<PAGE>
STAG VARIABLE LIFE LAST SURVIVOR
SEPARATE ACCOUNT VL II
HARTFORD LIFE INSURANCE COMPANY
SUPPLEMENT DATED JANUARY 2, 2001 TO PROSPECTUS DATED MAY 1, 2000
Effective January 15, 2001 the following changes apply:
The following Sub-Accounts are added in alphabetical order to the cover page of
the prospectus:
- AMERICAN FUNDS GLOBAL GROWTH FUND SUB-ACCOUNT Class 2 of the Global Growth
Fund of American Funds Insurance Series
- AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION FUND SUB-ACCOUNT Class 2 of the
Global Small Capitalization Fund of American Funds Insurance Series
- AMERICAN FUNDS GROWTH FUND SUB-ACCOUNT Class 2 of the Growth Fund of American
Funds Insurance Series
- AMERICAN FUNDS GROWTH-INCOME FUND SUB-ACCOUNT Class 2 of the Growth-Income
Fund of American Funds Insurance Series
- HARTFORD GLOBAL LEADERS SUB-ACCOUNT Class IA of Hartford Global Leaders HLS
Fund of Hartford Series Fund, Inc.
- HARTFORD GLOBAL TECHNOLOGY SUB-ACCOUNT Class IA of Hartford Global Technology
HLS Fund of Hartford Series Fund, Inc.
Under the Section entitled "Summary of Benefits and Risks", the paragraph
entitled "Investment Choices" is deleted and replaced with the following:
INVESTMENT CHOICES -- You may invest in up to 9 different investment choices
within your policy, from a choice of 42 investment options and a Fixed Account.
You may transfer money among your investment choices, subject to restrictions.
The table of Annual Fund Operating Expenses is deleted and replaced with the
following:
<TABLE>
<CAPTION>
TOTAL FUND
OPERATING
OTHER EXPENSES
12B-1 FEES EXPENSES (INCLUDING ANY
MANAGEMENT FEES (INCLUDING (INCLUDING ANY WAIVERS AND/OR ANY
(INCLUDING ANY WAIVERS) ANY WAIVERS) REIMBURSEMENTS) REIMBURSEMENTS)
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------------
American Funds Global Growth Fund 0.68% 0.25% 0.03% 0.96%
----------------------------------------------------------------------------------------------------------------------------
American Funds Global Small
Capitalization Fund 0.79% 0.25% 0.03% 1.07%
----------------------------------------------------------------------------------------------------------------------------
American Funds Growth Fund 0.38% 0.25% 0.01% 0.64%
----------------------------------------------------------------------------------------------------------------------------
American Funds Growth-Income Fund 0.34% 0.25% 0.01% 0.60%
----------------------------------------------------------------------------------------------------------------------------
Hartford Advisers HLS Fund 0.63% N/A 0.02% 0.65%
----------------------------------------------------------------------------------------------------------------------------
Hartford Bond HLS Fund 0.49% N/A 0.03% 0.52%
----------------------------------------------------------------------------------------------------------------------------
Hartford Capital Appreciation HLS Fund 0.64% N/A 0.02% 0.66%
----------------------------------------------------------------------------------------------------------------------------
Hartford Dividend and Growth HLS Fund 0.65% N/A 0.03% 0.68%
----------------------------------------------------------------------------------------------------------------------------
Hartford Global Leaders HLS Fund 0.74% N/A 0.12% 0.86%
----------------------------------------------------------------------------------------------------------------------------
Hartford Global Technology HLS Fund (1) 0.85% N/A 0.25% 1.10%
----------------------------------------------------------------------------------------------------------------------------
Hartford Growth and Income HLS Fund 0.78% N/A 0.04% 0.82%
----------------------------------------------------------------------------------------------------------------------------
Hartford Index HLS Fund 0.40% N/A 0.03% 0.43%
----------------------------------------------------------------------------------------------------------------------------
Hartford International Advisers HLS Fund 0.76% N/A 0.09% 0.85%
----------------------------------------------------------------------------------------------------------------------------
Hartford International Opportunities HLS
Fund 0.69% N/A 0.09% 0.78%
----------------------------------------------------------------------------------------------------------------------------
Hartford MidCap HLS Fund 0.76% N/A 0.03% 0.79%
----------------------------------------------------------------------------------------------------------------------------
Hartford Money Market HLS Fund 0.45% N/A 0.02% 0.47%
----------------------------------------------------------------------------------------------------------------------------
Hartford Mortgage Securities HLS Fund 0.45% N/A 0.03% 0.48%
----------------------------------------------------------------------------------------------------------------------------
Hartford Small Company HLS Fund 0.75% N/A 0.03% 0.78%
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
HV-2857
33-89990 1 of 6
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL FUND
OPERATING
OTHER EXPENSES
12B-1 FEES EXPENSES (INCLUDING ANY
MANAGEMENT FEES (INCLUDING (INCLUDING ANY WAIVERS AND/OR ANY
(INCLUDING ANY WAIVERS) ANY WAIVERS) REIMBURSEMENTS) REIMBURSEMENTS)
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------------
Hartford Stock HLS Fund 0.46% N/A 0.02% 0.48%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT Asia Pacific Growth Fund 0.80% N/A 0.33% 1.13%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT Diversified Income Fund 0.68% N/A 0.10% 0.78%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund 0.65% N/A 0.12% 0.77%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT Global Growth Fund 0.61% N/A 0.12% 0.73%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund 0.46% N/A 0.04% 0.50%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund 0.70% N/A 0.13% 0.83%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund 0.65% N/A 0.07% 0.72%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT Income Fund 0.60% N/A 0.07% 0.67%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT International Growth Fund 0.80% N/A 0.22% 1.02%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT International Growth and
Income Fund 0.80% N/A 0.18% 0.98%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT International New
Opportunities Fund 1.08% N/A 0.33% 1.41%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund 0.63% N/A 0.08% 0.71%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund 0.41% N/A 0.08% 0.49%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT New Opportunities Fund 0.54% N/A 0.05% 0.59%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT New Value Fund 0.70% N/A 0.10% 0.80%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT OTC & Emerging Growth Fund (2) 0.53% N/A 0.37% 0.90%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of
Boston 0.65% N/A 0.18% 0.83%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income
Fund 0.65% N/A 0.06% 0.71%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT Vista Fund 0.65% N/A 0.10% 0.75%
----------------------------------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund 0.53% N/A 0.04% 0.57%
----------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Asset Manager Portfolio
(3) 0.53% N/A 0.09% 0.62%
----------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio (3) 0.48% N/A 0.08% 0.56%
----------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio (3) 0.73% N/A 0.14% 0.87%
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Hartford Global Technology HLS Fund is a new fund. Total Fund Operating
Expenses are based on annualized estimates of such expenses to be incurred
during the current fiscal year.
(2) Total Annual Fund Operating Expenses for Putnam VT OTC & Emerging Growth
Fund reflect voluntary reductions and reimbursements through at least
December 31, 2000. Absent voluntary reductions and reimbursements, Total
Annual Fund Operating Expenses would have been as follows:
<TABLE>
<CAPTION>
TOTAL FUND
OTHER OPERATING
MANAGEMENT FEES EXPENSES EXPENSES
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
Putnam VT OTC & Emerging Growth Fund 0.70% 0.37% 1.07%
--------------------------------------------------------------------------------------------------------
</TABLE>
(3) A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, through arrangements with certain funds
of FMR on behalf of certain funds' custodian, credits realized as a result
of uninvested cash balances were used to reduce a portion of each applicable
fund's expenses. These reductions will continue through at least
HV-2857 2 of 6
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------
December 31, 2000 pursuant to an agreement between the adviser and the
funds. Without these reductions, Total Fund Operating Expenses would have
been:
<TABLE>
<CAPTION>
TOTAL FUND
OTHER OPERATING
MANAGEMENT FEES EXPENSES EXPENSES
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
Fidelity VIP II Asset Manager Portfolio 0.53% 0.10% 0.63%
--------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio 0.48% 0.09% 0.57%
--------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio 0.73% 0.18% 0.91%
--------------------------------------------------------------------------------------------------------
</TABLE>
The following is added in the section entitled "About Us" immediately following
the Hartford Ratings table:
These ratings apply to Hartford's ability to meet its obligations under the
Contract. The ratings do not apply to the Separate Account or the underlying
Funds.
Under the section entitled "The Funds," the following language is added in
alphabetical order:
AMERICAN FUNDS GLOBAL GROWTH FUND -- Seeks long-term growth of capital by
investing primarily in common stocks of issuers domiciled around the world.
AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION FUND -- Seeks long-term growth of
capital by investing primarily in equity securities of smaller companies located
around the world that typically have market capitalization of $50 million to
$1.5 billion.
AMERICAN FUNDS GROWTH FUND -- Seeks long-term growth of capital by investing
primarily in common stocks which demonstrate the potential for appreciation.
AMERICAN FUNDS GROWTH-INCOME FUND -- Seeks growth of capital and income by
investing primarily in common stocks or other securities which demonstrate the
potential for appreciation and/or dividends.
HARTFORD GLOBAL LEADERS HLS FUND -- Seeks growth of capital by investing
primarily in equity securities issued through high-quality growth companies
worldwide that, in the opinion of Wellington Management, are leaders within
their respective industries as indicated by established market presence and
strong competitive position on a global, regional or country basis. Sub-advised
by Wellington Management.
HARTFORD GLOBAL TECHNOLOGY HLS FUND -- Seeks long-term capital appreciation by
investing in equity securities of technology companies worldwide. Sub-advised by
Wellington Management.
The following text is added under the section entitled "The Funds":
The Funds may not be available in all states.
Under the section entitled "The Funds," under the sub-section entitled
"Investment Advisers," the following paragraph is inserted as the first
paragraph of the section:
American Funds Global Growth Fund, American Funds Global Small Capitalization
Fund, American Funds Growth Fund and American Funds Growth-Income Fund are all
part of American Funds Insurance Series. American Funds Insurance Series is a
fully managed, diversified, open-end investment company organized as a
Massachusetts business trust in 1983. American Funds Insurance Series offers two
classes of fund shares: Class 1 shares and Class 2 shares. This policy invests
only in Class 2 shares of American Funds Insurance Series. The investment
adviser for each of the funds of American Funds Insurance Series is Capital
Research and Management Company located at 333 South Hope Street, Los Angeles,
California 90071. Capital Research and Management Company is a wholly owned
subsidiary of The Capital Growth Companies, Inc.
Under the section entitled "Investment Advisers", the second paragraph is
deleted and replaced with the following:
Each Hartford HLS Fund, except for Hartford Global Leaders HLS Fund, Hartford
Global Technology HLS Fund and Hartford Growth and Income HLS Fund is a separate
Maryland corporation registered with the Securities and Exchange Commission as
an open-end management investment company. Hartford Global Leaders HLS Fund and
Hartford Growth and Income HLS Fund are diversified series of Hartford Series
Fund, Inc., a Maryland corporation, also registered with the Securities and
Exchange Commission as an open-end management investment company. Hartford
Global Technology HLS Fund is a non-diversified series of Hartford Series Fund,
Inc. The shares of each Fund have been divided into Class IA and Class IB. Only
Class IA shares are available in the policy.
The fourth paragraph under the sub-section entitled "Illustration of death
Benefits, Account Values and Cash Surrender Values" in the section entitled
"Statement of Additional Information" is deleted and replaced with the
following:
The amounts shown for the Death Benefit, Account Value and Cash Surrender Value
as of the end of each Policy Year take into account an average daily charge
equal to an annual charge of 0.75% of the average daily net assets of the Funds
for investment advisory and administrative service 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 0.75% average daily charge) of
-0.75%, 5.25% and 11.25%, respectively.
The three "Illustration of Death Benefits, Account Values and Cash Surrender
Values" tables in the section entitled "Statement of Additional Information" are
replaced with the attached three tables.
The attached Financial Statements are added to the section entitled "Statement
of Additional Information."
THIS SUPPLEMENT SHOULD BE RETAINED WITH THE PROSPECTUS FOR FUTURE REFERENCE.
HV-2857 3 of 6
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$1,000,000 BASIC FACE AMOUNT
ISSUE AGE 55 MALE PREFERRED NON-NICOTINE
ISSUE AGE 50 FEMALE PREFERRED NON-NICOTINE
$15,500 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% 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 6,680 1,000,000 6,394 1,000,000
2 33,364 19,953 1,000,000 19,353 1,000,000
3 51,307 34,498 1,000,000 33,550 1,000,000
4 70,147 50,424 1,000,000 49,093 1,000,000
5 89,930 67,850 1,000,000 66,095 1,000,000
6 110,701 88,649 1,000,000 86,426 1,000,000
7 132,511 111,402 1,000,000 108,660 1,000,000
8 155,412 136,282 1,000,000 132,968 1,000,000
9 179,457 163,485 1,000,000 159,536 1,000,000
10 204,705 193,216 1,000,000 188,564 1,000,000
11 231,215 229,837 1,000,000 222,317 1,000,000
12 259,051 270,355 1,000,000 259,324 1,000,000
13 288,279 315,183 1,000,000 299,898 1,000,000
14 318,968 364,779 1,000,000 344,391 1,000,000
15 351,191 419,653 1,000,000 393,212 1,000,000
16 385,026 480,372 1,000,000 446,837 1,000,000
17 420,552 547,546 1,000,000 505,841 1,000,000
18 457,855 621,891 1,000,000 570,908 1,000,000
19 497,022 704,197 1,000,000 642,870 1,000,000
20 538,148 795,345 1,000,000 722,736 1,000,000
25 724,270 1,439,280 1,540,030 1,297,307 1,388,119
30 1,014,302 2,520,219 2,646,230 2,255,580 2,368,360
--------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance rates,
administrative fees, and Mortality and Expense Risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and Mortality and Expense Risk rates.
The 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.
HV-2857 4 of 6
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$1,000,000 BASIC FACE AMOUNT
ISSUE AGE 55 MALE PREFERRED NON-NICOTINE
ISSUE AGE 50 FEMALE PREFERRED NON-NICOTINE
$15,500 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% 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 6,292 1,000,000 6,015 1,000,000
2 33,364 18,443 1,000,000 17,877 1,000,000
3 51,307 31,027 1,000,000 30,160 1,000,000
4 70,147 44,044 1,000,000 42,861 1,000,000
5 89,930 57,486 1,000,000 55,975 1,000,000
6 110,701 73,017 1,000,000 71,160 1,000,000
7 132,511 89,027 1,000,000 86,810 1,000,000
8 155,412 105,507 1,000,000 102,912 1,000,000
9 179,457 122,441 1,000,000 119,451 1,000,000
10 204,705 139,804 1,000,000 136,400 1,000,000
11 231,215 161,494 1,000,000 155,495 1,000,000
12 259,051 184,183 1,000,000 175,065 1,000,000
13 288,279 207,915 1,000,000 195,060 1,000,000
14 318,968 232,731 1,000,000 215,411 1,000,000
15 351,191 258,676 1,000,000 236,047 1,000,000
16 385,026 285,798 1,000,000 256,880 1,000,000
17 420,552 314,122 1,000,000 277,826 1,000,000
18 457,855 343,712 1,000,000 298,789 1,000,000
19 497,022 374,638 1,000,000 319,669 1,000,000
20 538,148 406,971 1,000,000 340,348 1,000,000
25 724,270 598,721 1,000,000 442,318 1,000,000
30 1,014,302 838,867 1,000,000 509,382 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.
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.
HV-2857 5 of 6
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$1,000,000 BASIC FACE AMOUNT
ISSUE AGE 55 MALE PREFERRED NON-NICOTINE
ISSUE AGE 50 FEMALE PREFERRED NON-NICOTINE
$15,500 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% 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 5,905 1,000,000 5,637 1,000,000
2 33,364 16,979 1,000,000 16,447 1,000,000
3 51,307 27,784 1,000,000 26,992 1,000,000
4 70,147 38,302 1,000,000 37,254 1,000,000
5 89,930 48,512 1,000,000 47,212 1,000,000
6 110,701 59,988 1,000,000 38,439 1,000,000
7 132,511 71,082 1,000,000 69,287 1,000,000
8 155,412 81,765 1,000,000 79,728 1,000,000
9 179,457 92,003 1,000,000 89,726 1,000,000
10 204,705 101,752 1,000,000 99,238 1,000,000
11 231,215 114,700 1,000,000 109,768 1,000,000
12 259,051 127,458 1,000,000 119,704 1,000,000
13 288,279 140,025 1,000,000 128,962 1,000,000
14 318,968 152,392 1,000,000 137,437 1,000,000
15 351,191 164,555 1,000,000 145,013 1,000,000
16 385,026 176,506 1,000,000 151,556 1,000,000
17 420,552 188,209 1,000,000 156,924 1,000,000
18 457,855 199,670 1,000,000 160,953 1,000,000
19 497,022 210,895 1,000,000 163,461 1,000,000
20 538,148 221,889 1,000,000 164,226 1,000,000
25 724,270 274,336 1,000,000 133,151 1,000,000
30 1,014,302 307,908 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.
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.
HV-2857 6 of 6
<PAGE>
SEPARATE ACCOUNT VL II -- HARTFORD LIFE INSURANCE COMPANY
FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
INDEX FOR HARTFORD AND FIDELITY SUB-ACCOUNTS
Statements of Assets and Liabilities For the Period Ended
September 30, 2000 (unaudited)............................. SA-2
Statements of Operations For the Period Ended September 30,
2000 (unaudited)........................................... SA-4
Statements of Changes in Net Assets For the Period Ended
September 30, 2000 (unaudited)............................. SA-6
INDEX FOR PUTNAM SUB-ACCOUNTS
Statements of Assets and Liabilities For the Period Ended
September 30, 2000 (unaudited)............................. SA-10
Statements of Operations For the Period Ended September 30,
2000 (unaudited)........................................... SA-14
Statements of Changes in Net Assets For the Period Ended
September 30, 2000 (unaudited)............................. SA-17
</TABLE>
SA-1
<PAGE>
SEPARATE ACCOUNT VL II -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
September 30, 2000 Bond Stock Money Advisers Capital Mortgage Index
Fund Fund Market Fund Fund Appreciation Securities Fund
Sub-Account Sub-Account Sub-Account Sub-Account Fund Fund Sub-Account
Sub-Account Sub-Account
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
-------------------------------------------------------------------------------------------------------------------------
HARTFORD BOND HLS FUND, INC. --
CLASS IA
Shares 5,811,397
Cost $6,174,474
........................................................................................................................
Market Value: $6,179,514 $ -- $ -- $ -- $ -- $ -- $ --
-------------------------------------------------------------------------------------------------------------------------
HARTFORD STOCK HLS
FUND, INC. -- CLASS IA
Shares 3,766,637
Cost $20,856,576
........................................................................................................................
Market Value: -- 23,412,687 -- -- -- -- --
-------------------------------------------------------------------------------------------------------------------------
HARTFORD MONEY MARKET HLS
FUND, INC. -- CLASS IA
Shares 5,728,264
Cost $5,728,264
........................................................................................................................
Market Value: -- -- 5,728,264 -- -- -- --
-------------------------------------------------------------------------------------------------------------------------
HARTFORD ADVISERS HLS
FUND, INC. -- CLASS IA
Shares 4,412,680
Cost $11,533,871
........................................................................................................................
Market Value: -- -- -- 11,972,249 -- -- --
-------------------------------------------------------------------------------------------------------------------------
HARTFORD CAPITAL APPRECIATION HLS
FUND, INC. -- CLASS IA
Shares 4,291,297
Cost $19,598,277
........................................................................................................................
Market Value: -- -- -- -- 27,097,852 -- --
-------------------------------------------------------------------------------------------------------------------------
HARTFORD MORTGAGE SECURITIES HLS
FUND, INC. -- CLASS IA
Shares 217,890
Cost $232,757
........................................................................................................................
Market Value: -- -- -- -- -- 239,242 --
-------------------------------------------------------------------------------------------------------------------------
HARTFORD INDEX HLS
FUND, INC. -- CLASS IA
Shares 5,411,247
Cost $16,657,404
........................................................................................................................
Market Value: -- -- -- -- -- -- 22,061,739
-------------------------------------------------------------------------------------------------------------------------
HARTFORD INTERNATIONAL
OPPORTUNITIES HLS FUND, INC. --
CLASS IA
Shares 3,581,501
Cost $4,961,085
........................................................................................................................
Market Value: -- -- -- -- -- -- --
-------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life Insurance
Company -- -- 54,145 -- -- -- --
........................................................................................................................
Receivable from fund shares sold 2,569 -- -- 5,012 8,451 336 3,598
........................................................................................................................
Total Assets 6,182,083 23,412,687 5,782,409 11,977,261 27,106,303 239,578 22,065,337
........................................................................................................................
LIABILITIES:
Due to Hartford Life Insurance
Company 2,593 752 -- 4,993 8,135 337 8,195
........................................................................................................................
Payable for fund shares purchased -- 636 53,285 -- -- -- --
........................................................................................................................
TOTAL LIABILITIES 2,593 1,388 53,285 4,993 8,135 337 8,195
-------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE
CONTRACT LIABILITIES) $6,179,490 $23,411,299 $5,729,124 $11,972,268 $27,098,168 $ 239,241 $22,057,142
-------------------------------------------------------------------------------------------------------------------------
Units Owned by Participants 3,950,341 6,399,345 4,008,825 4,441,032 6,670,762 153,829 6,262,389
........................................................................................................................
Unit Values $ 1.564293 $ 3.658390 $ 1.429128 $ 2.695830 $ 4.062230 $1.555236 $ 3.522161
-------------------------------------------------------------------------------------------------------------------------
<S> <C>
September 30, 2000 International
Opportunities
Fund
Sub-Account
--------------------------------------------------------------
ASSETS
Investments:
---------------------------------------------------------------------------
HARTFORD BOND HLS FUND, INC. --
CLASS IA
Shares 5,811,397
Cost $6,174,474
................................
Market Value: $ --
----------------------------------------------------------------------------------------
HARTFORD STOCK HLS
FUND, INC. -- CLASS IA
Shares 3,766,637
Cost $20,856,576
................................
Market Value: --
-----------------------------------------------------------------------------------------------------
HARTFORD MONEY MARKET HLS
FUND, INC. -- CLASS IA
Shares 5,728,264
Cost $5,728,264
................................
Market Value: --
------------------------------------------------------------------------------------------------------------------
HARTFORD ADVISERS HLS
FUND, INC. -- CLASS IA
Shares 4,412,680
Cost $11,533,871
................................
Market Value: --
-------------------------------------------------------------------------------------------------------------------------
HARTFORD CAPITAL APPRECIATION HLS
FUND, INC. -- CLASS IA
Shares 4,291,297
Cost $19,598,277
................................
Market Value: --
-------------------------------------------------------------------------------------------------------------------------
HARTFORD MORTGAGE SECURITIES HLS
FUND, INC. -- CLASS IA
Shares 217,890
Cost $232,757
................................
Market Value: --
-------------------------------------------------------------------------------------------------------------------------
HARTFORD INDEX HLS
FUND, INC. -- CLASS IA
Shares 5,411,247
Cost $16,657,404
................................
Market Value: --
-------------------------------------------------------------------------------------------------------------------------
HARTFORD INTERNATIONAL
OPPORTUNITIES HLS FUND, INC. --
CLASS IA
Shares 3,581,501
Cost $4,961,085
................................
Market Value: 5,218,931
-------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life Insurance
Company --
................................
Receivable from fund shares sold 1,154
................................
Total Assets 5,220,085
................................
LIABILITIES:
Due to Hartford Life Insurance
Company 1,305
................................
Payable for fund shares purchased --
................................
TOTAL LIABILITIES 1,305
-------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE
CONTRACT LIABILITIES) $5,218,780
-------------------------------------------------------------------------------------------------------------------------
Units Owned by Participants 2,499,204
................................
Unit Values $ 2.088177
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-2
<PAGE>
SEPARATE ACCOUNT VL II -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
September 30, 2000 Dividend Growth and International Small MidCap Fidelity VIP Fidelity
and Income Advisers Company Fund Fund Equity-Income VIP
Growth Fund Fund Fund Sub-Account Sub-Account Portfolio Overseas
Sub-Account Sub-Account Sub-Account Sub-Account Portfolio
Sub-Account
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
-----------------------------------------------------------------------------------------------------------------------------
HARTFORD DIVIDEND AND GROWTH HLS
FUND, INC. -- CLASS IA
Shares 4,909,747
Cost $9,338,020
............................................................................................................................
Market Value: $10,081,709 $ -- $ -- $ -- $ -- $ -- $ --
-----------------------------------------------------------------------------------------------------------------------------
HARTFORD GROWTH AND INCOME HLS
FUND -- CLASS IA
Shares 264,786
Cost $358,903
............................................................................................................................
Market Value: -- 380,934 -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------
HARTFORD INTERNATIONAL ADVISERS
HLS FUND, INC. -- CLASS IA
Shares 2,577
Cost $3,282
............................................................................................................................
Market Value: -- -- 3,168 -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------
HARTFORD SMALL COMPANY HLS
FUND, INC. -- CLASS IA
Shares 625,134
Cost $1,142,737
............................................................................................................................
Market Value: -- -- -- 1,192,116 -- -- --
-----------------------------------------------------------------------------------------------------------------------------
HARTFORD MIDCAP HLS
FUND, INC. -- CLASS IA
Shares 583,768
Cost $1,332,090
............................................................................................................................
Market Value: -- -- -- -- 1,532,517 -- --
-----------------------------------------------------------------------------------------------------------------------------
FIDELITY VIP EQUITY-INCOME
PORTFOLIO
Shares 394,853
Cost $9,059,855
............................................................................................................................
Market Value: -- -- -- -- -- 9,689,702 --
-----------------------------------------------------------------------------------------------------------------------------
FIDELITY VIP OVERSEAS PORTFOLIO
Shares 204,435
Cost $4,379,775
............................................................................................................................
Market Value: -- -- -- -- -- -- 4,448,508
-----------------------------------------------------------------------------------------------------------------------------
FIDELITY VIP II ASSET MANAGER
PORTFOLIO
Shares 124,628
Cost $2,100,314
............................................................................................................................
Market Value: -- -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life Insurance
Company 3,872 -- -- -- -- -- 7,125
............................................................................................................................
Receivable from fund shares sold -- 84 -- 883 528 -- --
............................................................................................................................
Total Assets 10,085,581 381,018 3,168 1,192,999 1,533,045 9,689,702 4,455,633
............................................................................................................................
LIABILITIES:
Due to Hartford Life Insurance
Company -- 81 -- 888 515 1,644 --
............................................................................................................................
Payable for fund shares purchased 4,088 -- -- -- -- 1,760 45
............................................................................................................................
TOTAL LIABILITIES 4,088 81 -- 888 515 3,404 45
-----------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE
CONTRACT LIABILITIES) $10,081,493 $ 380,937 $ 3,168 $1,192,111 $1,532,530 $9,686,298 $4,455,588
-----------------------------------------------------------------------------------------------------------------------------
Units Owned by Participants 3,911,711 267,713 2,678 680,097 686,809 4,459,891 2,320,108
............................................................................................................................
Unit Values $ 2.577259 $1.422924 $1.183079 $ 1.752856 $ 2.231378 $ 2.171869 $ 1.920422
-----------------------------------------------------------------------------------------------------------------------------
<S> <C>
September 30, 2000 Fidelity VIP
II
Asset
Manager
Portfolio
Sub-Account
-----------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments:
-----------------------------------------------------------------------------------------------------------------------------
HARTFORD DIVIDEND AND GROWTH HLS
FUND, INC. -- CLASS IA
Shares 4,909,747
Cost $9,338,020
................................
Market Value: $ --
-----------------------------------------------------------------------------------------------------------------------------
HARTFORD GROWTH AND INCOME HLS
FUND -- CLASS IA
Shares 264,786
Cost $358,903
................................
Market Value: --
-----------------------------------------------------------------------------------------------------------------------------
HARTFORD INTERNATIONAL ADVISERS
HLS FUND, INC. -- CLASS IA
Shares 2,577
Cost $3,282
................................
Market Value: --
-----------------------------------------------------------------------------------------------------------------------------
HARTFORD SMALL COMPANY HLS
FUND, INC. -- CLASS IA
Shares 625,134
Cost $1,142,737
................................
Market Value: --
-----------------------------------------------------------------------------------------------------------------------------
HARTFORD MIDCAP HLS
FUND, INC. -- CLASS IA
Shares 583,768
Cost $1,332,090
................................
Market Value: --
-----------------------------------------------------------------------------------------------------------------------------
FIDELITY VIP EQUITY-INCOME
PORTFOLIO
Shares 394,853
Cost $9,059,855
................................
Market Value: --
-----------------------------------------------------------------------------------------------------------------------------
FIDELITY VIP OVERSEAS PORTFOLIO
Shares 204,435
Cost $4,379,775
................................
Market Value: --
-----------------------------------------------------------------------------------------------------------------------------
FIDELITY VIP II ASSET MANAGER
PORTFOLIO
Shares 124,628
Cost $2,100,314
................................
Market Value: 2,073,809
-----------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life Insurance
Company --
................................
Receivable from fund shares sold --
................................
Total Assets 2,073,809
................................
LIABILITIES:
Due to Hartford Life Insurance
Company 7,066
................................
Payable for fund shares purchased --
................................
TOTAL LIABILITIES 7,066
-----------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE
CONTRACT LIABILITIES) $2,066,743
-----------------------------------------------------------------------------------------------------------------------------
Units Owned by Participants 1,063,166
................................
Unit Values $ 1.943951
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-3
<PAGE>
SEPARATE ACCOUNT VL II -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended Bond Stock Money Advisers Capital Mortgage Index
September 30, 2000 Fund Fund Market Fund Fund Appreciation Securities Fund
Sub-Account Sub-Account Sub-Account Sub-Account Fund Fund Sub-Account
Sub-Account Sub-Account
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 34,347 $ 6,073 $223,777 $ 25,821 $ 10,337 $ 1,561 $ 2,251
......................................................................................................................
Net investment income (loss) 34,347 6,073 223,777 25,821 10,337 1,561 2,251
......................................................................................................................
Capital gains income -- 2,507,944 (139) 1,027,707 3,415,266 -- 211,235
......................................................................................................................
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
......................................................................................................................
Net realized gain (loss) on
security transactions 29,364 2,748 -- (3,366) 3,212 (4,304) (6,956)
......................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period 459,858 (3,069,509) -- (995,416) 943,911 17,575 (600,372)
......................................................................................................................
Net gain (loss) on investments 489,222 (3,066,761) -- (998,782) 947,123 13,271 (607,328)
-----------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $523,569 $ (552,744) $223,638 $ 54,746 $4,372,726 $14,832 $(393,842)
-----------------------------------------------------------------------------------------------------------------------
<S> <C>
For the Period Ended International
September 30, 2000 Opportunities
Fund
Sub-Account
--------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 37,460
................................
Net investment income (loss) 37,460
................................
Capital gains income 600,005
................................
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
................................
Net realized gain (loss) on
security transactions 2,892
................................
Net unrealized appreciation
(depreciation) of investments
during the period (1,331,996)
................................
Net gain (loss) on investments (1,329,104)
---------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $ (691,639)
----------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-4
<PAGE>
SEPARATE ACCOUNT VL II -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended Dividend Growth and International Small MidCap Fidelity VIP Fidelity
September 30, 2000 and Income Advisers Company Fund Fund Equity-Income VIP
Growth Fund Fund Sub-Account Sub-Account Portfolio Overseas
Fund Sub-Account Sub-Account Sub-Account Portfolio
Sub-Account Sub-Account
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 7,705 $ 18 $ 41 $ -- $ -- $ 181,507 $ 66,972
.............................................................................................................................
Net investment income (loss) 7,705 18 41 -- -- 181,507 66,972
.............................................................................................................................
Capital gains income 846,252 3,766 222 126,600 35,459 683,816 421,740
.............................................................................................................................
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
.............................................................................................................................
Net realized gain (loss) on
security transactions 2,713 96 1 783 1,076 (196,811) (3,030)
.............................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period (364,258) 2,178 (425) (164,246) 147,231 (442,687) (1,086,099)
.............................................................................................................................
Net gain (loss) on investments (361,545) 2,274 (424) (163,463) 148,307 (639,498) (1,089,129)
------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $ 492,412 $6,058 $(161) $ (36,863) $183,766 $ 225,825 $ (600,417)
------------------------------------------------------------------------------------------------------------------------------
<S> <C>
For the Period Ended Fidelity VIP
September 30, 2000 II
Asset Manager
Portfolio
Sub-Account
-----------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 62,391
................................
Net investment income (loss) 62,391
................................
Capital gains income 146,990
................................
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
................................
Net realized gain (loss) on
security transactions 1,788
................................
Net unrealized appreciation
(depreciation) of investments
during the period (211,209)
................................
Net gain (loss) on investments (209,421)
--------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $ (40)
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-5
<PAGE>
SEPARATE ACCOUNT VL II -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended Bond Stock Money Advisers Capital Mortgage Index
September 30, 2000 Fund Fund Market Fund Fund Appreciation Securities Fund
Sub-Account Sub-Account Sub-Account Sub-Account Fund Fund Sub-Account
Sub-Account Sub-Account
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 34,347 $ 6,073 $ 223,777 $ 25,821 $ 10,337 $ 1,561 $ 2,251
.........................................................................................................................
Capital gains income -- 2,507,944 (139) 1,027,707 3,415,266 -- 211,235
.........................................................................................................................
Net realized gain (loss) on
security transactions 29,364 2,748 -- (3,366) 3,212 (4,304) (6,956)
.........................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period 459,858 (3,069,509) -- (995,416) 943,911 17,575 (600,372)
.........................................................................................................................
Net increase (decrease) in net
assets resulting from
operations 523,569 (552,744) 223,638 54,746 4,372,726 14,832 (393,842)
.........................................................................................................................
UNIT TRANSACTIONS:
Purchases 422,078 1,818,944 5,791,952 1,304,866 1,874,668 67,386 1,340,086
.........................................................................................................................
Net transfers (1,500,730) 1,479,878 (4,815,157) 597,986 522,652 (157,141) (349,224)
.........................................................................................................................
Surrenders for benefit payments
and fees (245,074) (428,697) (174,408) (233,403) (484,505) (10,162) (382,084)
.........................................................................................................................
Net Loan withdrawals 2,282 (9,888) (225) 11,040 (14,295) -- (7,549)
.........................................................................................................................
Cost of insurance (162,369) (612,698) (305,118) (479,092) (774,168) (9,222) (479,038)
.........................................................................................................................
Net (decrease) increase in net
assets resulting from unit
transactions (1,483,813) 2,247,539 497,044 1,201,397 1,124,352 (109,139) 122,191
.........................................................................................................................
Total (decrease) increase in net
assets (960,244) 1,694,795 720,682 1,256,143 5,497,078 (94,307) (271,651)
.........................................................................................................................
NET ASSETS:
Beginning of period 7,139,734 21,716,504 5,008,442 10,716,125 21,601,090 333,548 22,328,793
--------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $6,179,490 $23,411,299 $5,729,124 $11,972,268 $27,098,168 $ 239,241 $22,057,142
--------------------------------------------------------------------------------------------------------------------------
<S> <C>
For the Period Ended International
September 30, 2000 Opportunities
Fund
Sub-Account
--------------------------------------------------------------
OPERATIONS:
Net investment income $ 37,460
................................
Capital gains income 600,005
................................
Net realized gain (loss) on
security transactions 2,892
................................
Net unrealized appreciation
(depreciation) of investments
during the period (1,331,996)
................................
Net increase (decrease) in net
assets resulting from
operations (691,639)
................................
UNIT TRANSACTIONS:
Purchases 459,659
................................
Net transfers 160,928
................................
Surrenders for benefit payments
and fees (202,739)
................................
Net Loan withdrawals (8,458)
................................
Cost of insurance (144,000)
................................
Net (decrease) increase in net
assets resulting from unit
transactions 265,390
................................
Total (decrease) increase in net
assets (426,249)
................................
NET ASSETS:
Beginning of period 5,645,029
---------------------------------------------------------------------------
END OF PERIOD $5,218,780
----------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-6
<PAGE>
SEPARATE ACCOUNT VL II -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended Dividend Growth and International Small MidCap Fidelity VIP Fidelity
September 30, 2000 and Income Advisers Company Fund Fund Equity-Income VIP
Growth Fund Fund Fund Sub-Account Sub-Account Portfolio Overseas
Sub-Account Sub-Account Sub-Account Sub-Account Portfolio
Sub-Account
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 7,705 $ 18 $ 41 $ -- $ -- $ 181,507 $ 66,972
............................................................................................................................
Capital gains income 846,252 3,766 222 126,600 35,459 683,816 421,740
............................................................................................................................
Net realized gain (loss) on
security transactions 2,713 96 1 783 1,076 (196,811) (3,030)
............................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period (364,258) 2,178 (425) (164,246) 147,231 (442,687) (1,086,099)
............................................................................................................................
Net increase (decrease) in net
assets resulting from
operations 492,412 6,058 (161) (36,863) 183,766 225,825 (600,417)
............................................................................................................................
UNIT TRANSACTIONS:
Purchases 928,057 24,206 -- 107,661 56,262 802,314 255,579
............................................................................................................................
Net transfers 96,826 213,260 1,927 500,142 1,131,250 (1,671,022) 202,866
............................................................................................................................
Surrenders for benefit payments
and fees (246,982) (21,555) (440) (104,866) (79,549) (239,180) (155,420)
............................................................................................................................
Net Loan withdrawals (14,987) -- -- -- -- (11,050) (14)
............................................................................................................................
Cost of insurance (304,436) (9,579) (42) (45,498) (30,525) (257,830) (91,236)
............................................................................................................................
Net increase (decrease) in net
assets resulting from unit
transactions 458,478 206,332 1,445 457,439 1,077,438 (1,376,768) 211,775
............................................................................................................................
Total increase (decrease) in net
assets 950,890 212,390 1,284 420,576 1,261,204 (1,150,943) (388,642)
............................................................................................................................
NET ASSETS:
Beginning of period 9,130,603 168,547 1,884 771,535 271,326 10,837,241 4,844,230
-----------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $10,081,493 $ 380,937 $3,168 $1,192,111 $1,532,530 $ 9,686,298 $ 4,455,588
-----------------------------------------------------------------------------------------------------------------------------
<S> <C>
For the Period Ended Fidelity VIP
September 30, 2000 II
Asset
Manager
Portfolio
Sub-Account
-----------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 62,391
................................
Capital gains income 146,990
................................
Net realized gain (loss) on
security transactions 1,788
................................
Net unrealized appreciation
(depreciation) of investments
during the period (211,209)
................................
Net increase (decrease) in net
assets resulting from
operations (40)
................................
UNIT TRANSACTIONS:
Purchases 217,564
................................
Net transfers 2,923
................................
Surrenders for benefit payments
and fees (28,064)
................................
Net Loan withdrawals --
................................
Cost of insurance (70,566)
................................
Net increase (decrease) in net
assets resulting from unit
transactions 121,857
................................
Total increase (decrease) in net
assets 121,817
................................
NET ASSETS:
Beginning of period 1,944,926
------------------------------------------------------------------------------------------------------------------
END OF PERIOD $2,066,743
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-7
<PAGE>
SEPARATE ACCOUNT VL II -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF ASSETS & LIABILITIES (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
September 30, 2000 Asia Diversified The George Global Global Growth Health
Pacific Income Putnam Asset Growth and Income Sciences
Growth Sub-Account Fund Allocation Sub-Account Sub-Account Sub-Account
Sub-Account of Boston Sub-Account
Sub-Account
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
--------------------------------------------------------------------------------------------------------------------------
PUTNAM VT ASIA PACIFIC GROWTH
FUND
Shares 14,864
Cost $191,425
.........................................................................................................................
Market Value: $166,924 $ -- $ -- $ -- $ -- $ -- $ --
--------------------------------------------------------------------------------------------------------------------------
PUTNAM VT DIVERSIFIED INCOME FUND
Shares 55,548
Cost $571,376
.........................................................................................................................
Market Value: -- $ 512,151 -- -- -- -- --
--------------------------------------------------------------------------------------------------------------------------
PUTNAM VT THE GEORGE PUTNAM FUND
OF BOSTON
Shares 7,606
Cost $76,531
.........................................................................................................................
Market Value: -- -- $79,330 -- -- -- --
--------------------------------------------------------------------------------------------------------------------------
PUTNAM VT GLOBAL ASSET ALLOCATION
FUND
Shares 238,111
Cost $4,318,259
.........................................................................................................................
Market Value: -- -- -- $4,093,120 -- -- --
--------------------------------------------------------------------------------------------------------------------------
PUTNAM VT GLOBAL GROWTH FUND
Shares 468,990
Cost $9,105,904
.........................................................................................................................
Market Value: -- -- -- -- $10,228,673 -- --
--------------------------------------------------------------------------------------------------------------------------
PUTNAM VT GROWTH AND INCOME FUND
Shares 631,284
Cost $16,349,980
.........................................................................................................................
Market Value: -- -- -- -- -- $15,655,832 --
--------------------------------------------------------------------------------------------------------------------------
PUTNAM VT HEALTH SCIENCES FUND
Shares 23,982
Cost $294,982
.........................................................................................................................
Market Value: -- -- -- -- -- -- $353,254
--------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life Insurance
Company -- 1,331 3 230 3,176 86,005 401
.........................................................................................................................
Receivable from fund shares sold -- -- -- -- -- -- --
.........................................................................................................................
Total Assets 166,924 513,482 79,333 4,093,350 10,231,849 15,741,837 353,655
.........................................................................................................................
LIABILITIES
Due to Hartford Life Insurance
Company 1 -- -- -- -- --
.........................................................................................................................
Payable for fund shares purchased -- 1,329 -- -- 2,576 87,657 405
.........................................................................................................................
TOTAL LIABILITIES 1 1,329 -- 0 2,576 87,657 405
--------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE
CONTRACT LIABILITIES) $166,923 $ 512,153 $79,333 $4,093,350 $10,229,273 $15,654,180 $353,250
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-8
<PAGE>
SEPARATE ACCOUNT VL II -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF ASSETS & LIABILITIES (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
September 30, 2000 High Yield Income International International International Investors Money
Sub-Account Sub-Account Growth Growth and New Sub-Account Market
Sub-Account Income Opportunities Sub-Account
Sub-Account Sub-Account
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments:
------------------------------------------------------------------------------------------------------------------------------
PUTNAM VT HIGH YIELD FUND
Shares 427,248
Cost $4,963,588
.............................................................................................................................
Market Value: $4,093,037 $ -- $ -- $ -- $ -- $ -- $ --
------------------------------------------------------------------------------------------------------------------------------
PUTNAM VT INCOME FUND
Shares 176,459
Cost $2,236,332
.............................................................................................................................
Market Value: -- $2,159,855 -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------
PUTNAM VT INTERNATIONAL GROWTH
FUND
Shares 41,689
Cost $723,206
.............................................................................................................................
Market Value: -- -- $752,901 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------
PUTNAM VT INTERNATIONAL GROWTH
AND INCOME FUND
Shares 7,261
Cost $102,403
.............................................................................................................................
Market Value: -- -- -- $92,582 -- -- --
------------------------------------------------------------------------------------------------------------------------------
PUTNAM VT INTERNATIONAL NEW
OPPORTUNITIES FUND
Shares 16,407
Cost $374,292
.............................................................................................................................
Market Value: -- -- -- -- $276,450 -- --
------------------------------------------------------------------------------------------------------------------------------
PUTNAM VT INVESTORS FUND
Shares 48,350
Cost $572,089
.............................................................................................................................
Market Value: -- -- -- -- -- $702,519 --
------------------------------------------------------------------------------------------------------------------------------
PUTNAM VT MONEY MARKET FUND
Shares 195,393
Cost $195,393
.............................................................................................................................
Market Value: -- -- -- -- -- -- $ 195,393
------------------------------------------------------------------------------------------------------------------------------
Due from Hartford Life Insurance
Company 2,768 -- -- -- 488 4,585 42
.............................................................................................................................
Receivable from fund shares sold -- -- -- -- -- -- --
.............................................................................................................................
Total Assets 4,095,805 2,159,855 752,901 92,582 276,938 707,104 195,435
.............................................................................................................................
LIABILITIES
Due to Hartford Life Insurance
Company -- 72 4 1 -- -- --
.............................................................................................................................
Payable for fund shares purchased 2,758 -- -- -- 438 4,590 --
.............................................................................................................................
TOTAL LIABILITIES 2,758 72 4 1 438 4,590 0
------------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE
CONTRACT LIABILITIES) $4,093,047 $2,159,783 $752,897 $92,581 $276,500 $702,514 $ 195,435
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-9
<PAGE>
SEPARATE ACCOUNT VL II -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF ASSETS & LIABILITIES (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
September 30, 2000 New New OTC & Utilities Vista Voyager
Opportunities Value Emerging Growth Sub-Account Sub-Account
Sub-Account Sub-Account Growth and Income
Sub-Account Sub-Account
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
PUTNAM VT NEW OPPORTUNITIES FUND
Shares 415,594
Cost $9,741,192
.................................................................................................................
Market Value: $17,442,478 $ -- $ -- $ -- $ -- $ --
------------------------------------------------------------------------------------------------------------------
PUTNAM VT NEW VALUE FUND
Shares 28,348
Cost $332,758
.................................................................................................................
Market Value: -- $349,525 -- -- -- --
------------------------------------------------------------------------------------------------------------------
PUTNAM VT OTC & EMERGING GROWTH
FUND
Shares 40,703
Cost $862,212
.................................................................................................................
Market Value: -- -- $755,048 -- -- --
------------------------------------------------------------------------------------------------------------------
PUTNAM VT UTILITIES GROWTH &
INCOME FUND
Shares 69,525
Cost $1,113,117
.................................................................................................................
Market Value: -- -- -- $1,229,896 -- --
------------------------------------------------------------------------------------------------------------------
PUTNAM VT VISTA FUND
Shares 28,861
Cost $686,239
.................................................................................................................
Market Value: -- -- -- -- $ 715,473 --
------------------------------------------------------------------------------------------------------------------
PUTNAM VT VOYAGER FUND
Shares 442,227
Cost $18,363,234
.................................................................................................................
Market Value: -- -- -- -- -- $25,299,833
------------------------------------------------------------------------------------------------------------------
Due from Hartford Life Insurance
Company 3,789 3,779 -- 62 2 53,509
.................................................................................................................
Receivable from fund shares sold -- -- -- -- -- --
.................................................................................................................
Total Assets 17,446,267 353,304 755,048 1,229,958 715,475 25,353,342
.................................................................................................................
LIABILITIES
Due to Hartford Life Insurance
Company -- -- 7 -- -- --
.................................................................................................................
Payable for fund shares purchased 4,530 3,780 -- -- -- 51,571
.................................................................................................................
TOTAL LIABILITIES 4,530 3,780 7 -- -- 51,571
------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE
CONTRACT LIABILITIES) $17,441,737 $349,524 $755,041 $1,229,958 $ 715,475 $25,301,771
------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-10
<PAGE>
SEPARATE ACCOUNT VL II -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) (CONTINUED)
<TABLE>
-----------------------------------------------------------------------------------
September 30, 2000 Units Unit Contract
Owned by Price Liability
Participants
<S> <C> <C> <C>
-----------------------------------------------------------------------------------
Variable life contracts
Asia Pacific Growth Fund 11,176 $14.935338 $ 166,923
..................................................................................
Diversified Income Fund 39,056 13.113302 512,153
..................................................................................
George Putnam Fund 7,186 11.040569 79,333
..................................................................................
Global Asset Allocation Fund 179,415 22.815002 4,093,350
..................................................................................
Global Growth Fund 310,165 32.980056 10,229,273
..................................................................................
Growth and Income Fund 582,230 26.886600 15,654,180
..................................................................................
Health Sciences Fund 23,315 15.151502 353,250
..................................................................................
High Yield Fund 254,003 16.114172 4,093,047
..................................................................................
Income Fund 143,049 15.098227 2,159,783
..................................................................................
International Growth Fund 52,056 14.463235 752,897
..................................................................................
International Growth and Income Fund 7,818 11.842557 92,581
..................................................................................
International New Opportunities Fund 18,499 14.947040 276,500
..................................................................................
Investors Fund 50,360 13.949961 702,514
..................................................................................
Money Market Fund 137,813 1.418117 195,435
..................................................................................
New Opportunities Fund 436,370 39.970028 17,441,737
..................................................................................
New Value Fund 29,385 11.894540 349,524
..................................................................................
OTC & Emerging Growth Fund 37,669 20.043914 755,041
..................................................................................
Utilities Growth and Income Fund 49,867 24.664702 1,229,958
..................................................................................
Vista Fund 36,398 19.656868 715,475
..................................................................................
Voyager Fund 566,147 44.691134 25,301,771
..................................................................................
GRAND TOTAL: $85,154,725
-----------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-11
<PAGE>
SEPARATE ACCOUNT VL II -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended Asia Diversified The George Global Global Growth Health
September 30, 2000 Pacific Income Putnam Asset Growth and Income Sciences
Growth Sub-Account Fund Allocation Sub-Account Sub-Account Sub-Account
Sub-Account of Boston Sub-Account
Sub-Account
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 12,316 $ 35,542 -- $ 70,991 $ 75,911 $ 239,607 --
......................................................................................................................
Capital gains income -- -- 370,753 1,891,825 1,128,130 --
......................................................................................................................
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
......................................................................................................................
Net realized gain (loss) on
security transactions (33,484) (83) 13 (2,920) 1,082 8,516 189
......................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period (79,251) (32,173) 3,572 (521,051) (3,829,450) (787,276) 54,307
......................................................................................................................
Net gain (loss) on investments (112,735) (32,256) 3,585 (523,971) (3,828,368) (778,760) 54,496
-----------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $(100,419) $ 3,286 $3,585 $(82,227) $(1,860,632) $ 588,977 $ 54,496
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-12
<PAGE>
SEPARATE ACCOUNT VL II -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended High Yield Income International International International Investors Money Market
September 30, 2000 Sub-Account Sub-Account Growth Growth and New Sub-Account Sub-Account
Sub-Account Income Opportunities
Sub-Account Sub-Account
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $460,172 $154,348 $ 11,179 $ 3,053 $ 145 $ -- $ 9,603
..........................................................................................................................
Capital gains income -- 48,486 6,693 13,573 -- --
..........................................................................................................................
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
..........................................................................................................................
Net realized gain (loss) on
security transactions (16) (4,056) (368) 4 (36) 3,405 --
..........................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period (555,990) (41,499) (117,160) (11,955) (110,927) (30,376) --
..........................................................................................................................
Net gain (loss) on investments (556,006) (45,555) (117,528) (11,951) (110,963) (26,971) --
---------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $(95,834) $108,793 $(57,863) $(2,205) $(97,245) $(26,971) $9,603
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-13
<PAGE>
SEPARATE ACCOUNT VL II -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended New New OTC & Utilities Vista Voyager
September 30, 2000 Opportunities Value Emerging Growth Sub-Account Sub-Account
Sub-Account Sub-Account Growth and
Sub-Account Income
Sub-Account
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ -- $ 4,289 $ -- $ 40,997 $ -- $ 7,767
......................................................................................................
Capital gains income 1,304,356 15,191 6,665 72,373 1,850 3,295,557
......................................................................................................
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
......................................................................................................
Net realized gain (loss) on
security transactions 12,108 134 (16,212) (645) 663 (62,622)
......................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period (694,441) 17,392 (197,101) 49,888 23,635 (3,822,605)
......................................................................................................
Net gain (loss) on investments (682,333) 17,526 (213,313) 49,243 24,298 (3,885,227)
-------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $ 622,023 $37,006 $(206,648) $162,613 $26,148 $ (581,903)
-------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-14
<PAGE>
SEPARATE ACCOUNT VL II -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended Asia Diversified The George Global Asset Global Growth Health
September 30, 2000 Pacific Income Putnam Fund Allocation Growth and Income Sciences
Growth Sub-Account of Boston Sub-Account Sub-Account Sub-Account Sub-Account
Sub-Account Sub-Account
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 12,316 $ 35,542 $ -- $ 70,991 $ 75,911 $ 239,607 $ --
............................................................................................................................
Capital gains income -- -- -- 370,753 1,891,825 1,128,130 --
............................................................................................................................
Net realized gain (loss) on
security transactions (33,484) (83) 13 (2,920) 1,082 8,516 189
............................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period (79,251) (32,173) 3,572 (521,051) (3,829,450) (787,276) 54,307
............................................................................................................................
Net increase (decrease) in net
assets resulting from
operations (100,419) 3,286 3,585 (82,227) (1,860,632) 588,977 54,496
............................................................................................................................
UNIT TRANSACTIONS:
Purchases 17,571 116,833 16,368 230,443 934,029 1,752,733 24,162
............................................................................................................................
Net transfers 69,540 543 45,155 (75,950) (267,298) 1,538,652 209,568
............................................................................................................................
Surrenders for benefit payments
and fees (5,097) (9,606) (28,120) (32,233) (436,192) (242,831) (9,325)
............................................................................................................................
Net loan activity -- -- -- (6) (373) (12,445) (115)
............................................................................................................................
Cost of insurance (10,437) (20,544) (1,267) (86,856) (293,601) (486,484) (4,111)
............................................................................................................................
Net increase (decrease) in net
assets resulting from unit
transactions 71,577 87,226 32,136 35,398 (63,435) 2,549,625 220,179
............................................................................................................................
Total increase (decrease) in net
assets (28,842) 90,512 35,721 (46,829) (1,924,067) 3,138,602 274,675
............................................................................................................................
NET ASSETS:
Beginning of period 195,765 421,641 43,612 4,140,179 12,153,340 12,515,578 78,575
-----------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $166,923 $ 512,153 $79,333 $4,093,350 $10,229,273 $15,654,180 $353,250
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-15
<PAGE>
SEPARATE ACCOUNT VL II -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended High Yield Income International International International Investors Money
September 30, 2000 Sub-Account Sub-Account Growth Growth and New Sub-Account Market
Sub-Account Income Opportunities Sub-Account
Sub-Account Sub-Account
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 460,172 $ 154,348 $ 11,179 $ 3,053 $ 145 $ -- $ 9,603
................................................................................................................................
Capital gains income -- -- 48,486 6,693 13,573 -- --
................................................................................................................................
Net realized gain (loss) on
security transactions (16) (4,056) (368) 4 (36) 3,405 --
................................................................................................................................
Net unrealized (depreciation)
appreciation of investments
during the period (555,990) (41,499) (117,160) (11,955) (110,927) (30,376) --
................................................................................................................................
Net increase (decrease) in net
assets resulting from
operations (95,834) 108,793 (57,863) (2,205) (97,245) (26,971) 9,603
................................................................................................................................
UNIT TRANSACTIONS:
Purchases (423,002) 272,666 28,440 12,024 40,701 48,933 115,616
................................................................................................................................
Net transfers 147,110 (286,388) 373,832 62,876 265,661 21,004 (251,024)
................................................................................................................................
Surrenders for benefit payments
and fees (83,220) (179,077) (18,320) (1,704) (25,529) (10,906) (3,836)
................................................................................................................................
Net loan activity (9) (1,942) (1,528) -- -- (109)
................................................................................................................................
Cost of insurance (109,925) (79,874) (19,716) (4,398) (13,210) (21,865) (7,254)
................................................................................................................................
Net increase (decrease) in net
assets resulting from unit
transactions (469,046) (274,615) 362,708 68,798 267,623 37,057 (146,498)
................................................................................................................................
Total increase (decrease) in net
assets (564,880) (165,822) 304,845 66,593 170,378 10,086 (136,895)
................................................................................................................................
NET ASSETS:
Beginning of period 3,811,927 2,325,605 448,052 25,988 106,122 692,428 332,330
---------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $3,247,047 $2,159,783 $752,897 $92,581 $276,500 $ 702,514 $ 195,435
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-16
<PAGE>
SEPARATE ACCOUNT VL II -- HARTFORD LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
For the Period Ended New New OTC & Utilities Vista Voyager
September 30, 2000 Opportunities Value Emerging Growth Sub-Account Sub-Account
Sub-Account Sub-Account Growth and Income
Sub-Account Sub-Account
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ -- $ 14,289 $ -- $ 40,997 $ -- $ 7,767
...............................................................................................................................
Capital gains income 1,304,356 15,191 6,665 72,373 1,850 3,295,557
...............................................................................................................................
Net realized gain (loss) on security
transactions 12,108 134 (16,212) (645) 663 (62,622)
...............................................................................................................................
Net unrealized appreciation (depreciation) of
investments during the period (694,441) 17,392 (197,101) 49,888 23,635 (3,822,605)
...............................................................................................................................
Net increase (decrease) in net assets
resulting from operations 622,023 37,006 (206,648) 162,613 26,148 (581,903)
...............................................................................................................................
UNIT TRANSACTIONS:
Purchases 1,025,448 20,425 70,794 132,618 34,219 1,714,176
...............................................................................................................................
Net transfers 488,951 34,545 668,421 (180,639) 703,154 12,038
...............................................................................................................................
Surrenders for benefit payments and fees (496,370) (4,589) (14,638) (37,143) (71,247) (577,875)
...............................................................................................................................
Net loan activity 9,562 -- (5) (15,954)
...............................................................................................................................
Cost of insurance (460,628) (10,595) (18,804) (44,067) (7,167) (661,336)
...............................................................................................................................
Net increase (decrease) in net assets
resulting from unit transactions 566,963 39,786 705,773 (129,236) 658,959 471,049
...............................................................................................................................
Total increase (decrease) in net assets 1,188,986 76,792 499,125 33,377 685,107 (110,854)
...............................................................................................................................
NET ASSETS:
Beginning of period 16,252,751 272,732 255,916 1,196,581 30,368 25,412,625
--------------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $17,441,737 $349,524 $755,041 $1,229,958 $715,475 $25,301,771
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-17
<PAGE>
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THIRD QUARTER NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
-----------------------------------------------
2000 1999 2000 1999
-----------------------------------------------
(in millions) (Unaudited)
<S> <C> <C> <C> <C>
REVENUES
Premiums and other considerations $588 $513 $1,653 $1,517
Net investment income 338 333 979 1,019
Net realized capital gains (losses) (7) -- (44) 1
-----------------------------------------------
TOTAL REVENUES 919 846 2,588 2,537
-----------------------------------------------
BENEFITS, CLAIMS AND EXPENSES
Benefits, claims and claim adjustment expenses 372 379 1,086 1,195
Amortization of deferred policy acquisition costs 163 141 462 396
Dividends to policyholders 7 70 53 97
Other expenses 188 105 456 432
-----------------------------------------------
TOTAL BENEFITS, CLAIMS AND EXPENSES 730 695 2,057 2,120
-----------------------------------------------
Income before income tax expense 189 151 531 417
Income tax expense 60 51 144 144
-----------------------------------------------
NET INCOME $129 $100 $ 387 $ 273
-----------------------------------------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
F-1
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------------------------------
(Unaudited)
(in millions, except for share data)
<S> <C> <C>
ASSETS
Investments
Fixed maturities, available for sale, at fair value
(amortized cost of $13,851 and $13,923) $ 13,599 $ 13,499
Equity securities, at fair value 51 56
Policy loans, at outstanding balance 3,561 4,187
Other investments 727 342
------------------------------------
TOTAL INVESTMENTS 17,938 18,084
------------------------------------
Cash 95 55
Premiums receivable and agents' balances 23 29
Reinsurance recoverables 1,267 1,274
Deferred policy acquisition costs 4,242 4,013
Deferred income tax 462 459
Other assets 555 654
Separate account assets 118,333 110,397
------------------------------------
TOTAL ASSETS $142,915 $134,965
------------------------------------
LIABILITIES
Future policy benefits $ 4,643 $ 4,332
Other policyholder funds 14,796 16,004
Other liabilities 2,223 1,613
Separate account liabilities 118,333 110,397
------------------------------------
TOTAL LIABILITIES 139,995 132,346
------------------------------------
STOCKHOLDER'S EQUITY
Common stock -- 1,000 shares authorized,
issued and outstanding, par value $5,690 6 6
Capital surplus 1,045 1,045
Accumulated other comprehensive loss
Net unrealized capital losses on securities, net of tax (156) (255)
------------------------------------
TOTAL ACCUMULATED OTHER COMPREHENSIVE LOSS (156) (255)
------------------------------------
Retained earnings 2,025 1,823
------------------------------------
TOTAL STOCKHOLDER'S EQUITY 2,920 2,619
------------------------------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $142,915 $134,965
------------------------------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
F-2
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
Accumulated Other
Comprehensive
Income (Loss)
-----------------
Net Unrealized
Capital Gains
(Losses) on Total
Common Capital Securities, Retained Stockholder's
Stock Surplus Net of Tax Earnings Equity
---------------------------------------------------------------
(in millions) (Unaudited)
<S> <C> <C> <C> <C> <C>
NINE MONTHS ENDED SEPTEMBER 30, 2000
Balance, December 31, 1999 $6 $1,045 $(255) $1,823 $2,619
Comprehensive income (loss)
Net income 387 387
Other comprehensive income (loss), net of
tax
Net unrealized capital gains (losses) on
securities (1) 99 99
Total other comprehensive income (loss) 99
Total comprehensive income (loss) 486
Dividends paid to parent (185) (185)
---------------------------------------------------------------
BALANCE, SEPTEMBER 30, 2000 $6 $1,045 $(156) $2,025 $2,920
---------------------------------------------------------------
NINE MONTHS ENDED SEPTEMBER 30, 1999
Balance, December 31, 1998 $6 $1,045 $ 184 $1,462 $2,697
Comprehensive income (loss)
Net income 273 273
Other comprehensive income (loss), net of
tax
Net unrealized capital gains (losses) on
securities (1) (353) (353)
Total other comprehensive income (loss) (353)
Total comprehensive income (loss) (80)
---------------------------------------------------------------
BALANCE, SEPTEMBER 30, 1999 $6 $1,045 $(169) $1,735 $2,617
---------------------------------------------------------------
</TABLE>
(1) Net unrealized capital gains (losses) on securities are reflected net of tax
provision (benefit) of $53 and $(190) for the nine months ended
September 30, 2000 and 1999, respectively. There were reclassification
adjustments for after-tax gains (losses) realized in net income of $(29) and
$1 for the nine months ended September 30, 2000 and 1999, respectively.
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
F-3
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------------
2000 1999
--------------------------------
(Unaudited) (in millions)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 387 $ 273
Adjustments to reconcile net income to net cash provided
by operating activities
Depreciation and amortization (20) (8)
Net realized capital losses (gains) 44 (1)
Decrease (increase) in premiums receivable and agents'
balances 6 (15)
Increase (decrease) in other liabilities 169 (97)
Change in receivables, payables and accruals 40 142
Increase (decrease) in accrued tax 262 (200)
(Increase) decrease in deferred income tax (56) 164
Increase in deferred policy acquisition costs (229) (258)
Increase in future policy benefits 311 438
Decrease (increase) in reinsurance recoverables 27 (162)
Other, net 79 (100)
--------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,020 176
--------------------------------
INVESTING ACTIVITIES
Purchases of investments (4,134) (5,132)
Sales of investments 3,458 6,434
Maturities and principal paydowns of fixed maturity
investments 1,117 1,338
Purchase of affiliates and other 2 --
--------------------------------
NET CASH PROVIDED BY INVESTING ACTIVITIES 443 2,640
--------------------------------
FINANCING ACTIVITIES
Dividends paid to parent (185) --
Net disbursements for investment and universal life-type
contracts charged against policyholder accounts (1,238) (2,798)
--------------------------------
Net cash used for financing activities (1,423) (2,798)
--------------------------------
Net increase in cash 40 18
Cash -- beginning of period 55 17
--------------------------------
Cash -- end of period $ 95 $ 35
--------------------------------
Supplemental Disclosure of Cash Flow Information
Net cash paid during the period for
Income taxes $ 34 $ 111
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
F-4
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN MILLIONS, UNLESS OTHERWISE STATED)
(Unaudited)
--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Hartford Life
Insurance Company and subsidiaries ("Hartford Life Insurance Company" or the
"Company"), a wholly-owned subsidiary of Hartford Life and Accident Insurance
Company (its parent), a wholly-owned subsidiary of Hartford Life, Inc., have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and note disclosures which are normally
included in financial statements prepared on the basis of accounting principles
generally accepted in the United States have been condensed or omitted pursuant
to those rules and regulations, although the Company believes that the
disclosures made are adequate to make the information presented not misleading.
In the opinion of management, these statements include all adjustments which
were normal recurring adjustments necessary to present fairly the financial
position, results of operations and cash flows for the periods presented. For a
description of significant accounting policies, see Note 2 of Notes to
Consolidated Financial Statements in Hartford Life Insurance Company's 1999 Form
10-K Annual Report.
Certain reclassifications have been made to prior year financial information to
conform to the current year classification of transactions and accounts.
(b) NEW ACCOUNTING STANDARDS
In October 2000, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities - a Replacement of SFAS No. 125". SFAS No. 140 carries forward most
of SFAS No. 125's provisions without amendment. However, it revises criteria for
accounting for certain transfers of financial assets and the reporting and
disclosure requirements for collateral arrangements. SFAS No. 140's disclosure
requirements must be applied for fiscal years ending after December 15, 2000.
The other provisions of SFAS No. 140 apply prospectively to transactions and
commitments occurring after March 31, 2001. Implementation of the accounting
provisions of SFAS No. 140 is not expected to have a material impact on the
Company's financial condition or results of operations.
In July 2000, the Emerging Issues Task Force (EITF) reached consensus on Issue
No. 99-20, "Recognition of Interest Income and Impairment on Certain
Investments". This pronouncement requires investors in certain asset-backed
securities to record changes in their estimated yield on a prospective basis and
to evaluate these securities for an other-than-temporary decline in value. This
consensus is effective for financial statements with fiscal quarters beginning
after December 15, 2000. While the Company is currently in the process of
quantifying the impact of EITF No. 99-20, the consensus provisions are not
expected to have a material impact on the Company's financial condition or
results of operations.
In June 2000, the FASB issued SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities", which amended SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities". SFAS No. 133
established accounting and reporting requirements for derivative instruments,
including certain derivative instruments embedded in other contracts. SFAS No.
133 requires, among other things, that all derivatives be carried on the balance
sheet at fair value. SFAS No. 133 also specifies hedge accounting criteria under
which a derivative can qualify for special accounting. SFAS No. 138 amended SFAS
No. 133 so that for interest rate hedges, a company may designate as the hedged
risk, the risk of changes only in a benchmark interest rate. Also, credit risk
is newly defined as the company-specific spread over the benchmark interest rate
and may be hedged separately from, or in combination with, the benchmark
interest rate. Initial application of SFAS No. 133, as amended, for Hartford
Life Insurance Company will begin January 1, 2001. Implementation of SFAS No.
133, as amended, is not expected to have a material impact on the Company's
financial condition or results of operations. However, the FASB's Derivative
Implementation Group continues to deliberate on multiple issues, the resolution
of which could have a significant impact on the Company's expectations.
Effective January 1, 2000, Hartford Life Insurance Company adopted Statement of
Position (SOP) No. 98-7, "Accounting for Insurance and Reinsurance Contracts
That Do Not Transfer Insurance Risk". This SOP provides guidance on the method
of accounting for insurance and reinsurance contracts that do not transfer
insurance risk, defined in the SOP as the deposit method. Adoption of this SOP
did not have a material impact on the Company's financial condition or results
of operations.
2. COMMITMENTS AND CONTINGENT LIABILITIES
(a) LITIGATION
Hartford Life Insurance Company is involved in pending and threatened litigation
in the normal course of its business in which claims for alleged economic and
punitive damages have been asserted. Although there can be no assurances, at the
present time the Company does not anticipate that the ultimate liability arising
from such pending or threatened litigation, after consideration of provisions
made for estimated losses and costs of defense, will have a material adverse
effect on the financial condition or operating results of the Company.
(b) TAX MATTERS
Hartford Life, Inc.'s federal income tax returns are routinely audited by the
Internal Revenue Service. Hartford Life, Inc.'s 1996-1997 federal income tax
returns are currently under audit by the Internal Revenue Service.
F-5
<PAGE>
Management believes that sufficient provision has been made in the financial
statements for issues that may result from tax examinations and other tax
related matters for all open years.
During the second quarter of 2000, Hartford Life, Inc. reached a settlement with
the Internal Revenue Service with respect to certain tax matters for the
1993-1995 years. This settlement resulted in a $24 tax benefit being recorded in
Hartford Life Insurance Company's second quarter results of operations.
3. SEGMENT INFORMATION
Hartford Life Insurance Company is organized into three reportable operating
segments which include Investment Products, Individual Life and Corporate Owned
Life Insurance (COLI). Investment Products offers individual fixed and variable
annuities, retirement plan services and other investment products. Individual
Life sells a variety of life insurance products, including variable life,
universal life, interest sensitive whole life and term life insurance. COLI
primarily offers variable products used by employers to fund non-qualified
benefits or other post-employment benefit obligations as well as leveraged COLI.
The Company includes in "Other" corporate items not directly allocable to any of
its reportable operating segments, as well as certain group benefit products
including group life and disability insurance that is directly written by the
Company and is substantially ceded to its parent.
The accounting policies of the reportable operating segments are the same as
those described in the summary of significant accounting policies in Note 2 of
Notes to Consolidated Financial Statements in Hartford Life Insurance Company's
1999 Form 10-K Annual Report. Hartford Life Insurance Company evaluates
performance of its segments based on revenues, net income and the segment's
return on allocated capital. The Company charges direct operating expenses to
the appropriate segment and allocates the majority of indirect expenses to the
segments based on an intercompany expense arrangement. Intersegment revenues are
not significant and primarily occur between corporate and the operating
segments. These amounts include interest income on allocated surplus and the
allocation of net realized capital gains and losses through net investment
income utilizing the duration of the segment's investment portfolios.
The following tables present summarized financial information concerning the
Company's segments.
<TABLE>
<CAPTION>
Investment Individual
SEPTEMBER 30, 2000 Products Life COLI Other Total
<S> <C> <C> <C> <C> <C>
------------------------------------------------
THIRD QUARTER ENDED
Total revenues $ 522 $141 $238 $ 18 $ 919
Net income 86 19 9 15 129
------------------------------------------------
NINE MONTHS ENDED
Total revenues $1,548 $405 $572 $ 63 $2,588
Net income 262 53 25 47 387
</TABLE>
<TABLE>
<CAPTION>
Investment Individual
SEPTEMBER 30, 1999 Products Life COLI Other Total
<S> <C> <C> <C> <C> <C>
------------------------------------------------
THIRD QUARTER ENDED
Total revenues $ 468 $148 $220 $ 10 $ 846
Net income 69 19 7 5 100
------------------------------------------------
NINE MONTHS ENDED
Total revenues $1,403 $421 $659 $ 54 $2,537
Net income (loss) 228 51 20 (26) 273
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Dollar amounts in millions, unless otherwise stated)
Management's Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) addresses the financial condition of Hartford Life Insurance
Company and subsidiaries ("Hartford Life Insurance Company" or the "Company") as
of September 30, 2000, compared with December 31, 1999, and its results of
operations for the third quarter and nine months ended September 30, 2000
compared with the equivalent periods in 1999. This discussion should be read in
conjunction with the MD&A included in the Company's 1999 Form 10-K Annual
Report.
Certain statements contained in this discussion, other than statements of
historical fact, are forward-looking statements. These statements are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 and include estimates and assumptions related to economic,
competitive and legislative developments. These forward-looking statements are
subject to change and uncertainty which are, in many instances, beyond the
Company's control and have been made based upon management's expectations and
beliefs concerning future developments and their potential effect on the
F-6
<PAGE>
Company. There can be no assurance that future developments will be in
accordance with management's expectations or that the effect of future
developments on Hartford Life Insurance Company will be those anticipated by
management. Actual results could differ materially from those expected by the
Company, depending on the outcome of certain factors, including the possibility
of general economic, business and legislative conditions that are less favorable
than anticipated, changes in interest rates or the stock markets, stronger than
anticipated competitive activity and those described in the forward-looking
statements.
INDEX
<TABLE>
<S> <C> <C> <C>
Consolidated Results of Operations 9 Corporate Owned Life Insurance (COLI) 11
Investment Products 10 Regulatory Matters and Contingencies 11
Individual Life 10 Accounting Standards 12
</TABLE>
CONSOLIDATED RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
THIRD QUARTER NINE MONTHS
ENDED ENDED
OPERATING SUMMARY SEPTEMBER 30, SEPTEMBER 30,
<S> <C> <C> <C> <C>
--------------------------------------------------
2000 1999 2000 1999
--------------------------------------------------
Revenues $919 $846 $2,588 $2,537
Expenses 790 746 2,201 2,264
--------------------------------------------------
NET INCOME $129 $100 $ 387 $ 273
--------------------------------------------------
</TABLE>
Hartford Life Insurance Company has the following reportable segments:
Investment Products, Individual Life and Corporate Owned Life Insurance (COLI).
The Company reports in "Other" corporate items not directly allocable to any of
its segments, as well as certain group benefits business, including group life
and disability insurance that is directly written by the Company and is
substantially ceded to its parent, Hartford Life and Accident Insurance Company
(HLA).
Revenues increased $73, or 9%, and $51, or 2%, for the third quarter and nine
months ended September 30, 2000, respectively, as compared to the equivalent
1999 periods. The increases in revenues were primarily attributable to growth in
the Investment Products segment which was, for the most part, due to higher fee
income related to the individual annuity operation which is directly
attributable to increased assets under management. Additionally, for the third
quarter the COLI segment's revenues increased primarily due to fees generated
from strong sales. Partially offsetting the growth in the nine month period was
a decline in the COLI segment's revenues primarily due to the declining block of
leveraged COLI business.
Expenses increased $44, or 6%, for the third quarter, while expenses for the
nine month period decreased $63, or 3%, as compared to the equivalent prior year
periods due to the factors described above.
Net income increased $29, or 29%, and $114, or 42%, for the third quarter and
nine months ended September 30, 2000, respectively, as compared to the
equivalent 1999 periods primarily driven by increases in net income across each
of the Company's reportable segments for the nine months. The Company also
reported a benefit related to the settlement of certain federal tax matters of
$24 for the second quarter of 2000 (see Note 2(b) of Notes to Consolidated
Financial Statements). This benefit, along with an $8 benefit related to state
income taxes in the first quarter of 2000, resulted in $32 of tax benefits for
the nine months ended September 30, 2000. Partially offsetting the increase for
the nine month period, the Company realized $29 of net realized capital losses,
primarily as a result of portfolio re-balancing. Excluding the tax items and the
net realized capital losses, net income increased $111, or 41%, for the nine
months ended September 30, 2000.
SEGMENT RESULTS
Below is a summary of net income (loss) by segment.
<TABLE>
<CAPTION>
THIRD QUARTER NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
<S> <C> <C> <C> <C>
--------------------------------------------------
2000 1999 2000 1999
--------------------------------------------------
Investment Products $ 86 $ 69 $262 $228
Individual Life 19 19 53 51
Corporate Owned Life Insurance
(COLI) 9 7 25 20
Other 15 5 47 (26)
--------------------------------------------------
NET INCOME $129 $100 $387 $273
--------------------------------------------------
</TABLE>
The sections that follow analyze each segment's results.
F-7
<PAGE>
INVESTMENT PRODUCTS
<TABLE>
<CAPTION>
THIRD QUARTER NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
<S> <C> <C> <C> <C>
--------------------------------------------------
2000 1999 2000 1999
--------------------------------------------------
Revenues $522 $468 $1,548 $1,403
Expenses 436 399 1,286 1,175
--------------------------------------------------
NET INCOME $ 86 $ 69 $ 262 $ 228
--------------------------------------------------
</TABLE>
Revenues in the Investment Products segment increased $54, or 12%, and $145, or
10%, for the third quarter and nine months ended September 30, 2000,
respectively, as compared to the equivalent 1999 periods, primarily due to
higher fee income in the individual annuity operation. Fee income generated by
individual annuities increased $58, or 22%, and $149, or 19%, for the respective
third quarter and nine month periods, as related account values grew
$14.7 billion, or 19%, from September 30, 1999. This substantial growth was
mostly due to strong individual annuity sales (including $8.5 billion for the
first nine months of 2000) and equity market appreciation.
Due to the continued growth in this segment, particularly the individual annuity
operation, expenses increased $37, or 9%, or $111, or 9%, for the third quarter
and nine months ended September 30, 2000, respectively, as compared to the
equivalent 1999 periods. These increases were primarily driven by amortization
of deferred policy acquisition costs, which grew $24, or 23%, and $61, or 20%,
for the respective third quarter and nine month periods and other expenses which
increased $9, or 10%, and $43, or 17%, over the respective prior year levels.
The segment's operating expenses as a percentage of average assets under
management declined slightly for the third quarter and nine months ended versus
the respective prior year periods.
Net income increased $17, or 25%, and $34, or 15%, for the third quarter and
nine months ended September 30, 2000, respectively, as compared to the
equivalent 1999 periods, primarily due to the growth in revenues associated with
the increase in assets under management across the entire segment. Additionally,
the Investment Products segment continued to maintain its profit margins related
to its primary businesses thus contributing to the segment's earnings growth.
INDIVIDUAL LIFE
<TABLE>
<CAPTION>
THIRD QUARTER NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
<S> <C> <C> <C> <C>
--------------------------------------------------
2000 1999 2000 1999
--------------------------------------------------
Revenues $141 $148 $405 $421
Expenses 122 129 352 370
--------------------------------------------------
NET INCOME $ 19 $ 19 $ 53 $ 51
--------------------------------------------------
</TABLE>
The slight decrease in revenues and expenses in the Individual Life segment is
primarily due to HLA's December 1, 1999 recapture of an in force block of
individual life insurance previously ceded to the Company. (For a discussion of
the recapture, see Note 9 of Notes to Consolidated Financial Statements in
Hartford Life Insurance Company's 1999 Form 10-K Annual Report.)
Excluding the recapture described above, revenues in the Individual Life segment
increased $16, or 13%, and $53, or 15%, for the third quarter and nine months
ended September 30, 2000, respectively, as compared to the equivalent 1999
periods. This increase in revenues is attributable to higher fee income
associated with the growing block of variable life insurance. Fee income
increased $13, or 15%, and $53, or 22%, for the respective third quarter and
nine month periods, as variable life account values increased $918, or 44%, and
variable life insurance in force increased $9.7 billion, or 46%, from
September 30, 1999.
Excluding the recapture described above, expenses increased $14, or 13%, and
$47, or 15%, for the third quarter and nine months ended September 30, 2000,
respectively, as compared to the equivalent 1999 periods. The increases in
expenses were primarily due to a $4, or 9%, and $12, or 8%, increase in
benefits, claims and claim adjustment expenses for the respective third quarter
and nine month periods and other expenses which increased $7, or 40%, and $16,
or 29%, over the respective prior year levels. These increases were associated
with the growth in this segment as indicated above. Additionally, for the nine
month period, amortization of deferred policy acquisition costs increased $15,
or 19%, primarily associated with the growth in this segment's variable
business. Excluding the recapture described above, net income increased $2, or
12%, and $6, or 13%, for the respective periods, primarily due to the higher fee
income as year-to-date mortality was essentially in line with prior year.
F-8
<PAGE>
CORPORATE OWNED LIFE INSURANCE (COLI)
<TABLE>
<CAPTION>
THIRD QUARTER NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
<S> <C> <C> <C> <C>
--------------------------------------------------
2000 1999 2000 1999
--------------------------------------------------
Revenues $238 $220 $572 $659
Expenses 229 213 547 639
--------------------------------------------------
NET INCOME $ 9 $ 7 $ 25 $ 20
--------------------------------------------------
</TABLE>
COLI revenues increased $18, or 8%, for the third quarter ended September 30,
2000, from the respective prior year period, while for the nine month period,
revenues decreased $87, or 13%. The revenue increase in the third quarter was
primarily due to an increase in fee income of $22, or 19%, associated with
strong sales of $2.5 billion in the third quarter 2000.
For the nine month period, revenues decreased primarily due to a decline in net
investment income of $59, or 18%. This decline was primarily due to the
leveraged COLI block of business, as related account values decreased $786, or
14%, as a result of the downsizing caused by the Health Insurance Portability
and Accountability Act of 1996.
Expenses increased $16, or 8%, for the third quarter, while expenses for the
nine month period decreased $92, or 14%, respectively, as compared to the
equivalent prior year periods due to the factors described above.
Net income increased $2, or 29%, and $5, or 25%, for the third quarter and nine
months ended September 30, 2000, respectively, as compared to the equivalent
prior year periods. The increase was primarily attributable to the variable COLI
business where account values increased $3.5 billion, or 29%, as well as
increased earnings associated with a block of leveraged COLI business recaptured
in 1998. (For a discussion of the MBL Recapture, see the Capital Resources and
Liquidity section in Hartford Life Insurance Company's 1999 Form 10-K Annual
Report.)
REGULATORY MATTERS AND CONTINGENCIES
NAIC PROPOSALS
The NAIC adopted the Codification of Statutory Accounting Principles (SAP) in
March 1998. The effective date for the statutory accounting guidance is
January 1, 2001. Hartford Life Insurance Company and its subsidiaries'
domiciliary state has adopted the SAP and the Company will make the necessary
changes required for implementation. The Company has not yet determined the
impact that the SAP will have on the statutory financial statements of Hartford
Life Insurance Company and its subsidiaries.
DEPENDENCE ON CERTAIN THIRD PARTY RELATIONSHIPS
Hartford Life Insurance Company distributes its annuity and life insurance
products through a variety of distribution channels, including broker-dealers,
banks, wholesalers, its own internal sales force and other third party marketing
organizations. The Company periodically negotiates provisions and renewals of
these relationships and there can be no assurance that such terms will remain
acceptable to the Company or such service providers. An interruption in the
Company's continuing relationship with certain of these third parties could
materially affect the Company's ability to market its products.
ACCOUNTING STANDARDS
For a discussion of accounting standards, see Note 1 of Notes to Consolidated
Financial Statements.
F-9
