in accordance with the Internal Revenue
Code, We reserve the right to refund the excess premium payments. We will refund
such premium payments and interest thereon within 60 days after the end of a
Policy Year.
A premium payment that results in an increase in the Death Benefit greater
than the amount of the premium will be accepted only after We approve evidence
of insurability.
ACCOUNT VALUES
As with traditional life insurance, each Policy will have an Account Value.
There is no minimum guaranteed Account Value.
The Account Value of a Policy changes on a daily basis and will be computed
on each Valuation Day. The Account Value will vary to reflect the investment
experience of the Sub-Accounts, and the interest credited to the Fixed and Loan
Accounts as well as the Monthly Deduction Amounts.
The Account Value of a particular Policy is related to the net asset value
of the Funds associated with the Sub-Accounts, if any, to which premium payments
on the Policy have been allocated. The Account Value in the Sub-Accounts on any
Valuation Day is calculated by multiplying the number of Accumulation Units in
each Sub-Account as of the Valuation Day by the current Accumulation Unit Value
of that Sub-Account and then summing the result for all the Sub-Accounts. The
Account Value equals the Account Value in the Sub-Accounts plus the value of the
Fixed and Loan Accounts. The Cash Surrender Value, which is the net amount
available upon surrender of the Policy, is the Account Value less any
Indebtedness. See "Accumulation Unit Values," page 11.
AMOUNT PAYABLE ON SURRENDER OF THE POLICY
As long as the Policy is in effect, a Policy Owner may elect, without the
consent of the Beneficiary (provided the designation of Beneficiary is not
irrevocable), to fully surrender the Policy. Upon surrender, the Policy Owner
will receive the Cash Surrender Value determined as of the day ITT Hartford
receives the Policy Owner's written request or the date requested by the Policy
Owner, whichever is later. The Cash Surrender Value equals the Account Value
less any Indebtedness. The Policy will terminate on the date of receipt of the
written request, or the date the Policy Owner requests the surrender to be
effective, whichever is later.
LOAD REFUND
If a Policy is surrendered during the first two Policy Years, the Policy
Owner may be entitled to payment of a refund in addition to the Cash Surrender
Value.
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The refund will be equal to the excess, if any, of the sum of the actual
front-end sales load charged to date over:
1. the sum of 30% of payments in aggregate amount less than or equal to one
Guideline Annual Premium plus 10% of payments in aggregate amount greater
than one Guideline Annual Premium but not more than two Guideline Annual
Premiums; and
2. 9% of each payment made in excess of two Guideline Annual Premiums.
PARTIAL WITHDRAWALS
A maximum of twelve (12) partial withdrawals are allowed each Policy Year;
however, only (1) one partial withdrawal is allowed between any successive
Monthly Activity Dates. The minimum partial withdrawal allowed is $500. The
maximum partial withdrawal is the Cash Surrender Value, less $1,000. If the
Death Benefit Option then in effect is Option A or Option C, the Face Amount is
reduced by the amount of the Partial Withdrawal. The minimum Face Amount
required after a partial withdrawal is subject to Our rules then in effect.
Unless specified otherwise, the Partial Withdrawal will be deducted on a Pro
Rata Basis from the Fixed Account and the Sub-Accounts. Currently, ITT Hartford
does not impose a partial withdrawal charge. However, ITT Hartford reserves the
right to impose a partial withdrawal charge of up to $50.
TRANSFERS OF ACCOUNT VALUE
AMOUNT AND FREQUENCY OF TRANSFERS
Upon request and as long as the Policy is in effect, You may transfer
amounts among the Fixed Account and Sub-Accounts. Transfers may be made by
written request or by calling toll free 1-800-231-5453. Transfers by telephone
may be made by the agent of record or by the attorney-in-fact pursuant to a
power of attorney. Telephone transfers may not be permitted in some states. The
policy of ITT 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. We will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine; otherwise, We may be liable
for any losses due to unauthorized or fraudulent instructions. The procedures We
follow for transactions initiated by telephone include requirements that callers
provide certain identifying information for themselves (if not the Policy Owner)
and the Policy Owner. All transfer instructions by telephone are tape recorded.
The amounts which may be transferred and the number of transfers will be
limited by Our rules then in effect.
Currently there are no restrictions on transfers other than those described
below. There is no charge currently for the first four (4) transfers in any
Policy Year. Each subsequent transfer is subject to a Transfer Charge of up to
$25.
We reserve the right at a future date to limit the size of transfers and
remaining balances, and to limit the number and frequency of transfers.
TRANSFERS TO OR FROM SUB-ACCOUNTS
In the event of a transfer from a Sub-Account, the number of Accumulation
Units credited to the Sub-Account from which the transfer is made will be
reduced. The reduction will be determined by dividing:
1. the amount transferred by,
2. the Accumulation Unit Value for that Sub-Account determined as of the
next Valuation Day after We receive Your request for transfer In Writing.
In the event of a transfer to a Sub-Account, We will increase the number of
Accumulation Units credited to the Sub-Account. The increase will equal:
1. the amount transferred divided by,
2. the Accumulation Unit Value for that Sub-Account determined as of the
next Valuation Day after We receive Your request for transfer in writing.
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<PAGE>
TRANSFERS FROM THE FIXED ACCOUNT
In addition to the conditions above, transfers from the Fixed Account are
subject to the following:
(a) the transfer must occur during the 30-day period following each Policy
Anniversary; and
(b) if the Accumulated Value in Your Fixed Account exceeds $1,000, the
amount transferred in any Policy Year may be no larger than 25% of the
Accumulated Value in the Fixed Account on the date of transfer.
POLICY LOANS
As long as the Policy is in effect, a Policy Owner may obtain, without the
consent of the Beneficiary (provided the designation of Beneficiary is not
irrevocable), a cash loan from ITT Hartford. The total Indebtedness at the time
of the new loan (including the accrued interest on prior loans plus the
currently applied for loan) may not exceed 90% of the Account Value.
The amount of each loan will be transferred on a Pro Rata Basis from the
Fixed Account and each of the Sub-Accounts (unless the Policy Owner specifies
otherwise) to the Loan Account. The Loan Account is a mechanism used to ensure
that any outstanding Indebtedness remains fully secured by the Account Value.
LOAN INTEREST
Interest will accrue daily on the Indebtedness at the Policy Loan Rate,
which is the interest rate as shown in the Policy. The difference between the
value of the Loan Account and the Indebtedness will be transferred on a Pro Rata
Basis from the Fixed Account and Sub-Accounts to the Loan Account on each
Monthly Activity Date.
CREDITED INTEREST
During the first ten Policy Years, any amounts in the Loan Account will be
credited with interest at a rate equal to the Policy Loan Rate, minus 2%. For
Policy Years 11 and beyond, except for Preferred Loans described below, the Loan
Account will be credited with interest at a rate equal to the Policy Loan Rate
applicable to that Indebtedness, minus 1%.
PREFERRED LOAN
If, any time after the tenth Policy Anniversary, the Account Value exceeds
the total of all premiums paid since issue, a Preferred Loan is available. The
amount available for a Preferred Loan is the amount by which the Account Value
exceeds total premiums paid. The amount of the Loan Account which equals a
Preferred Loan will be credited with interest at a rate equal to the Policy Loan
Rate. The amount of Indebtedness that qualifies as a Preferred Loan is
determined on each Monthly Activity Date.
LOAN REPAYMENTS
You can repay any part of or the entire loan at any time while Your Policy
is in force and either of the Insureds is alive. The amount of loan repayment
will be deducted from the Loan Account and will be allocated among the Fixed
Account and Sub-Accounts in the same percentage as premiums are allocated.
TERMINATION DUE TO EXCESSIVE INDEBTEDNESS
If total Indebtedness equals or exceeds the Account Value, the Policy will
terminate 61 days after We have mailed notice to Your last known address and
that of any assignees of record. If sufficient loan repayment is not made by the
end of this 61 day period, the Policy will end without value.
EFFECT OF LOANS ON ACCOUNT VALUE
A loan, whether or not repaid, will have a permanent effect on the Account
Value because the investment results of each Sub-Account will apply only to the
amount remaining in such Sub-Accounts. In addition, the rate of interest
credited to the Fixed Account will usually be different than the rate credited
to the Loan Account. The longer a loan is outstanding, the greater the effect is
likely to be. The effect could be favorable or unfavorable. If the Fixed Account
and Sub-Accounts earn more than the annual interest rate for funds held in the
Loan Account, a Policy Owner's Account Value will not increase as rapidly as it
would have had no loan been made. If the Fixed Account and Sub-Accounts earn
less than the Loan Account, the Policy Owner's
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<PAGE>
Account Value will be greater than it would have been had no loan been made.
Also, if not repaid, the aggregate amount of the outstanding loan (i.e., the
Indebtedness) will reduce the Death Proceeds and Cash Surrender Value otherwise
payable.
DEATH BENEFIT
The Policies provide for the payment of the Death Proceeds to the named
Beneficiary when the last surviving Insured under the Policy dies. The Death
Proceeds payable to the Beneficiary equal the Death Benefit less any
Indebtedness and less any due and unpaid Monthly Deduction Amount occurring
during a Grace Period. The Death Benefit depends on the Death Benefit Option
selected by You, the minimum Death Benefit provision, and whether or not the
Death Benefit guarantee is in effect. All or part of the Death Proceeds may be
paid in cash or applied under a "Payment Option." See "Other Matters -- Payment
Options," page 28.
DEATH BENEFIT OPTIONS
There are three Death Benefit Options: the Level Death Benefit Option
("Option A"), the Return of Account Value Death Benefit Option ("Option B") and
the Return of Premium Death Benefit Option ("Option C"). Subject to the minimum
Death Benefit described below, the Death Benefits under each option are:
1. Under Option A, the Death Benefit is the Face Amount.
2. Under Option B, the Death Benefit is the Face Amount plus the Account
Value.
3. Under Option C, the Death Benefit is the Face Amount plus the sum of the
premiums paid.
OPTION CHANGE
You may change Your Death Benefit Option to Option A or Option B without
evidence of insurability. If a change to Option A is elected, the Face Amount
will become that amount available as a Death Benefit immediately prior to the
option change. If a change to Option B is elected, the Face Amount will become
that amount available as a Death Benefit immediately prior to the option change,
reduced by the then current Account Value. Changing your Death Benefit Option
does not result in any Policy fees or charges. However, you should consult a
competent tax adviser regarding the possible adverse tax consequences resulting
from a change in your Death Benefit Option.
Any unscheduled increase in the Face Amount will be deemed an increase in
the Supplemental Face Amount.
DEATH BENEFIT GUARANTEE
If the Death Benefit guarantee is in effect, payment of the Basic Face
Amount upon the death of the last surviving Insured will be guaranteed
regardless of the Policy's investment performance. The Death Benefit guarantee
is in effect if:
(a) the Death Benefit guarantee period has not expired;
(b) the Supplemental Face Amount has never exceeded nor is scheduled to
exceed the Basic Face Amount;
(c) on each Monthly Activity Date, the cumulative premiums paid into the
Policy, less withdrawals from the Policy, equal or exceed the Cumulative
Death Benefit Guarantee Premium.
The Death Benefit guarantee period will expire at the end of: (1) the first
ten Policy Years, or (2) the life expectancy of the last surviving Insured
(based on the 1980 Commissioners' Standard Ordinary Mortality Smoker or
Nonsmoker Table, age last birthday), whichever period was chosen under the
Policy.
MINIMUM DEATH BENEFIT
Notwithstanding the above, there is a minimum Death Benefit equal to the
Account Value multiplied by a percentage specified in Your Policy. This
percentage varies according to each Insured's Issue Age, the Policy Year, sex
(where unisex rates are not used) and insurance class, but may be increased by
You in the application.
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EXAMPLES OF THE MINIMUM DEATH BENEFIT:
<TABLE>
<CAPTION>
A B
-------- --------
<S> <C> <C>
Face Amount............................................. $100,000 $100,000
Account Value on Date of Death.......................... 46,500 34,000
Specified Percentage.................................... 250% 250%
Death Benefit Option.................................... Level Level
</TABLE>
In Example A, the minimum Death Benefit equals $116,250, i.e., the greater
of $100,000 (the Face Amount) or $116,250 (the Account Value at the Date of
Death of $46,500, multiplied by the specified percentage of 250%). This amount
less any outstanding loans constitutes the Death Proceeds which We would pay to
the Beneficiary.
In Example B, the minimum Death Benefit is $100,000, i.e., the greater of
$100,000 (the Face Amount) or $85,000 (the Account Value of $34,000 multiplied
by the specified percentage of 250%).
SUPPLEMENTAL FACE AMOUNT
If You selected Supplemental Face Amount coverage on Your application, the
amount is shown on the Policy's specifications page, subject to any scheduled
changes You instructed in application and any unscheduled changes, as described
below. You may discontinue a scheduled increase by written request. A decrease
in Face Amount, other than as a result of a partial withdrawal, will affect Your
scheduled increases.
UNSCHEDULED INCREASES AND DECREASES IN FACE AMOUNT
At any time after the first Policy Year, You may request a change in the
Face Amount by writing to Us.
The minimum amount by which the Face Amount can be increased or decreased is
based on Our rules then in effect.
Any unscheduled increase in the Face Amount will be deemed an increase in
the Supplemental Face Amount. All requests to increase the Face Amount must be
applied for on a new application and accompanied by the Policy. All requests
will be subject to evidence of insurability satisfactory to Us. Any increase
approved by Us will be effective on the date shown on the new Policy
specifications page 10 provided that the deduction for the Cost of Insurance for
the first month is made.
Each unscheduled increase in Face Amount is subject to an increase fee of
$.05 per thousand dollars of each increase per month for the first five Policy
Years from the date of each increase.
A decrease in the Face Amount will be effective on the Monthly Activity Date
following the date We receive the request. The remaining Face Amount must not be
less than Our minimum rules then in effect. Decreases will be applied first to
the Supplemental Face Amount and then to the Basic Face Amount.
We reserve the right to limit the number of increases or decreases made
under the Policy to no more than one in any 12 month period.
BENEFITS AT MATURITY
If either Insured is living on the Maturity Date, on surrender of the Policy
to ITT Hartford, ITT Hartford will pay to the Policy Owner the Cash Surrender
Value. On the Maturity Date, the Policy will terminate and ITT Hartford will
have no further obligations under the Policy.
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LAPSE AND REINSTATEMENT
POLICY LAPSE AND GRACE PERIOD
The Policy will be in default on any Monthly Activity Date on which the Cash
Surrender Value is not sufficient to cover the Monthly Deduction Amount. A
61-day period called the "Grace Period" will begin from the date of default. ITT
Hartford will mail the Owner and any assignee written notice of the amount of
premium that will be required to continue the Policy in force at least 30 days
before the end of the Grace Period. The premiums required will be no greater
than the amount required to pay three Monthly Deduction Amounts as of the day
the Grace Period began. Unless the Death Benefit guarantee is in effect, the
Policy will terminate without value if the required premium is not paid by the
end of the Grace Period. If the Death Benefit guarantee is in effect and
sufficient premium has not been paid by the end of the Grace Period, the Death
Benefit will be reduced to the Basic Face Amount and any riders will no longer
be in force. If the last surviving Insured dies during the Grace Period, We will
pay the Death Proceeds.
DEATH BENEFIT GUARANTEE DEFAULT AND GRACE PERIOD
If the cumulative premiums, less withdrawals, are not sufficient to maintain
the Death Benefit guarantee in effect, the lapse and Grace Period provisions for
the Death Benefit guarantee will apply as follows:
On every Monthly Activity Date during the Death Benefit guarantee period, We
will compare the cumulative premiums received, less withdrawals, to the
Cumulative Death Benefit Guarantee Premium for the Death Benefit guarantee
period in effect.
If the cumulative premiums received, less withdrawals, are less than the
Cumulative Death Benefit Guarantee Premium, the Death Benefit guarantee will be
deemed to be in default as of that Monthly Activity Date. A Grace Period of 61
days from the date of default will begin. We will mail the Policy Owner and any
assignee written notice of the amount of premium required to continue the Death
Benefit guarantee.
At the end of the Grace Period under a ten-year guarantee period, the Death
Benefit guarantee will be removed from the Policy if We have not received the
amount of the required premium. You will receive a written notification of the
change.
At the end of the Grace Period under the last survivor life expectancy
guarantee period, the Death Benefit guarantee will be removed from the Policy if
We have not received the amount of the required premium, subject to the
following exception: If the Policy is in the first ten Policy Years and the
cumulative premiums received, less withdrawals, equal or exceed the Cumulative
Death Benefit Guarantee Premium for the ten-year period, We will change the
Death Benefit guarantee period to ten years. In this case, We will send You
notification of:
(a) the ten-year period measured from the Policy Date; and
(b) the Annual Death Benefit Guarantee Premium for that ten-year period.
REINSTATEMENT
Unless the Policy has been surrendered, the Policy may be reinstated prior
to the Maturity Date, provided:
(a) the Insureds alive at the end of the Grace Period are also alive on the
date of reinstatement;
(b) You make Your request within five years;
(c) satisfactory evidence of insurability is submitted;
(d) any Policy loan is repaid or reinstated; and
(e) You pay sufficient premium to (1) cover all Monthly Deduction Amounts
that are due and unpaid during the Grace Period and (2) keep the Policy
in force for three months after the date of reinstatement.
The Account Value on the reinstatement date will reflect:
(a) The Account Value at the time of termination; plus
(b) Net Premiums derived from premiums paid at the time of reinstatement.
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<PAGE>
Upon reinstatement, any Indebtedness at the time of termination must be
repaid or carried over to the reinstated Policy.
THE RIGHT TO EXAMINE OR EXCHANGE THE POLICY
An applicant has a limited right to return a Policy for cancellation. If the
Policy is returned, by mail or personal delivery to ITT Hartford or to the agent
who sold the Policy, to be canceled within ten days after delivery of the Policy
to the Policy Owner, within 10 days of ITT Hartford's mailing or personal
delivery of a Notice of Right to Withdraw, or within 45 days of completion of
the Policy application (whichever is later, and subject to applicable state
regulation), ITT Hartford will return to the applicant, within seven days
thereafter, the greater of the premium paid, less any Indebtedness, or the sum
of (1) the Account Value, less any Indebtedness, on the date the returned Policy
is received by ITT Hartford or its agent and (2) any deductions under the Policy
or by the Funds for taxes, charges or fees.
Once the Policy is in effect, it may be exchanged during the first 24 months
after its issuance, for a non-variable last survivor life insurance policy
offered by Us or an affiliate on the life of the Insureds. No evidence of
insurability will be required. The new policy will have an amount at risk which
equals or is less than the amount at risk in effect on the date of exchange.
Premiums under the new policy will be based on the same risk classifications as
this Policy. An exchange of the Policy under these circumstances should be a
tax-free transaction under Section 1035 of the Code.
SURRENDER
At any time prior to the Maturity Date, provided the Policy has a Cash
Surrender Value, You may surrender the Policy to Us. We will pay You the Cash
Surrender Value. Our liability under the Policy will cease as of the date of
Your request.
VALUATION OF PAYMENTS AND TRANSFERS
We value the Policy on every Valuation Day.
We will pay Death Proceeds, Cash Surrender Values, Partial Withdrawals, and
loan amounts allocable to the Sub-Accounts within seven (7) days after We
receive all the information needed to process the payment unless the New York
Stock Exchange is closed for other than a regular holiday or weekend, trading is
restricted by the Securities and Exchange Commission ("SEC") or that the SEC
declares that an emergency exists.
ITT Hartford may defer payment of any amounts not allocable to the
Sub-Accounts for up to six months from the date on which We receive the request.
APPLICATION FOR A POLICY
Individuals wishing to purchase a Policy must submit an application to ITT
Hartford. Within limits, an applicant may choose the initial Face Amount. A
Policy generally will be issued only on the lives of Insureds between the ages
of 20 and 80 who supply evidence of insurability satisfactory to ITT Hartford.
(ITT Hartford may extend the age 80 limit to higher ages for the older Insured,
in which case certain age and risk classification restrictions on the younger
Insured will apply.) Acceptance is subject to ITT Hartford's underwriting rules
and ITT Hartford reserves the right to reject an application for any reason. No
change in the terms or conditions of a Policy will be made without the consent
of the Policy Owner.
The Policy will be effective on the Policy Date only after ITT Hartford has
received all outstanding delivery requirements and received the initial premium.
The Policy Date is the date used to determine all future cyclical transactions
on the Policy, e.g., Monthly Activity Date, Policy Months and Policy Years.
17
<PAGE>
REDUCED CHARGES FOR ELIGIBLE GROUPS
Certain of the charges and deductions described below may be reduced for
Policies issued in connection with a specific plan in accordance with Our rules
in effect as of the date an application for a Policy is approved. To qualify for
such a reduction, a plan must satisfy certain criteria as to, for example, size
of the plan, expected number of participants and anticipated premium payment
from the plan. Generally, the sales contacts and effort, administrative costs
and mortality cost per Policy vary based on such factors as the size of the
plan, the purposes for which Policies are purchased and certain characteristics
for the plan's members. The amount of reduction and the criteria for
qualification will reflect in the reduced sales effort and administrative costs
resulting from, and the different mortality experience expected as a result of,
sales to qualifying plans. We may modify from time to time on a uniform basis
both the amounts of reductions and the criteria for qualification. Reductions in
these charges will not be unfairly discriminatory against any person, including
the affected Policy Owners funded by Separate Account VL II.
DEDUCTIONS FROM THE PREMIUM
Before the allocation of the premium to the Account Value, a deduction as a
percentage of premium is made for the premium processing charge, premium tax and
federal tax charge and front-end sales load. The amount of each premium
allocated to the Account Value is Your Net Premium.
PREMIUM PROCESSING CHARGE
A 1.25% charge is deducted from each premium payment for premium collection
costs and premium and Policy processing costs.
PREMIUM TAX CHARGE AND FEDERAL TAX CHARGE
We deduct as a premium tax charge a percentage of each premium to cover
premium-based taxes assessed against ITT Hartford. This percentage will vary by
locale depending on the tax rates in effect there and is based on the actual tax
imposed. The range is generally between 0% and 4%.
We also deduct a 1.25% charge from each premium payment to cover the
estimated costs to Us of the federal income tax treatment of the Policies'
deferred acquisition costs under Section 848 of the Code. We have determined
that this charge is reasonable in relation to our increased federal income tax
burden under the Code resulting from the receipt of premiums.
FRONT-END SALES LOAD
The front-end sales load is a charge deducted from each premium based on the
(1) amount of premium paid in relation to the Target Premium, (2) Policy Year in
which the premium is paid, and (3) amount of the premium Attributable to the
Basic Face Amount and to the Supplemental Face Amount. See "Special Terms" for a
discussion of "Target Premium", page 5.
The current and maximum front-end sales load for premiums Attributable to
the Basic Face Amount up to the Target Premium is 50% in the first Policy Year,
15% in Policy Years 2 through 5, 10% in Policy Years 6 through 10, and 2% in
Policy Years 11 through 20. After Policy Year 20, the current front-end sales
load is 0%, with a maximum of 2%.
The current and maximum front-end sales load for premiums Attributable to
the Basic Face Amount in excess of the Target Premium is 9% in Policy Year 1, 4%
in Policy Years 2 through 10, and 2% in Policy Years 11 through 20. After Policy
Year 20, the current front-end sales load is 0%, with a maximum of 2%.
The current and maximum front-end sales load for all premiums Attributable
to the Supplemental Face Amount is 4% in Policy Years 1 through 10 and 2% in
Policy Years 11 through 20. After Policy Year 20, the current front-end sales
load is 0%, with a maximum of 2%.
Front-end sales loads which cover expenses relating to the sale and
distribution of the Policies may be reduced for certain sales of the Policies
under circumstances which may result in savings of such sales and distribution
expenses.
18
<PAGE>
EXAMPLES OF FRONT-END SALES LOADS/IMPACT OF REFUND OF LOAD
An example of the actual Front-End Sales Loads and the impact of the refund
of the load, if any (see "Refund of Loads," page 19), for a Policy is shown
below. This example uses the same specific information (i.e., Issue Age, Face
Amount, premium level, etc.) as the illustration on page 39 of the prospectus.
<TABLE>
<S> <C>
Death Benefit Option: Level
Face Amount: $1,000,000 Basic Face Amount
Issue Ages/Sex/Class: 65/Male/Preferred
65/Female/Preferred
Guideline Annual Premium: $36,042.00
Annual Planned Premium: $27,000.00
</TABLE>
<TABLE>
<CAPTION>
IMPACT OF FRONT-END SALES LOAD/REFUND OF LOADS
- -----------------------------------------------------------------------------
CUMULATIVE CUMULATIVE
CUMULATIVE FRONT-END NON-REFUNDABLE AMOUNT OF REFUND
POLICY YEAR PREMIUM PAID SALES LOADS SALES LOADS UPON SURRENDER
- -------------- ------------ ----------- -------------- ----------------
<S> <C> <C> <C> <C>
1 $27,000.00 $ 12,771.00 $ 8,098.96 $4,672.04
2 54,000.00 16,602.30 12,548.31 4,053.99
</TABLE>
DEDUCTIONS AND CHARGES FROM THE ACCOUNT VALUE
MONTHLY DEDUCTION AMOUNTS
On the Policy Date and on each subsequent Monthly Activity Date, ITT
Hartford will deduct an amount (the "Monthly Deduction Amount") from the Account
Value to cover certain charges and expenses incurred in connection with a
Policy. Each Monthly Deduction Amount will be deducted on a Pro Rata Basis from
the Fixed Account and each of the Sub-Accounts. The Monthly Deduction Amount
will vary from month to month.
The Monthly Deduction Amount equals:
(a) the charge for the Cost of Insurance; plus
(b) the charges for additional benefits provided by rider, if any; plus
(c) the charges for "special" insurance class rating, if any; plus
(d) the Monthly Administrative Fee and Issue Charge; plus
(e) the Mortality and Expense Risk Charge; plus
(f) any Face Amount increase fee.
(a) COST OF INSURANCE CHARGE
The charge for the Cost of Insurance is equal to:
(i) the Cost of Insurance rate per $1,000; multiplied by
(ii) the amount at risk; divided by
(iii) $1,000
The amount at risk equals the Death Benefit less the Account Value on that
date, prior to assessing the Monthly Deduction Amount.
The Cost of Insurance charge is to cover ITT Hartford's anticipated
mortality costs. For standard risks, the Cost of Insurance rate will not exceed
those based on the 1980 Commissioners' Standard Ordinary Mortality Smoker or
Nonsmoker Table, age last birthday. A table of guaranteed Cost of Insurance
rates per $1,000 will be included in each Policy; however, ITT Hartford reserves
the right to use rates less than those shown in the table. Substandard risks
will be charged a higher Cost of Insurance rate that will not exceed rates based
on a multiple of the 1980 Commissioners' Standard Ordinary Mortality Smoker or
Nonsmoker Table, age last birthday. The multiple will be based on the Insureds'
risk classes. ITT Hartford will determine the Cost of Insurance rate at the
start of each Policy Year. Any changes in the Cost of Insurance rate will be
made uniformly for all Insureds of the same issue ages, sexes and risk classes
and whose coverage has been inforce for the same length of time. No change in
insurance class or cost will occur on account of deterioration of the Insureds'
health.
19
<PAGE>
Because the Account Value and the Death Benefit under a Policy may vary from
month to month, the Cost of Insurance charge may also vary on each Monthly
Activity Date.
On each Monthly Activity Date during the last 25 Policy Years before the
Maturity Date, ITT Hartford will apply a discount to the Cost of Insurance rate
if You qualify for this discount. The discount is 10% times the ratio of the
Basic Face Amount at issue to the Face Amount at issue as shown on the Policy
specification page. To qualify for the discount, the Policy must have been in
force at least 15 Policy Years and the ratio of the then current Account Value
to the then current Death Benefit must at least equal the qualifying ratio
described below. The qualifying ratio is 0% with 25 Policy Years remaining until
the Maturity Date and increases by three percentage points thereafter. For
example, with ten Policy Years remaining until the Maturity Date the qualifying
ratio is 45%, and with one Policy Year remaining the qualifying ratio is 72%.
This discount may not be available in all states.
(b) RIDER CHARGE
If the Policy includes riders, a charge is made applicable to the riders
from the Account Value on each Monthly Activity Date.
The charge applicable to these riders is to compensate ITT Hartford for
anticipated cost of providing these benefits and are specified on the applicable
rider.
The riders available are described on page 29 under "Supplemental Benefits"
section.
(c) SPECIAL CLASS CHARGE
A charge for a special insurance class rating of an Insured may be made
against the Account Value, if applicable. This charge is to compensate ITT
Hartford for the additional mortality risk associated with individuals in these
classes.
(d) MONTHLY ADMINISTRATIVE FEE AND ISSUE CHARGE
ITT Hartford will assess a current Monthly Administrative Fee to compensate
ITT Hartford for administrative costs in connection with the Policies. The
current Monthly Administrative Fee is the sum of $7.50 per month, plus $0.01 per
month per thousand of Face Amount at issue, paid in Policy Years 1 through 10.
On a blended-rate basis, the charge is guaranteed never to exceed for all Policy
Years the sum of $10.00 per month plus $0.03 per month per thousand of Basic
Face Amount at issue and $15.00 per month plus $0.05 per month per thousand of
Supplemental Face Amount at issue. This guaranteed charge is a blended rate
based on the ratio of the initial Basic Face Amount and the Supplemental Face
Amount to the initial Face Amount. For example, if the initial Basic Face Amount
was $200,000 and the initial Supplemental Face Amount was $50,000, then the
ratio of initial Basic Face Amount to initial Face Amount is .80 ($200,000
divided by $250,000) and the ratio of initial Supplemental Face Amount to
initial Face Amount is .20 ($50,000 divided by $250,000). The blended guaranteed
charge would be $11.00 per month (.80 times $10 plus .20 times $15) and $.034
per thousand of Face Amount (.80 times $.03 plus .20 times $.05).
In addition, in the first five Policy Years, there is a monthly Issue Charge
to compensate ITT Hartford for the up-front costs to underwrite and issue a
Policy. The Issue Charge is the sum of $20 per month for the first five Policy
Years plus $.05 per $1000 of Face Amount at Issue Date or unscheduled
Supplemental Face Amount increase per month for the first five years from Date
of Issue or increase.
The sum of the Premium Processing Charges, the Monthly Administrative Fee
and the Issue Charge will not exceed the cost ITT Hartford incurs in providing
administrative services under the Policies.
(e) MORTALITY AND EXPENSE RISK CHARGE
A current charge is made for mortality and expense risks assumed by ITT
Hartford. This charge is allocated to ITT Hartford's General Account. ITT
Hartford may profit from this charge. See also, "Policy Benefits and Rights --
Account Values," page 11.
The current Mortality and Expense Risk Charge for any Monthly Activity Date
is equal to:
(i) the current Mortality and Expense Risk Rate; multiplied by
(ii) the portion of the Account Value allocated to the Sub-Account on the
Monthly Activity Date prior to assessing the Monthly Deduction Amount.
20
<PAGE>
The current and guaranteed Mortality and Expense Risk Rate for the first ten
Policy Years is 0.80%. After the tenth Policy Year, the current and maximum Rate
is 0.80% on the first $100,000 of Account Value as determined just prior to the
Monthly Deduction. On the remaining Account Value, the current Rate is 0.25% and
the maximum Rate is 0.40% for Account Value Attributable to the Basic Face
Amount and 0.50% for Account Value Attributable to the Supplemental Face Amount.
The mortality risk assumed is that the actual Cost of Insurance charges
specified in the Policy will be insufficient to meet actual claims. The expense
risk assumed is that expenses incurred in issuing and administering the Policies
will exceed the administrative charges set in the Policy. ITT Hartford may
profit from the mortality and expense risk charge and may use any profits for
any proper purpose, including any difference between the cost it incurs in
distributing the Policies and the proceeds of the front-end sales load.
CHARGES AGAINST THE FUNDS
The investment advisers charge the Funds an investment management fee on a
daily basis as compensation for services. The following Table shows the fee
charged for each Fund available for investment by Policy Owners.
<TABLE>
<CAPTION>
ANNUAL INVESTMENT MANAGEMENT FEE
AS A PERCENTAGE OF AVERAGE
HARTFORD FUNDS DAILY NET ASSETS
- -------------------------------------------------- --------------------------------------------------
<S> <C>
Hartford Capital Appreciation Fund, Inc.,
Hartford Advisers Fund, Inc.,
Hartford International Opportunities Fund, Inc.,
Hartford Dividend and Growth Fund, Inc.......... .575% of the first $250 million of average net
assets
.525% of the next $250 million of average net
assets
.475% of the next $250 million of average net
assets
.425% of any amount over $1.0 billion
Hartford Bond Fund, Inc.,
Hartford Stock Fund, Inc........................ .325% of the first $250 million of average net
assets
.300% of the next $250 million of average net
assets
.275% of the next $250 million of average net
assets
.250% of any amount over 1.0 billion
Hartford Index Fund, Inc.......................... .20%
Hartford Mortgage Securities Fund, Inc.,
HVA Money Market Fund, Inc...................... .25%
<CAPTION>
ANNUAL INVESTMENT MANAGEMENT FEE
AS A PERCENTAGE OF AVERAGE
PUTNAM FUNDS DAILY NET ASSETS
- -------------------------------------------------- --------------------------------------------------
<S> <C>
PCM Diversified Income Fund,
PCM Global Asset Allocation Fund,
PCM High Yield Fund,
PCM New Opportunities Fund, and
PCM Voyager Fund................................ .70% of the first $500 million of average net
assets
.60% of the next $500 million of average net
assets
.55% of the next $500 million of average net
assets
.50% of any amount over $1.5 billion
PCM Growth and Income Fund........................ .65% of the first $500 million of average net
assets
.55% of the next $500 million of average net
assets
.50% of the next $500 million of average net
assets
.45% of any amount over $1.5 billion
PCM Money Market Fund............................. .45% of the first $500 million of average net
assets
.35% of the next $500 million of average net
assets
.30% of the next $500 million of average net
assets
.25% of any amount over $1.5 billion
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
ANNUAL INVESTMENT MANAGEMENT FEE
AS A PERCENTAGE OF AVERAGE
PUTNAM FUNDS DAILY NET ASSETS
- -------------------------------------------------- --------------------------------------------------
<S> <C>
PCM U.S. Government and
High Quality Bond Fund.......................... .65% of the first $500 million of average net
assets
.55% of the first $500 million of average net
assets
.50% of the next $500 million of average net
assets
.45% of the next $5 billion of average net assets
.425% of the first $5 billion of average net
assets
.405% of the first $5 billion of average net
assets
.39% of the next $5 billion of average net assets
.38% of any excess thereafter
PCM Global Growth Fund and
PCM Utilities Growth and Income Fund............ .60%
<CAPTION>
FIDELITY FUNDS
- --------------------------------------------------
<S> <C>
Equity-Income Portfolio........................... .52%
Overseas Portfolio................................ .77%
Asset Manager Portfolio........................... .72%
</TABLE>
TAXES
Currently, no charge is made to Separate Account VL II for federal, state,
and local taxes that may be allocable to Separate Account VL II. A change in the
applicable federal, state or local tax laws which impose tax on ITT Hartford
and/or Separate Account VL II may result in a charge against the Policy in the
future. Charges for other taxes, if any, allocable to Separate Account VL II may
also be made.
THE COMPANY
ITT Hartford Life and Annuity Insurance Company ("ITT Hartford"), formerly
ITT Life Insurance Corporation, was originally incorporated under the laws of
Wisconsin on January 9, 1956. ITT Hartford was redomiciled to Connecticut on May
1, 1996. It is a stock life insurance company engaged in the business of writing
both individual and group life insurance and annuities in all states including
the District of Columbia, except New York. The offices of ITT Hartford are
located in Minneapolis, Minnesota; however, its mailing address is P.O. Box
2999, Hartford, Connecticut 06102-2999.
ITT Hartford is a wholly owned subsidiary of Hartford Life Insurance
Company. ITT Hartford is ultimately 100% owned by Hartford Fire Insurance
Company, one of the largest multiple lines insurance carriers in the United
States. On December 20, 1995, Hartford Fire Insurance Company became an
independent, publicly traded corporation.
ITT Hartford is rated A+ (superior) by A.M. Best and Company, Inc. on the
basis of its financial soundness and operating performance. ITT Hartford is
rated AA+ by both Standard & Poor's and Duff and Phelps on the basis of its
claims paying ability.
These ratings do not apply to the performance of the Separate Account.
However, the contractual obligations under this variable life insurance policy
are the general corporate obligations of ITT Hartford. These ratings do apply to
ITT Hartford's ability to meet its insurance obligations under the Policy.
ITT Hartford is subject to Connecticut law governing insurance companies and
is regulated and supervised by the Connecticut Commissioner of Insurance. An
annual statement in a prescribed form must be filed with that Commissioner on or
before March 1 in each year covering the operations of ITT Hartford for the
preceding year and its financial condition on December 31 of such year.
Its books and assets are subject to review or examination by the
Commissioner or his agents at all times, and a full examination of its
operations is conducted by the National Association of Insurance Commissioners
at least once in every four years. In addition, ITT Hartford is subject to the
insurance laws and regulations of any jurisdiction in which it sells its
insurance policies. ITT Hartford is also subject to various federal and state
securities laws and regulations.
22
<PAGE>
SEPARATE ACCOUNT VL II
GENERAL
Separate Account VL II is a separate account of ITT Hartford established on
September 30, 1994 pursuant to the insurance laws of the State of Connecticut
and organized as a unit investment trust registered with the Securities and
Exchange Commission under the Investment Company Act of 1940. Separate Account
VL II meets the definition of "separate account" under federal securities law.
Under Connecticut law, the assets of Separate Account VL II are held exclusively
for the benefit of Policy Owners and persons entitled to payments under the
Policies. The assets for Separate Account VL II are not chargeable with
liabilities arising out of any other business which ITT Hartford may conduct.
FUNDS
The assets of each Sub-Account of Separate Account VL II are invested
exclusively in one of the Funds. A Policy Owner may allocate premium payments
among the Sub-Accounts. Policy Owners should review the following brief
descriptions of the investment objectives of each of the Funds in connection
with that allocation. There is no assurance that any of the Funds will achieve
its stated objectives. Policy Owners are also advised to read the prospectuses
for each of the Funds accompanying this prospectus for more detailed
information.
HARTFORD FUNDS
HARTFORD ADVISERS FUND, INC.
To achieve maximum long term total rate of return consistent with
prudent investment risk by investing in common stock and other equity
securities, bonds and other debt securities, and money market instruments.
The investment adviser will vary the investments of the Fund among equity
and debt securities and money market instruments depending upon its analysis
of market trends. Total rate of return consists of current income, including
dividends, interest and discount accruals and capital appreciation.
HARTFORD BOND FUND, INC.
To achieve maximum current income consistent with preservation of
capital by investing primarily in bonds.
HARTFORD CAPITAL APPRECIATION FUND, INC.
To achieve growth of capital by investing in equity securities and
securities convertible into equity securities selected solely on the basis
of potential for capital appreciation; income, if any, is an incidental
consideration.
HARTFORD DIVIDEND AND GROWTH FUND, INC.
To achieve a high level of current income consistent with growth of
capital and reasonable investment risk by investing primarily in equity
securities and securities convertible into equity securities.
HARTFORD INDEX FUND, INC.
To provide investment results which approximate the price and yield
performance of publicly-traded common stocks in the aggregate, as
represented by the Standard & Poor's 500 Composite Stock Price Index. *
HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.
To achieve long-term total return consistent with prudent investment
risk through investment primarily in equity securities issued by foreign
companies.
23
<PAGE>
HARTFORD MORTGAGE SECURITIES FUND, INC.
To achieve maximum current income consistent with safety of principal
and maintenance of liquidity by investing primarily in mortgage-related
securities, including securities issued by the Government National Mortgage
Association ("GNMA").
HARTFORD STOCK FUND, INC.
To achieve long-term capital growth primarily through capital
appreciation, with income a secondary consideration, by investing in
equity-type securities.
HVA MONEY MARKET FUND, INC.
To achieve maximum current income consistent with liquidity and
preservation of capital by investing in money market securities.
* "Standard & Poor's-Registered Trademark-", "S &P-Registered Trademark-", "S&P
500-Registered Trademark-", "Standard & Poor's 500", and "500" are trademarks
of The McGraw-Hill Companies, Inc. and have been licensed for use by Hartford
Life Insurance Company. The Hartford Index Fund, Inc. ("Index Fund") is not
sponsored, endorsed, sold or promoted by Standard & Poor's ("S&P") and S&P
makes no representation regarding the advisability of investing in the Index
Fund.
PUTNAM FUNDS
PCM DIVERSIFIED INCOME FUND
Seeks high current income consistent with capital preservation by
investing in the following three sections of the fixed income securities
markets: U.S. Government Sector, High Yield Sector (which invests primarily
in what are commonly referred to as "junk bonds"), and International Sector.
See the Special Considerations for investments in high yield securities
described in the Fund prospectus.
PCM GLOBAL ASSET ALLOCATION FUND
Seeks a high level of long-term total return consistent with
preservation of capital by investing in U.S. equities, international
equities, U.S. fixed income securities, and international fixed income
securities.
PCM GLOBAL GROWTH FUND
Seeks capital appreciation through a globally diversified common stock
portfolio.
PCM 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.
PCM HIGH YIELD FUND
Seeks high current income by investing primarily in high-yielding,
lower-rated fixed income securities (commonly referred to as "junk bonds"),
constituting a diversified portfolio which Putnam Investment Management,
Inc. ("Putnam Management") believes does not involve undue risk to income or
principal. Capital growth is a secondary objective when consistent with high
current income. See the special considerations for investments in high yield
securities described in the Fund prospectus.
PCM MONEY MARKET FUND
Seeks to achieve as high a level 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.
24
<PAGE>
PCM NEW OPPORTUNITIES FUND
Seeks long-term capital appreciation by investing principally in common
stocks of companies in sectors of the economy which Putnam Management
believes possess above-average long-term growth potential.
PCM 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 Standard & Poor's or Moody's
or, if not rated, determined by Putnam Management to be of comparable
quality.
PCM UTILITIES GROWTH AND INCOME FUND
Seeks capital growth and current income by concentrating its investments
in securities issued by companies in the public utilities industries.
PCM VOYAGER FUND
Aggressively seeks capital appreciation primarily from a portfolio of
common stocks which Putnam Management believes have potential for capital
appreciation which is significantly greater than that of market averages.
FIDELITY FUNDS
EQUITY-INCOME PORTFOLIO
To seek reasonable income by investing primarily in income-producing
equity securities. In choosing these securities, the Portfolio will also
consider the potential for capital appreciation. The Portfolio's goal is to
achieve a yield which exceeds the composite yield on the securities
comprising the Standard & Poor's Daily Stock Price Index of 500 Common
Stocks. The Portfolio may invest in high yielding, lower-rated securities
(commonly referred to as "junk bonds") which are subject to greater risk
than investments in higher-rated securities. For a further discussion of
lower-rated securities, please see "Risks of Lower-Rated Debt Securities" in
the Fidelity prospectus for this Portfolio.
OVERSEAS PORTFOLIO
To seek long-term growth of capital primarily through investments in
foreign securities and provide a means for aggressive investors to diversify
their own portfolios by participating in companies and economies outside of
the United States.
ASSET MANAGER PORTFOLIO
To seek high total return with reduced risk over the long-term by
allocating its assets among stocks, bonds and short-term fixed-income
instruments.
The ITT Hartford Funds are organized as corporations under the laws of the
State of Maryland and are registered as diversified open-end management
companies under the Investment Company Act of 1940. The Putnam Funds are
portfolios of the Putnam Capital Manager Trust, which is organized as a business
trust under the laws of Massachusetts as a open-end series investment company
under the Investment Company Act of 1940. The Fidelity Funds involve two
diversified open-end management investment companies, each with multiple
portfolios and organized as a Massachusetts business trust. The Equity-Income
Portfolio and Overseas Portfolio are portfolios of the Variable Insurance
Products Fund. The Asset Manager Portfolio is a portfolio of the Variable
Insurance Products Fund II.
Each Fund continually issues an unlimited number of full and fractional
shares of beneficial interest in the Fund. Such shares are offered to separate
accounts, including Separate Account VL II, established by ITT Hartford or one
of its affiliated companies specifically to fund the Policies and other policies
issued by ITT Hartford or its affiliates as permitted by the Investment Company
Act of 1940.
25
<PAGE>
It is conceivable that in the future it may be disadvantageous for variable
life insurance separate accounts and variable annuity separate accounts to
invest in the Funds simultaneously. Although neither ITT Hartford nor the Funds
currently foresee any such disadvantages either to variable life insurance
Policy Owners or to variable annuity Policy Owners, the Board of Directors
intend for the ITT Hartford Funds and the Board of Trustees for the Putnam Funds
and the Fidelity Funds (collectively the "Board") to monitor events in order to
identify any material conflicts between such Policy Owners and to determine what
action, if any, should be taken in response thereto. If the Boards were to
conclude that separate funds should be established for variable life and
variable life insurance separate accounts, ITT Hartford will bear the attendant
expenses.
All investment income of and other distributions to each Sub-Account of
Separate Account VL II arising from the applicable Fund are reinvested in shares
of that Fund at net asset value. The income and both realized gains or losses on
the assets of each Sub-Account of Separate Account VL II are therefore separate
and are credited to or charged against the Sub-Account without regard to income,
gains or losses from any other Sub-Account or from any other business of ITT
Hartford. ITT Hartford will purchase shares in the Funds in connection with
premium payments allocated to the applicable Sub-Account in accordance with
Policy Owners' directions and will redeem shares in the Funds to meet Policy
obligations or make adjustments in reserves, if any. The Funds are required to
redeem Fund shares at net asset value and generally to make payment within seven
days.
ITT Hartford reserves the right, subject to compliance with the law as then
in effect, to make additions to, deletions from, or substitutions for Separate
Account VL II and its Sub-Accounts which fund the Policies. If shares of any of
the Funds should no longer be available for investment, or if, in the judgment
of ITT Hartford's management, further investment in shares of any Fund should
become inappropriate in view of the purposes of the Policies, ITT Hartford may
substitute shares of another Fund for shares already purchased, or to be
purchased in the future, under the Policies. No substitution of securities will
take place without notice to and consent of Policy Owners and without prior
approval of the Securities and Exchange Commission to the extent required by the
Investment Company Act of 1940. Subject to Policy Owner approval, if required,
ITT Hartford also reserves the right to end the registration under the
Investment Company Act of 1940 of Separate Account VL II or any other separate
accounts of which it is the depositor which may fund the Policies.
Each Fund is subject to certain investment restrictions which may not be
changed without the approval of a majority of the shareholders of the Fund. See
the accompanying prospectuses for each of the Funds.
INVESTMENT ADVISER
HARTFORD FUNDS
The investment adviser for each of the Hartford Funds is The Hartford
Investment Management Company. ("HIMCO"), a wholly-owned subsidiary of Hartford
Life Insurance Company. HIMCO was organized under the laws of the State of
Connecticut in October of 1981.
HIMCO also serves as investment adviser to several other ITT Hartford
sponsored funds which are also registered with the Securities and Exchange
Commission. HIMCO is registered as an investment adviser under the Investment
Advisers Act of 1940. HIMCO provides investment advice and, in general,
supervises the management and investment program of Hartford Bond Fund, Inc.,
Hartford Index Fund, Inc., Hartford Mortgage Securities Fund, Inc., and HVA
Money Market Fund, Inc., pursuant to an Investment Advisory Agreement entered
into with each of these Funds for which HIMCO receives a fee. HIMCO also
supervises the investment programs of Hartford Advisers Fund, Inc., Hartford
Capital Appreciation Fund, Inc., Hartford Dividend and Growth Fund, Inc.,
Hartford International Opportunities Fund, Inc., and Hartford Stock Fund, Inc.
pursuant to an Investment Management Agreement for which HIMCO receives a fee.
In addition, with respect to these five Funds, HIMCO has a Sub-Investment
Advisory Agreement with Wellington Management Company ("Wellington Management")
to provide an investment program to HIMCO for utilization by HIMCO in rendering
services to these funds. Wellington Management is a professional investment
counseling firm which provides investment services to investment companies,
other institutions and individuals. Wellington Management is organized as a
private Massachusetts partnership and its predecessor organizations have
provided investment advisory services to investment companies since 1933 and to
investment counseling clients since 1960. See the accompanying prospectuses for
each of the Funds for a more complete description of HIMCO and Wellington
Management and their respective fees.
26
<PAGE>
PUTNAM FUNDS
Putnam Management, One Post Office Square, Boston, Massachusetts, 02109,
serves as the investment manager for the Funds. 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.
FIDELITY FUNDS
The Fidelity Funds are managed by Fidelity Management & Research Company
("Fidelity Management"), whose principal business address is 82 Devonshire
Street, Boston, Massachusetts. Fidelity Management is one of America's largest
investment management organizations. It is composed of a number of different
companies, which provide a variety of financial services and products. Fidelity
Management is the original Fidelity company, founded in 1946. It provides a
number of mutual funds and other clients with investment research and portfolio
management services. Various Fidelity companies perform certain activities
required to operate Variable Insurance Products Fund and Variable Insurance
Products Fund II.
THE FIXED ACCOUNT
THAT PORTION OF THE POLICY 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 Account Values allocated to the Fixed Account become a
part of the general assets of ITT Hartford. ITT Hartford invests the assets of
the General Account in accordance with applicable law governing the investments
of insurance company general accounts.
The Fixed Account Minimum Credited Rate is shown in the Contract. Currently,
ITT Hartford guarantees that it will credit interest at a rate of not less than
4% per year, compounded annually, to amounts allocated to the Fixed Account
under the Policies. ITT Hartford may credit interest at a rate in excess of the
Fixed Account Minimum Credited Rate, however, ITT Hartford is not obligated to
credit any interest in excess of the Fixed Account Minimum Credited Rate. There
is no specific formula for the determination of excess interest credits. Some of
the factors that ITT 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 ITT Hartford's investments, regulatory and tax requirements and
competitive factors. ANY INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE FIXED
ACCOUNT IN EXCESS OF THE FIXED ACCOUNT MINIMUM CREDITED RATE WILL BE DETERMINED
IN THE SOLE DISCRETION OF ITT HARTFORD. THE POLICY OWNER ASSUMES THE RISK THAT
INTEREST CREDITED TO FIXED ACCOUNT ALLOCATIONS MAY NOT EXCEED THE FIXED ACCOUNT
MINIMUM CREDITED RATE.
OTHER MATTERS
VOTING RIGHTS
In accordance with its view of presently applicable law, ITT Hartford will
vote the shares of the Funds at regular and special meetings of the shareholders
of the Funds in accordance with instructions from Policy Owners (or the assignee
of the Policy, as the case may be) having a voting interest in Separate Account
VL II. The number of shares held in the Separate Account which are allocable to
each Policy Owner is determined
27
<PAGE>
by dividing the Policy Owner's interest in each Sub-Account by the net asset
value of the applicable shares of the Funds. ITT Hartford will vote shares for
which no instructions have been given and shares which are not allocable to
Policy Owners (i.e., shares owned by ITT Hartford) in the same proportion as it
votes shares for which it has received instructions. If the Investment Company
Act of 1940 or any rule promulgated thereunder should be amended, however, or if
ITT Hartford's present interpretation should change and, as a result, ITT
Hartford determines it is permitted to vote the shares of the Funds in its own
right, it may elect to do so.
The voting interests of the Policy Owner (or the assignee) in the Funds will
be determined as follows: Policy Owners may cast one vote for each full or
fractional Accumulation Unit owned under the Policy and allocated to a
Sub-Account the assets of which are invested in the particular Fund on the
record date for the shareholder meeting for that Fund. If, however, a Policy
Owner has taken a loan secured by the Policy, amounts transferred from the
Sub-Account(s) to the Loan Account(s) in connection with the loan (see "Policy
Benefits and Rights -- Policy Loans," page ) will not be considered in
determining the voting interests of the Policy Owner. Policy Owners should
review the prospectuses for the Funds which accompany this Prospectus to
determine matters on which shareholders may vote.
ITT Hartford may, when required by state insurance regulatory authorities,
disregard voting instructions if the instructions require that the shares be
voted so as to cause a change in the sub-classification or investment objective
of one or more of the Funds or to approve or disapprove an investment advisory
policy for the Funds. In addition, ITT Hartford itself may disregard voting
instructions in favor of changes initiated by a Policy Owner in the investment
policy or the investment adviser of the Funds if ITT Hartford reasonably
disapproves of such changes. A change would be disapproved only if the proposed
change is contrary to state law or prohibited by state regulatory authorities.
In the event ITT Hartford does disregard voting instructions, a summary of that
action and the reasons for such action will be included in the next periodic
report to Policy Owners.
STATEMENTS TO POLICY OWNERS
We will send You a statement at least once each Policy Year, showing:
(a) the current Account Value, Cash Surrender Value and Face Amount;
(b) the premiums paid, Monthly Deduction Amounts and loans since the last
report;
(c) the amount of any Indebtedness;
(d) notifications required by the provisions of the Policy; and
(e) any other information required by the Insurance Department of the State
where the Policy was delivered
LIMIT ON RIGHT TO CONTEST
ITT Hartford may not contest the validity of the Policy after it has been in
effect during the lifetime of the Insureds for two years from the Issue Date. If
the Policy is reinstated, the two-year period is measured from the date of
reinstatement. Any increase in the Supplemental Face Amount for which evidence
of insurability was obtained is contestable during the lifetime of the Insureds
for two years from its effective date. In addition, if either Insured commits
suicide in the two-year period, or such period as specified in state law, the
benefit payable will be limited to the premiums paid less any Indebtedness and
partial withdrawals.
MISSTATEMENT AS TO AGE
If the age of an Insured is incorrectly stated, the amount of Death Benefit
will be appropriately adjusted as specified in the Policy.
PAYMENT OPTIONS
Proceeds under the Policies may be paid in a lump sum or may be applied to
one of ITT Hartford's payment options. The minimum amount that may be placed
under a payment option is subject to the then current rules of ITT Hartford.
Once payments under Options 2, 3 or 4 commence, no surrender of the Policy may
be made for the purpose of receiving a lump sum settlement in lieu of the life
insurance payments. The following options are available under the Policies.
28
<PAGE>
FIRST OPTION -- Interest Income
Payments of interest at the rate We declare, but not less than 3 1/2% per
year, on the amount applied under this option.
SECOND OPTION -- Income of Fixed Amount
Equal payments of the amount chosen until the amount applied under this
option, with interest of not less than 3 1/2% per year, is exhausted. The
final payment will be for the balance remaining.
THIRD OPTION -- Payments for a Fixed Period
An amount payable monthly for the number of years selected which may be from
1 to 30 years.
FOURTH OPTION -- Life Income
LIFE ANNUITY -- an annuity payable monthly during the lifetime of the
annuitant and terminating with the last monthly payment due preceding the
death of the annuitant.
LIFE ANNUITY WITH 120 MONTHLY PAYMENTS CERTAIN -- an annuity providing
monthly income to the annuitant for a fixed period of 120 months and for as
long thereafter as the annuitant shall live.
The Tables in the Policy provide for guaranteed dollar amounts of monthly
payments for each $1,000 applied under the four Payment Options. Under the
Fourth Option, the amount of each payment will depend upon the age of the
Annuitant at the time the first payment is due. If any periodic payment due any
payee is less than $200, ITT Hartford may make payments less often.
The Table for the Fourth Option is based on the 1983a Individual Annuity
Mortality Table set back one year and a net investment rate of 3.5% per annum.
The Tables for the First, Second and Third Options are based on a net investment
rate of 3.5% per annum. ITT Hartford may, however, from time to time, at Our
discretion if mortality appears more favorable and interest rates justify, apply
other tables which will result in higher monthly payments for each $1,000
applied under one or more of the four Payment Options.
ITT Hartford will make any other arrangements for income payments as may be
agreed on.
BENEFICIARY
The applicant names the Beneficiary in the application for the Policy. The
Policy Owner may change the Beneficiary (unless irrevocably named) during the
lifetime of the Insureds by written request to ITT Hartford. If no Beneficiary
is living when the last surviving Insured dies, the Death Proceeds will be paid
to the Policy Owner if living; otherwise to the Policy Owner's estate.
ASSIGNMENT
The Policy may be assigned as collateral for a loan or other obligation. ITT
Hartford is not responsible for any payment made or action taken before receipt
of written notice of such assignment. Proof of interest must be filed with any
claim under a collateral assignment.
DIVIDENDS
No dividends will be paid under the Policies.
SUPPLEMENTAL BENEFITS
The following supplemental benefits, which are subject to the restrictions
and limitations set forth therein, are among the options that may be included in
a Policy by rider:
LAST SURVIVOR EXCHANGE OPTION RIDER
We will exchange this Policy for two individual policies on the life of each
of the Insured, subject to the conditions stated in this rider.
29
<PAGE>
ESTATE PROTECTION RIDER
We will pay a term insurance benefit upon receipt of due proof of the last
surviving Insured's death while this Policy and rider were in force, subject to
the conditions stated in this rider.
MATURITY DATE EXTENSION RIDER
We will extend the Maturity Date (the date on which the Policy will mature)
to the date of the death of the second Insured to die, regardless of the age of
either Insured. Certain Death Benefit and premium restrictions apply. See
"Income Taxation of Policy Benefits."
YEARLY RENEWABLE TERM LIFE INSURANCE RIDER
While this Policy and rider are in force, We will pay the term life
insurance amount upon receipt of due proof of death of the designated Insured,
subject to the conditions stated in this rider.
30
<PAGE>
EXECUTIVE OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
OTHER BUSINESS PROFESSION,
VOCATION OR EMPLOYMENT
POSITION WITH IHLA, FOR PAST 5 YEARS;
NAME, AGE YEAR OF ELECTION OTHER DIRECTORSHIPS
- ---------------------------------- -------------------------------------- -----------------------------------------
<S> <C> <C>
Andrew, Joan M., 38 Vice President, 1992 Vice President and Director, National
Service Center Operations
(1992-Present), ITT Hartford.
Bossen, Wendell J., 62 Vice President, 1995** Vice President (1992), Hartford Life
Insurance Company; Executive Vice
President (1984), Mutual Benefit.
Gregory A. Boyko, 44 Vice President, 1995 Vice President and Controller
(1995-Present), Hartford Life Insurance
Company; Chief Financial Officer
(1994-1995), IMG American Life; Senior
Vice President (1992-1994), Connecticut
Mutual.
Cummins, Peter W., 59 Vice President, 1993 Vice President, Individual Annuity
Operations (1989-Present), Hartford
Life Insurance Company.
deRaismes, Ann M., 45 Vice President, 1994 Vice President (1994-Present), Assistant
Vice President (1992), Director of
Human Resources (1991-Present),
Hartford Life Insurance Company.
Dooley, James R., 59 Vice President, 1977 Vice President, Director Information
Services (1973- Present), ITT Hartford.
Fitch, Timothy M., 43 Vice President, 1995 Vice President (1995-Present); Assistant
Vice President (1993); Director (1991),
Hartford Life.
Frahm, Donald R., 64 Director, 1995* Chairman and Chief Executive Officer
(1988-Present), ITT Hartford Insurance
Group, Inc.
Gardner, Bruce D., 45 Director, 1991* Vice President (1996-Present) General
Counsel and Corporate Secretary (1991),
Hartford Life Insurance Company
Gareau, Joseph H., 49 Executive Vice President, 1993 Chief Executive Vice President and Chief
Investment Officer 1993 Director, Investment Officer, (1993-Present),
1993* Hartford Life Insurance Company
Gillette, Donald J., 50 Vice President, 1993 Vice President, Director of Marketing
(1991-Present), ITT Hartford; MSI
Insurance (1986)
Godkin, Lynda, 42 Associate General Counsel, 1995 Associate General Counsel and Corporate
Corporate Secretary, 1995 Secretary (1995-Present), Assistant
General Counsel and Secretary (1994),
Counsel (1990), Hartford Life Insurance
Company
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
OTHER BUSINESS PROFESSION,
VOCATION OR EMPLOYMENT
POSITION WITH IHLA, FOR PAST 5 YEARS;
NAME, AGE YEAR OF ELECTION OTHER DIRECTORSHIPS
- ---------------------------------- -------------------------------------- -----------------------------------------
<S> <C> <C>
Grady, Lois W., 51 Vice President, 1993 Vice President (1993-Present), Assistant
Vice President (1988), Hartford Life
Insurance Company
Hall, David A. 42 Senior Vice President, 1993 Actuary, Senior Vice President and Actuary
1993 (1993-Present), Hartford Life Insurance
Company
Kanarek, Joseph, 48 Vice President, 1994 Vice President (1991-Present), Director
Director, 1994* (1992-Present), Hartford Life Insurance
Company
Robert A. Kerzner, 44 Vice President, 1994 Vice President (1994-Present), Regional
Vice President (1991), Life Sales
Manager (1990), Hartford Life Insurance
Company.
Kohlhof, LaVern L., 66 Vice President, 1980 Vice President and Secretary
Secretary, 1980 (1980-Present), ITT Hartford
Malchodi, Jr., William B., 45 Vice President, 1994 Vice President (1994-Present), Director
Director of Taxes, 1992 of Taxes (1992-Present), Assistant
General Counsel and Assistant Director
of Taxes (1986), Hartford Insurance
Group
Marra, Thomas M., 37 Executive Vice President, 1995 Senior Vice President (1994), Director of
Director, 1994* Individual Annuities (1991), Vice
President (1989), Hartford Life
Insurance Company
Matthiesen, Steven L., 51 Vice President, 1984 Vice President, Director of New Business
(1984-Present), ITT Hartford
Joseph J. Noto, 44 Vice President, 1989 Vice President (1989-Present), Hartford
Life Insurance Company.
Raymond, Craig D., 32 Vice President, 1993 Vice President and Chief Actuary
Chief Actuary, 1994 (1994-Present), Vice President (1993),
Assistant Vice President (1992),
Actuary (1989-1994), Hartford Life
Insurance Company
Schrandt, David T., 48 Vice President, 1987 Vice President, Treasurer and Controller
Treasurer, 1987 (1987-Present), ITT Hartford
Smith, Lowndes A., 55 President, 1993 Chief Executive President and Chief Executive Officer
Officer, 1993 Director, 1985* (1993-Present), ITT Hartford; President
and Chief Operating Officer
(1989-Present), Hartford Life Insurance
Company
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
OTHER BUSINESS PROFESSION,
VOCATION OR EMPLOYMENT
POSITION WITH IHLA, FOR PAST 5 YEARS;
NAME, AGE YEAR OF ELECTION OTHER DIRECTORSHIPS
- ---------------------------------- -------------------------------------- -----------------------------------------
<S> <C> <C>
Zlatkus, Lizabeth H., 36 Vice President, 1994 Director, 1994* Vice President, Director Business
Operations (1994), Assistant Vice
President, Director Executive
Operations (1992), Executive Staff
Assistant to President (1990), Hartford
Life Insurance Company
</TABLE>
- ------------------------
* Denotes year of election to Board of Directors
** ITT Hartford Affiliated Company
DISTRIBUTION OF THE POLICIES
ITT Hartford intends to sell the Policies in all jurisdictions where it is
licensed to do business. The Policies will be sold by life insurance sales
representatives who represent ITT Hartford and who are registered
representatives of Hartford Equity Sales Company, Inc. ("HESCO"), or certain
other registered Broker-Dealers. Any sales representative or employee will have
been qualified to sell variable life insurance policies under applicable federal
and state laws. Each Broker-Dealer is registered with the Securities and
Exchange Commission under the Securities Exchange Act of 1934 and all are
members of the National Association of Securities Dealers, Inc. HESCO is the
principal underwriter for the Policies. During the first Policy Year, the
maximum sales commission payable to ITT Hartford agents, independent registered
insurance brokers, and other registered Broker-Dealers is 45% of the premiums
paid up to a Target Premium and 5% of any excess. In Policy Years 2 through 10,
agent commissions will not exceed 5.5% of premiums paid. For Policy Years 11 and
later, the agent commissions will not exceed 2% of the premiums paid. Agent
commissions may be less for premiums Attributable to Supplemental Face Amount.
In addition, expense allowances may be paid. The sales representative may be
required to return all or a portion of the commissions paid if the Policy
terminates prior to the second Policy Anniversary.
SAFEKEEPING OF SEPARATE
ACCOUNT VL II'S ASSETS
The assets of the Separate Account are held by ITT Hartford. The assets of
the Separate Account are kept physically segregated and held separate and apart
from the General Account of ITT Hartford. ITT Hartford maintains records of all
purchases and redemptions of shares of the Fund. Additional protection for the
assets of the Separate Account is afforded by ITT Hartford's blanket fidelity
bond issued by Aetna Casualty and Surety Company, in the aggregate amount of $50
million, covering all of the officers and employees of ITT Hartford.
FEDERAL TAX CONSIDERATIONS
GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING
TO THE ACTUAL STATUS OF THE POLICY OWNER INVOLVED AND THE TYPE OF PLAN UNDER
WHICH THE POLICY IS PURCHASED, LEGAL AND TAX ADVICE MAY BE NEEDED BY A PERSON,
TRUSTEE OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF A POLICY DESCRIBED HEREIN.
It should be understood that any detailed description of the Federal income
tax consequences regarding the purchase of these Policies cannot be made in this
Prospectus and that special tax rules may be applicable with respect to certain
purchase situations not discussed herein. In addition, no attempt is made here
to consider any applicable state or other tax laws. For detailed information, a
qualified tax adviser should always be consulted. This discussion of Federal tax
considerations is based upon ITT Hartford's understanding of current Federal
income tax laws as they are currently interpreted.
33
<PAGE>
TAXATION OF ITT HARTFORD AND THE SEPARATE ACCOUNT
The Separate Account is taxed as a part of ITT Hartford which is taxed as a
life insurance company under Subchapter L of the Internal Revenue Code ("Code").
Accordingly, the Separate Account will not be taxed as a "regulated investment
company" under Subchapter M of the Code. Investment income and realized capital
gains on the assets of the Separate Account (the underlying Funds) are
reinvested and are taken into account in determining the value of the
Accumulation Units. As a result, such investment income and realized capital
gains are automatically applied to increase reserves under the Policy. (See
"Detailed Description of Policy Benefits and Provisions -- Accumulation Unit
Values", page 11).
ITT Hartford does not expect to incur any Federal income tax on the earnings
or realized capital gains attributable to the Separate Account. Based upon this
expectation, no charge is currently being made to the Separate Account for
Federal income taxes. If ITT Hartford incurs income taxes attributable to the
Separate Account or determines that such taxes will be incurred, it may assess a
charge for such taxes against the Separate Account.
INCOME TAXATION OF POLICY BENEFITS
For Federal income tax purposes, the Policies should be treated as life
insurance policies under Section 7702 of the Code. The death benefit under a
life insurance policy is generally excluded from the gross income of the
Beneficiary. Also, a life insurance Policy Owner is generally not taxed on
increments in the policy value until the Policy is partially or completely
surrendered. Section 7702 limits the amount of premiums that may be invested in
a Policy that is treated as life insurance. ITT Hartford intends to monitor
premium levels to assure compliance with the Section 7702 requirements.
Although ITT Hartford believes that the Last Survivor Policies are in
compliance with Section 7702 of the Code, the manner in which Section 7702
should be applied to certain features of a joint survivorship life insurance
contract is not directly addressed by Section 7702. In the absence of final
regulations or other guidance issued under Section 7702, there is necessarily
some uncertainty whether a last survivor life insurance policy will meet the
Section 7702 definition of a life insurance contract.
ITT Hartford also believes that any loan received under a Policy will be
treated as Indebtedness of the Policy Owner, and that no part of any loan under
a Policy will constitute income to the Policy Owner. A surrender or assignment
of the Policy may have tax consequences depending upon the circumstances. Policy
Owners should consult a qualified tax adviser concerning the effect of such
changes.
During the first fifteen Policy Years, an "income first" rule generally
applies to distributions of cash required to be made under Code Section 7702
because of a reduction in benefits under the Policy.
The Last Survivor Exchange Option Rider permits, under limited
circumstances, a Policy to be split into two individual policies on the life of
each of the Insureds. A Policy split may have adverse tax consequences. It is
not clear whether a Policy split will be treated as a nontaxable exchange or
transfer under the Code. Unless a Policy split is so treated, among other
things, the split or transfer will result in the recognition of taxable income
on the gain in the Policy. In addition, it is not clear whether, in all
circumstances, the individual policies that result from a Policy split would be
treated as life insurance policies under Section 7702 of the Code or would be
classified as modified endowment contracts. The Policy Owner should consult a
qualified tax adviser regarding the possible adverse tax consequences of a
Policy split.
The Maturity Date Extension Rider allows a Policy Owner to extend the
Maturity Date to the date of the death of the last surviving insured. If the
Maturity Date of the Policy is extended by rider, ITT Hartford believes the
Policy will continue to be treated as a life insurance contract for Federal
income tax purposes after the scheduled Maturity Date. However, due to the lack
of specific guidance on this issue, the result is not certain. If the Policy is
not treated as a life insurance contract for Federal income tax purposes after
the scheduled Maturity Date, among other things, the Death Proceeds may be
taxable to the recipient. The Policy Owner should consult a qualified tax
adviser regarding the possible adverse tax consequences resulting from an
extension of the scheduled Maturity Date.
MODIFIED ENDOWMENT CONTRACTS
Code Section 7702A applies an additional test, the "seven-pay" test, to life
insurance contracts. A modified endowment contract is a life insurance policy
which satisfies the Section 7702 definition of life
34
<PAGE>
insurance but fails the seven-pay test of Section 7702A. The seven-pay test
provides that premiums cannot be paid at a rate more rapidly than that allowed
by the payment of seven annual premiums using specified computational rules
provided in Section 7702A(c).
A policy that is classified as a modified endowment contract is generally
eligible for the beneficial tax treatment accorded to life insurance. That is,
the death benefit is generally excluded from income and increments in value are
not subject to current taxation. However, a loans, distributions or other
amounts received from a modified endowment contract are treated first as income,
then as a recovery of basis. Taxable withdrawals are subject to a 10% additional
tax, with certain exceptions. Generally, only distributions and loans made in
the first year in which a policy becomes a modified endowment contract, and in
subsequent years, are taxable. However, distributions and loans made in the two
years prior to a policy's failing the seven-pay test are deemed to be in
anticipation of failure and are subject to tax.
If the Policy satisfies the seven-pay test for seven years, distributions
and loans made thereafter will not be subject to the modified endowment contract
rules, unless the Policy is changed materially. The seven-pay test will be
applied anew at any time the Policy undergoes a material change, which includes
an increase in the death benefit.
All modified endowment contracts that are issued within any calendar year to
the same Policy Owner by one company or its affiliates shall be treated as one
modified endowment contract for the purpose of determining the taxable portion
of any loan or distribution.
ESTATE AND GENERATION SKIPPING TAXES
When the last surviving Insured dies, the Death Proceeds will generally be
includible in the Policy Owner's estate for purposes of federal estate tax if
the last surviving Insured owned the Policy. If the Policy Owner was not the
last surviving Insured, the fair market value of the Policy would be included in
the Policy Owner's estate upon the Policy Owner's death. The Policy would not be
includible in the last surviving Insured's estate if he or she neither retained
incidents of ownership at death nor had given up ownership within three years
before death.
Federal estate tax is integrated with federal gift tax under a unified rate
schedule. In general, estates less than $600,000 will not incur a federal estate
tax liability. In addition, an unlimited marital deduction may be available for
federal estate and gift tax purposes. The unlimited marital deduction permits
the deferral of taxes until the death of the surviving spouse.
If the Policy Owner (whether or not he or she is an Insured) transfers
ownership of the Policy to someone two or more generations younger, the transfer
may be subject to the generation skipping transfer tax, the taxable amount being
the value of the Policy. The generation-skipping transfer tax provisions
generally apply to transfers which would be subject to the gift and estate tax
rules. Individuals are generally allowed an aggregate generation skipping
transfer exemption of $1 million. Because these rules are complex, the Policy
Owner should consult with a qualified tax adviser for specific information if
ownership is passing to younger generations.
DIVERSIFICATION REQUIREMENTS
Section 817 of the Code provides that a variable life insurance contract
(other than a pension plan policy) will not be treated as a life insurance
contract for any period during which the investments made by the separate
account or underlying fund are not adequately diversified in accordance with
regulations prescribed by the Treasury Department. If a Policy is not treated as
a life insurance contract, the Policy Owner will be subject to income tax on the
annual increases in cash value.
The Treasury Department has issued diversification regulations which
generally require, among other things, that no more than 55% of the value of the
total assets of the segregated asset account underlying a variable contract is
represented by any one investment, no more than 70% is represented by any two
investments, no more than 80% is represented by any three investments, and no
more than 90% is represented by any four investments. In determining whether the
diversification standards are met, all securities of the same issuer, all
interests in the same real property project, and all interests in the same
commodity are each treated as a single investment. In addition, in the case of
government securities, each government agency or instrumentality shall be
treated as a separate issuer.
35
<PAGE>
A separate account must be in compliance with the diversification standards
on the last day of each calendar quarter or within 30 days after the quarter
ends. If an insurance company inadvertently fails to meet the diversification
requirements, the company may comply within a reasonable period and avoid the
taxation of policy income on an ongoing basis. However, either the company or
the Policy Owner must agree to pay the tax due for the period during which the
diversification requirements were not met.
ITT Hartford monitors the diversification of investments in the separate
accounts and tests for diversification as required by the Code. ITT Hartford
intends to administer all contracts subject to the diversification requirements
in a manner that will maintain adequate diversification.
OWNERSHIP OF THE ASSETS IN THE SEPARATE ACCOUNT
In order for a variable life insurance contract to qualify for tax deferral,
assets in the segregated asset accounts supporting the variable contract must be
considered to be owned by the insurance company and not by the variable contract
owner. The Internal Revenue Service ("IRS") has issued several rulings which
discuss investor control. The IRS has ruled that 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, ITT Hartford does
not know if or in what form such guidance will be issued. In addition, although
regulations are generally issued with prospective effect, it is possible that
regulations may be issued with retroactive effect. Due to the lack of specific
guidance regarding the issue of investor control, there is necessarily some
uncertainty regarding whether a Policy Owner could be considered the owner of
the assets for tax purposes. ITT Hartford reserves the right to modify the
Policies, as necessary, to prevent Policy Owners from being considered the
owners of the assets in the separate accounts.
LIFE INSURANCE PURCHASED FOR USE IN SPLIT DOLLAR ARRANGEMENTS
On January 26, 1996, the IRS released a technical advice memorandum ("TAM")
on the taxability of life insurance policies used in certain split dollar
arrangements. A TAM, issued by the National Office of the IRS, provides advice
as to the internal revenue laws, regulations, and related statutes with respect
to a specific set of facts and a specific taxpayer. In the TAM, among other
things, the IRS concluded that an employee was subject to current taxation on
the excess of the cash surrender value of the policy over the premiums to be
returned to the employer. Purchasers of life insurance policies to be used in
split dollar arrangements are strongly advised to consult with a qualified tax
adviser to determine the tax treatment resulting from such an arrangement.
FEDERAL INCOME TAX WITHHOLDING
If any amounts are deemed to be current taxable income to the Policy Owner,
such amounts will be subject to Federal income tax withholding and reporting,
pursuant to the Code.
NON-INDIVIDUAL OWNERSHIP OF POLICIES
Legislation has recently been proposed which would limit certain of the tax
advantages now afforded non-individual owners of life insurance contracts.
Prospective Policy Owners which are not individuals should consult a qualified
tax adviser to determine the status of this proposed legislation and its
potential impact on the purchaser.
36
<PAGE>
OTHER
Federal estate tax, state and local estate, inheritance and other tax
consequences of ownership, or receipt of Policy proceeds depend on the
circumstances of each Policy Owner or beneficiary. A qualified tax adviser
should be consulted to determine the impact of these taxes.
LIFE INSURANCE PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS
The discussion above provides general information regarding U.S. federal
income tax consequences to life insurance purchasers that are U.S. citizens or
residents. Purchasers that are not U.S. citizens or residents will generally be
subject to U.S. federal income tax and withholding on taxable distributions from
life insurance policies at a 30% rate, unless a lower treaty rate applies. In
addition, purchasers may be subject to state and/or municipal taxes and taxes
that may be imposed by the purchaser's country of citizenship or residence.
Prospective purchasers are advised to consult with a qualified tax advisor
regarding U.S. state, and foreign taxation with respect to a life insurance
policy purchase.
LEGAL PROCEEDINGS
There are no pending material legal proceedings affecting the Policies,
Separate Account VL II or any of the Funds.
LEGAL MATTERS
Legal matters in connection with the issue and sale of the last survivor
flexible premium variable life insurance policies described in this Prospectus
and the organization of ITT Hartford, its authority to issue the Policies under
Connecticut law and the validity of the forms of the Policies under Connecticut
law and legal matters relating to the Federal securities and income tax laws
have been passed on by Lynda Godkin, Associate General Counsel of ITT Hartford.
EXPERTS
The financial statements included in this Prospectus and Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report herein, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report. The principal business address of Arthur Andersen LLP is
One Financial Plaza, Hartford, Connecticut 06103.
Reference is made to said report of ITT Hartford Life and Annuity Insurance
Company (the depositor), which includes an explanatory paragraph with respect to
changing the valuation method in determining aggregate reserves for future
benefits.
The hypothetical Policy illustrations included in this Prospectus and
Registration Statement have been approved by Ken A. McCullum, FSA, and MAAA,
Director of Individual Life Product Development, and are included in reliance
upon his opinion as to their reasonableness.
REGISTRATION STATEMENT
A registration statement has been filed with the Securities and Exchange
Commission under the Securities Act of 1933 as amended. This Prospectus does not
contain all information set forth in the registration statement, its amendments
and exhibits, to all of which reference is made for further information
concerning Separate Account VL II, ITT Hartford, and the Policies.
37
<PAGE>
APPENDIX A
ILLUSTRATION OF DEATH BENEFITS, ACCOUNT
VALUES AND CASH SURRENDER VALUES
The tables in Appendix A illustrate the way in which a Policy operates. They
show how the death benefit and surrender value could vary over an extended
period of time assuming hypothetical gross rates of return equal to constant
after tax annual rates of 0%, 6% and 12%. The illustrations assume the
following: a male, preferred, age 55, and a female, preferred, age 50, with
$1,000,000 of Basic Face Amount and a premium of $15,500.00 paid in all years; a
male, preferred, age 55, and a female, preferred, age 50, with $750,000 of Basic
Face Amount and $250,000 of Supplemental Face Amount and a premium of $7,500.00
paid in all years; a male, preferred, age 65, and a female, preferred, age 65,
with $1,000,000 of Basic Face Amount and a premium of $27,000.00 paid for in all
years; and a male, preferred, age 65, and a female, preferred, age 65 with
$750,000 of Basic Face Amount and $250,000 of Supplemental Face Amount and a
premium of $21,500.00 paid in all years.
The death benefit and surrender value for a Policy would be different from
those shown if the rates of return averaged 0%, 6% and 12% over a period of
years, but also fluctuated above or below those averages for individual Policy
Years. They would also differ if any contract loan were made during the period
of time illustrated.
The tables reflect the deductions of current Policy charges and guaranteed
Policy charges for a single gross interest rate. The death benefits and
surrender values would change if the current Cost of Insurance charges change.
The amounts shown for the death benefit and surrender value as of the end of
each Policy Year take into account an average daily charge equal to an annual
charge of 0.70% of the average daily net assets of the Funds for investment
advisory and administrative services fees. The gross annual investment return
rates of 0%, 6% and 12% on the Fund's assets are equal to net annual investment
return rates (net of the 0.70% average daily charge) of -.70%, 5.30% and 11.30%,
respectively.
In addition, the death benefit and surrender value as of the end of each
Policy Year take into account the front-end sales load, premium processing
charge, federal tax charge, premium tax charge (assumed to be 2.0% in these
illustrations), Cost of Insurance Charge, Monthly Administrative Fee, Issue
Charge, and Mortality and Expense Risk Charge.
The hypothetical returns shown in the tables are without any tax charges
that may be allocable to the Separate Account in the future. In order to produce
after tax returns of 0%, 6%, and 12%, the Separate Account would have to earn a
sufficient amount in excess of 0% or 6% or 12% to cover any tax charges (see
"Deductions and Charges -- Charges Against the Separate Account -- Taxes," page
22).
The "Premium Paid Plus Interest" column of each table shows the amount which
would accumulate if the initial premium was invested to earn interest, after
taxes of 5% per year, compounded annually.
ITT Hartford will furnish upon request, a comparable illustration reflecting
the proposed insureds age, risk classification, Face Amount or initial premium
requested, and reflecting guaranteed Cost of Insurance rates. ITT Hartford will
also furnish an additional similar illustration reflecting current Cost of
Insurance rates which may be less than, but never greater than, the guaranteed
Cost of Insurance rates.
38
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$1,000,000 BASIC FACE AMOUNT
ISSUE AGE 55 MALE PREFERRED/
ISSUE AGE 50 FEMALE PREFERRED
$15,500 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.30% NET)
<TABLE>
<CAPTION>
PREMIUMS CURRENT CHARGES* GUARANTEED CHARGES**
END OF ACCUMULATED -------------------- --------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
- ------ -------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
1 16,275 6,640 1,000,000 6,355 1,000,000
2 33,364 19,876 1,000,000 19,276 1,000,000
3 51,307 34,386 1,000,000 33,438 1,000,000
4 70,147 50,280 1,000,000 48,948 1,000,000
5 89,930 67,680 1,000,000 65,923 1,000,000
6 11,0701 88,459 1,000,000 86,232 1,000,000
7 13,2511 111,199 1,000,000 108,453 1,000,000
8 15,5412 136,078 1,000,000 132,757 1,000,000
9 17,9457 163,290 1,000,000 159,332 1,000,000
10 20,4705 193,046 1,00,0000 188,382 1,000,000
11 23,1215 229,559 1,000,000 221,973 1,000,000
12 25,9051 270,036 1,000,000 258,855 1,000,000
13 28,8279 314,910 1,000,000 299,348 1,000,000
14 31,8968 364,656 1,000,000 343,816 1,000,000
15 35,1191 419,812 1,000,000 392,680 1,000,000
16 38,5026 480,980 1,000,000 446,431 1,000,000
17 42,0552 548,784 1,000,000 505,661 1,000,000
18 45,7855 623,886 1,000,000 570,998 1,000,000
19 49,7022 707,036 1,000,000 642,465 1,000,000
20 53,8148 799,101 1,000,000 720,352 1,000,000
25 72,4270 1,424,338 1,000,000 1,221,573 1,000,000
35 101,4302 2,435,429 1,000,000 1,951,085 1,000,000
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $9,740.00 IN YEAR ONE AND $23,557.74 IN YEAR TWO FOR THE
CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
39
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$1,000,000 BASIC FACE AMOUNT
ISSUE AGE 55 MALE PREFERRED/
ISSUE AGE 50 FEMALE PREFERRED
$15,500 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.30% NET)
<TABLE>
<CAPTION>
GUARANTEED
PREMIUMS CURRENT CHARGES* CHARGES**
END OF ACCUMULATED ----------------------- -------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
- ------ -------------- ---------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C>
1 16,275 6,255*** 1,000,000 5,978 1,000,000
2 33,364 18,372*** 1,000,000 17,806 1,000,000
3 51,307 30,928 1,000,000 30,060 1,000,000
4 70,147 43,921 1,000,000 42,738 1,000,000
5 89,930 57,346 1,000,000 55,832 1,000,000
6 11,0701 72,865 1,000,000 71,006 1,000,000
7 13,2511 88,870 1,000,000 86,650 1,000,000
8 15,5412 105,353 1,000,000 102,754 1,000,000
9 17,9457 122,298 1,000,000 119,302 1,000,000
10 20,4705 139,682 1,000,000 136,269 1,000,000
11 23,1215 161,092 1,000,000 155,138 1,000,000
12 25,9051 183,507 1,000,000 174,499 1,000,000
13 28,8279 206,971 1,00,0000 194,304 1,000,000
14 31,8968 231,513 1,000,000 214,486 1,000,000
15 35,1191 257,177 1,000,000 234,972 1,000,000
16 38,5026 284,001 1,000,000 255,679 1,000,000
17 42,0552 311,968 1,000,000 276,521 1,000,000
18 45,7855 341,156 1,000,000 297,403 1,000,000
19 49,7022 371,651 1,000,000 318,228 1,000,000
20 53,8148 403,540 1,000,000 338,875 1,000,000
25 72,4270 583,303 1,000,000 433,159 1,000,000
35 101,4302 804,440 1,000,000 486,347 1,000,000
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $9,355.00 IN YEAR ONE AND $22,053.74 IN YEAR TWO FOR THE
CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
40
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$1,000,000 BASIC FACE AMOUNT
ISSUE AGE 55 MALE PREFERRED/
ISSUE AGE 50 FEMALE PREFERRED
$15,500 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.70% NET)
<TABLE>
<CAPTION>
GUARANTEED
PREMIUMS CURRENT CHARGES* CHARGES**
END OF ACCUMULATED ----------------------- -------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
- ------ -------------- ----------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
1 16,275 5,870*** 1,000,000 5,602 1,000,000
2 33,364 16,915*** 1,000,000 16,383 1,000,000
3 51,307 27,697 1,000,000 26,905 1,000,000
4 70,147 38,198 1,000,000 37,149 1,000,000
5 89,930 48,396 1,000,000 47,095 1,000,000
6 11,0701 59,867 1,000,000 58,315 1,000,000
7 13,2511 70,960 1,000,000 69,163 1,000,000
8 15,5412 81,648 1,000,000 79,607 1,000,000
9 17,9457 91,897 1,000,000 89,615 1,000,000
10 20,4705 101,661 1,000,000 99,141 1,000,000
11 23,1215 114,217 1,000,000 109,403 1,000,000
12 25,9051 126,576 1,000,000 119,089 1,000,000
13 28,8279 138,728 1,000,000 128,113 1,000,000
14 31,8968 150,646 1,000,000 136,367 1,000,000
15 35,1191 162,318 1,000,000 143,735 1,000,000
16 38,5026 173,717 1,000,000 150,081 1,000,000
17 42,0552 184,749 1,000,000 155,258 1,000,000
18 45,7855 195,427 1,000,000 159,102 1,000,000
19 49,7022 205,760 1,000,000 161,426 1,000,000
20 53,8148 215,757 1,000,000 162,006 1,000,000
25 72,4270 25,4025 1,000,000 126,058 1,000,000
35 101,4302 26,1033 1,000,000 0 1,000,000
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $8970.00 IN YEAR ONE AND $20,596.74 IN YEAR TWO FOR THE
CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
41
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$750,000 BASIC FACE AMOUNT
$250,000 SUPPLEMENTAL FACE AMOUNT
ISSUE AGE 55 MALE PREFERRED/
ISSUE AGE 50 FEMALE PREFERRED
$7,500 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.30% NET)
<TABLE>
<CAPTION>
GUARANTEED
PREMIUMS CURRENT CHARGES* CHARGES**
END OF ACCUMULATED ------------------------- -------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
- ------ -------------- ------------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
1 7,875 3,573*** 1,000,000 3,209 1,000,000
2 16,144 9,606*** 1,000,000 8,839 1,000,000
3 24,826 16,159 1,000,000 14,948 1,000,000
4 33,942 23,263 1,000,000 21,561 1,000,000
5 43,514 30,948 1,000,000 28,703 1,000,000
6 53,565 40,441 1,000,000 37,596 1,000,000
7 64,118 50,696 1,000,000 47,187 1,000,000
8 75,199 61,757 1,000,000 57,513 1,000,000
9 86,834 73,665 1,000,000 68,608 1,000,000
10 99,051 86,455 1,000,000 80,495 1,000,000
11 111,878 102,890 1,000,000 93,739 1,000,000
12 125,347 121,037 1,000,000 107,884 1,000,000
13 139,490 141,092 1,000,000 122,975 1,000,000
14 154,339 163,237 1,000,000 139,008 1,000,000
15 169,931 187,692 1,000,000 155,974 1,000,000
16 186,303 214,688 1,000,000 173,851 1,000,000
17 203,493 244,419 1,000,000 192,620 1,000,000
18 221,543 277,214 1,000,000 212,251 1,000,000
19 240,495 313,440 1,000,000 232,717 1,000,000
20 260,394 353,506 1,000,000 253,970 1,000,000
25 350,453 623,999 1,000,000 368,547 1,000,000
35 490,791 1,068,158 1,426,222 482,460 1,000,000
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $4,210.50 IN YEAR ONE AND $9,606.00 IN YEAR TWO FOR THE
CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
42
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$750,000 BASIC FACE AMOUNT
$250,000 SUPPLEMENTAL FACE AMOUNT
ISSUE AGE 55 MALE PREFERRED/
ISSUE AGE 50 FEMALE PREFERRED
$7,500 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.30% NET)
<TABLE>
<CAPTION>
GUARANTEED
PREMIUMS CURRENT CHARGES* CHARGES**
END OF ACCUMULATED ---------------------- ------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
- -------- -------------- ---------- --------- ------- ---------
<S> <C> <C> <C> <C> <C>
1 7,875 3,353*** 1,000,000 3,000 1,000,000
2 16,144 8,828*** 1,000,000 8,105 1,000,000
3 24,826 14,443 1,000,000 13,334 1,000,000
4 33,942 20,181 1,000,000 18,669 1,000,000
5 43,514 26,019 1,000,000 24,084 1,000,000
6 53,565 33,084 1,000,000 30,709 1,000,000
7 64,118 40,242 1,000,000 37,405 1,000,000
8 75,199 47,458 1,000,000 44,137 1,000,000
9 86,834 54,690 1,000,000 50,862 1,000,000
10 99,051 61,881 1,000,000 57,520 1,000,000
11 111,878 71,654 1,000,000 64,553 1,000,000
12 125,347 81,778 1,000,000 71,387 1,000,000
13 139,490 92,254 1,000,000 77,907 1,000,000
14 154,339 103,074 1,000,000 83,972 1,000,000
15 169,931 114,290 1,000,000 89,420 1,000,000
16 186,303 125,893 1,000,000 94,061 1,000,000
17 203,493 137,796 1,000,000 97,682 1,000,000
18 221,543 150,025 1,000,000 100,045 1,000,000
19 240,495 162,605 1,000,000 100,864 1,000,000
20 260,394 175,563 1,000,000 99,788 1,000,000
25 350,453 238,152 1,000,000 46,648 1,000,000
35 490,791 283,875 1,000,000 0 0
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $399050 IN YEAR ONE AND $8,828.00 IN YEAR TWO FOR THE
CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
43
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$750,000 BASIC FACE AMOUNT
$250,000 SUPPLEMENTAL FACE AMOUNT
ISSUE AGE 55 MALE PREFERRED/
ISSUE AGE 50 FEMALE PREFERRED
$7,500 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.70% NET)
<TABLE>
<CAPTION>
GUARANTEED
PREMIUMS CURRENT CHARGES* CHARGES**
END OF ACCUMULATED --------------------- -------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
- -------- -------------- --------- --------- ------- ---------
<S> <C> <C> <C> <C> <C>
1 7,875 3,133*** 1,000,000 2,791 1,000,000
2 16,144 8,078*** 1,000,000 7,398 1,000,000
3 24,826 12,848 1,000,000 11,835 1,000,000
4 33,942 17,422 1,000,000 16,082 1,000,000
5 43,514 21,776 1,000,000 20,113 1,000,000
6 53,565 26,993 1,000,000 25,011 1,000,000
7 64,118 31,913 1,000,000 29,616 1,000,000
8 75,199 36,502 1,000,000 33,894 1,000,000
9 86,834 40,719 1,000,000 37,803 1,000,000
10 99,051 44,509 1,000,000 41,288 1,000,000
11 111,878 50,444 1,000,000 44,770 1,000,000
12 125,347 56,205 1,000,000 47,681 1,000,000
13 139,490 61,778 1,000,000 49,921 1,000,000
14 154,339 67,136 1,000,000 51,365 1,000,000
15 169,931 72,260 1,000,000 51,873 1,000,000
16 186,303 77,119 1,000,000 51,281 1,000,000
17 203,493 81,608 1,000,000 49,414 1,000,000
18 221,543 85,734 1,000,000 46,065 1,000,000
19 240,495 89,507 1,000,000 41,005 1,000,000
20 260,394 92,931 1,000,000 33,954 1,000,000
25 350,453 95,700 1,000,000 0 0
35 490,791 55,227 1,000,000 0 0
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $3,770.50 IN YEAR ONE AND $8,078.00 IN YEAR TWO FOR THE
CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
44
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$1,000,000 BASIC FACE AMOUNT
ISSUE AGE 65 MALE PREFERRED/
ISSUE AGE 65 FEMALE PREFERRED
$27,000 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.30% NET)
<TABLE>
<CAPTION>
PREMIUMS CURRENT CHARGES* GUARANTEED CHARGES**
END OF ACCUMULATED ------------------------ ------------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
- -------- -------------- ------------ --------- ------------ ---------
<S> <C> <C> <C> <C> <C>
1 28,350 12,929*** 1,000,000 12,643 1,000,000
2 58,118 36,326*** 1,000,000 35,725 1,000,000
3 89,373 61,279 1,000,000 60,329 1,000,000
4 122,192 87,821 1,000,000 86,483 1,000,000
5 156,652 115,976 1,000,000 114,207 1,000,000
6 192,834 148,056 1,000,000 145,804 1,000,000
7 230,826 181,978 1,000,000 179,186 1,000,000
8 270,717 225,670 1,000,000 214,301 1,000,000
9 312,603 273,714 1,000,000 251,078 1,000,000
10 356,583 326,531 1,000,000 289,476 1,000,000
11 402,762 388,547 1,000,000 332,772 1,000,000
12 451,251 457,159 1,000,000 378,477 1,000,000
13 502,163 533,085 1,000,000 427,000 1,000,000
14 555,621 617,128 1,000,000 478,929 1,000,000
15 611,752 710,397 1,000,000 535,056 1,000,000
16 670,690 813,544 1,000,000 596,446 1,000,000
17 732,574 926,834 1,000,000 664,590 1,000,000
18 797,553 1,051,293 1,000,000 741,634 1,000,000
19 865,781 1,188,074 1,000,000 829,591 0
20 937,420 1,338,460 1,000,000 924,255 0
25 1,261,632 2,336,059 1,000,000 1,504,229 0
35 1,766,849 3,916,137 1,426,222 2,332,386 0
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $16,138.04 IN YEAR ONE AND $34,914.99 IN YEAR TWO FOR
THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
45
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$1,000,000 BASIC FACE AMOUNT
ISSUE AGE 65 MALE PREFERRED/
ISSUE AGE 65 FEMALE PREFERRED
$27,000 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.30% NET)
<TABLE>
<CAPTION>
GUARANTEED
PREMIUMS CURRENT CHARGES* CHARGES**
END OF ACCUMULATED ------------------------ -------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
- -------- -------------- ------------ --------- -------- ---------
<S> <C> <C> <C> <C> <C>
1 28,350 12,197*** 1,000,000 11,920 1,000,000
2 58,118 33,549*** 1,000,000 32,983 1,000,000
3 89,373 54,992 1,000,000 54,123 1,000,000
4 122,192 76,395 1,000,000 75,206 1,000,000
5 156,652 97,597 1,000,000 96,074 1,000,000
6 192,834 120,602 1,000,000 118,723 1,000,000
7 230,826 143,053 1,000,000 140,797 1,000,000
8 270,717 172,784 1,000,000 161,952 1,000,000
9 312,603 203,617 1,000,000 181,771 1,000,000
10 356,583 235,548 1,000,000 199,788 1,000,000
11 402,762 271,759 1,000,000 218,186 1,000,000
12 451,251 309,412 1,000,000 234,026 1,000,000
13 502,163 348,475 1,000,000 246,774 1,000,000
14 555,621 388,842 1,000,000 255,798 1,000,000
15 611,752 430,594 1,000,000 260,268 1,000,000
16 670,690 473,134 1,000,000 259,047 1,000,000
17 732,574 516,297 1,000,000 250,589 1,000,000
18 797,553 560,462 1,000,000 232,792 1,000,000
19 865,781 606,045 1,000,000 202,903 0
20 937,420 653,511 1,000,000 157,330 0
25 1,261,632 930,954 1,000,000 0 0
35 1,766,849 1,273,986 1,426,222 0 0
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $16,869.04 IN YEAR ONE AND $37,602.99 IN YEAR TWO FOR
THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
46
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$1,000,000 BASIC FACE AMOUNT
ISSUE AGE 65 MALE PREFERRED/
ISSUE AGE 65 FEMALE PREFERRED
$27,000 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.70% NET)
<TABLE>
<CAPTION>
GUARANTEED
PREMIUMS CURRENT CHARGES* CHARGES**
END OF ACCUMULATED ---------------------- -------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
- ------ -------------- ---------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
1 28,350 11,466*** 1,000,000 11,198 1,000,000
2 58,118 30,861*** 1,000,000 30,329 1,000,000
3 89,373 49,126 1,000,000 48,333 1,000,000
4 122,192 66,137 1,000,000 65,084 1,000,000
5 156,652 81,744 1,000,000 80,434 1,000,000
6 192,834 97,856 1,000,000 96,289 1,000,000
7 230,826 112,101 1,000,000 110,276 1,000,000
8 270,717 132,396 1,000,000 122,059 1,000,000
9 312,603 152,149 1,000,000 131,221 1,000,000
10 356,583 171,303 1,000,000 137,295 1,000,000
11 402,762 192,429 1,000,000 142,036 1,000,000
12 451,251 212,893 1,000,000 142,668 1,000,000
13 502,163 232,548 1,000,000 138,587 1,000,000
14 555,621 251,140 1,000,000 129,061 1,000,000
15 611,752 268,599 1,000,000 113,113 1,000,000
16 670,690 283,955 1,000,000 89,401 1,000,000
17 732,574 296,658 1,000,000 56,140 1,000,000
18 797,553 306,796 1,000,000 10,933 1,000,000
19 865,781 314,429 1,000,000 0 0
20 937,420 319,587 1,000,000 0 0
25 1,261,632 262,720 1,000,000 0 0
35 1,766,849 0 1,426,222 0 0
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $16,138.04 IN YEAR ONE AND $34,914.99 IN YEAR TWO FOR
THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
47
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$750,000 BASIC FACE AMOUNT
ISSUE AGE 65 MALE PREFERRED/
ISSUE AGE 65 FEMALE PREFERRED
$21,500 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.30% NET)
<TABLE>
<CAPTION>
GUARANTEED
PREMIUMS CURRENT CHARGES* CHARGES**
END OF ACCUMULATED ------------------------ -------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
- ------ -------------- ------------ --------- -------- ---------
<S> <C> <C> <C> <C> <C>
1 22,575 12,091*** 1,000,000 11,727 1,000,000
2 46,279 30,919*** 1,000,000 30,151 1,000,000
3 71,168 50,812 1,000,000 49,598 1,000,000
4 97,301 71,737 1,000,000 70,028 1,000,000
5 124,741 93,643 1,000,000 91,383 1,000,000
6 153,553 118,222 1,000,000 115,345 1,000,000
7 183,806 143,737 1,000,000 140,170 1,000,000
8 215,571 178,412 1,000,000 165,644 1,000,000
9 248,925 216,474 1,000,000 191,489 1,000,000
10 283,946 258,229 1,000,000 217,393 1,000,000
11 320,718 306,799 1,000,000 245,176 1,000,000
12 359,329 360,386 1,000,000 272,793 1,000,000
13 399,871 419,485 1,000,000 300,025 1,000,000
14 442,439 484,607 1,000,000 326,642 1,000,000
15 487,136 556,543 1,000,000 352,340 1,000,000
16 534,068 635,594 1,000,000 376,689 1,000,000
17 583,346 722,891 1,000,000 399,100 1,000,000
18 635,089 819,948 1,057,673 418,793 1,000,000
19 689,418 926,790 1,173,156 434,828 1,000,000
20 746,464 1,044,229 1,298,943 446,094 1,000,000
25 1,004,633 1,822,499 2,114,992 357,400 1,000,000
35 1,406,935 3,053,019 3,345,743 0 0
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $13,918.50 IN YEAR ONE AND $30,919.00 IN YEAR TWO FOR
THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
48
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$750,000 BASIC FACE AMOUNT
$250,000 SUPPLEMENTAL FACE AMOUNT
ISSUE AGE 65 MALE PREFERRED/
ISSUE AGE 65 FEMALE PREFERRED
$21,500 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.30% NET)
<TABLE>
<CAPTION>
GUARANTEED
PREMIUMS CURRENT CHARGES* CHARGES**
END OF ACCUMULATED ---------------------- -------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
- ------ -------------- ---------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
1 22,575 11,405*** 1,000,000 11,051 1,000,000
2 46,279 28,481*** 1,000,000 27,757 1,000,000
3 71,168 45,444 1,000,000 44,333 1,000,000
4 97,301 62,141 1,000,000 60,623 1,000,000
5 124,741 78,388 1,000,000 76,441 1,000,000
6 153,553 95,659 1,000,000 93,259 1,000,000
7 183,806 112,024 1,000,000 109,141 1,000,000
8 215,571 135,613 1,000,000 123,685 1,000,000
9 248,925 160,011 1,000,000 136,391 1,000,000
10 283,946 185,193 1,000,000 146,686 1,000,000
11 320,718 213,309 1,000,000 155,665 1,000,000
12 359,329 242,397 1,000,000 161,056 1,000,000
13 399,871 272,371 1,000,000 162,087 1,000,000
14 442,439 303,046 1,000,000 157,820 1,000,000
15 487,136 334,429 1,000,000 147,022 1,000,000
16 534,068 365,527 1,000,000 128,010 1,000,000
17 583,346 396,044 1,000,000 98,492 1,000,000
18 635,089 426,189 1,000,000 55,384 1,000,000
19 689,418 456,183 1,000,000 0 0
20 746,464 486,258 1,000,000 0 0
25 1,004,633 628,972 1,000,000 0 0
35 1,406,935 781,318 1,000,000 0 0
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $13,232.50 IN YEAR ONE AND $28,481.00 IN YEAR TWO FOR
THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
49
<PAGE>
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$750,000 BASIC FACE AMOUNT
$250,000 SUPPLEMENTAL FACE AMOUNT
ISSUE AGE 65 MALE PREFERRED/
ISSUE AGE 65 FEMALE PREFERRED
$21,500 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.70% NET)
<TABLE>
<CAPTION>
GUARANTEED
PREMIUMS CURRENT CHARGES* CHARGES**
END OF ACCUMULATED ---------------------- -------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
- ------ -------------- ---------- --------- ------- ---------
<S> <C> <C> <C> <C> <C>
1 22,575 10,719*** 1,000,000 10,377 1,000,000
2 46,279 26,126*** 1,000,000 25,446 1,000,000
3 71,168 40,451 1,000,000 39,437 1,000,000
4 97,301 53,558 1,000,000 52,213 1,000,000
5 124,741 65,286 1,000,000 63,612 1,000,000
6 153,553 77,062 1,000,000 75,059 1,000,000
7 183,806 86,959 1,000,000 84,627 1,000,000
8 215,571 103,147 1,000,000 91,949 1,000,000
9 248,925 118,841 1,000,000 96,569 1,000,000
10 283,946 133,976 1,000,000 97,966 1,000,000
11 320,718 150,242 1,000,000 97,002 1,000,000
12 359,329 165,851 1,000,000 91,627 1,000,000
13 399,871 180,638 1,000,000 81,146 1,000,000
14 442,439 194,317 1,000,000 64,731 1,000,000
15 487,136 206,797 1,000,000 41,283 1,000,000
16 534,068 216,795 1,000,000 9,279 1,000,000
17 583,346 223,785 1,000,000 0 0
18 635,089 226,911 1,000,000 0 0
19 689,418 226,650 1,000,000 0 0
20 746,464 223,137 1,000,000 0 0
25 1,004,633 113,345 1,000,000 0 0
35 1,406,935 0 0 0 0
</TABLE>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $12,546.50 IN YEAR ONE AND $26,126.00 IN YEAR TWO FOR
THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
50
<PAGE>
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Board of Directors of
ITT Hartford Life and Annuity Insurance Company:
We have audited the accompanying statutory balance sheets of ITT Hartford
Life and Annuity Insurance Company (a Wisconsin corporation and wholly-owned
subsidiary of Hartford Life Insurance Company) (the Company) as of December
31, 1995 and 1994, and the related statutory statements of income, changes in
capital and surplus, and cash flows for each of the three years in the period
ended December 31, 1995. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
statutory-basis financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
The Company presents its financial statements in conformity with statutory
accounting practices as described in Note 1 of notes to statutory financial
statements. When statutory financial statements are presented for purposes
other than for filing with a regulatory agency, generally accepted auditing
standards require that an auditors' report on them state whether they are
presented in conformity with generally accepted accounting principles. The
accounting practices used by the Company vary from generally accepted
accounting principles as explained and quantified in Note 1. In our opinion,
because the differences in accounting practices as described in Note 1 are
material, the statutory financial statements referred to above do not present
fairly, in accordance with generally accepted accounting principles, the
financial position of the Company as of December 31, 1995 and 1994, and the
results of its operations and its cash flows for each of the three years in
the period ended December 31, 1995.
<PAGE>
However, in our opinion, the statutory financial statements referred to above
present fairly, in all material respects, the financial position of the
Company as of December 31, 1995 and 1994, and the results of operations and
its cash flows for each of the three years in the period ended December 31,
1995 in conformity with statutory accounting practices as described in Note 1.
As discussed in Note 1 of notes to statutory financial statements, the
Company changed its valuation method in determining aggregate reserves for
future benefits.
/s/ Arthur Andersen LLP
Hartford, Connecticut
January 24, 1996
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY STATEMENTS OF INCOME
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
REVENUES
Premiums and Annuity Considerations $ 165,792 $ 442,173 $ 14,281
Annuity and Other Fund Deposits 1,087,661 608,685 1,986,140
Net Investment Income 78,787 29,012 7,970
Commissions and Expense Allowances on
Reinsurance Ceded 183,380 154,527 60,700
Reserve Adjustment on Reinsurance Ceded 1,879,785 1,266,926 0
Other Revenues 140,796 41,857 369,598
----------- ----------- -----------
TOTAL REVENUES 3,536,201 2,543,180 2,438,689
----------- ----------- -----------
BENEFITS AND EXPENSES
Death and Annuity Benefits 53,029 7,948 3,192
Surrenders and Other Benefit Payments 221,392 181,749 4,955
Commissions and Other Expenses 236,202 186,303 132,169
Increase in Reserves for Future Benefits 94,253 416,748 5,120
Increase in Liability for Premium
and Other Deposit Funds 460,124 182,934 281,024
Net Transfers to Separate Accounts 2,414,669 1,541,419 2,013,183
----------- ----------- -----------
TOTAL BENEFITS AND EXPENSES 3,479,669 2,517,101 2,439,643
----------- ----------- -----------
NET GAIN (LOSS) FROM OPERATIONS
BEFORE FEDERAL INCOME TAX EXPENSE 56,532 26,079 (954)
Federal Income Tax Expense 14,048 24,038 11,270
----------- ----------- -----------
NET GAIN (LOSS) FROM OPERATIONS 42,484 2,041 (12,224)
Net Realized Capital Gains (Losses) 374 (2) 877
----------- ----------- -----------
NET INCOME (LOSS) $ 42,858 $ 2,039 $ (11,347)
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of
these financial statements
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY BALANCE SHEETS
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------------------
1995 1994
----------- ------------
<S> <C> <C>
ASSETS
Bonds $ 1,226,489 $ 798,501
Common Stocks 39,776 2,275
Policy Loans 22,521 20,145
Cash and Short-Term Investments 173,304 84,312
Other Invested Assets 13,432 2,519
----------- -----------
TOTAL CASH AND INVESTED ASSETS 1,475,522 907,752
----------- -----------
Investment Income Due and Accrued 18,021 12,757
Premium Balances Receivable 402 467
Receivables from Affiliates 8,182 2,861
Other Assets 25,907 13,749
Separate Account Assets 7,324,910 3,588,077
----------- -----------
TOTAL ASSETS $ 8,852,944 $ 4,525,663
----------- -----------
----------- -----------
LIABILITIES
Aggregate Reserves for Future Benefits $ 542,082 $ 447,284
Policy and Contract Claims 8,223 9,902
Liability for Premium and Other Deposit Funds 948,361 479,202
Asset Valuation Reserve 8,010 2,422
Payable to Affiliates 3,682 7,840
Other Liabilities (220,658) (100,349)
Separate Account Liabilities 7,324,910 3,588,077
----------- -----------
TOTAL LIABILITIES 8,614,610 4,434,378
----------- -----------
CAPITAL AND SURPLUS
Common Stock 2,500 2,500
Gross Paid-In and Contributed Surplus 226,043 114,109
Unassigned Funds 9,791 (25,324)
----------- -----------
TOTAL CAPITAL AND SURPLUS 238,334 91,285
----------- -----------
TOTAL LIABILITIES AND CAPITAL AND SURPLUS $ 8,852,944 $ 4,525,663
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of
these financial statements.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------
1995 1994 1993
------------ ----------- -----------
<S> <C> <C> <C>
CAPITAL AND SURPLUS - BEGINNING OF YEAR $ 91,285 $ 88,693 $ 30,027
----------- ----------- -----------
Net Income (Loss) 42,858 2,039 (11,347)
Net Unrealized Gains (Losses) 1,709 (133) (1,198)
Change in Asset Valuation Reserve (5,588) (1,356) 135
Change in Non-Admitted Assets (1,944) (8,599) 1,076
Change in Reserve (calculation basis-see Note 1) 0 10,659 0
Aggregate Write-ins for Surplus (see Note 3) 8,080 (18) 0
Dividends to Shareholder (10,000) 0 0
Paid-in Surplus 111,934 0 70,000
----------- ----------- -----------
Change in Capital and Surplus 147,049 2,592 58,666
----------- ----------- -----------
CAPITAL AND SURPLUS - END OF YEAR $ 238,334 $ 91,285 $ 88,693
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of
these financial statements
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY STATEMENTS OF CASH FLOW
($000)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------
1995 1994 1993
------------ ------------ -----------
<S> <C> <C> <C>
OPERATIONS
Premiums, Annuity Considerations and Fund
Deposits $ 1,253,511 $ 1,050,493 $ 2,000,492
Investment Income 78,328 24,519 5,594
Other Income 2,253,466 1,515,700 434,851
----------- ----------- -----------
Total Income 3,585,305 2,590,712 2,440,937
----------- ----------- -----------
Benefits Paid 277,965 181,205 8,215
Federal Income Taxes Paid on Operations 208,423 20,634 9,666
Other Expenses 2,664,385 1,832,905 2,231,477
----------- ----------- -----------
Total Benefits and Expenses 3,150,773 2,034,744 2,249,358
----------- ----------- -----------
NET CASH FROM OPERATIONS 434,532 555,968 191,579
PROCEEDS FROM INVESTMENTS
Bonds 287,941 87,747 88,334
Common Stocks 52 0 0
Other 28 40 23,638
----------- ----------- -----------
NET INVESTMENT PROCEEDS 288,021 87,787 111,972
----------- ----------- -----------
TAX ON CAPITAL GAINS 226 (96) 376
PAID-IN-SURPLUS 111,934 0 70,000
OTHER CASH PROVIDED 28,199 30,554 0
----------- ----------- -----------
TOTAL PROCEEDS 862,460 674,405 373,175
----------- ----------- -----------
COST OF INVESTMENTS ACQUIRED
Bonds 720,521 595,181 314,933
Common Stocks 35,794 808 567
Miscellaneous Applications 2,146 2,523 0
----------- ----------- -----------
TOTAL INVESTMENTS ACQUIRED 758,461 598,512 315,500
----------- ----------- -----------
OTHER CASH APPLIED
Dividends Paid to Stockholder 10,000 0 0
Other 5,007 24,813 24,626
----------- ----------- -----------
TOTAL OTHER CASH APPLIED 15,007 24,813 24,626
----------- ----------- -----------
TOTAL APPLICATIONS 773,468 623,325 340,126
----------- ----------- -----------
NET CHANGE IN CASH AND SHORT-TERM INVESTMENTS 88,992 51,080 33,049
CASH AND SHORT-TERM INVESTMENTS, BEGINNING OF YEAR 84,312 33,232 183
----------- ----------- -----------
CASH AND SHORT-TERM INVESTMENTS, END OF YEAR $ 173,304 $ 84,312 $ 33,232
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of
these financial statements.
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
(AMOUNTS IN THOUSANDS UNLESS OTHERWISE STATED)
1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION
ITT Hartford Life and Annuity Insurance Company (ILA or the Company), formerly
known as ITT Life Insurance Corporation, is a wholly owned subsidiary of
Hartford Life Insurance Company (HLIC), which is an indirect subsidiary of ITT
Hartford Group, Inc. (ITT Hartford), formerly a wholly owned subsidiary of ITT
Corporation (ITT). On December 19, 1995, ITT Corporation distributed all the
outstanding shares of ITT Hartford Group to ITT shareholders of record in an
action known herein as the "Distribution". As a result of the Distribution, ITT
Hartford became an independent, publicly traded company.
ILA offers a complete line of ordinary and universal life insurance, individual
annuities and certain supplemental accident and health benefit coverages.
BASIS OF PRESENTATION
The accompanying ILA statutory basis financial statements were prepared in
conformity with statutory accounting practices prescribed or permitted by the
National Association of Insurance Commissioners (NAIC) and the Insurance
Department of the State of Wisconsin.
The preparation of financial statements in conformity with statutory accounting
principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilties and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reported period. Actual results could differ
from those estimates.
Statutory accounting practices and generally accepted accounting principles
(GAAP) differ in certain significant respects. These differences principally
involve:
(1) treatment of policy acquisition costs (commissions, underwriting and selling
expenses, premium taxes, etc.) which are charged to expense when incurred for
statutory purposes rather than on a pro-rata basis over the expected life of the
policy;
(2) recognition of premium revenues, which for statutory purposes are generally
recorded as collected or when due during the premium paying period of the
contract and which for GAAP purposes, generally, for universal life policies and
investment products, are only recorded for policy charges for the cost of
insurance, policy administration and surrender charges assessed to policy
account balances. Also, for GAAP purposes, premiums for traditional life
insurance policies are recognized as revenues when they are due from
policyholders and the retrospective deposit method is used in accounting for
universal life and other types of contracts where the payment pattern is
irregular or surrender charges are a significant source of profit. The
prospective deposit method is used for GAAP purposes where investment margins
are the primary source of profit;
(3) development of liabilities for future policy benefits, which for statutory
purposes predominantly use interest rate and mortality assumptions prescribed by
the NAIC which may vary considerably from interest and mortality assumptions
used for GAAP financial reporting;
(4) providing for income taxes based on current taxable income (tax return) only
for statutory purposes, rather than establishing additional assets or
liabilities for deferred Federal income taxes to recognize the tax effect
related to reporting revenues and expenses in different periods for financial
reporting and tax return purposes;
-1-
<PAGE>
(5) excluding certain GAAP assets designated as non-admitted assets (e.g., past
due agent's balances and furniture and equipment) from the balance sheet for
statutory purposes by directly charging surplus;
(6) establishing accruals for post-retirement and post-employment health care
benefits on an optional basis, immediate recognition or a twenty year phase-in
approach, whereas GAAP liabilities were established at date of adoption;
(7) establishing a formula reserve for realized and unrealized losses due to
default and equity risk associated with certain invested assets (Asset Valuation
Reserve); as well as the deferral and amortization of realized gains and losses,
motivated by changes in interest rates during the period the asset is held, into
income over the remaining life to maturity of the asset sold (Interest
Maintenance Reserve); whereas on a GAAP basis, no such formula reserve is
required and realized gains and losses are recognized in the period the asset is
sold;
(8) the reporting of reserves and benefits net of reinsurance ceded, where risk
transfer has taken place; whereas on a GAAP basis, reserves are reported gross
of reinsurance with reserve credits presented as recoverable assets;
(9) the reporting of fixed maturities at amortized cost, where GAAP requires
that fixed maturities be classified as "held-to-maturity", "available-for-sale"
or "trading", based on the Company's intentions with respect to the ultimate
disposition of the security and its ability to affect those intentions. The
Company's fixed maturities were classified on a GAAP basis as "available-for-
sale" and accordingly, these investments were reflected at fair value with the
corresponding impact included as a component of Stockholder's Equity designated
as "Unrealized Gain/Loss on Investments, Net of Tax". For statutory reporting
purposes, Net Unrealized Loss on Investments represents unrealized gains or
losses on common stock and other bonds reported at fair value; and
(10) separate account liabilties are valued on the Commissioner's Annuity
Reserve Valuation Method (CARVM), with the surplus generated recorded as a
liability to the general account (and a contra liability on the balance sheet of
the general account), whereas GAAP liabilities are valued at account value.
As of December 31, 1995, 1994 and 1993, the significant differences between
statutory and GAAP basis
net income and capital and surplus for the Company are summarized as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
GAAP Net Income: $ 38,821 $23,295 $ 6,071
Amortization and deferral
of policy acquisition costs (174,341) (117,863) (147,700)
Benefit reserve adjustment 31,392 30,912 14,059
Deferred taxes 2,801 (9,267) (7,123)
Separate accounts 146,635 75,941 110,547
Coinsurance 0 3,472 11,578
Other, net (2,450) (4,451) 1,221
Statutory Net Income (Loss) $ 42,858 $ 2,039 $(11,347)
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
1995 1994 1993
GAAP Capital and Surplus $ 455,541 $ 199,785 $ 198,408
<S> <C> <C> <C>
Deferred policy
acquisition costs (596,542) (422,201) (304,338)
Benefit reserve adjustment 74,782 85,191 43,621
Deferred taxes 1,493 13,257 13,706
Separate accounts 333,123 186,488 110,547
Asset valuation reserve (8,010) (2,422) (1,066)
Coinsurance 0 0 22,642
Unrealized gain (loss) on bonds (1,696) 21,918 0
Adjustment relating
to Lyndon contribution (41,277) 0 0
Other, net 20,920 9,269 5,173
Statutory Capital and Surplus $ 238,334 $ 91,285 $ 88,693
</TABLE>
AGGREGATE RESERVES AND LIABILITIES FOR PREMIUM AND OTHER DEPOSIT FUNDS
Aggregate reserves for payment of future life, health and annuity benefits were
computed in accordance with presently accepted actuarial standards. Reserves
for life insurance policies are generally based on the 1958 and 1980
Commissioner's Standard Ordinary Mortality Tables at various rates ranging from
2.5% to 6.0%. Accumulation and on-benefit annuity reserves are based
principally on Individual Annuity tables at various rates ranging from 2.5% to
8.75% and using the Commissioner's Annuity Reserve Valuation Method (CARVM).
Accident and health reserves are established using a two year preliminary term
method and morbidity tables based on Company experience.
ILA has established separate accounts to segregate the assets and liabilities of
certain annuity contracts that must be segregated from the Company's general
assets under the terms of the contracts. The assets consist primarily of
marketable securities reported at market value. Premiums, benefits and expenses
of these contracts are reported in the Statutory Statements of Income.
During 1994, the Company changed the valuation method on aggregate reserves for
future benefits resulting in a $10.7 million increase in surplus. The new
valuation method is in accordance with presently accepted actuarial standards.
INVESTMENTS
Investments in bonds are carried at amortized cost. Bonds which are deemed
ineligible to be held at amortized cost by the National Association of Insurance
Commissioners (NAIC) Securities Valuation Office (SVO) are carried at the
appropriate SVO published value. When a permanent reduction in the value of
publicly traded securities occurs, the decrease is reported as a realized loss
and the carrying value is adjusted accordingly. Common stocks are carried at
market value with the difference from cost reflected in surplus. Other invested
assets are generally recorded at fair value.
Changes in unrealized capital gains and losses on common stock are reported as
additions to or reductions of surplus. The Asset Valuation Reserve is designed
to provide a standardized reserve process for realized and unrealized losses due
to the default and equity risks associated with invested assets. The reserve
increased by $5,588, $1,356 and $135 in 1995, 1994 and 1993, respectively.
Additionally, the Interest Maintenance Reserve (IMR) captures net realized
capital gains and losses, net of applicable income taxes, resulting from changes
in interest rates and amortizes these gains or losses into income over the
remaining life of the mortgage loan or bond sold. Realized capital gains and
losses, net of taxes, not included in IMR are reported in the Statutory
Statements of Income. Realized investment gains and losses are determined
-3-
<PAGE>
on a specific identification basis. The amount of net capital gains reclassified
from the IMR was $39 in 1995 and the amount of net capital losses was $67 and
$264 in 1994 and 1993, respectively. The amount of income amortized was $256,
$114 and $178 in 1995, 1994 and 1993, respectively.
OTHER LIABILITIES
The amount reflected in other liabilities includes a receivable from the
separate accounts of $333.1, $186.5 million in 1995 and 1994, respectively. The
balances are classified in accordance with NAIC accounting practices.
2. INVESTMENTS:
(a) COMPONENTS OF NET INVESTMENT INCOME
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Interest income from fixed
maturity securities $ 76,100 $ 28,335 $ 7,541
Interest income from policy loans 1,504 454 124
Interest and dividends from
other investments 2,288 1,069 481
Gross investment income 79,892 29,858 8,146
Less: investment expenses 1,105 846 176
Net investment income $ 78,787 $ 29,012 $ 7,970
</TABLE>
(b) UNREALIZED GAINS (LOSSES) ON COMMON STOCKS
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Gross unrealized gains at
end of year $ 1,724 $ 75 $ 148
Gross unrealized losses at
end of year 0 (60) 0
Net unrealized gains 1,724 15 148
Balance at beginning of year 15 148 93
Change in net unrealized gains on
common stocks $ 1,709 $ (133) $ 55
</TABLE>
(c) UNREALIZED GAINS (LOSSES) ON BONDS AND SHORT-TERM INVESTMENTS
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Gross unrealized gains at
end of year $ 22,251 $ 986 $ 5,916
Gross unrealized losses at
end of year (1,374) (34,718) (684)
Net unrealized gains (losses)
after tax 20,877 (33,732) 5,232
Balance at beginning of year (33,732) 5,232 2,287
Change in net unrealized gains
(losses) on bonds and
short-term investments $ 54,609 $ (38,964) $ 2,945
</TABLE>
-4-
<PAGE>
(d) COMPONENTS OF NET REALIZED CAPITAL GAINS (LOSSES)
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Bonds and short term investments $ 156 $ (101) $ (316)
Common stocks 52 0 0
Real estate and other 0 34 1,316
----
Realized gains (losses) 208 (67) 1,000
Capital gains (benefit) taxes (205) 2 386
----
Net realized capital gains (losses)
after tax 413 (69) 614
Less: IMR capital gains (losses) 39 (67) (263)
----
Net realized capital gains (losses) $ 374 $ (2) $ 877
</TABLE>
(e) OFF-BALANCE SHEET INVESTMENTS
The Company had no significant financial instruments with off-balance sheet risk
as of December 31, 1995 and 1994.
(f) CONCENTRATION OF CREDIT RISK
Excluding U.S. government and government agency investments, the Company is not
exposed to any significant concentration of credit risk.
(g) BONDS, SHORT-TERM AND COMMON STOCK INVESTMENTS
<TABLE>
<CAPTION>
1995
----------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. government and government
agencies and authorities:
- - guaranteed and sponsored 44,268 14 (248) 44,034
- - guaranteed and
sponsored - asset backed 176,160 4,644 (682) 180,122
States, municipalities and
political subdivisions 16,948 38 (6) 16,980
International governments 5,402 441 0 5,843
Public utilities 108,083 1,652 (90) 109,645
All other corporate 374,058 8,145 (248) 381,955
All other
corporate - asset backed 410,197 5,841 (89) 415,949
Short-term investments 139,011 18 0 139,029
Certificates of deposit 91,373 1,458 (11) 92,820
Total 1,365,500 22,251 (1,374) 1,386,377
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
1995
----------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Common Stock - Unaffiliated 2,668 555 0 3,223
Common Stock - Affiliated 35,384 1,169 0 36,553
Total Common Stock 38,052 1,724 0 39,776
</TABLE>
<TABLE>
<CAPTION>
1994
----------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. government and government
agencies and authorities:
- - guaranteed and sponsored 175,925 0 (12,059) 163,866
- - guaranteed and
sponsored - asset backed 142,318 382 (4,911) 137,789
States, municipalities and
political subdivisions 10,409 0 (603) 9,806
International governments 2,248 0 (69) 2,179
Public utilities 29,509 31 (1,271) 28,269
All other corporate 257,301 246 (9,452) 248,095
All other
corporate - asset backed 112,390 327 (4,066) 108,651
Short-term investments 56,365 0 0 56,365
Certificates of deposit 68,401 0 (2,287) 66,114
Total 854,866 986 (34,718) 821,134
</TABLE>
<TABLE>
<CAPTION>
1994
----------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Common Stock - Unaffiliated 2,260 75 (60) 2,275
</TABLE>
The amortized cost and estimated market value of bonds and short-term
investments at December 31, 1995 by management's anticipated maturity are shown
below. Asset backed securities are distributed to maturity year based on ILA's
estimate of the rate of future prepayments of principal over the remaining life
of the securities. Expected maturities differ from contractual maturities
reflecting borrowers' rights to call or prepay their obligations.
-6-
<PAGE>
<TABLE>
<CAPTION>
Estimated
Amortized Fair
Cost Value
Maturity
--------
<S> <C> <C>
Due in one year or less 439,793 442,327
Due after one year through five years 840,088 855,741
Due after five years through ten years 80,820 83,432
Due after ten years 4,799 4,877
Total 1,365,500 1,386,377
</TABLE>
Proceeds from sales of investments in bonds and short-term investments during
1995, 1994 and 1993 were $313,961, $117,912 and $333,023, respectively,
resulting in gross realized gains of $1,419, $518 and $937, respectively, and
gross realized losses of $1,263, $624 and $1,255, respectively, before
transfers to IMR. The Company had realized gains of $52 during 1995 from a
capital gain distribution.
(h) FAIR VALUE OF FINANCIAL INSTRUMENTS
<TABLE>
<CAPTION>
Balance sheet items: (in millions) 1995 1994
------------------ -----------------
Carrying Fair Carrying Fair
Amount Value Amount Value
<S> <C> <C> <C> <C>
Assets
Fixed maturites 1,366 1,386 855 821
Common stocks 40 40 2 2
Policy loans 23 23 20 20
Miscellaneous 13 13 2 2
Liabilities
Liabilities on investment contracts 1,031 981 534 526
</TABLE>
The carrying amounts for policy loans approximates fair value. The
liabilities are determined by forecasting future cash flows discounted at
current market rates.
3. RELATED PARTY TRANSACTIONS:
Transactions between the Company and its affiliates within ITT Hartford relate
principally to tax settlements, reinsurance, service fees, capital contributions
and payments of dividends.
On June 30, 1995, the assets of Lyndon Insurance Company were contributed to
ILA. As a result, ILA received approximately $365 million in fixed maturities,
equity securities and cash, $28 million in policy reserves, $187 million of
current tax liability, $26 million in IMR, $8 million in AVR (offset by an
aggregate write-in to surplus), and $4 million of other liabilities. The assets
in excess of liabilities of $112 were recorded as an increase to paid-in
surplus.
For additional information, see Note 5.
4. FEDERAL INCOME TAXES:
The Company is included in the consolidated Federal income tax return of ITT
Hartford and its includable subsidiaries. Allocation of taxes is based
primarily upon separate company tax return calculations with current credit for
net losses used in consolidation except that increases resulting from
consolidation are
-7-
<PAGE>
allocated in proportion to separate return amounts. Intercompany Federal income
tax balances are generally settled quarterly with Hartford Fire Insurance
Company (Hartford Fire), a subsidiary of ITT Hartford. Federal income taxes paid
by the Company were $215,921, $20,538, and $10,042 in 1995, 1994 and 1993,
respectively. The effective tax rate was 25%, 92%, and 1,181% in 1995, 1994, and
1993 respectively. The following schedule provides a reconciliation of the
effective tax rate (in millions).
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Tax provision (benefit) at US statutory rate 20 9 (1)
Tax acquisiton deferred costs 8 8 10
Statutory to tax reserves 3 5 0
Investments and other (17) 2 2
Federal income tax expense 14 24 11
</TABLE>
5. CAPITAL AND SURPLUS AND SHAREHOLDER DIVIDEND RESTRICTIONS:
The maximum amount of dividends which can be paid, without prior approval, by
State of Wisconsin insurance companies to shareholders is subject to
restrictions relating to statutory surplus. Dividends are paid as determined by
the Board of Directors and are not cumulative. ILA paid dividends of $10 million
to its parent, HLIC, in 1995. No dividends were paid in 1994 and 1993. As a
result of the distribution by ITT, the assets of ITT Lyndon Insurance Company
(Lyndon) were contributed to ILA in June 1995. Substantially all the business
was removed from Lyndon prior to the contribution. The amount of assets which
exceeded liabilities at the contribution date ($112 million) was included in
paid-in capital.
6. PENSION PLANS AND OTHER POST-RETIREMENT AND POST-EMPLOYMENT BENEFITS:
The Company's employees are included in ITT Hartford's non-contributory defined
benefit pension plans. These plans provide pension benefits that are based on
years of service and the employee's compensation during the last ten years of
employment. The Company's funding policy is to contribute annually an amount
between the minimum funding requirements set forth in the Employee Retirement
Income Security Act of 1974 and the maximum amount that can be deducted for
Federal income tax purposes. Generally, pension costs are funded through the
purchase of HLIC's group pension contracts. Pension expense was $1,034, $1,211,
and $765 in 1995, 1994 and 1993, respectively. Liabilities for the plan are held
by Hartford Fire.
The Company also participates in ITT Hartford 's Investment and Savings Plan,
which includes a deferred compensation option under IRC section 401(k) and
an ESOP allocation under IRC section 404(k). The liabilities for these plans are
included in the financial statements of Hartford Fire. The cost to ILA was not
material in 1995, 1994 and 1993.
The Company's employees are included in Hartford Fire's contributory defined
health care and life insurance benefit plans. These plans provide health care
and life insurance benefits for retired employees. Substantially all employees
may become eligible for those benefits if they reach normal or early retirement
age while still working for the Company. The Company has prefunded a portion of
the health care and life insurance obligations through trust funds where such
prefunding can be accomplished on a tax effective basis. Amounts allocated by
Hartford Fire for post-retirement health care and life insurance benefits
expense (not including provisions for accrual of post-retirement benefit
obligations) are immaterial.
The assumed rate of future increases in the per capita cost of health care (the
health care trend rate) was 10.1% for 1995, decreasing ratably to 6% in the year
2001. Increasing the health care trend rates by one percent per year would have
an immaterial impact on the accumulated post-retirement benefit obligation and
the annual expense. The cost to ILA was not material in 1995, 1994 and 1993.
Post-employment benefits are primarily comprised of obligations to provide
medical and life insurance to employees on long term disability. Post-
employment benefit expense was not material in 1995, 1994 and 1993.
-8-
<PAGE>
7. REINSURANCE:
The Company cedes insurance to non-affiliated insurers in order to limit its
maximum loss. Such transfer does not relieve ILA of its primary liability. ILA
also assumes insurance from other insurers.
Life insurance net retained premiums were comprised of the following:
For the years ended december 31
-------------------------------
1995.00 1994.00 1993.00
Direct premiums 159,918 133,180 131,586
Premiums assumed 13,299 960 841
Premiums ceded 7,425 (308,033) 118,146
Premiums and annuity considerations 165,792 442,173 14,281
In December 1994 the Company ceded to a third party, on a modified coinsurance
basis, 80% of the variable annuity business written in 1994. The ceded business
includes both general and separate account liabilities. As a result of the
agreement ILA transferred approximately $1,352 million in assets and
liabilities. The financial impact of the cession was an increase of
approximately $15 million to net income and surplus.
In November 1994, the Company ceded, on a modified coinsurance basis, 30% of
the separate account variable annuity business distributed by Paine Webber to
Paine Webber Life Insurance Company (PWLIC). As a result of the agreement, ILA
transferred approximately $24 million in assets and liabilities to PWLIC. The
financial impact of the cession was an increase of approximately $765 to net
income and surplus.
In October 1994, the agreement, effective December 1990, which required ILA to
coinsure 90% of all existing and new business, excluding variable annuity
business, written by the Company to HLIC, was terminated. As a result of the
termination, ILA received approximately $430 million in assets and liabilities
from HLIC. The impact of the transaction was a decrease of approximately $15
million to net income and surplus.
In November 1993, ILA acquired, through an assumption reinsurance transaction,
substantially all of the individual fixed and variable annuity business of
Hartford Life and Accident, an affiliate. As a result of this transaction, the
assets and liabilities of the Company increased approximately $1 billion,
substantially all of which was transferred to the separate accounts of the
Company. The remaining assets and liabilities (approximately $41 million) were
transferred in October 1995. The impact of these transactions on net income and
surplus was not significant.
8. SEPARATE ACCOUNTS:
The Company maintains separate account assets and liabilties totaling $7.3
billion and $3.6 billion at December 31, 1995 and 1994, respectively. Separate
account assets are reported at fair value and separate account liabilities are
determined in accordance with the Commissioners Annuity Reserve Valuation
Method (CARVM), which approximates the market value less applicable surrender
charges. Separate account assets are segregated from other investments, the
policyholder assumes the investment risk, and the investment income and gains
and losses accrue directly to the policyholder. Separate account management
fees, net of minimum guarantees, were $72 million, $42 million, and $6 million
in 1995, 1994, and 1993, respectively.
-9-
<PAGE>
9. COMMITMENTS AND CONTINGENCIES:
As of December 31, 1995, the Company had no material contingent liabilities, nor
had the Company committed any surplus funds for any contingent liabilities or
arrangements. The Company is involved in various legal actions which have
arisen in the course normal of its business. In the opinion of management, the
ultimate liability with respect to such lawsuits as well as other contingencies
is not considered to be material in relation to the results of operations and
financial position of the Company.
Under insurance guaranty laws in most states, insurers doing business therein
can be assessed up to prescribed limits for policyholder losses incurred by
insolvent companies. The amount of any future assessments on ILA under these
laws cannot be reasonably estimated. Most of the laws do provide, however, that
an assessment may be excused or deferred if it would threaten an insurer's own
financial strength. Additionally, guaranty fund assessments are used to reduce
state premium taxes paid by the company in certain states. ILA paid guaranty
fund assessments of $1,684, $583, and $495 in 1995, 1994, and 1993,
respectively.
-10-
<PAGE>
PART II
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
The prospectus consisting of pages.
The undertaking to file reports.
The Rule 484 undertaking.
The signatures.
(1) The following exhibits included herewith correspond to those required by
paragraph A of the instructions for exhibits to Form N-8B-2.
(A1) Resolution of Board of Directors of the Company authorizing the
Separate Account is incorporated herein.
(A2) Not Applicable.
(A3a) Principal Underwriting Agreement is incorporated herein.
(A3b) Forms of Selling Agreements is incorporated herein.
(A4) Not Applicable.
(A5) Form of Flexible Premium Variable Life Insurance Policy is
incorporated herein.
(A6a) Certificate of Incorporation of ITT Hartford Life and Annuity
Insurance Company is incorporated herein.
(A6b) Bylaws of ITT Hartford Life and Annuity Insurance Company is
incorporated herein.
(A7) Not Applicable.
(A8) Not Applicable.
(A9) Not Applicable.
(A10) Form of Application for Flexible Premium Variable Life Insurance
Policies is
<PAGE>
incorporated herein.
(A11) Memorandum describing transfer and redemption procedures is
incorporated herein.
(2) Opinion and consent of Lynda Godkin, Associate General Counsel is
incorporated herein.
(3) No financial statement will be omitted from the Prospectus pursuant to
Instruction 1 (b) or (c) of Part I.
(4) Not applicable.
(5) Opinion and consent of Ken A.McCullum, FSA, MAAA is incorporated herein.
(6) Consent of Arthur Andersen LLP, Independent Certified Public Accountants
is incorporated herein.
(7) Opinion and consent of Counsel is incorporated by reference as Exhibit 2.
(8) Opinion and consent of Actuary is incorporated by reference as Exhibit 5.
(9) Power of Attorney is incorporated herein.
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Act of
1934, the undersigned Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
UNDERTAKINGS AND REPRESENTATIONS AS REQUIRED BY RULE 6e-3(T)
1. Separate Account VL II meets the definition of "Separate Account" under
Rule 6e-3(T).
2. The Registrant represents that:
(a) it relies on Rule 6e-3(T)(b)(13)(ii)(F) to offer the Contracts;
(b) the level of mortality and expense risk charge is within the range
of industry practice for comparable flexible contracts.
(c) The Company has conducted a survey of similar policies and insurers
and determined that the charge is within the range of industry
practice;
(d) the Company undertakes to keep and make available to the Commission
upon request the documents we used to support the representation in
(b); and
(e) The Company further represents that the account will invest only in
management investment companies which have undertaken to have a
Board of Directors, a majority of whom are not interested persons of
the company, formulate and approve a plan under Rule 12b-1 to
finance distribution expenses.
(f) The Company has concluded that there is a reasonable likelihood that
the distribution financing arrangement of the separate account
benefits the Separate Account and Policy Owners and will keep and
make available to the Commission on request a memorandum setting for
the basis for this representation.
UNDERTAKING ON INDEMNIFICATION
Article VIII of Bylaws of ITT Hartford Life and Annuity Insurance Company, a
Connecticut corporation, provides for indemnification of its officers,
directors and employees as follows:
SECTION 1. No person shall be liable to the Company for any loss or damage
suffered by it on account of any action taken or omitted to be taken by him
as director or officer of the Company, or of any other company, partnership,
joint venture, trust or other enterprise for which he serves
<PAGE>
as a director, officer or employee at the request of the Company, in good
faith, if such person (a) exercised and used the same degree of care and
skill as a prudent man would have exercised or used under the circumstances
in the conduct of his own affairs, or (b) took or omitted to take such action
in reliance upon advice of counsel for the Company or upon statements made or
information furnished by officers or employees of the Company, which he had
reasonable grounds to believe to be true. The foregoing shall not be
exclusive of other rights and defenses to which he may be entitled as a
matter of law.
SECTION 2. The Company shall indemnify any person who was or is a party or
threatened to be made a party to any threatended, pending or completed
action, suit or proceeding (other than one by or in the right of the Company)
by reason of the fact that he is or was a director, officer or employee of
the company, or is or was serving at the request of the Company as a
director, officer or employeee of another company, partnership, joint
venture, trust or other enterprise, against expenses, including afforney's
fees, judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo conentdere or its
equivalent shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Company, and with respect to any
criminal action or proceeding had reasonable cause to believe that his
conduct was unlawful.
SECTION 3. The Company shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, by or in the right of the Company to procure a judgment
in its favor by reason of the fact that he is or was a director, officer or
employee of the Company, or is or was at the request of the Company as a
director, officer or employee of another company, partnership, joint venture,
trust or other enterprise against expenses, including attorneys' fees,
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit, if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Company unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability and in view of all circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses as
such court shall deem proper.
SECTION 4. Expenses, including attorneys' fees, incurred in defending a civil
or criminal action, suit or proceeding may be paid by the Company in advance
of the final disposition of such action, suit or proceeding, upon receipt of
any undertaking by or on behalf of the director or employee to repay such
amount unless it shall ultimately be determined that he is entitled to be
indemnified by the Company as authorized hereby.
<PAGE>
SECTION 5. The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those indemnified may be entitled
under any statute, bylaw, agreement, vote of shareholders or of disinterested
directors or otherwise, both as to action in an official capacity and as to
action in another capacity while holding such office, and shall continue as
to a person who has ceased to be a director, officer or employee and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
The registrant hereby undertakes that insofar as indemnification for
liability arising under the Securities Act of 1933 (the "Act") may be
permitted to directors, officers and controlling persons of the registrant,
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precendent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements pursuant to Rule 485(b) under the Securities Act of 1933 for
effectiveness of this Registration Statement and duly caused this Registration
Statement to be signed by the following persons in the capacities and on the
dates indicated.
ITT HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY - SEPARATE ACCOUNT VL II (Registrant)
By: /s/ Gregory A. Boyko
----------------------------------------
Gregory A. Boyko, Vice President &
Controller
ITT HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY (Depositor)
By: /s/ Gregory A. Boyko
----------------------------------------
Gregory A. Boyko, Vice President &
Controller
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons and in the capacities and on
the dates indicated.
Donald R. Frahm, Director *
Bruce D. Gardner, Director *
Joseph H. Gareau, Executive Vice
President and Chief Investment
Officer, Director *
Joseph Kanarek, Vice President *By: /s/ Lynda Godkin
Director * --------------------
Thomas M. Marra, Executive Vice Lynda Godkin
President, Director * Attorney-in-Fact
Lowndes A. Smith, President,
Chief Operating Officer, Director * Dated: April 15,1996
Lizabeth H. Zlatkus, Vice President, ------------------
Director *
<PAGE>
[Exhibit 1A1]
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
CONSENT OF DIRECTORS
The undersigned, being all of the Directors of ITT Hartford Life and Annuity
Insurance Company, hereby consent to the following action, such action to have
the same force and effect as if taken at a meeting duly called and held for such
purpose.
ESTABLISHMENT OF SEPARATE ACCOUNTS
RESOLVED, that the Company is hereby authorized to establish a new separate
account designated Separate Account VL II, herein referred to as the "Account."
RESOLVED, that the Officers of the Company are hereby authorized and directed to
take all actions necessary to:
1. Designate or redesignate the Account as such Officers deem appropriate;
2. Comply with applicable state and federal laws and regulations applicable to
the establishment and operation of the Account; including filing all
necessary registrations and application for exemptive relief under the
federal securities law.
3. Establish, from time to time, the terms and conditions pursuant to which
interests in the Account will be sold to contract owners;
4. Establish all procedures, standards and arrangements necessary or
appropriate for the operation of the Account.
/s/ Bruce D. Gardner /s/ Lowndes A. Smith
--------------------------------- --------------------------------------
Bruce D. Gardner Lowndes A. Smith
/s/ Joseph H. Gareau /s/ Lizabeth H. Zlatkus
--------------------------------- --------------------------------------
Joseph H. Gareau Lizabeth H. Zlatkus
/s/ Joseph Kanarek /s/ Donald J. Znamierowski
--------------------------------- --------------------------------------
Joseph Kanarek Donald J. Znamierowski
/s/ Thomas M. Marra
------------------------------
Thomas M. Marra
Dated: September 30, 1994
-----------------------
<PAGE>
[Exhibit 1A3a]
PRINCIPAL UNDERWRITER AGREEMENT
THIS AGREEMENT, dated as of the June 26, 1995, made by and between ITT HARTFORD
LIFE AND ANNUITY INSURANCE COMPANY ("ILA" or the "Sponsor"), a corporation
organized and existing under the laws of the State of Wisconsin, and HARTFORD
EQUITY SALES COMPANY, INC. ("HESCO"), a corporation organized and existing under
the laws of the State of Connecticut,
WITNESSETH:
WHEREAS, the Board of Directors of ILA has made provision for the establishment
of a separate account within ILA in accordance with the laws of the State of
Wisconsin, which separate account was organized and is established and
registered as a unit investment trust type investment company with the
Securities and Exchange Commission under the Investment Company Act of 1940
("1940 Act"), as amended, and which is designated ITT Hartford Life and Annuity
Insurance Company Separate Account VL II (referred to as the "UIT"); and
WHEREAS, HESCO offers to the public a certain Last Survivor Flexible Premium
Variable Life Insurance Policy (the "Policy") issued by ILA with respect to the
UIT units of interest thereunder which are registered under the Securities Act
of 1933 ("1933 Act"), as amended; and
WHEREAS, HESCO has previously agreed to act as distributor in connection with
offers and sales of the Policy under the terms and conditions set forth in this
Principal Underwriter Agreement.
NOW THEREFORE, in consideration of the mutual agreements made herein, ILA and
HESCO agree as follows:
I.
HESCO'S DUTIES
1. HESCO, as principal underwriter for the Policy, will use its best efforts
to effect offers and sales of the Policy through broker-dealers that are
members of the National Association of Securities Dealers, Inc. and whose
registered representatives are duly licensed as insurance agents of ILA.
HESCO is responsible for compliance with all applicable requirements of
the 1933 Act, as amended, the Securities Exchange Act of 1934 ("1934
Act"), as amended, and the 1940 Act, as amended, and the rules and
regulations relating to the sales and distribution of the Policy, the
need for which arises out of its duties as principal underwriter of said
Policy and relating to the creation of the UIT.
<PAGE>
2. HESCO agrees that it will not use any prospectus, sales literature, or
any other printed matter or material or offer for sale or sell the Policy
if any of the foregoing in any way represent the duties, obligations, or
liabilities of ILA as being greater than, or different from, such duties,
obligations and liabilities as are set forth in this Agreement, as it may
be amended from time to time.
3. HESCO agrees that it will utilize the then currently effective prospectus
relating to the UIT's Policies in connection with its selling efforts.
As to the other types of sales materials, HESCO agrees that it will use
only sales materials which conform to the requirements of federal and
state insurance laws and regulations and which have been filed, where
necessary, with the appropriate regulatory authorities.
4. HESCO agrees that it or its duly designated agent shall maintain records
of the name and address of, and the securities issued by the UIT and held
by, every holder of any security issued pursuant to this Agreement, as
required by the Section 26(a)(4) of the 1940 Act, as amended.
5. HESCO's services pursuant to this Agreement shall not be deemed to be
exclusive, and it may render similar services and act as an underwriter,
distributor, or dealer for other investment companies in the offering of
their shares.
6. In the absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations and duties hereunder on the part of
HESCO, HESCO shall not be subject to liability under a Policy for any act
or omission in the course, or connected with, rendering services
hereunder.
II.
1. The UIT reserves the right at any time to suspend or limit the public
offering of the Policies upon 30 days' written notice to HESCO, except
where the notice period may be shortened because of legal action taken by
any regulatory agency.
2. The UIT agrees to advice HESCO immediately:
(a) Of any request by the Securities and Exchange Commission for
amendment of its 1933 Act registration statement or for additional
information;
(b) Of the issuance by the Securities and Exchange Commission of any
stop order suspending the effectiveness of the 1933 Act registration
statement relating to units of interest issued with respect to the
UIT or of the initiation of any proceedings for that purpose;
-2-
<PAGE>
(c) Of the happening of any material event, if known, which makes untrue
any statement in said 1933 Act registration statement or which
requires a change therein in order to make any statement therein not
misleading.
ILA will furnish to HESCO such information with respect to the UIT and
the Policies in such form and signed by such of its officers and
directors and HESCO may reasonably request and will warrant that the
statements therein contained when so signed will be true and correct.
ILA will also furnish, from time to time, such additional information
regarding the UIT's financial condition as HESCO may reasonably request.
III.
COMPENSATION
In accordance with an Expense Reimbursement Agreement between ILA and HESCO,
HESCO is entitled to receive: (1) compensation equal to a pro rata portion of
$10,000 per year for all services provided on behalf of ILA and the UIT; plus
(2) reimbursement for the actual expenses incurred by HESCO in excess of $10,000
for all operating costs associated with the services provided on behalf of ILA
and the UIT under this Principal Underwriter Agreement. No additional
compensation is payable in excess of that required under the Expense
Reimbursement Agreement. The Expense Reimbursement Agreement provides for an
aggregate payment of $10,000 for all services performed by HESCO on behalf of
ILA and its affiliated companies and any unit investment trusts sponsored by ILA
and its affiliated companies.
IV.
RESIGNATION AND REMOVAL OF PRINCIPAL UNDERWRITER
HESCO may resign as a Principal Underwriter hereunder, upon 120 days' prior
written notice to ILA. However, such resignation shall not become effective
until either the UIT has been completely liquidated and the proceeds of the
liquidation distributed through ILA to the Policy owners or a successor
Principal Underwriter has been designated and has accepted its duties.
V.
MISCELLANEOUS
1. This Agreement may not be assigned by any of the parties hereto without
the written consent of the other party.
2. All notices and other communications provided for hereunder shall be in
writing and shall be delivered by hand or mailed first class, postage
prepaid, addressed as follows:
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<PAGE>
(a) If to ILA - ITT Hartford Life and Annuity Insurance Company, P.O.
Box 2999, Hartford, Connecticut 06104.
(b) If to HESCO - Hartford Equity Sales Company, Inc., P.O. Box 2999,
Hartford, Connecticut 06104.
or to such other address as HESCO or ILA shall designate by written
notice to the other.
3. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which shall be deemed one
instrument, and an executed copy of this Agreement and all amendments
hereto shall be kept on file by the Sponsor and shall be open to
inspection any time during the business hours of the Sponsor.
4. This Agreement shall inure to the benefit of and be binding upon the
successor of the parties hereto.
5. This Agreement shall be construed and governed by and according to the
laws of the State of Connecticut.
6. This Agreement may be amended from time to time by the mutual agreement
and consent of the parties hereto.
7. (a) This Agreement shall become effective June 26, 1995 and shall
continue in effect for a period of two years from that date and,
unless sooner terminated in accordance with 7(b) below, shall
continue in effect from year to year thereafter provided that its
continuance is specifically approved at least annually by a majority
of the members of the Board of Directors of ILA.
(b) This Agreement (1) may be terminated at any time, without the
payment of any penalty, either by a vote of a majority of the
members of the Board of Directors of ILA on 60 days' prior written
notice to HESCO; (2) shall immediately terminate in the event of its
assignment and (3) may be terminated by HESCO on 60 days' prior
written notice to ILA, but such termination will not be effective
until ILA shall have an agreement with one or more persons to act as
successor principal underwriter of the Policies. HESCO hereby
agrees that it will continue to act as successor principal
underwriter until its successor or successors assume such
undertaking.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
(Seal) ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
BY: /s/ Thomas M. Marra
-------------------------------
Thomas M. Marra
Senior Vice President
Attest: HARTFORD EQUITY SALES COMPANY, INC.
/s/ Lynda Godkin BY: /s/ George Jay
- ------------------------------ ----------------------------------
Lynda Godkin George Jay
Secretary Controller
-5-
<PAGE>
BROKER-DEALER SALES AND
SUPERVISION AGREEMENT
This Broker-Dealer Sales and Supervision Agreement ("Agreement")
dated ____________________ is made by and between Hartford Life Insurance
Company and ITT Hartford Life and Annuity Insurance Company (referred to
collectively as "Companies"), Hartford Securities Distribution Company, Inc.
("Distributor"), a broker-dealer registered with the Securities and Exchange
Commission ("SEC") under the Securities and Exchange Act of 1934 ("1934 Act")
and a member of the National Association of Securities Dealers, Inc. ("NASD")
and __________________________________, who is also a broker-dealer registered
with the SEC under the 1934 Act and a member of the NASD ("Broker-Dealer"), and
any and all undersigned insurance agency affiliates ("Affiliates") of Broker-
Dealer.
WHEREAS, Companies offer certain variable life insurance policies and variable
and modified guaranteed annuity contracts which are deemed to be securities
under the Securities Act of 1933 (the "Registered Products"); and
WHEREAS, Companies wish to appoint the Broker-Dealer and Affiliates as agents of
the Companies for the solicitation and procurement of applications for
Registered Products; and
WHEREAS, Distributor is the principal underwriter of the Registered Products;
and
WHEREAS, Distributor anticipates having registered representatives who are
associated with Broker-Dealer ("Registered Representatives"), who are NASD
registered and are duly licensed under applicable state insurance law and
appointed as life insurance agents of Companies solicit and sell the Registered
Products; and
WHEREAS, Distributor acknowledges that the Broker-Dealer will provide certain
supervisory and administrative services to Registered Representatives who are
associated with the Broker-Dealer in connection with the solicitation, service
and sale of the Registered Products; and
WHEREAS, Broker-Dealer agrees to provide the aforementioned supervisory services
to its Registered Representatives who have been appointed by the Companies to
sell the Registered Products.
NOW THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the parties agree to the following:
I. APPOINTMENT OF THE BROKER-DEALER
The Companies hereby appoint Broker-Dealer as an agent of the Companies for
the solicitation and procurement of applications for the Registered Products
offered by the Companies, as outlined in Exhibit A attached herein, in all
states in which the Companies are authorized to do business and in which
Broker-Dealer or any Affiliates are properly licensed. Distributor hereby
authorizes Broker-Dealer under the securities laws to supervise Registered
Representatives in connection with the solicitation, service and sale of the
Registered Products.
II. AUTHORITY OF THE BROKER-DEALER
<PAGE>
Broker-Dealer has the authority to represent Distributor and Companies only
to the extent expressly granted in this Agreement. Broker-Dealer and any
Registered Representatives shall not hold themselves out to be employees of
Companies or Distributor in any dealings with the public. Broker-Dealer and
any Registered Representatives shall be independent contractors as to
Distributor or Companies. Nothing contained herein is intended to create a
relationship of employer and employee between Broker-Dealer and Distributor
or Companies or between Registered Representatives and Distributor or
Companies.
III. BROKER-DEALER REPRESENTATION
Broker-Dealer represents that it is a registered broker-dealer under the
1934 Act, a member in good standing of the NASD, and is registered as a
broker-dealer under state law to the extent necessary to perform the duties
described in this Agreement. Broker-Dealer represents that its Registered
Representatives, who will be soliciting applications for the Registered
Products, will be duly registered representatives associated with Broker-
Dealer and that they will be representatives in good standing with
accreditation as required by the NASD to sell the Registered Products.
Broker-Dealer agrees to abide by all rules and regulations of the NASD,
including its Rules of Fair Practice, and to comply with all applicable
state and federal laws and the rules and regulations of authorized
regulatory agencies affecting the sale of the Registered Products.
IV. BROKER-DEALER OBLIGATIONS
(a) TRAINING AND SUPERVISION
Broker-Dealer has full responsibility for the training and
supervision of all Registered Representatives associated with
Broker-Dealer and any other persons who are engaged directly or
indirectly in the offer or sale of the Registered Products. Broker-
Dealer shall, during the term of this Agreement, establish and
implement reasonable procedures for periodic inspection and
supervision of sales practices of its Registered Representatives.
If a Registered Representative ceases to be a Registered
Representative of Broker-Dealer, is disqualified for continued
registration or has their registration suspended by the NASD or
otherwise fails to meet the rules and standards imposed by Broker-
Dealer, Broker-Dealer shall immediately notify such Registered
Representative that he or she is no longer authorized to solicit
applications, on behalf of the Companies, for the sale of Registered
Products. Broker-Dealer shall immediately notify Distributor of
such termination or suspension.
(b) SOLICITATION
Broker-Dealer agrees to supervise its Registered Representatives so
that they will only solicit applications in states where the
Registered Products are approved for sale in accordance with
applicable state and federal laws. Broker-Dealer shall be notified
by Companies or Distributor of the availability of the Registered
Products in each state.
(c) NO CHURNING
Broker-Dealer and any Registered Representatives shall not make any
misrepresentation or incomplete comparison of products for the
purpose of inducing a policyholder to lapse, forfeit or surrender
its insurance in favor of purchasing a Registered Product.
(d) PROSPECTUS DELIVERY AND SUITABILITY REQUIREMENTS
Broker-Dealer shall ensure that its Registered Representatives
comply with the prospectus delivery requirements under the
Securities Act of 1933. In addition, Broker-Dealer shall ensure
that its Registered Representatives shall not make recommendations
to an applicant to purchase a Registered Product in the absence of
reasonable grounds to believe that the
2
<PAGE>
purchase is suitable for such applicant, as outlined in the
suitability requirements of the 1934 Act and the NASD Rules of Fair
Practice. Broker-Dealer shall ensure that each application
obtained by its Registered Representatives shall bear evidence of
approval by one of its principals indicating that the application
has been reviewed for suitability.
(e) PROMOTIONAL MATERIAL
Broker-Dealer and its Registered Representatives are not authorized
to provide any information or make any representation in connection
with this Agreement or the solicitation of the Registered Products
other than those contained in the prospectus or other promotional
material produced or authorized by Companies or Distributor.
Broker-Dealer agrees that if it develops any promotional material
for sales, training, explanatory or other purposes in connection
with the solicitation of applications for Registered Products,
including generic advertising and/or training materials which may be
used in connection with the sale of Registered Products, it will
obtain the prior written consent of Distributor, and where
appropriate, approval of Companies, such approval not to be
unreasonably withheld.
(f) RECORD KEEPING
Broker-Dealer is responsible for maintaining the records of its
Registered Representatives. Broker-Dealer shall maintain such other
records as are required of it by applicable laws and regulations.
The books, accounts and records maintained by Broker-Dealer that
relate to the sale of the Registered Products, or dealings with the
Companies, Distributor and/or Broker-Dealer shall be maintained so
as to clearly and accurately disclose the nature and details of each
transaction.
Broker-Dealer acknowledges that all the records maintained by
Broker-Dealer relating to the solicitation, service or sale of the
Registered Products subject to this Agreement, including but not
limited to applications, authorization cards, complaint files and
suitability reviews, shall be available to Companies and Distributor
upon request during normal business hours. Companies and
Distributor may retain copies of any such records which Companies
and Distributor, in their discretion, deems necessary or desirable
to keep.
(g) REFUND OF COMPENSATION
Broker-Dealer agrees to repay Companies the total amount of any
compensation which may have been paid to it within thirty (30)
business days of notice of the request for such refund should
Companies for any reason return any premium on a Registered Product
which was solicited by a Registered Representative of Broker-Dealer.
(h) PREMIUM COLLECTION
Broker-Dealer only has the authority to collect initial premiums
unless specifically set forth in the applicable commission schedule.
Unless previously authorized by Distributor, neither Broker-Dealer
nor any of its Registered Representatives shall have any right to
withhold or deduct any part of any premium it shall receive for
purposes of payment of commission or otherwise.
V. COMPANIES AND/OR DISTRIBUTOR OBLIGATIONS
(a) PROSPECTUS/PROMOTIONAL MATERIAL
Companies and/or Distributor will provide Broker-Dealer with
reasonable quantities of the currently effective prospectus for the
Registered Products and appropriate sales promotional
3
<PAGE>
material which has been filed with the NASD, and applicable state
insurance departments.
(b) COMPENSATION
Distributor will pay Broker-Dealer as full compensation for all
services rendered by Broker-Dealer under this Agreement, commissions
and/or service fees in the amounts, in the manner and for the period
of time as set forth in the Commission Schedules attached to this
Agreement or subsequently made a part hereof, and which are in
effect at the time such Registered Products are sold. The manner of
commission payments (I.E. fronted or trail) is not subject to change
after the effective date of a contract for which the compensation is
payable.
Distributor or Companies may change the Commission Schedules
attached to this Agreement at any time. Such change shall become
effective only when Distributor or Companies provide the Broker-
Dealer with written notice of the change. No such change shall
affect any contracts issued upon applications received by Companies
at Companies' Home Office prior to the effective date of such
change.
Distributor agrees to identify to Broker-Dealer for each such
payment, the name of the Registered Representative of Broker-Dealer
who solicited each contract covered by the payment. Distributor
will not compensate Broker-Dealer for any Registered Product which
is tendered for redemption after acceptance of the application. Any
chargebacks will be assessed against the Broker-Dealer of record at
the time of the redemption.
Distributor will only compensate Broker-Dealer or Affiliates, as
outlined below, for those applications accepted by Companies, and
only after receipt by Companies at Companies' Home Office or at such
other location as Companies may designate from time to time for its
various lines of business, of the required premium and compliance by
Broker-Dealer with any outstanding contract and prospectus delivery
requirements.
In the event that this Agreement terminates for fraudulent
activities or due to a material breach by the Broker-Dealer,
Distributor will only pay to Broker-Dealer or Affiliate commissions
or other compensation earned prior to discovery of events requiring
termination. No further commissions or other compensation shall
thereafter be payable.
(c) COMPENSATION PAYABLE TO AFFILIATES
If Broker-Dealer is unable to comply with state licensing
requirements because of a legal impediment which prohibits a non-
domiciliary corporation from becoming a licensed insurance agency or
prohibits non-resident ownership of a licensed insurance agency,
Distributor agrees to pay compensation to Broker-Dealer's
contractually affiliated insurance agency, a wholly-owned life
agency affiliate of Broker-Dealer, or a Registered Representative or
principal of Broker-Dealer who is properly state licensed. As
appropriate, any reference in this Agreement to Broker-Dealer shall
apply equally to such Affiliate. Distributor agrees to pay
compensation to an Affiliate subject to Affiliates agreement to
comply with the requirements of Exhibit B, attached hereto.
VI. TERMINATION
(a) This Agreement may be terminated by any party by giving thirty (30)
days' notice in writing to the other party.
(b) Such notice of termination shall be mailed to the last known address
of Broker-Dealer appearing on Companies' records, or in the event of
termination by Broker-Dealer, to the Home Office of Companies at
P.O. Box 2999, Hartford, Connecticut 06104-2999.
4
<PAGE>
(c) Such notice shall be an effective notice of termination of this
Agreement as of the time the notice is deposited in the United
States mail or the time of actual receipt of such notice if
delivered by means other than mail.
(d) This Agreement shall automatically terminate without notice upon the
occurrence of any of the events set forth below:
(1) Upon the bankruptcy or dissolution of Broker-Dealer.
(2) When and if Broker-Dealer commits fraud or gross negligence in the
performance of any duties imposed upon Broker-Dealer by this
Agreement or wrongfully withholds or misappropriates, for Broker-
Dealer's own use, funds of Companies, its policyholders or
applicants.
(3) When and if Broker-Dealer materially breaches this Agreement or
materially violates state insurance or Federal securities laws and
administrative regulations of a state in which Broker-Dealer
transacts business.
(4) When and if Broker-Dealer fails to obtain renewal of a necessary
license in any jurisdiction, but only as to that jurisdiction.
(e) The parties agree that on termination of this Agreement, any
outstanding indebtedness to Companies shall become immediately due
and payable.
VII. GENERAL PROVISIONS
(a) COMPLAINTS AND INVESTIGATIONS
Broker-Dealer shall cooperate with Distributor and Companies in the
investigation and settlement of all complaints or claims against
Broker-Dealer and/or Distributor or Companies relating to the
solicitation or sale of the Registered Products under this
Agreement. Broker-Dealer, Distributor and Companies each shall
promptly forward to the other any complaint, notice of claim or
other relevant information which may come into either one's
possession. Broker-Dealer, Distributor and Companies agree to
cooperate fully in any investigation or proceeding in order to
ascertain whether Broker-Dealer's, Distributor's or Companies'
procedures with respect to solicitation or servicing is consistent
with any applicable law or regulation.
In the event any legal process or notice is served on Broker-Dealer
in a suit or proceeding against Distributor or Companies, Broker-
Dealer shall forward forthwith such process or notice to Companies
at its Home Office in Hartford, Connecticut, by certified mail.
(b) WAIVER
The failure of Distributor or Companies to enforce any provisions of
this Agreement shall not constitute a waiver of any such provision.
The past waiver of a provision by Distributor or Companies shall not
constitute a course of conduct or a waiver in the future of that
same provision.
(c) INDEMNIFICATION
Broker-Dealer shall indemnify and hold Distributor and Companies
harmless from any liability, loss or expense sustained by Companies
or the Distributor (including reasonable attorney fees) on account
of any acts or omissions by Broker-Dealer or persons employed or
appointed by Broker-Dealer, except to the extent Companies' or
Distributor's acts or omissions caused such
5
<PAGE>
liability.
Indemnification by Broker-Dealer is subject to the conditions that
Distributor or Companies promptly notify Broker-Dealer of any claim
or suit made against Distributor or Companies, and that Distributor
or Companies allow Broker-Dealer to make such investigation,
settlement, or defense thereof as Broker-Dealer deems prudent.
Broker-Dealer expressly authorizes Companies to charge against all
compensation due or to become due to Broker-Dealer under this
Agreement any monies paid or liabilities incurred by Companies under
this Indemnification provision.
Distributor and Companies shall indemnify and hold Broker-Dealer
harmless from any liability, loss or expense sustained by the
Broker-Dealer (including reasonable attorney fees) on account of any
acts or omissions by Distributor or Companies, except to the extent
Broker-Dealer's acts or omissions caused such liability.
Indemnification by Distributor or Companies is subject to the
condition that Broker-Dealer promptly notify Distributor or
Companies of any claim or suit made against Broker-Dealer, and that
Broker-Dealer allow Distributor or Companies to make such
investigation, settlement, or defense thereof as Distributor or
Companies deems prudent.
(d) ASSIGNMENT
No assignment of this Agreement, or commissions payable hereunder,
shall be valid unless authorized in writing by Distributor. Every
assignment shall be subject to any indebtedness and obligation of
Broker-Dealer that may be due or become due to Companies and any
applicable state insurance regulations pertaining to such
assignments.
(e) OFFSET
Companies may at any time deduct, from any monies due under this
Agreement, every indebtedness or obligation of Broker-Dealer to
Companies or to any of its affiliates.
(f) CONFIDENTIALITY
Companies, Distributor and Broker-Dealer agree that all facts or
information received by any party related to a contract owner shall
remain confidential, unless such facts or information is required to
be disclosed by any regulatory authority or court of competent
jurisdiction.
(g) PRIOR AGREEMENTS
This Agreement terminates all previous agreements, if any, between
Companies, Distributor and Broker-Dealer. However, the execution of
this Agreement shall not affect any obligations which have already
accrued under any prior agreement.
(h) CHOICE OF LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of Connecticut.
By executing this Broker-Dealer Sales and Supervision Agreement Specifications
Page, Broker-Dealer acknowledges that it has read this Agreement in its entirety
and is in agreement with the terms and conditions outlining the rights of
Distributor, Companies and Broker-Dealer and Affiliates under this Agreement.
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement to be
effective as set forth above, upon the later of the execution date below or
approval of Distributor's registration by all appropriate state securities
commissions.
6
<PAGE>
BROKER-DEALER HARTFORD SECURITIES DISTRIBUTION
COMPANY INC.
By: By:
Title: Title:
Date: Date:
AFFILIATE (IF APPLICABLE) HARTFORD LIFE INSURANCE COMPANY
By: By:
Title: Title:
Date: Date:
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
By:
Title:
Date:
7
<PAGE>
EXHIBIT B
In accordance with Section V.(c) of the Broker-Dealer-Dealer Sales and
Supervision Agreement, no compensation is payable unless Broker-Dealer and
Registered Representative have first complied with all applicable state
insurance laws, rules and regulations. Distributor must ensure that any Broker-
Dealer with whom Distributor intends to enter into an Agreement and any
Registered Representatives meet the licensing and registration requirements of
the state(s) Broker-Dealer operates in and the NASD.
Companies are required by the Insurance Department in all 50 states to pay
compensation only to individuals and entities that are properly insurance
licensed and appointed. For registered products, Distributor must also comply
with NASD regulations that require Distributor to pay compensation to an NASD
registered Broker-Dealer. Distributor must comply with both state and NASD
requirements.
Distributor requires confirmation that Broker-Dealer holds current state
insurance licenses or markets insurance products through a contractual affiliate
or wholly owned life agency, which is properly insurance licensed. If Broker-
Dealer is properly state licensed then compensation may be paid to Broker-Dealer
in compliance with both state and NASD requirements.
If Broker-Dealer is not state insurance licensed and relies on the licensing of
a contractual affiliate or wholly owned life agency, the SEC has issued a number
of letters indicating that, under specific limited circumstances, it will take
"no action" against insurers (Distributor) paying compensation on registered
products to Broker-Dealer's contractual affiliate or wholly owned life agency.
At the request of Broker-Dealer, Distributor will provide copies of several of
these letters as well as a summary of their requirements.
If Broker-Dealer intends to rely on one of these "no-action" letters, legal
counsel for Broker-Dealer must confirm to Distributor in writing that all of the
circumstances of any one of the SEC no-action letters are applicable. Broker-
Dealer's counsel must summarize each point upon which the no-action relief was
granted and represent that Broker-Dealer's method of operation is identical or
meets the same criteria. Broker-Dealer's counsel must also confirm that, to the
best of counsel's knowledge, the SEC has not rescinded or modified its no-action
position since the letter was released.
The Broker-Dealer Sales and Supervision Agreement will not be finalized and no
new applications for registered products will be accepted or no new compensation
will be payable unless the appropriate proof of state licensing or no-action
relief is confirmed. In addition to a letter from Broker-Dealer's counsel,
copies of the following documentation is required:
-- life insurance licenses for all states in which Broker-Dealer holds
these licenses and intends to operate and/or;
-- life insurance licenses for any contractual affiliate or wholly owned
life agency; and
-- the SEC No-Action Letter that will be relied upon.
If you have any questions regarding these matters, please contact your Life
Licensing and Contracting representative.
8
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MADISON, WISCONSIN 53703
(A stock insurance company)
NATIONAL SERVICE CENTER ADDRESS:
P.O. BOX 59179
MINNEAPOLIS, MINNESOTA 55459
Will pay the Death Proceeds to the Beneficiary upon receipt at Our National
Service Center in Minneapolis, Minnesota of due proof of the Last Surviving
Insured's death while this policy was in force. You must notify Us In
Writing and give Us due proof of the first death of the Insureds as soon as
possible after the death.
Signed for the Company
/s/ B. Gardner /s/ L. A. Smith
BRUCE D. GARDNER, SECRETARY LOWNDES A. SMITH, PRESIDENT
READ YOUR POLICY CAREFULLY
This is a legal contract between You and Us
RIGHT TO EXAMINE POLICY
WE WANT YOU TO BE SATISFIED WITH THIS POLICY YOU HAVE PURCHASED. WE URGE YOU
TO EXAMINE IT CLOSELY. IF, FOR ANY REASON YOU ARE NOT SATISFIED, YOU MAY
DELIVER OR MAIL THIS POLICY TO US OR TO THE AGENT FROM WHOM IT WAS PURCHASED
WITHIN TEN DAYS AFTER YOU RECEIVE IT OR WITHIN 45 DAYS AFTER YOU SIGN THE
APPLICATION OR WITHIN TEN DAYS AFTER WE MAIL YOU THE NOTICE OF WITHDRAWAL
RIGHT, WHICHEVER IS LATEST. IN SUCH AN EVENT, THIS POLICY WILL BE RESCINDED
AND WE WILL PAY AN AMOUNT EQUAL TO THE GREATER OF THE PREMIUMS PAID FOR THIS
POLICY LESS ANY INDEBTEDNESS OR THE SUM OF: I) THE ACCOUNT VALUE LESS ANY
INDEBTEDNESS, ON THE DATE THE RETURNED POLICY IS RECEIVED BY US OR TO THE
AGENT FROM WHOM IT WAS PURCHASED; AND, II) ANY DEDUCTIONS UNDER THE POLICY OR
CHARGES ASSOCIATED WITH THE SEPARATE ACCOUNT.
CASH SURRENDER VALUE PAYABLE ON MATURITY DATE
DEATH PROCEEDS PAYABLE AT DEATH OF THE LAST SURVIVING INSURED
ADJUSTABLE DEATH BENEFIT
PREMIUMS PAYABLE AS SHOWN ON PAGE 3
NON-PARTICIPATING
THE PORTIONS OF THE ACCOUNT VALUES PROVIDED BY THIS CONTRACT THAT ARE IN THE
SUB-ACCOUNTS ARE BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT.
THEY ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. THE AMOUNT
OF THE DEATH BENEFIT MAY BE FIXED OR VARIABLE DEPENDING ON THE INVESTMENT
EXPERIENCE OF THAT SEPARATE ACCOUNT. THE BASIC FACE AMOUNT IS A GUARANTEED
DEATH BENEFIT DURING THE FIRST TEN POLICY YEARS (OR LONGER, IF APPLIED FOR)
SUBJECT TO THE CONDITIONS DESCRIBED ON PAGE 7.
LAST SURVIVOR
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE POLICY
[ITT HARTFORD LOGO]
ILA-1020 Printed in U.S.A.
<PAGE>
TABLE OF CONTENTS
PAGE
Policy Specifications 3
Definitions 5
Death Benefit 7
Increases and Decreases in Face Amount 8
Premiums 9
Lapse and Grace Period 10
Valuation Provisions 11
Account Value and Cash
Surrender Value 12
Monthly Deduction Amount 13
Transfers 14
Termination and Maturity Date 15
Reinstatement 15
Policy Loans 15
Withdrawals 16
Surrenders 16
Payments By Us 17
Taxation 17
The Contract 17
Ownership and Beneficiary 19
Exchange Option 19
Income Settlement Options 20
Any Riders follow page 21
Page 2
ILA-1020 Printed in U.S.A.
POLICY SPECIFICATIONS
DATE OF ISSUE JANUARY 1, 1995 FIRST INSURED JOHN S. DOE
<PAGE>
POLICY DATE JANUARY 1, 1995 ISSUE AGE/SEX 35 MALE
MATURITY DATE JANUARY 1, 2060* INSURANCE CLASS PREFERRED
OWNER JOHN DOE SECOND INSURED MARY DOE
BENEFICIARY JANE DOE ISSUE AGE/SEX 35 FEMALE
PREMIUM MODE ANNUAL INSURANCE CLASS PREFERRED
FIRST PLANNED PREMIUM $10,000.00 BASIC FACE AMOUNT $750,000
TARGET PREMIUM $6,995.00 INITIAL SUPPLEMENTAL
ANNUAL DEATH BENEFIT FACE AMOUNT $250,000
GUARANTEE PREMIUM $1,281.51 DEATH BENEFIT OPTION OPTION A
DEATH BENEFIT POLICY NUMBER VL0000001
GUARANTEE PERIOD JANUARY 1, 1995 - DISCOUNT RATE [7.50%]**
DECEMBER 31, 2004
DESCRIPTION OF BENEFIT
FIRST YEAR YEARS PAYABLE
ANNUAL PLANNED
PREMIUM
LAST SURVIVOR FLEXIBLE PREMIUM $10,000.00 1-65
VARIABLE LIFE INSURANCE POLICY
MONTHLY CHARGES FOR ADDITIONAL
BENEFITS, RATINGS AND RIDERS
FIRST YEAR COVERAGE TO
ANNUAL COST
LAST SURVIVOR EXCHANGE OPTION RIDER $0.00 01/01/2060
ESTATE PROTECTION $309.24 01/01/99
TERM INSURANCE BENEFIT: $1,222,222.22
RIDER RATE: 1/1/95
TERMINATION DATE: 12/31/98
MATURITY DATE EXTENSION RIDER $0.00
* IT IS POSSIBLE THAT COVERAGE WILL EXPIRE PRIOR TO THE MATURITY DATE SHOWN
WHERE PREMIUMS AND INVESTMENT EXPERIENCE ARE INSUFFICIENT TO CONTINUE
COVERAGE TO SUCH DATE. COVERAGE MAY ALSO BE AFFECTED BY CHANGES IN THE
MONTHLY DEDUCTION AMOUNT.
** THIS DISCOUNT RATE IS SUBJECT TO THE ELIGIBILITY REQUIREMENTS DESCRIBED
IN THE MONTHLY DEDUCTION AMOUNT PROVISION.
Page 3
1020(3) Printed in U.S.A.
POLICY NUMBER: VL0000001
NAME OF FIRST INSURED: JOHN S. DOE NAME OF SECOND INSURED: MARY DOE
ISSUE AGE/SEX: 35/MALE ISSUE AGE/SEX: 35/FEMALE
<PAGE>
MONTHLY CHARGES FOR ADDITIONAL
BENEFITS, RATINGS AND RIDERS (CONTINUED)
FIRST YEAR COVERAGE TO
ANNUAL COST
SINGLE LIFE YEARLY RENEWABLE TERM $21.36 01/01/2060
DESIGNATED INSURED: JOHN DOE
DEATH BENEFIT OPTION: LEVEL
RIDER FACE AMOUNT: $50,000
RIDER EFFECTIVE DATE: 1/1/95
TERMINATION DATE: 01/01/60
SINGLE LIFE YEARLY RENEWABLE TERM $2.76 01/01/2015
DESIGNATED INSURED: MARY DOE
DEATH BENEFIT OPTION: RETURN OF POLICY PREMIUM
RIDER FACE AMOUNT: $0.00
RIDER EFFECTIVE DATE: 1/1/95
TERMINATION DATE: 01/01/15
Page 3 (continued)
1020(3 cont'd) Printed in U.S.A.
POLICY NUMBER: VL0000001
NAME OF FIRST INSURED: JOHN S. DOE NAME OF SECOND INSURED: MARY DOE
ISSUE AGE/SEX: 35/MALE ISSUE AGE/SEX: 35/FEMALE
<PAGE>
POLICY SPECIFICATIONS
POLICY YEARS SUPPLEMENTAL FACE AMOUNT *
1-65 $250,000
* THE SUPPLEMENTAL FACE AMOUNT MAY CHANGE IN ACCORDANCE WITH THE PROVISIONS OF
THIS POLICY. SEE THE DEFINITION OF SUPPLEMENTAL FACE AMOUNT.
Page 3A
1020(3A) Printed in U.S.A.
POLICY NUMBER: VL0000001
NAME OF FIRST INSURED: JOHN S. DOE NAME OF SECOND INSURED: MARY DOE
ISSUE AGE/SEX: 35/MALE ISSUE AGE/SEX: 35/FEMALE
POLICY SPECIFICATIONS
<PAGE>
POLICY YEARS SUPPLEMENTAL FACE AMOUNT *
1-10 $50,000
11 55,000
12 60,000
13 65,000
14 70,000
15 75,000
16 80,000
17 85,000
18 90,000
19 95,000
20 100,000
21 + THEREAFTER 100,000
* THE SUPPLEMENTAL FACE AMOUNT MAY CHANGE IN ACCORDANCE WITH THE PROVISIONS
OF THIS POLICY. SEE THE DEFINITION OF SUPPLEMENTAL FACE AMOUNT.
Page 3A (continued)
1020(3A cont'd) Printed in U.S.A.
POLICY NUMBER: VL0000001
NAME OF FIRST INSURED: JOHN S. DOE NAME OF SECOND INSURED: MARY DOE
ISSUE AGE/SEX: 35/MALE ISSUE AGE/SEX: 35/FEMALE
POLICY SPECIFICATIONS
LIST OF SUB-ACCOUNTS AND FUNDS
<PAGE>
LISTED BELOW ARE THE SUB-ACCOUNTS OF ITT HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY SEPARATE [ACCOUNT VL II] AND THE FUNDS THEY INVEST IN.
SUB-ACCOUNT FUND
[HARTFORD BOND SECURITIES HARTFORD BOND FUND, INC.
HARTFORD STOCK HARTFORD STOCK FUND, INC.
HARTFORD MONEY MARKET HVA MONEY MARKET FUND, INC.
HARTFORD ADVISERS HARTFORD ADVISERS FUND, INC.
HARTFORD AGGRESSIVE GROWTH HARTFORD AGGRESSIVE GROWTH FUND, INC.
HARTFORD MORTGAGE SECURITIES HARTFORD MORTGAGE SECURITIES FUND, INC.
HARTFORD INDEX HARTFORD INDEX FUND, INC.
HARTFORD INTERNATIONAL HARTFORD INTERNATIONAL
OPPORTUNITIES OPPORTUNITIES FUND, INC.
PUTNAM GLOBAL GROWTH PCM GLOBAL GROWTH FUND
PUTNAM GROWTH AND INCOME PCM GROWTH AND INCOME FUND
PUTNAM HIGH YIELD PCM HIGH YIELD FUND
PUTNAM MONEY MARKET PCM MONEY MARKET FUND
PUTNAM GLOBAL ASSET ALLOCATION PCM GLOBAL ASSET ALLOCATION FUND
PUTNAM U.S. GOVERNMENT AND PCM U.S. GOVERNMENT AND
HIGH QUALITY BOND HIGH QUALITY FUND
PUTNAM VOYAGER PCM VOYAGER FUND
PUTNAM UTILITIES GROWTH PCM UTILITIES GROWTH AND
AND INCOME INCOME FUND
FIDELITY ASSET MANAGER ASSET MANAGER PORTFOLIO OF VARIABLE
INSURANCE PRODUCTS FUND II
FIDELITY OVERSEAS OVERSEAS PORTFOLIO OF VARIABLE
INSURANCE PRODUCTS FUND
FIDELITY EQUITY INCOME EQUITY-INCOME PORTFOLIO OF VARIABLE
INSURANCE PRODUCTS FUND]
AND OTHER SUB-ACCOUNTS AND FUNDS AS MAY BE MADE AVAILABLE FROM TIME TO TIME.
INITIAL ALLOCATION
OF NET PREMIUMS: HARTFORD MONEY MARKET SUB-ACCOUNT 100%
Page 3B
1020(3B) Printed in U.S.A.
POLICY NUMBER: VL0000001
NAME OF FIRST INSURED: JOHN S. DOE NAME OF SECOND INSURED: MARY DOE
ISSUE AGE/SEX: 35/MALE ISSUE AGE/SEX: 35/FEMALE
POLICY SPECIFICATIONS
FIXED ACCOUNT MINIMUM CREDITED RATE: 4.00%
POLICY LOAN RATE: 6.00%
GUARANTEED MAXIMUM POLICY CHARGES
DEDUCTIONS FROM PREMIUM PAYMENTS
<PAGE>
SALES CHARGES:
PERCENT OF PREMIUM PERCENT OF PREMIUM
POLICY YEARS PAID UP TO $6,995.00 IN EXCESS OF $6,995.00
1 [38.5%] [7.75%]
2-5 [12.25%] 4%
6-10 [8.5%] 4%
11+ 2% 2%
DAC TAX CHARGE 1.25% OF ALL PREMIUMS PAID
PREMIUM TAX CHARGE 2.35% OF ALL PREMIUMS PAID
PREMIUM PROCESSING CHARGE 1.25% OF ALL PREMIUMS PAID
DEDUCTIONS FROM ACCOUNT VALUE
MONTHLY ADMINISTRATIVE FEE
ALL POLICY YEARS [$11.25] PER MONTH
PLUS [$.035] PER $1,000 OF FACE AMOUNT
AT ISSUE PER MONTH
MONTHLY ISSUE CHARGE
POLICY YEARS 1-5: $20.00 PER MONTH
PLUS $.05 PER $1,000 OF FACE AMOUNT AT
ISSUE PER MONTH
MORTALITY AND EXPENSE RISK CHARGE
POLICY YEARS 1-10: .80% OF THE ACCOUNT VALUE
POLICY YEARS 11 & LATER: .80% OF THE FIRST $100,000 OF
ACCOUNT VALUE
[.425%] OF THE REMAINING ACCOUNT
VALUE
FACE AMOUNT INCREASE FEE $.05 PER $1,000 OF UNSCHEDULED
FACE AMOUNT
INCREASE PER MONTH FOR THE FIRST
5 POLICY YEARS FROM DATE OF
INCREASE
TRANSFER CHARGE $0.00 FOR FIRST 4 IN ANY POLICY
YEAR
$25.00 PER TRANSFER IN EXCESS OF
4 IN ANY POLICY YEAR
Page 3C
1020(3C) Printed in U.S.A.
POLICY NUMBER: VL0000001
NAME OF FIRST INSURED: JOHN S. DOE NAME OF SECOND INSURED: MARY DOE
ISSUE AGE/SEX: 35/MALE ISSUE AGE/SEX: 35/FEMALE
POLICY SPECIFICATIONS
TABLE OF MINIMUM DEATH BENEFIT PERCENTAGES
AND MONTHLY MAXIMUM COST OF INSURANCE RATES PER $1,000
MINIMUM MAXIMUM COST MINIMUM MAXIMUM COST
POLICY DEATH BENEFIT OF INSURANCE POLICY DEATH BENEFIT OF INSURANCE
YEAR PERCENTAGES RATE YEAR PERCENTAGES RATE
1 250.00 0.0003 34 117.00 0.7182
2 250.00 0.0007 35 116.00 0.8414
<PAGE>
3 250.00 0.0013 36 115.00 0.9879
4 250.00 0.0020 37 113.00 1.1653
5 250.00 0.0028 38 111.00 1.3822
6 250.00 0.0038 39 109.00 1.6447
7 243.00 0.0051 40 107.00 1.9553
8 236.00 0.0066 41 105.00 2.3140
9 229.00 0.0083 42 105.00 2.7198
10 222.00 0.0103 43 105.00 3.1724
11 215.00 0.0127 44 105.00 3.6760
12 209.00 0.0155 45 105.00 4.2428
13 203.00 0.0188 46 105.00 4.8903
14 197.00 0.0226 47 105.00 5.6355
15 191.00 0.0271 48 105.00 6.4950
16 185.00 0.0324 49 105.00 7.4696
17 178.00 0.0388 50 105.00 8.5493
18 171.00 0.0466 51 105.00 9.7187
19 164.00 0.0559 52 105.00 10.9650
20 157.00 0.0669 53 105.00 12.2768
21 150.00 0.0799 54 105.00 13.6477
22 146.00 0.0949 55 105.00 15.0844
23 142.00 0.1120 56 105.00 16.5963
24 138.00 0.1316 57 104.00 18.2119
25 134.00 0.1548 58 103.00 19.9859
26 130.00 0.1823 59 102.00 22.0472
27 128.00 0.2156 60 101.00 24.6880
28 126.00 0.2565 61 100.00 28.4789
29 124.00 0.3068 62 100.00 34.5196
30 122.00 0.3671 63 100.00 44.7758
31 120.00 0.4378 64 100.00 61.9954
32 119.00 0.5194 65 100.00 83.3333
33 118.00 0.6123
THE MINIMUM DEATH BENEFIT PERCENTAGES ARE DETERMINED TO COMPLY WITH SECTION 7702
OF THE INTERNAL REVENUE CODE, OR YOUR REQUESTED PERCENTAGES, IF GREATER. THE
MAXIMUM COST OF INSURANCE RATES DO NOT EXCEED THE COST OF INSURANCE RATES BASED
ON THE 1980 COMMISSIONERS STANDARD ORDINARY SMOKER OR NONSMOKER MORTALITY TABLE,
AGE LAST BIRTHDAY.
Page 4
1020(4) Printed in U.S.A.
POLICY NUMBER: VL0000001
NAME OF FIRST INSURED: JOHN S. DOE NAME OF SECOND INSURED: MARY DOE
ISSUE AGE/SEX: 35/MALE ISSUE AGE/SEX: 35/FEMALE
DESIGNATED INSURED: JOHN DOE
SINGLE LIFE YEARLY RENEWABLE TERM LIFE RIDER SPECIFICATIONS
TABLE OF SINGLE LIFE YEARLY RENEWABLE TERM LIFE RIDER
MONTHLY MAXIMUM RATES
(PER $1,000 OF RIDER BENEFIT)
POLICY MAXIMUM POLICY MAXIMUM
YEAR RATE YEAR RATE
1 0.1442 34 2.4933
2 0.1517 35 2.7483
<PAGE>
3 0.1617 36 3.0367
4 0.1725 37 3.3658
5 0.1842 38 3.7458
6 0.1983 39 4.1758
7 0.2133 40 4.6483
8 0.2292 41 5.1533
9 0.2467 42 5.6867
10 0.2658 43 6.2442
11 0.2875 44 6.8292
12 0.3108 45 7.4600
13 0.3358 46 8.1567
14 0.3633 47 8.9375
15 0.3933 48 9.8183
16 0.4275 49 10.7950
17 0.4667 50 11.8483
18 0.5117 51 12.9542
19 0.5633 52 14.0983
20 0.6208 53 15.2633
21 0.6850 54 16.4442
22 0.7550 55 17.6575
23 0.8292 56 18.9208
24 0.9117 57 20.2633
25 1.0042 58 21.7350
26 1.1075 59 23.4792
27 1.2225 60 25.8192
28 1.3550 61 29.3217
29 1.5050 62 35.0825
30 1.6717 63 45.0833
31 1.8542 64 62.0958
32 2.0517 65 83.3333
33 2.2633
THE MAXIMUM RATES DO NOT EXCEED THE COST OF INSURANCE RATES BASED ON THE 1980
COMMISSIONERS STANDARD ORDINARY SMOKER OR NONSMOKER MORTALITY TABLE, AGE LAST
BIRTHDAY.
Page 4A
1020(4A) Printed in U.S.A.
POLICY NUMBER: VL0000001
NAME OF FIRST INSURED: JOHN S. DOE NAME OF SECOND INSURED: MARY DOE
ISSUE AGE/SEX: 35/MALE ISSUE AGE/SEX: 35/FEMALE
DESIGNATED INSURED: MARY DOE
SINGLE LIFE YEARLY RENEWABLE TERM LIFE RIDER SPECIFICATIONS
TABLE OF SINGLE LIFE YEARLY RENEWABLE TERM LIFE RIDER
MONTHLY MAXIMUM RATES
(PER $1,000 OF RIDER BENEFIT)
POLICY MAXIMUM
YEAR RATE
1 0.0201
<PAGE>
2 0.0241
3 0.0294
4 0.0370
5 0.0450
6 0.0535
7 0.0619
8 0.0695
9 0.0771
10 0.0847
11 0.0967
12 0.1052
13 0.1141
14 0.1257
15 0.1359
16 0.1471
17 0.1591
18 0.1729
19 0.1881
20 0.2050
THE MAXIMUM RATES DO NOT EXCEED THE COST OF INSURANCE RATES BASED ON THE 1980
COMMISSIONERS STANDARD ORDINARY SMOKER OR NONSMOKER MORTALITY TABLE, AGE LAST
BIRTHDAY.
Page 4A (continued)
1020(4A cont'd) Printed in U.S.A.
DEFINITIONS The definitions in this section apply to the following words and
phrases whenever and wherever they appear in this policy.
ACCOUNT VALUE: an amount We use to determine certain policy
benefits and charges. See the Account Value and Cash Surrender
Value provisions for a more detailed explanation.
ACCUMULATION UNIT: an accounting unit used to calculate the
value of a Sub-Account.
BASIC FACE AMOUNT: on the Policy Date, the Basic Face Amount
equals the Basic Face Amount shown on Page 3. Thereafter, it may
change in accordance with the terms of the Increases and
Decreases in Face Amount provision and the Surrenders provision.
CASH SURRENDER VALUE: the Account Value less all Indebtedness.
CUMULATIVE DEATH BENEFIT GUARANTEE PREMIUM: the number of fully
completed Policy Years, plus the completed portion of the current
Policy Year, multiplied by the Annual Death Benefit Guarantee
Premium shown on Page 3.
<PAGE>
DATE OF ISSUE: the date shown on Page 3 from which Suicide and
Incontestability provisions are measured. The Date may be
different from the Policy Date.
DEATH BENEFIT: on the Policy Date, the Death Benefit equals the
Face Amount. Thereafter, it may change in accordance with the
terms of the Death Benefit Option provision, the Minimum Death
Benefit provision, the Death Benefit Guarantee provision and the
Surrenders provision.
DEATH BENEFIT OPTION: the Death Benefit Option in effect
determines how the Death Benefit is calculated. The three Death
Benefit Options provided are described in the Death Benefit
section.
DEATH PROCEEDS: the amount which We will pay on the death of the
Last Surviving Insured.
FACE AMOUNT: the sum of the Basic Face Amount, plus the
Supplemental Face Amount.
FIXED ACCOUNT: part of the Company's General Account to which
all or a portion of the Account Value may be allocated.
FUNDS: the registered open end management investment companies
in which the assets of its Separate Account may be invested.
GENERAL ACCOUNT: all assets of ITT Hartford Life and Annuity
Insurance Company other than those allocated to the Separate
Accounts.
INDEBTEDNESS: all outstanding loans on this policy, including
any interest due or accrued.
IN WRITING: in a written form satisfactory to Us.
Page 5
ILA-1020(5/6) Printed in U.S.A.
DEFINITIONS ISSUE AGE: as of the Policy Date, an Insured's age on his/her
(continued) last birthday.
LAST SURVIVING INSURED: the Insured who survives after the death
of one of the Insureds shown on Page 3. If both Insureds die
simultaneously, the Last Surviving Insured will be the First
Insured shown on Page 3.
LOAN ACCOUNT: an account established for any amounts transferred
from the Fixed Account and Sub-Accounts as a result of loans.
The account is credited with interest and is not based on the
experience of any Separate Account.
MATURITY DATE: the date, shown on Page 3, on which this policy
will mature.
MONTHLY ACTIVITY DATE: the Policy Date and the same date in each
succeeding month as the Policy Date except that whenever the
Monthly Activity Date falls on a date other than a Valuation Day,
the Monthly Activity Date will be deemed the next Valuation Day.
NET PREMIUM: the amount of premium actually credited to the
Account Value. It is the premium paid minus the deductions from
premium shown on Page 3C.
PLANNED PREMIUM: the amount that the Owner intends to pay. The
First Planned Premium is shown on Page 3.
<PAGE>
POLICY ANNIVERSARY: an anniversary of the Policy Date.
POLICY DATE: the date shown on Page 3 from which Policy
Anniversaries and Policy Years are determined.
POLICY LOAN RATE: the interest rate charged on policy loans.
POLICY YEARS: years as measured from the Policy Date.
PRO-RATA BASIS: an allocation method based on the proportion of
the Account Value in the Fixed Account and each Sub-Account.
SEPARATE ACCOUNT: an account entitled Separate Account VL II
which has been established by ITT Hartford Life and Annuity
Insurance Company to separate the assets funding the variable
benefits for the class of contracts to which this policy belongs
from the other assets of ITT Hartford Life and Annuity Insurance
Company. Separate Account VL II will have the Funds listed on
Page 3B as its underlying investments.
SUB-ACCOUNTS: the subdivisions of the Separate Account. These
are shown on Page 3B.
SUPPLEMENTAL FACE AMOUNT: on the Policy Date, the Supplemental
Face Amount equals the Supplemental Face Amount shown on Page 3.
The Supplemental Face Amounts after Policy Year 1 are shown on
Page 3A. The Supplemental Face Amount may also change in
accordance with the Option Change provision, the Minimum Death
Benefit provision, the Increases and Decreases in Face Amount
provision and the Surrenders provision.
TARGET PREMIUM: the amount shown on Page 3. It is used to
determine deductions from premium payments.
Page 6
ILA-1020(5/6) Printed in U.S.A.
DEFINITIONS VALUATION DAY: the date on which a Sub-Account is valued. This
(continued) occurs every day We are open and the New York Stock Exchange is
open for trading.
VALUATION PERIOD: the period of time between the close of
business on successive Valuation Days.
YOU, YOUR: the Owner of this policy.
WE, US, OUR, THE COMPANY: ITT Hartford Life and Annuity
Insurance Company.
DEATH BENEFIT GENERAL
The Death Benefit depends upon:
(a) the Death Benefit Option in effect, as shown on Page 3; and
(b) the Minimum Death Benefit described below.
DEATH BENEFIT OPTION
You have three Death Benefit Options.
1. Under Option A (Level Option), the Death Benefit is the Face
Amount on the date We receive due proof of the Last
Surviving Insured's death.
<PAGE>
2. Under Option B (Return of Account Value Option), the Death
Benefit is the Face Amount, plus the Account Value on the
date We receive due proof of the Last Surviving Insured's
death.
3. Under Option C (Return of Premium Option), the Death Benefit
is the Face Amount on the date of the Last Surviving
Insured's death, plus the sum of all the premiums paid up to
the date We receive due proof of the Last Surviving
Insured's death.
OPTION CHANGE
You may change Option C (Return of Premium Option) or Option B
(Return of Account Value Option) to Option A (Level Option). If
You do, the Face Amount will become that amount available as a
Death Benefit immediately prior to the option change. Any
increase in the Face Amount will be deemed an increase in the
Supplemental Face Amount. You may change Option A (Level Option)
or Option C (Return of Premium Option) to Option B (Return of
Account Value Option). If You do, the Face Amount will become
that amount available as a Death Benefit immediately prior to
the option change, reduced by the then current Account Value.
You must notify Us In Writing of the change. Such change will
be effective on the Monthly Activity Date following the date We
receive the request.
MINIMUM DEATH BENEFIT
We will automatically increase the Death Benefit so that it will
never be less than the Account Value multiplied by the Minimum
Death Benefit Percentage for the then current Policy Year. The
Table of Minimum Death Benefit Percentages is shown on Page 4.
This is to ensure that:
(a) this policy continues to qualify as life insurance under the
Internal Revenue Code; or
(b) this policy maintains the relationship between the Account
Value and the Death Benefit You selected on Your application, if
greater.
Page 7
ILA-1020(7/8) Printed in U.S.A.
DEATH BENEFIT DEATH PROCEEDS
(continued) The Death Proceeds are the amount which We will pay on the death
of the Last Surviving Insured. This equals the Death Benefit
less any Indebtedness and less any due and unpaid Monthly
Deduction Amounts occurring during a Grace Period.
If the Last Surviving Insured dies after We receive a written
request from You to surrender this policy, the Cash Surrender
Value will be paid in lieu of the Death Proceeds.
NOTIFICATION OF FIRST DEATH OF THE INSUREDS
You must notify Us In Writing and give Us due proof of the first
death of the Insureds as soon as possible after the death.
INCREASES AND At any time after the first Policy Year, You may
DECREASES IN request a change in the Face Amount by writing to Us.
FACE AMOUNT
The minimum amount by which the Face Amount can be increased or
decreased is based on Our rules then in effect.
We reserve the right to limit the number of increases or
decreases made under this policy to not more than one in any
12 month period.
<PAGE>
DECREASES
A decrease in the Face Amount will be effective on the Monthly
Activity Date following the date We receive the request. The
remaining Face Amount must not be less than Our minimum rules
then in effect. Decreases will be applied first to the
Supplemental Face Amount and then to the Basic Face Amount.
UNSCHEDULED INCREASES
Any unscheduled increases in the Face Amount will be deemed an
increase in the Supplemental Face Amount. All requests to
increase the Supplemental Face Amount must be applied for on a
new application and accompanied by this policy. All requests
will be subject to evidence of insurability satisfactory to Us.
Any increase approved by Us will be effective on the date shown
on the new policy specifications page, provided that the
deduction for the Cost of Insurance for the first month is made.
The Monthly Deduction Amount on the first Monthly Activity Date
on or after the effective date of the increase will reflect the
Face Amount Increase Fee.
SCHEDULED INCREASES
We will increase the Supplemental Face Amount automatically as
shown on Page 3A. These scheduled increases will continue as
applied for as long as You did not request to discontinue such
increases or request to decrease the Face Amount of Your policy
other than as a result of a withdrawal.
Scheduled increases in the Supplemental Face Amount are not
subject to the Face Amount Increase Fee.
Page 8
ILA-1020(7/8) Printed in U.S.A.
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MADISON, WISCONSIN 53703
(A STOCK INSURANCE COMPANY)
NATIONAL SERVICE CENTER ADDRESS:
P.O. BOX 59179
MINNEAPOLIS, MINNESOTA 55459
CASH SURRENDER VALUE PAYABLE ON MATURITY DATE
DEATH PROCEEDS PAYABLE AT DEATH OF THE LAST SURVIVING INSURED
ADJUSTABLE DEATH BENEFIT
PREMIUMS PAYABLE AS SHOWN ON PAGE 3
NON-PARTICIPATING
<PAGE>
THE PORTIONS OF THE ACCOUNT VALUES PROVIDED BY THIS CONTRACT THAT ARE IN THE
SUB-ACCOUNTS ARE BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT.
THEY ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. THE AMOUNT
OF THE DEATH BENEFIT MAY BE FIXED OR VARIABLE DEPENDING ON THE INVESTMENT
EXPERIENCE OF THAT SEPARATE ACCOUNT. THE BASIC FACE AMOUNT IS A GUARANTEED
DEATH BENEFIT DURING THE FIRST TEN POLICY YEARS (OR LONGER, IF APPLIED FOR)
SUBJECT TO THE CONDITIONS DESCRIBED ON PAGE 7.
[ITT HARTFORD LOGO]
LAST SURVIVOR
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE POLICY
ILA-1020 Printed in U.S.A.
<PAGE>
CERTIFICATE AMENDING AND RESTATING
THE CERTIFICATE OF INCORPORATION BY
ACTION OF THE BOARD OF DIRECTORS AND SHAREHOLDERS
1. The name of the Corporation is ITT HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY.
2. The Certificate of Incorporation is amended and restated by the following
resolution of the Board of Directors and Shareholder of the Corporation.
RESOLVED, that the Certificate of Incorporation of the Corporation, as
supplemented and amended to date, is further amended and restated to read
as follows:
Section 1. The name of the Corporation is ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY.
Section 2. The address of the Registered Office of the Corporation is
Hartford Plaza, Hartford, Connecticut 06104-2999.
Section 3. The Corporation is a body politic and corporate and shall
have all the powers granted by the general statutes, as now
enacted or hereinafter amended, to corporations formed under
the Stock Corporation Act.
Section 4. The Corporation shall have the purposes and powers to write
any and all forms of insurance which any other corporation
now or hereafter chartered in Connecticut and empowered to
do an insurance business may now or hereafter lawfully do;
to accept and to cede reinsurance; to issue policies and
contracts for any kind or combination of kinds of insurance;
to issue policies or contracts either with or without
participation in profits; to acquire and hold any or all of
the shares or other securities of any insurance corporation
or any other kind of corporation; and to engage in any
lawful act or activity for which corporations may be formed
under the Stock Corporation Act. The corporation is
authorized to exercise the powers herein granted in any
state, territory or jurisdiction of the United States or in
any foreign country.
Section 5. The Corporation shall obtain a license from the insurance
commissioner prior to the commencement of business and shall
be subject to all general statutes applicable to insurance
companies.
Section 6. The aggregate number of shares which the corporation shall
have authority to issue is 3,000 shares consisting of one
class only, designated as Common Shares, of the par value of
$1,250.
Section 7. No shareholder shall, because of his ownership of shares,
have a preemptive or
<PAGE>
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other right to purchase, subscribe for, or take any part of
any shares or any part of the notes, debentures, bonds, or
other securities convertible into or carrying options or
warrants to purchase shares of this corporation issued,
optioned, or sold by it after its incorporation.
Section 8. The minimum amount of stated capital with which the
corporation shall commence business is One Thousand Dollars
($1,000.00).
Section 9. So much of the charter of said corporation is amended, as is
inconsistent herewith is repealed, provided such repeal
shall not invalidate or otherwise affect any action taken
pursuant to the charter of the corporation, in accordance
with its terms, prior to the effective date of such repeal.
3. The above resolution was passed by the Board of Directors and the
Shareholder of the Corporation. The number of shares entitled to vote
thereon was 3,000 and the vote required for adoption was 2,000 shares. The
vote favoring adoption was 3,000 which was the greatest vote needed to pass
the resolution.
4. The term of existence of the corporation shall be perpetual.
Dated at Simsbury, Connecticut this 30 day of April, 1996.
--
We hereby declare, under the penalties of false statement, that the statements
made in the foregoing Certificate are true.
ITT HARTFORD LIFE AND
ANNUITY INSURANCE COMPANY
/s/ Lowndes A. Smith
-----------------------------
Lowndes A. Smith, President
/s/ Lynda Godkin
- ----------------------------------------
Lynda Godkin, Associate General Counsel
and Corporate Secretary
<PAGE>
AMENDED AND RESTATED BYLAWS
OF
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
EFFECTIVE MAY 1, 1996
<PAGE>
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ARTICLE I
Name - Home Office
SECTION 1. This company shall be named ITT Hartford and Annuity Life Insurance
Company.
SECTION 2. The Company may have such principal and other business offices,
either within or without the State of Connecticut, as the Board of Directors may
designate or as the business of the Company may require.
SECTION 3. The registered office of the Company is Hartford Plaza, Hartford,
Connecticut 06104-2999.
ARTICLE II
Stockholders' Meetings - Notice-Quorum-Right to Vote
SECTION 1. All meetings of the stockholders shall be held at the principal
business office of the Company unless the Board of Directors shall otherwise
provide and direct.
SECTION 2. The annual meeting of the stockholders shall be held on such day and
at such hour as the Board of Directors may decide. For cause the Board of
Directors may postpone or adjourn such annual meeting to any other time during
the year.
SECTION 3. Special meetings of the stockholders may be called by the Board of
Directors, the Executive Committee, the Chairman or Vice Chairman of the Board,
the President or any Vice President.
SECTION 4. Notice of stockholders' meetings shall be delivered to each
stockholder, either personally or by mail at his address as it appears on the
records of the Company, at least seven days prior to the meeting. The notice
shall state the place, date and time of the meeting and shall specify all
matters proposed to be acted upon at the meeting.
SECTION 5. At each annual meeting, the stockholders shall choose Directors as
hereinafter provided.
SECTION 6. Each stockholder shall be entitled to one vote at all meetings of
the Company for each share of stock held by such stockholder. Proxies may be
authorized by written power of attorney.
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SECTION 7. A majority of the total number of shares entitled to vote,
represented in person or by proxy, shall constitute a quorum.
SECTION 8. Each stockholder shall be entitled to a certificate of stock which
shall be signed by the President or a Vice President, and either the Treasurer
or an Assistant Treasurer of the Company, and shall bear the seal of the
Company, but such signatures and seal may be facsimile.
ARTICLE III
Directors-Meetings-Quorum
SECTION 1. The property, business and affairs of the Company shall be managed
by a board of not less than three nor more than twenty Directors, who shall be
chosen by the stockholders at each annual meeting. Vacancies occurring between
annual meetings may be filled by the affirmative vote of a majority of the
Directors then in office. Each Director shall hold office until the next annual
meeting of stockholders and until his successor is chosen and qualified.
SECTION 2. Meetings of the Board of Directors may be called by the direction of
the Chairman of the Board, the President, or any three Directors.
SECTION 3. Three days' notice of meetings of the Board of Directors shall be
given to each Director, either personally or by mail or telegraph, at his
residence or usual place of business, but notice may be waived, at any time, in
writing, and attendance of a Director at a meeting shall constitute a waiver of
notice of such meeting except where a Director attends a meeting and objects
thereat to the transaction of any business on grounds that the meeting was not
lawfully called or convened.
SECTION 4. A majority of the number of existing directorships, but not less than
two Directors, shall constitute a quorum.
ARTICLE IV
Election of Officer - Duties of Board of
Directors and Executive Committee
SECTION 1. The Board of Directors shall annually elect a President, a Secretary
and a Treasurer. It may elect a Chairman of the Board, a Vice Chairman of the
Board and such Vice Presidents, other Secretaries, Assistant Secretaries,
Assistant Treasurers and other officers as it may determine. All officer of the
Company shall hold office during the pleasure of the Board of Directors.
<PAGE>
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SECTION 2. The Directors may fill any vacancy among the officers by election
for the unexpired term.
SECTION 3. The Board of Directors may appoint from its own number an
Executive Committee of not less than five Directors. The Executive Committee may
exercise all powers vested in and conferred upon the Board of Directors at any
time when the Board is not in session. A majority of the members of said
Committee shall constitute a quorum. Meetings of the Committee shall be called
whenever the Chairman of the Board, the President or a majority of its members
shall request.
SECTION 4. The Board of Directors may annually appoint from its own number a
Finance Committee of not less than three Directors, whose duties shall be as
hereinafter provided.
SECTION 5. The Board of Directors may, at any time, appoint such other
committees, not necessarily from its own number, as it may deem necessary for
the proper conduct of the business of the Company, which committees shall have
only such powers and duties as are specifically assigned to them by the Board of
Directors or the Executive Committee.
For all meetings, forty-eight hours' notice shall be given but notice may be
waived, at any time, in writing, and attendance of a Director at a meeting shall
constitute a waiver of notice of such meeting except where a Director attends a
meeting and objects thereat to the transaction of any business on grounds that
the meeting was not lawfully called or convened.
SECTION 6. The Board of Directors may authorize corporate contributions, in such
amounts as it determines to be reasonable, for public welfare or for charitable,
scientific or educational purposes, subject to the limits and restrictions
imposed by law and to such rules and regulations consistent with law as it
makes.
ARTICLE V
Officers
Chairman of the Board
and
Vice Chairman of the Board
SECTION 1. The Chairman of the Board shall preside at the meetings of the
Board of Directors and the Executive Committee and, in the absence of the
Chairman of the Finance Committee, at the meetings of the Finance Committee.
In the absence or inability of the Chairman of the Board to so preside, the Vice
Chairman shall preside in his place if there be one, otherwise the President
shall preside.
<PAGE>
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SECTION 2. The Vice Chairman of the Board shall, in the absence of the Chairman
of the Board, exercise the powers and perform the duties of the Chairman of the
Board. He shall perform such other duties and have such other powers as may be
assigned to him by the Board of Directors.
President
SECTION 3. The President, unless the Board of Directors shall otherwise order
pursuant to Section 7 below, shall be the chief executive officer of the Company
and, subject to the control of the Board of Directors, shall in general
supervise and control all the business and affairs of the Company. Unless the
Board of Directors shall provide otherwise, he shall, when present, preside at
all meetings of the shareholders and shall preside at all meetings of the Board
of Directors unless the Board shall have elected a Chairman of the Board of
Directors. He shall have authority, subject to such rules as may be prescribed
by the Board of Directors, to appoint such agents and employees of the Company
as he shall deem necessary, to prescribe their powers, duties and compensation,
and to delegate authority to them. Such agents and employees shall hold office
at the discretion of the President. Except as otherwise provided in these
Bylaws or by resolution of the Board of Directors, the President shall have
authority to sign, execute and acknowledge, on behalf of the Company all
contracts, reports and other documents or instruments necessary or proper to be
executed in the course of the Company's regular business, or which shall be
authorized by resolution of the Board of Directors; and except as otherwise
provided by law or the Board of Directors, he may authorize any Vice President
or other officer or agent of the Company to sign, execute and acknowledge such
documents or instruments in his place and stead. In general, he shall perform
all duties incident to the office of the chief executive officer and such other
duties as may be prescribed by the Board of Directors from time to time.
If the President is not the chief executive officer, he shall have such duties
and authority as prescribed by the Board of Directors or the chief executive
officer.
SECTION 4. In the absence or inability of the President to perform his duties,
the Board or the Chairman thereof may designate a Vice President to exercise the
powers and perform the duties of the President during such absence or inability.
Secretary
SECTION 5. The Secretary shall keep a record of all the meetings of the
Company, of the Board of Directors and of the Executive Committee, and he shall
discharge all other duties specifically required of the Secretary by law.
<PAGE>
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The other Secretaries and the Assistant Secretaries shall perform such duties as
may be assigned to them by the Board of Directors or by their senior officers
and any Secretary or Assistant Secretary may affix the seal of the Company and
attest it and the signature of any officer to any and all instruments.
Treasurer
SECTION 6. The Treasurer shall keep, or cause to be kept, full and accurate
accounts of the Company. He shall see that the funds of the Company are
disbursed as may be ordered by the Board of Directors, the Finance Committee or
a duly authorized individual. He shall have charge of all moneys paid to the
Company and shall deposit such to the credit of the Company or in any other
properly authorized name, in such banks or depositories as may be designated in
a manner provided by these Bylaws. He shall also discharge all other duties
that may be required of him by law.
Other Officers
SECTION 7. The other officers shall perform such duties as may be assigned to
them by the President or the Board of Directors. The Board of Directors may
designate the Chairman of the Board or the Vice Chairman as the chief executive
officer of the Company. In such event that person shall assume all authority,
power, duties and responsibilities otherwise appointed to the President pursuant
to Section 3 above, and all references to the President in these Bylaws shall be
regarded as references to the Chairman of the Board or Vice Chairman, as the
case may be, as such chief executive officer, except where a contrary meaning is
clearly required, and provided that in no case shall that person be empowered in
place of the President to sign the certificates for shares of stock of the
Company.
ARTICLE VI
Finance Committee
SECTION 1. If a Finance Committee is established, it shall be the duty of that
committee to supervise the investment of the funds of the Company in securities
in which insurance companies are permitted by law to invest, and all other
matters connected with the management of investments. If no Finance Committee
is established, this duty shall be performed by the Board of Directors.
SECTION 2. All loans or purchases for the investment and reinvestment of the
funds of the Company shall be submitted for approval to the Finance Committee,
if not specifically approved by the Board of Directors.
<PAGE>
-7-
SECTION 3. Sale or transfer of any stocks or bonds shall be made upon
authorization of the Finance Committee unless specifically authorized by the
Board of Directors.
SECTION 4. Transfers of stock and registered bonds, deeds, leases, releases,
sales, mortgages chattel or real, assignments or partial releases of mortgages
chattel or real, and in general all instruments of defeasance of property and
all agreements or contracts affecting the same, except discharges of mortgages
and entries to foreclose the same as hereinafter provided, shall be authorized
by the Finance Committee or the Board of Directors, and be executed jointly for
the Company by two persons, to wit: the Chairman of the Board, the Vice
Chairman, the President or a Vice President, and a Secretary, the Treasurer or
an Assistant Treasurer, but may be acknowledged and delivered by either one of
those executing the instrument; provided, however, that either a Secretary, the
Treasurer, or an Assistant Treasurer alone, when authorized as aforesaid, or any
person specially authorized by the Finance Committee as attorney for the
Company, may make entry to foreclose any mortgage, and a Secretary, the
Treasurer or an Assistant Treasurer alone is authorized, without the necessity
of further authority, to discharge by deed or otherwise any mortgage on payment
to the Company of the principal, interest and all charges due.
SECTION 5. The Finance Committee may fix times and places for regular
meetings. No notice of regular meetings shall be necessary. Reasonable notice
shall be given of special meetings but the action of a majority of the Finance
Committee at any meeting shall be valid notwithstanding any defect in the notice
of such meeting.
SECTION 6. In the absence of specific authorization from the Board of
Directors or the Finance Committee, the Chairman of the Board, the President, a
Vice President or the Treasurer shall have the power to vote or execute proxies
for voting any shares held by the Company.
ARTICLE VII
Funds
SECTION 1. All monies belonging to the Company shall be deposited to the
credit of the Company, or in such other name as the Finance Committee, the
Chairman of the Finance Committee or such executive officers as are designated
by the Board of Directors shall direct, in such bank or banks as may be
designated from time to time by the Finance Committee, the Chairman of the
Finance Committee or by such executive officers as are designated by the Board
of Directors. Such monies shall be drawn only on checks or drafts signed by any
two executive officers of the Company, provided that the Board of Directors may
authorize the withdrawal of such monies by check or draft signed with the
facsimile signature of any one or more executive officers, and provided further,
that the Finance Committee may authorize such alternative methods of withdrawal
as it deems proper.
<PAGE>
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The Board of Directors, the President, the Chairman of the Finance Committee, a
Vice President, or such executive officers as are designated by the Board of
Directors may authorize withdrawal of funds by checks or drafts drawn at offices
of the Company to be signed by Managers, General Agents, or employees of the
Company, provided that all such checks or drafts shall be signed by two such
authorized persons, except checks or drafts used for the payment of claims or
losses which need to be signed by only one such authorized person, and provided
further that the Board of Directors of the Company or executive officers
designated by the Board of Directors may impose such limitations or restrictions
upon the withdrawal of such funds as it deems proper.
ARTICLE VIII
Liability and Indemnity
SECTION 1. No person shall be liable to the Company for any loss or damage
suffered by it on account of any action taken or omitted to be taken by him as
director or officer of the Company, or of any other company, partnership, joint
venture, trust or other enterprise for which he serves as a director, officer
or employee at the request of the Company, in good faith, if such person (a)
exercised and used the same degree of care and skill as a prudent man would have
exercised or used under the circumstances in the conduct of his own affairs, or
(b) took or omitted to take such action in reliance upon advice of counsel for
the Company or upon statements made or information furnished by officers or
employees of the Company which he had reasonable grounds to believe to be true.
The foregoing shall not be exclusive of other rights and defenses to which he
may be entitled as a matter of law.
SECTION 2. The Company shall indemnify any person who was or is a party or
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, (other than one by or in the right of the Company) by reason
of the fact that he is or was a director, officer or employee of the Company, or
is or was serving at the request of the Company as a director, officer or
employee of another company, partnership, joint venture, trust or other
enterprise, against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding had reasonable
cause to believe that his conduct was unlawful.
SECTION 3. The Company shall indemnify any person who was or is a party or is
threatened to
<PAGE>
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be made a party to any threatened, pending or completed action, suit or
proceeding, by or in the right of the Company to procure a judgment in its
favor by reason of the fact that he is or was a director, officer or
employee of the Company, or is or was serving at the request of the Company as a
director, officer or employee of another company, partnership, joint venture,
trust or other enterprise against expenses, including attorneys' fees, actually
and reasonably incurred by him in connection with the defense or settlement of
such action or suit, if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company, except
that no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Company unless and only to the
extent that the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability and in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as such court shall deem proper.
SECTION 4. Expenses, including attorneys' fees, incurred in defending a civil
or criminal action, suit or proceeding may be paid by the Company in advance of
the final disposition of such action, suit or proceeding, upon receipt of an
undertaking by or on behalf of the director or employee to repay such amount
unless it shall ultimately be determined that he is entitled to be indemnified
by the Company as authorized hereby.
SECTION 5. The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any statute, bylaw, agreement, vote of shareholders or of disinterested
directors or otherwise, both as to action in an official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer or employee and shall inure to
the benefit of the heirs, executors and administrators of such a person.
ARTICLE IX
Amendment of Bylaws
SECTION 1. The Directors shall have power to adopt, amend and repeal such
bylaws as may be deemed necessary or appropriate for the management of the
property and affairs of the Company.
SECTION 2. The stockholders at any annual or special meeting may amend or
repeal these bylaws or adopt new ones if the notice of such meeting contains a
statement of the proposed alteration, amendment, repeal or adoption of the
substance thereof. Bylaws amended or adopted by the stockholders may be amended
or repealed by the Directors.
<PAGE>
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ARTICLE X
Term of Existence
SECTION 1. The term of existence of the corporation shall be perpetual.
This is to certify that the foregoing is a true copy of the Bylaws of ITT
Hartford Life and Annuity Insurance Company in full force and effect on this
first day of May, 1996.
Attest:
- ---------------------------------
Gregory A. Boyko
Vice President
<PAGE>
EXHIBIT 1A11
HARTFORD LIFE INSURANCE COMPANY
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
DESCRIPTION OF TRANSFER AND REDEMPTION PROCEDURES AND
METHOD OF COMPUTING ADJUSTMENTS IN PAYMENTS AND
ACCOUNT VALUES UPON CONVERSION TO
FIXED BENEFIT POLICIES
This document sets forth, as required by Rule 6e-3(T)(b)(12)(ii), the
administrative procedures that will be followed by Hartford Life Insurance
Company and ITT Hartford Life and Annuity Insurance Company (collectively
"Hartford") in connection with the issuance of its last survivor flexible
premium variable life insurance policy (the "Policy"), the transfer of assets
held thereunder, and the redemption by Policy Owners of their interests in said
Policies. The document also describes the method that Hartford will use in
adjusting the payments and cash values when a Policy is exchanged for a fixed
benefit insurance policy pursuant to Rule 6e-3(T)(b)(13)(v)(B).
TRANSFER AND REDEMPTION PROCEDURES
I. PURCHASE AND RELATED TRANSACTIONS
A. PREMIUMS AND UNDERWRITING STANDARDS
This Policy is a last survivor flexible premium variable life policy. The
Policies will be offered and sold pursuant to established underwriting
standards and in accordance with state insurance laws, which prohibit
unfair discrimination among Policy Owners, but recognize that premiums must
be based upon factors such as age, health or occupation.
B. APPLICATION AND INITIAL PREMIUM PROCESSING
Upon receipt of a completed application, Hartford will follow certain
insurance underwriting (i.e., evaluation of risks) procedures designed to
determine whether the applicant is insurable. This process may involve
such verification procedures as medical examinations and may require that
further information be provided by the proposed Insured before a
determination can be made. A Policy will not be issued and consequently a
Policy Issue Date established, until this underwriting procedure has been
completed.
If a premium is submitted with the Policy application, insurance coverage
will begin immediately if the proposed Insured is insurable at a standard
rate under a conditional receipt agreement. Otherwise, insurance coverage
will not begin until the Policy's Issue Date. In either case, the Policy
when issued will be effective from the date Hartford receives the initial
premium at its National Service Center.
<PAGE>
If a premium is not paid with the application, insurance coverage will
begin and the Policy will be effective on the later of the date the
underwriting determination is made or on the date the premium is received.
C. PREMIUM ALLOCATION
In the application for a Policy, the Policy Owner can allocate the initial
premium among the Fixed Account and various Sub-Accounts. Hartford will
allocate the entire premium to the Hartford Money Market Sub-Account. At a
later date, the value of the Policy Owner's interest in the Hartford Money
Market Sub-Account will be allocated among the Fixed Account and the
Sub-Accounts of Separate Account VL II in accordance with the Policy
Owner's instructions in the application for insurance. The Policy Owner
may select up to five (5) Funds to allocate your premium. An allocation to
any one Fund must be for 10% or more, in whole percentages.
D. POLICY LOANS
A Policy Owner may obtain a cash loan from Hartford, which is secured by
the Policy. The total Indebtedness at the time of the new loan (including
the accrued interest on prior loans plus the currently applied for loan)
may not exceed 90% of the Account Value.
The amount of each loan will be transferred on a Pro Rata Basis from each
of the Sub-Accounts (unless the Policy Owner specifies otherwise) to the
Loan Account. The Loan Account is a mechanism used to ensure that any
outstanding Indebtedness remains fully secured by the policy values.
LOAN INTEREST
Interest will accrue daily on the Indebtedness at the Policy Loan Interest
Rate indicated in the Policy. The difference between the value of the Loan
Account and the Indebtedness will be transferred on a pro rata basis from
the Sub-Accounts to the Loan Account on each Monthly Activity Date.
CREDITED INTEREST
During the first ten Policy Years, any amounts in the Loan Account will be
credited with interest at a rate equal to the Policy Loan Rate, minus 2%.
For Policy Years 11 and beyond, except for Preferred Loans described below,
the Loan Account will be credited with interest at a rate equal to the
policy Loan Rate applicable to that Indebtedness, minus 1%.
PREFERRED LOAN
If, any time after the tenth Policy Anniversary, the Account Value exceeds
the total of all premiums paid since issue, a Preferred Loan is available.
The amount available for a Preferred Loan is the amount by which the
Account Value exceeds total premiums paid. The
<PAGE>
amount of the Loan Account which equals a Preferred Loan will be credited
with interest at a rate equal to the Policy Loan Rate. The amount of
Indebtedness that qualified as a Preferred Loan is determined on each
Monthly Activity Date.
LOAN REPAYMENTS
You can repay the any part of or the entire loan at any time.
The amount of loan repayment will be deducted from the Loan Account and
will be allocated among the Fixed Account and Sub-Accounts in the same
percentage as premiums are allocated.
TERMINATION DUE TO EXCESSIVE INDEBTEDNESS
If total Indebtedness equals or exceeds the Account Value, the Policy will
terminate 61 days after we have mailed notice to your last known address
and that of any assignees of record. If sufficient loan repayment if not
made by the end of the Grace Period, the policy will end without value.
EFFECT OF LOANS ON ACCOUNT VALUE
A loan, whether or not repaid, will have a permanent effect on the Account
Value because the investment results of each Sub-Account will apply only to
the amount remaining in such Sub-Accounts. In addition, the rate of
interest credited to the Fixed Account will usually be different than the
rate credited to the Loan Account. The longer a loan is outstanding, the
greater the effect is likely to be. The effect could be favorable or
unfavorable. If the Fixed Account and Sub-Accounts earn more than the
annual interest rate for funds held in the Loan Account, a Policy Owner's
Account Value will not increase as rapidly as it would have had no loan
been made. If the Fixed Account and Sub-Accounts earn less than the Loan
Account, the Policy Owners Account Value will be greater than it would have
been had no loan been made. Also, if not repaid, the aggregate amount of
the outstanding loan (i.e., the Indebtedness) will reduce the Death
Proceeds and Cash Surrender Value otherwise payable.
II. TRANSFER AMONG INVESTMENT DIVISIONS
The Separate Account currently has twenty-two Sub-Accounts, each of which
invests in shares of an open-end diversified management investment company
registered with the Commission and a Fixed Account. At any time, the Policy
Owner may transfer value among the Funds or the Fixed Account. We reserve the
right at a future date to limit the size of transfers and remaining balances and
to limit the number and frequency of transfers.
A transfer will take effect on the date the written request (or telephone
request) is received at Hartford unless a later date is designated in the
request for transfer. A transfer between the Loan Accounts and the Separate
Account incident to the repayment or making of a loan under the Policy will not
be considered a transfer. A transfer from the Money Market Fund at the end of
<PAGE>
the Right to Cancel Period or a transfer arising because of a substitution of
securities by Hartford will also not be considered a transfer.
III. "REDEMPTION" PROCEDURES: SURRENDER AND RELATED TRANSACTIONS
A. SURRENDER FOR ACCOUNT VALUE
At any time before the death of the Insured and while the Policy is in
force, the Policy Owner may completely surrender the Policy by written
request. The surrender payment from the Sub-Accounts will be made within
seven days after Hartford receives the written request, unless payment is
postponed pursuant to the relevant provision of the Investment Company Act
of 1940. The surrender payment from the Fixed Account may be postponed up
to six months under state law. The surrender payment will equal the Policy
Owner's Cash Surrender Value.
B. BENEFIT CLAIMS
As long as the Policy remains in force, Hartford will usually pay the Death
Proceeds to the named Beneficiary within seven days after receipt of due
proof of death of the Insured unless the Policy is contested. Payment of
the Death Proceeds may be postponed as permitted pursuant to the relevant
provisions of the Investment Company Act of 1940 and up to six months if
the Account Values were in the Fixed Account.
The Death Proceeds equal the Death Benefit under the Policy less all
outstanding loans. The Death Benefit will be determined on the date
Hartford receives written notice of death and is a function of the Death
Benefit Option chosen by the Policy Owner.
In lieu of payment of the death proceeds in a single sum, an election may
be made to apply all or a portion of the proceeds under one of the fixed
benefit settlement options described in the Policy or a combination of
options. The election may be made by the Policy Owner during the Insured's
lifetime. The Beneficiary may make or change an election within 90 days of
the death of the Insured, unless the Policy Owner has made an irrevocable
election. The fixed benefit settlement options are subject to the
restrictions and limitations set forth in the Policy.
C. POLICY LAPSE
The Policy will terminate 61 days after a Monthly Activity Date on which
the Cash Surrender Value is not sufficient to cover the Monthly Deduction
Amount. The 61-day period is the Grace Period. If sufficient premium is
not paid by the end of the Grace Period, the Policy will terminate without
value. The Company will mail the Owner and any assignee written notice of
the amount of premium that will be required to continue the policy in force
at least 61 days before the end of the Grace Period. The premiums required
will be no greater than the amount required to pay three (3) Monthly
Deduction Amounts as of the day the Grace Period began. If that premium is
not paid by the end of the Grace Period, the policy will terminate.
<PAGE>
If the cumulative premiums, less withdrawals, are not sufficient to
maintain the Death Benefit guarantee in effect, the lapse and Grace Period
provisions for the Death Benefit guarantee will apply as follows:
On every Monthly Activity Date during the Death Benefit guarantee period,
We will compare the cumulative premiums received, less withdrawals, to the
Cumulative Death Benefit Guarantee Premium for the Death Benefit guarantee
period in effect.
If the cumulative premiums received, less withdrawals, are less than the
Cumulative Death Benefit Guarantee Premium, the Death Benefit guarantee
will be deemed to be in default as of that Monthly Activity Date. A Grace
Period of 61 days from the date of default will begin. We will mail the
Policy Owner and any assignee written notice of the amount of premium
required to continue the Death Benefit guarantee.
At the end of the Grace Period under a ten-year guarantee period, the Death
Benefit guarantee will be removed from the Policy if We have not received
the amount of the required premium. The Policy Owner will receive a
written notification of the change.
At the end of the Grace Period under the last survivor life expectancy
guarantee period, the Death Benefit guarantee will be removed from the
Policy if We have not received the amount of the required premium, subject
to the following exception: If the Policy is in the first ten Policy Years
and the cumulative premiums received, less withdrawals, equal or exceed the
cumulative Death Benefit guarantee premium for the ten-year period, We will
change the Death Benefit guarantee period to ten years. In this case, We
will send the Policy Owner notification of:
(a) the ten-year period measured from the Policy Date; and
(b) the Annual Death Benefit Guarantee Premium for that ten-year period.
Unless the Policy has been surrendered, the Policy may be reinstated prior
to the Maturity Date, provided:
(a) the Insureds alive at the end of the Grace Period are also alive on
the date of reinstatement;
(b) the Policy Owner makes the request within five years;
(c) satisfactory evidence of insurability is submitted;
(d) any Policy loan is repaid or reinstated; and
(e) The Policy Owner pays sufficient premium to (1) cover all Monthly
Deduction Amounts that are due and unpaid during the Grace Period and
(2) keep the Policy in
<PAGE>
force for three months after the date of reinstatement.
The Account Value on the reinstatement date will reflect:
(a) The Account Value at the time of termination; plus
(b) Net Premiums derived from premiums paid at the time of reinstatement.
Upon reinstatement, any Indebtedness at the time of termination must be
repaid or carried over to the reinstated Policy.
D. POLICY LOANS
See "Purchase and Related Transactions," Section I. D. on page 2 of this
Exhibit.
CASH ADJUSTMENT UPON EXCHANGE OF POLICY
Once the Policy is in effect, it may be exchanged during the first 24 months
after its issuance, for a non-variable last survivor life insurance policy
offered by Us or an affiliate on the life of the Insureds. No evidence of
insurability will be required. The new policy will have an amount at risk which
equals or is less than the amount at risk in effect on the date of exchange.
Premiums under the new policy will be based on the same risk classifications as
this Policy.
<PAGE>
[Exhibit 2]
March 15, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: SEPARATE ACCOUNT VL II ("SEPARATE ACCOUNT")
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("COMPANY")
FILE NO. 33-89988
Dear Sir/Madam:
In my capacity as Associate General Counsel of the Company, I have supervised
the establishment of the Separate Account by the Board of Directors of the
Company as a separate account for assets applicable to Policies offered by the
Company pursuant to Wisconsin law. I have participated in the preparation of
the registration statement for the Separate Account on Form S-6 under the
Securities Act of 1933 and the Investment Company Act of 1940 with respect to
the Policies.
I am of the following opinion:
1. The Separate Account is a separate account of the Company validly existing
pursuant to Wisconsin law and the regulations issued thereunder.
2. The assets held in the Separate Account are not chargeable with liabilities
arising out of any other business the Company may conduct.
3. The Policies are legally issued and represent binding obligations of the
Company.
In arriving at the foregoing opinion, I have made such examination of the law
and examined such records and other documents as in my opinion as are necessary
or appropriate.
I hereby consent to the filing of this opinion as an exhibit to the registration
statement under the Securities Act of 1933.
Sincerely,
/s/ Lynda Godkin
Lynda Godkin
Associate General Counsel & Secretary
<PAGE>
[Exhibit 5]
March 1, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs;
This opinion is furnished in connection with the registration statement under
the Securities Act of 1933 as amended ("Securites Act"), of a certain last
survivor flexible premium variable life insurance policy (the "Policy") that
will be offered and sold by ITT Hartford Life and Annuity Insurance Company and
certain units of interest to be issued in connection with the Policy.
The hypothetical illustrations of the Policy used in this Registration Statement
accurately reflect reasonable estimates of projected performance of the Policy
under the stipulated rates of investment return, the contractual expense
deductions and guaranteed cost-of-insurance rates, and utilizing a reasonable
estimation for expected fund operating expenses.
I hereby consent to the use of this opinion as an exhibit to the Securities Act
Registration Statement on Form S-6 and to the reference to my name under the
heading "Experts" in the Prospectus included in the Securities Act Registration
Statement.
Very truly yours,
/s/ Ken A. McCullum
Ken A. McCullum, FSA, MAAA
Director Individual Life
Product Development
<PAGE>
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of
this Registration Statement File No. 33-89988 for ITT Hartford Life and
Annuity Insurance Company Separate Account VL II on Form S-6.
/s/ Arthur Andersen LLP
Hartford, Connecticut
April 24, 1996
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
POWER OF ATTORNEY
Bruce D. Gardner
Joseph H. Gareau
Joseph Kanarek
Thomas M. Marra
Lowndes A. Smith
Lizabeth H. Zlatkus
do hereby jointly and severally authorize Lynda Godkin and/or Scott K.
Richardson to sign as their agent, any Registration Statement, pre-effective
amendment, post-effective amendment and any application for exemptive relief of
the ITT Hartford Life and Annuity Insurance Company under the Securities Act of
1933 and/or the Investment Company Act of 1940.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for
the purpose herein set forth.
/s/ Bruce D. Gardner Dated: 10/19/95
------------------------------ --------
Bruce D. Gardner
/s/ Joseph H. Gareau Dated: 10/19/95
------------------------------ --------
Joseph H. Gareau
/s/ Joseph Kanarek Dated: 10/19/95
------------------------------ --------
Joseph Kanarek
/s/ Thomas M. Marra Dated: 10/19/95
------------------------------ --------
Thomas M. Marra
/s/ Lowndes A. Smith Dated: 10/19/95
------------------------------ --------
Lowndes A. Smith
/s/ Lizabeth H. Zlatkus Dated: 10/19/95
------------------------------ --------
Lizabeth H. Zlatkus
