-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PDw++uOwwHaOzn1U8BK6oPHy4D9WO+3TsRtYSIEsNpHqlJUmLOglDCZFEnBH3jbg 3Jr8AiPDU+1iU9ZuInFz3g== 0000948572-97-000036.txt : 19990902 0000948572-97-000036.hdr.sgml : 19990902 ACCESSION NUMBER: 0000948572-97-000036 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970627 FILED AS OF DATE: 19970630 DATE AS OF CHANGE: 19990901 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARTFORD FINANCIAL SERVICES GROUP INC/DE CENTRAL INDEX KEY: 0000874766 STANDARD INDUSTRIAL CLASSIFICATION: 6411 IRS NUMBER: 133317783 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-13958 FILM NUMBER: 97633466 BUSINESS ADDRESS: STREET 1: HARTFORD PLZ CITY: HARTFORD STATE: CT ZIP: 06115 BUSINESS PHONE: 8605475000 MAIL ADDRESS: STREET 1: HARTFORD PLAZA T-15 CITY: HARTFORD STATE: CT ZIP: 06115 FORMER COMPANY: FORMER CONFORMED NAME: ITT HARTFORD GROUP INC /DE DATE OF NAME CHANGE: 19930328 11-K 1 THE HARTFORD FINANCIAL SERVICES GROUP, INC. ================================================================================ FORM 11-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ______________ Commission file number 0-19277 THE HARTFORD INVESTMENT AND SAVINGS PLAN THE HARTFORD FINANCIAL SERVICES GROUP, INC. (Exact name of registrant as specified in its charter) DELAWARE 13-3317783 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) HARTFORD PLAZA, HARTFORD, CONNECTICUT 06115-1900 (Address of principal executive offices) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (860) 547-5000 ================================================================================ SIGNATURE PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE PENSION FUND TRUST AND INVESTMENT COMMITTEE OF THE HARTFORD INVESTMENT AND SAVINGS PLAN HAS DULY CAUSED THIS ANNUAL REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED HEREUNTO DULY AUTHORIZED. THE HARTFORD INVESTMENT AND SAVINGS PLAN ---------------------------------------- (NAME OF PLAN) BY: /S/ FRANCIS A. DORION --------------------------------------- (FRANCIS A. DORION, PLAN ADMINISTRATOR) JUNE 25, 1997 - - ------------- (DATE) THE HARTFORD INVESTMENT AND SAVINGS PLAN CONTENTS Pages ----- Report of Independent Public Accountants F-1 Statement of Net Assets Available for Benefits With Fund Information as of December 31, 1996 F-2 Statement of Net Assets Available for Benefits With Fund Information as of December 31, 1995 F-3 Statement of Changes in Net Assets Available for Benefits With Fund Information For the Year Ended December 31, 1996 F-4 Statement of Changes in Net Assets Available for Benefits With Fund Information For the Period December 19, 1995 through December 31, 1995 F-5 Notes to Financial Statements F-6 - F-9 Item 27a - Schedule of Assets Held for Investment Purposes - Part I as of December 31, 1996 F-10 - F-13 Item 27d - Schedule of Reportable Transactions for the Year Ended December 31, 1996 F-14 Exhibit 23 - Consent of Independent Public Accountants F-15 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To The Hartford Financial Services Group, Inc. We have audited the accompanying statements of net assets available for benefits of The Hartford Investment and Savings Plan as of December 31, 1996 and 1995, and the related statements of changes in net assets available for benefits for the year ended December 31, 1996 and the period December 19, 1995 through December 31, 1995. These financial statements and the schedules referred to below are the responsibility of the Plan Administrator. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of The Hartford Investment and Savings Plan as of December 31, 1996 and 1995, and the changes in net assets available for benefits for the year ended December 31, 1996 and the period December 19, 1995 through December 31, 1995, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules on pages F-10 through F-14 are presented for purposes of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN LLP Hartford, Connecticut June 27, 1997 F-1
EIN# 13-3317783 PLAN# 100 THE HARTFORD INVESTMENT AND SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION AS OF DECEMBER 31, 1996 ($ IN THOUSANDS) NON-MEMBER DIRECTED MEMBER DIRECTED ------------------------------------------ THE HARTFORD THE HARTFORD COMMON STOCK COMMON STOCK INDEX FUND FIXED INCOME TOTAL FUND (FUND A) FUND (FUND A) (FUND B) FUND (FUND C) - - ----------------------------------------------------------------------------------------------------------------- ASSETS Investments, at fair value: The Hartford common stock: 4,759,452 shares $ 321,263 $ 240,305 $ 80,958 $ -- $ -- ITT Corporation common stock: 3,594,381 shares 155,906 -- -- -- -- ITT Industries, Inc. common stock: 3,597,377 shares 88,136 -- -- -- -- Investment in securities of unaffiliated issuers 197,028 2,989 1,007 145,009 18,197 Investment in group annuity contracts at contract value 248,155 -- -- -- 248,155 Dividends and interest receivable 4,080 1,492 502 42 1,377 Loans receivable 24,821 -- -- -- -- ---------------------------------------------------------------------- TOTAL ASSETS 1,039,389 244,786 82,467 145,051 267,729 ---------------------------------------------------------------------- LIABILITIES Interfund transfers pending -- (4,384) (1,477) 745 (2,440) Unsettled security purchases 548 410 138 -- -- Contributions payable 112 (62) (21) 103 211 ---------------------------------------------------------------------- TOTAL LIABILITIES 660 (4,036) (1,360) 848 (2,229) ---------------------------------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS $ 1,038,729 $ 248,822 $ 83,827 $ 144,203 $ 269,958 - - -------------------------------------------=============-=============-=============-============--=============- The accompanying notes are an integral part of these financial statements
EIN# 13-3317783 PLAN# 100 THE HARTFORD INVESTMENT AND SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION AS OF DECEMBER 31, 1996 ($ IN THOUSANDS) (Continued) MEMBER DIRECTED -------------------------------------------------------- ITT ITT CORPORATION INDUSTRIES BALANCED FUND COMMON STOCK COMMON STOCK (FUND D) FUND (FUND F) FUND (FUND G) LOAN FUND - - --------------------------------------------------------------------------------------------------- ASSETS Investments, at fair value: The Hartford common stock: 4,759,452 shares $ -- $ -- $ -- $ -- ITT Corporation common stock: 3,594,381 shares -- 155,906 -- -- ITT Industries, Inc. common stock: 3,597,377 shares -- -- 88,136 -- Investment in securities of unaffiliated issuers 25,950 2,651 1,225 -- Investment in group annuity contracts at contract value -- -- -- -- Dividends and interest receivable 57 (23) 633 -- Loans receivable -- -- -- 24,821 -------------------------------------------------------- TOTAL ASSETS 26,007 158,534 89,994 24,821 -------------------------------------------------------- LIABILITIES Interfund transfers pending (164) 4,264 3,456 -- Unsettled security purchases -- -- -- -- Contributions payable (213) 69 25 -- -------------------------------------------------------- TOTAL LIABILITIES (377) 4,333 3,481 -- -------------------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS $ 26,384 $ 154,201 $ 86,513 $ 24,821 - - -------------------------------------------=============--=============-=============--===========- The accompanying notes are an integral part of these financial statements
F-2
EIN# 13-3317783 PLAN# 100 THE HARTFORD INVESTMENT AND SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION AS OF DECEMBER 31, 1995 ($ IN THOUSANDS) NON-MEMBER DIRECTED MEMBER DIRECTED ------------------------------------------ THE HARTFORD THE HARTFORD COMMON STOCK COMMON STOCK INDEX FUND FIXED INCOME TOTAL FUND (FUND A) FUND (FUND A) (FUND B) FUND (FUND C) - - ----------------------------------------------------------------------------------------------------------------- ASSETS Receivable from ITT Industries Investment & Savings Plan $ 935,439 $ 154,104 $ 51,917 $ 107,687 $ 256,294 Contributions receivable 5,221 2,005 676 1,431 871 Loan repayments pending transfer -- 162 55 129 234 Interest receivable 133 32 11 29 54 ---------------------------------------------------------------------- TOTAL ASSETS 940,793 156,303 52,659 108,716 258,013 ---------------------------------------------------------------------- LIABILITIES Accrued administrative expenses 187 33 11 22 53 Interfund transfers pending -- 1,252 422 278 (745) Participant loans payable -- (97) (33) (123) (204) Other liabilities, net 289 101 34 -- (21) ---------------------------------------------------------------------- TOTAL LIABILITIES 476 1,289 434 177 (917) ---------------------------------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS $ 940,317 $ 155,014 $ 52,225 $ 108,539 $ 258,930 - - -------------------------------------------=============-=============-=============-============--=============- The accompanying notes are an integral part of these financial statements.
EIN# 13-3317783 PLAN# 100 THE HARTFORD INVESTMENT AND SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION AS OF DECEMBER 31, 1995 ($ IN THOUSANDS) (Continued) MEMBER DIRECTED -------------------------------------------------------- ITT ITT CORPORATION INDUSTRIES BALANCED FUND COMMON STOCK COMMON STOCK (FUND D) FUND (FUND F) FUND (FUND G) LOAN FUND - - --------------------------------------------------------------------------------------------------- ASSETS Receivable from ITT Industries Investment & Savings Plan $ 15,988 $ 225,946 $ 103,177 $ 20,326 Contributions receivable 238 -- -- -- Loan repayments pending transfer 37 -- -- (617) Interest receivable 7 -- -- -- -------------------------------------------------------- TOTAL ASSETS 16,270 225,946 103,177 19,709 -------------------------------------------------------- LIABILITIES Accrued administrative expenses 3 44 21 -- Interfund transfers pending 530 (440) (1,297) -- Participant loans payable (35) (138) (63) 693 Other liabilities, net -- 120 55 -- -------------------------------------------------------- TOTAL LIABILITIES 498 (414) (1,284) 693 -------------------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS $ 15,772 $ 226,360 $ 104,461 $ 19,016 - - -------------------------------------------=============--=============-=============--==========-- The accompanying notes are an integral part of these financial statements.
F-3
EIN# 13-3317783 PLAN# 100 THE HARTFORD INVESTMENT AND SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 1996 ($ IN THOUSANDS) NON-MEMBER DIRECTED MEMBER DIRECTED ------------------------------------------ THE HARTFORD THE HARTFORD COMMON STOCK COMMON STOCK INDEX FUND FIXED INCOME TOTAL FUND (FUND A) FUND (FUND A) (FUND B) FUND (FUND C) - - -------------------------------------------------------------------------------------------------------------------- ADDITIONS TO NET ASSETS ATTRIBUTED TO: Investment Income: Net unrealized appreciation/(depreciation) $ 45,847 $ 64,003 $ 21,562 $ 25,515 $ -- Dividends 12,201 6,683 2,252 -- 33 Net realized appreciation 38,695 2,053 692 292 -- Interest 17,283 140 47 56 16,624 --------------------------------------------------------------------- Total investment income/(loss) 114,026 72,879 24,553 25,863 16,657 Interest on participant loans 1,642 396 134 401 616 Repayment of participant loans -- 2,387 804 2,331 3,888 Contributions 67,226 25,077 8,448 13,092 16,958 --------------------------------------------------------------------- TOTAL ADDITIONS/(DEDUCTIONS) 182,894 100,739 33,939 41,687 38,119 DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Interfund transfers -- 10,954 3,691 4,875 7,456 Loans to participants -- (3,230) (1,088) (2,645) (4,884) Administrative expense (1,831) (360) (124) (251) (377) Withdrawals and distributions (80,823) (13,269) (4,470) (7,883) (29,154) Other, net (1,828) (1,026) (346) (119) (132) --------------------------------------------------------------------- TOTAL (DEDUCTIONS)/ADDITIONS (84,482) (6,931) (2,337) (6,023) (27,091) --------------------------------------------------------------------- NET INCREASE/(DECREASE) 98,412 93,808 31,602 35,664 11,028 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 940,317 155,014 52,225 108,539 258,930 ------------------------------------------------------------------- END OF YEAR $ 1,038,729 $ 248,822 $ 83,827 $ 144,203 $ 269,958 - - -----------------------------------------------============--===========---=============-============-============-- The accompanying notes are an integral part of these financial statements.
EIN# 13-3317783 PLAN# 100 THE HARTFORD INVESTMENT AND SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 1996 ($ IN THOUSANDS) (Continued) MEMBER DIRECTED -------------------------------------------------------- ITT ITT CORPORATION INDUSTRIES BALANCED FUND COMMON STOCK COMMON STOCK (FUND D) FUND (FUND F) FUND (FUND G) LOAN FUND - - --------------------------------------------------------------------------------------------------- ADDITIONS TO NET ASSETS ATTRIBUTED TO: Investment Income: Net unrealized appreciation/(depreciation) $ (1,761) $ (55,966)$ (7,506) $ -- Dividends 188 -- 3,045 -- Net realized appreciation 3,383 22,268 10,007 -- Interest 220 125 71 -- -------------------------------------------------------- Total investment income/(loss) 2,030 (33,573) 5,617 -- Interest on participant loans 95 -- -- -- Repayment of participant loans 547 -- -- (9,957) Contributions 3,823 (90) (82) -- -------------------------------------------------------- TOTAL ADDITIONS/(DEDUCTIONS) 6,495 (33,663) 5,535 (9,957) DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Interfund transfers 5,328 (19,066) (14,491) 1,253 Loans to participants (458) (1,518) (686) 14,509 Administrative expense (43) (469) (207) -- Withdrawals and distributions (1,189) (17,100) (7,758) -- Other, net 479 (343) (341) -- -------------------------------------------------------- TOTAL (DEDUCTIONS)/ADDITIONS 4,117 (38,496) (23,483) 15,762 -------------------------------------------------------- NET INCREASE/(DECREASE) 10,612 (72,159) (17,948) 5,805 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 15,772 226,360 104,461 19,016 -------------------------------------------------------- END OF YEAR $ 26,384 $ 154,201 $ 86,513 $ 24,821 - - -------------------------------------------===============-=============-============--===========- The accompanying notes are an integral part of these financial statements.
F-4
EIN# 13-3317783 PLAN# 100 THE HARTFORD INVESTMENT AND SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION FOR THE PERIOD DECEMBER 19, 1995 THROUGH DECEMBER 31, 1995 ($ IN THOUSANDS) NON-MEMBER DIRECTED MEMBER DIRECTED ------------------------------------------ THE HARTFORD THE HARTFORD COMMON STOCK COMMON STOCK INDEX FUND FIXED INCOME TOTAL FUND (FUND A) FUND (FUND A) (FUND B) FUND (FUND C) - - -------------------------------------------------------------------------------------------------------------------- ADDITIONS TO NET ASSETS ATTRIBUTED TO: Transfer in from ITT Industries Investment & Savings Plan at 12/19/95 $ 922,040 $ 155,130 $ 52,263 $ 106,842 $ 255,691 Investment Income: Net unrealized appreciation/(depreciation) 12,667 (1,026) (346) 749 -- Net realized appreciation 626 -- -- 1 603 Dividends 102 -- -- 95 -- Interest 4 -- -- -- -- --------------------------------------------------------------------- Total investment income 13,399 (1,026) (346) 845 603 Interest on participant loans 133 32 11 29 54 Repayment of participant loans -- 162 55 129 234 Contributions 5,221 2,005 676 871 1,431 --------------------------------------------------------------------- TOTAL ADDITIONS 940,793 156,303 52,659 108,716 258,013 DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Interfund transfers -- (1,252) (422) (278) 745 Loans to participants -- 97 33 123 204 Administrative expense (187) (33) (11) (22) (53) Other, net (289) (101) (34) -- 21 --------------------------------------------------------------------- TOTAL (DEDUCTIONS)/ADDITIONS (476) (1,289) (434) (177) 917 --------------------------------------------------------------------- NET INCREASE/(DECREASE) 940,317 155,014 52,225 108,539 258,930 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of period -- -- -- -- -- ------------------------------------------------------------------- END OF PERIOD $ 940,317 $ 155,014 $ 52,225 $ 108,539 $ 258,930 - - -----------------------------------------------============--===========---=============-============-============-- The accompanying notes are an integral part of these financial statements.
EIN# 13-3317783 PLAN# 100 THE HARTFORD INVESTMENT AND SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION FOR THE PERIOD DECEMBER 19, 1995 THROUGH DECEMBER 31, 1995 ($ IN THOUSANDS) (Continued) MEMBER DIRECTED ------------------------------------------------------------ ITT ITT CORPORATION INDUSTRIES BALANCED FUND COMMON STOCK COMMON STOCK (FUND D) FUND (FUND F) FUND (FUND G) LOAN FUND - - ------------------------------------------------------------------------------------------------------- ADDITIONS TO NET ASSETS ATTRIBUTED TO: Transfer in from ITT Industries Investment & Savings Plan at 12/19/95 $ 15,942 $ 208,540 $ 107,306 $ 20,326 Investment Income: Net unrealized appreciation/(depreciation) 17 17,406 (4,133) -- Net realized appreciation 18 -- 4 -- Dividends 7 -- -- -- Interest 4 -- -- -- -------------------------------------------------------- Total investment income 46 17,406 (4,129) -- Interest on participant loans 7 -- -- -- Repayment of participant loans 37 -- -- (617) Contributions 238 -- -- -- -------------------------------------------------------- TOTAL ADDITIONS 16,270 225,946 103,177 19,709 DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Interfund transfers (530) 440 1,297 -- Loans to participants 35 138 63 (693) Administrative expense (3) (44) (21) -- Other, net -- (120) (55) -- -------------------------------------------------------- TOTAL (DEDUCTIONS)/ADDITIONS (498) 414 1,284 (693) -------------------------------------------------------- NET INCREASE/(DECREASE) 15,772 226,360 104,461 19,016 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of period -- -- -- -- -------------------------------------------------------- END OF PERIOD $ 15,772 $ 226,360 $ 104,461 $ 19,016 - - -----------------------------------------------==============--=============-============--===========- The accompanying notes are an integral part of these financial statements.
F-5 - - -------------------------------------------------------------------------------- THE HARTFORD INVESTMENT AND SAVING PLAN - - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (DOLLAR AMOUNTS IN THOUSANDS) NOTE 1 - DESCRIPTION OF THE PLAN The Hartford Financial Services Group, Inc., ("The Hartford" or the "Company", formerly ITT Hartford Group, Inc.), a Delaware corporation, was a wholly-owned subsidiary of ITT Corporation ("ITT" which was renamed ITT Industries, Inc.). On December 19, 1995, ITT distributed all of the outstanding shares of The Hartford to ITT shareholders of record in an action known herein as the "Distribution". In such Distribution, holders of common stock of ITT, including the ITT Investment and Savings Plan for Salaried Employees ("ITT Plan"), received one share of ITT Destinations, Inc. (renamed "ITT Corporation") common stock, one share of ITT Industries, Inc. common stock and one share of The Hartford common stock for each share of ITT common stock held. Shares in The Hartford, ITT Corporation, and ITT Industries, Inc. are held in Fund A, Fund F and Fund G, respectively. Through the date of the Distribution, eligible employees of the Company participated in the ITT Plan. Subsequent to the Distribution, the Company established The Hartford Investment and Savings Plan (the "Plan", formerly the ITT Hartford Investment and Savings Plan) for the benefit of eligible employees of The Hartford. The accounts of employees who had participated in the ITT Plan were transferred to the Plan. Information with regard to eligibility, contributions, distributions, vesting, trustees, withdrawals, restoration, loans, fund redistribution and definitions of all capitalized terms are contained in the Plan information document, which has been distributed to the participants. General - - ------- The Plan is a defined contribution plan covering all full-time and some part-time employees of the Company who have six months or more of service, or who have fulfilled the requisite eligibility requirements for employees on a temporary or less than full-time basis. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Contributions - - ------------- Plan members may generally elect to save 2% to 16% of base salary. Members may designate their savings as before-tax, after-tax or a combination of both. Members who are highly compensated employees may be limited to less than 16% due to the operation of certain tests required under the Internal Revenue Code of 1986, as amended from time to time (the "Code"). An amount equal to 50% of a member's Basic Savings is matched by the Company. Basic Savings are contributions which are not in excess of the first 6% of base salary. Member's savings in excess of 6% of base salary are supplemental savings that are not matched by Company contributions. In addition, the Company allocates .50% of base salary to the Floor Company Contribution Account of each eligible employee. Matching Company contributions are used to acquire The Hartford common stock. Administrative Costs - - -------------------- The Trust, as defined by the Plan, pays for the administrative expenses of the Plan up to 0.25% of the market value of trust assets. These expenses are limited to services provided by unrelated vendors. The Company continues to pay Plan administrative expenses which are not paid by the Trust. F-6 NOTES TO FINANCIAL STATEMENTS (CONTINUED) (DOLLAR AMOUNTS IN THOUSANDS) Member Accounts - - --------------- Each member's account is credited with that member's contributions and allocations of (a) the Company's contribution and (b) Plan earnings, and is charged with an allocation of administrative expenses. Allocations are based on member earnings or account balances, as defined. The benefit to which a member is entitled is the benefit that can be provided from that member's vested account. Vesting - - ------- Vesting in the Company-matched contributions begins one year after employment at 20% and increases 20% each consecutive year until the fifth consecutive year of employment when 100% is vested. Notwithstanding the foregoing statement, a member becomes fully vested in such member's Company contribution account upon retirement, disability, death, or upon reaching age 65, or the complete discontinuance of Company contributions or upon termination of the Plan. Investment Options - - ------------------ Contributions of member savings made on or after the Distribution date have been, and continue to be, invested in any one or more of Fund A, B, C or D, in multiples of 5%, as elected by the member. Except with respect to dividends thereon, no such amounts will be invested in Fund F or Fund G. Fund A - A fund invested primarily in The Hartford common stock. Fund B - A fund invested in a portfolio of common stocks, all of which are included in the Standard and Poor's 500 Composite Stock Index ( "S&P 500" ), with the objective of providing investment results which approximate the performance of the S&P 500 ( the "Index Fund" ). Fund C - A fund invested in a diversified portfolio consisting of fixed income investments and agreements in support of capital preservation and liquidity. Fund D - A fund invested through an actively managed portfolio consisting of equity securities, fixed income securities and cash equivalents ( the "Balanced Fund" ). Fund F - A fund invested primarily in common stock of ITT Corporation, attributable to the Distribution. Fund G - A fund invested primarily in common stock of ITT Industries, Inc., attributable to the Distribution. F-7 NOTES TO FINANCIAL STATEMENTS (CONTINUED) (DOLLAR AMOUNTS IN THOUSANDS) Participant Loans - - ----------------- Members may borrow from their fund accounts a minimum of $1,000 to a maximum equal to the lesser of $50,000 or 50 percent of their vested account balances. Loan transactions are treated as transfers to (from) the investment fund from (to) the loan fund. Loan terms range from one to five years, or up to 15 years for the purchase of a primary residence. The loan is secured by the balance in the member's account and bears interest at the prime rate (as published in the Wall Street Journal) plus 1%. The interest rate is determined quarterly. Payment of Benefits - - ------------------- On termination of service due to death, disability, retirement, or other reasons, members may elect to receive either a lump sum amount equal to the value of the vested interest in their respective accounts or, subject to certain conditions, annual installments over a period not greater than twenty years. Members may also elect to defer distributions subject to certain conditions. Forfeitures - - ----------- Forfeitures of the nonvested portion of any member's Company contributions are applied to reduce future Company contributions. Forfeitures for the year ended December 31, 1996 and the period December 19, 1995 through December 31, 1995 were immaterial. NOTE 2 -ACCOUNTING POLICIES The financial statements have been prepared using the accrual basis of accounting. Repayment of participant loans, interest on participant loans, new loans to participants, contributions and administrative expenses for the period December 19, 1995 through December 31, 1995 represent such transactions for the entire month of December 1995. The preparation of financial statements in conformity with generally accepted accounting principles and the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 requires management of the plan to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates. NOTE 3 - FEDERAL INCOME TAX In 1997, the Company plans to file with the Internal Revenue Service a request for a formal determination that the Plan is qualified, and that the Trust established under the Plan is tax-exempt. In the opinion of management, upon such a filing, a favorable ruling would be received in due course. The Plan administrator and the Plan's legal counsel believe that the Plan is designed and is currently being operated in compliance with applicable provisions of the Code and other applicable law. F-8 NOTES TO FINANCIAL STATEMENTS (CONTINUED) (DOLLAR AMOUNTS IN THOUSANDS) NOTE 4 - PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to suspend, reduce, or partially or completely discontinue its contributions at any time and to terminate the Plan, the trust agreement and the trust hereunder subject to the provisions of ERISA. In the event of termination of the Plan or partial termination or complete discontinuance of contributions, the interest of members shall automatically become nonforfeitable. NOTE 5 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for plan benefits per the financial statements to the Form 5500:
1996 1995 - - ------------------------------------------------------------------------------------------ ----------------- --------------- Net assets available for plan benefits per financial statements $ 1,038,729 $ 940,317 Amounts allocated to withdrawing members (7,342) (4,021) - - ------------------------------------------------------------------------------------------ -- -------------- -- ------------ Net assets available for plan benefits per the Form 5500 $ 1,031,387 $ 936,296 - - ------------------------------------------------------------------------------------------ -- -------------- -- ------------
The following is a reconciliation of benefits paid to members according to the financial statements to Form 5500:
1996 1995 - - ------------------------------------------------------------------------------------------ -------------- ------------------ Benefits paid to members per the financial statements $ 80,823 $ -- Amounts allocated to withdrawing members at December 31, 1996 7,342 -- Amounts allocated to withdrawing members at December 31, 1995 (4,021) 4,021 - - ------------------------------------------------------------------------------------------ -- ----------- --- -------------- Benefits paid to members per Form 5500 $ 84,144 $ 4,021 - - ------------------------------------------------------------------------------------------ -- ----------- --- --------------
Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to the end of the Plan year, but not yet paid as of that date. NOTE 6 - ANNUITY CONTRACTS WITH INSURANCE COMPANIES The Plan has entered into numerous group annuity contracts with approximately 23 regulated insurance carriers. These contracts, which are classified as part of Fund C, are included in the financial statements at contract value. Contract value represents contributions made under the contract, plus earnings, less Plan withdrawals and administrative expenses. As of December 31, 1996, the estimated fair value of the group annuity contracts was $250,030. The average yield and weighted-average crediting interest rate on these contracts was 6.59% and 6.18%, respectively, for the year ended December 31, 1996. NOTE 7 - PARTY-IN-INTEREST TRANSACTIONS Certain Plan investments are held in funds managed by Bankers Trust Company and Hartford Life Insurance Company. Bankers Trust Company is the Trustee, as defined by the Plan, and Hartford Life Insurance Company, a subsidiary of The Hartford, is an asset manager and, therefore, these transactions qualify as party-in-interest transactions. Fees paid by the Plan for Trustee and Investment management services provided by Bankers Trust Company amounted to $595 for the year ended December 31, 1996. Fees paid by the Plan related to the Plan's group annuity contracts issued by Hartford Life Insurance Company amounted to $26 for the year ended December 31, 1996. No fees were paid by the Plan to Bankers Trust Company and Hartford Life Insurance Company in 1995. In addition, certain Plan investments are shares of The Hartford common stock. As The Hartford is the Plan Sponsor, these transactions qualify as party-in-interest transactions. F-9
EIN# 13-3317783 PLAN# 100 THE HARTFORD INVESTMENT AND SAVINGS PLAN ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - PART I AS OF DECEMBER 31, 1996 ($ IN THOUSANDS) Description of investment including maturity date, rate of interest, Identity of Party collateral, par or maturity value Cost Market Value ----------------- --------------------------------- ---- ------------ Fund A: ------- * The Hartford Financial Services Group, Inc. Common Stock $ 124,776 $ 321,263 * Bankers Trust Company BT Pyramid Directed Account Cash Fund - STIF 3,996 3,996 ---------------- ----------------- SUB-TOTAL 128,772 325,259 ---------------- ----------------- Fund B: - - ------- * Hartford Life Insurance Company S&P 500 Index Portfolio Hartford - GA - 6226, S/A BI 88,696 144,304 * Bankers Trust Company BT Pyramid Discretionary Account Cash Fund - STIF 705 705 ---------------- ----------------- SUB-TOTAL 89,401 145,009 ---------------- ----------------- Fund C: - - ------- * Bankers Trust Company BT Pyramid Discretionary Account Cash Fund - STIF 18,197 18,197 New York Life Group Annuity Contract Insurance Company #30495, 8.38%, 08/01/1997 7,482 7,482 Metro politan Life Group Annuity Contract Insurance Company #24533, 6.05%, 04/30/1994 16,834 16,834 Allstate Life Group Annuity Contract Insurance Company #GA 5429A, 5.74%, 05/03/1999 8,838 8,838 People Security Life Group Annuity Contract Insurance Company #BDA00598FR, 5.15%, 12/23/1998 9,676 9,676 Pacific Mutual Group Annuity Contract Insurance Company #26243-01, 9.20%, 01/02/1997 2,008 2,008 Connecticut General Group Annuity Contract Insurance Company #25214, 8.64%, 12/01/1997 3,890 3,890 The accompanying notes are an integral part of these financial statements. * - Indicates party-in-interest
F-10
EIN# 13-3317783 PLAN# 100 THE HARTFORD INVESTMENT AND SAVINGS PLAN ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - PART I AS OF DECEMBER 31, 1996 ($ IN THOUSANDS) (continued) Description of investment including maturity date, rate of interest, Identity of Party collateral, par or maturity value Cost Market Value ----------------- --------------------------------- ---- ------------ New York Life Group Annuity Contract Insurance Company GA#30497, 7.20%, 09/30/1999 $ 7,300 $ 7,300 Allstate Life Group Annuity Contract Insurance Company GA#5593A, 7.52%, 11/01/1999 3,945 3,945 Prudential Life Group Annuity Contract Insurance Company #8163-211, 8.62%, 11/30/1997 3,312 3,312 Prudential Life Group Annuity Contract Insurance Company #GA-8162, 6.52%, 06/05/1995 22,927 22,927 Life Insurance Company Group Annuity Contract of Virginia #GS2891, 5.91%, 06/02/1998 2,953 2,953 John Hancock Group Annuity Contract Insurance Company #8509, 7.50% 28,950 28,950 * Hartford Life Group Annuity Contract Insurance Company #30026, 5.46%, 06/04/1999 9,012 9,012 * Hartford Life Group Annuity Contract Insurance Company GA#10361, 5.64%,03/31/1999 4,318 4,318 Metropolitan Life Group Annuity Contract Insurance Company GAC#24543, 5.80% 12,630 12,630 * Hartford Life Group Annuity Contract Insurance Company GA#30027, 6.22%, 06/01/1999 4,394 4,394 Commonwealth Life Group Annuity Contract Insurance Company ADA000013TR 30,598 30,598 Principal Financial Group Annuity Contract Group #06126, 8.70% 11,989 11,989 Principal Financial Group Annuity Contract Group #14950-2, 8.15%, 03/20/1999 5,447 5,447 Transamerica Group Annuity Contract Insurance Company #76592, 5.88% 15,488 15,488 The accompanying notes are an integral part of these financial statements. * - Indicates party-in-interest
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EIN# 13-3317783 PLAN# 100 THE HARTFORD INVESTMENT AND SAVINGS PLAN ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - PART I AS OF DECEMBER 31, 1996 ($ IN THOUSANDS) (continued) Description of investment including maturity date, rate of interest, Identity of Party collateral, par or maturity value Cost Market Value ----------------- --------------------------------- ---- ------------ Sun Life Group Annuity Contract Insurance Company #4670, 6.81%, 10/16/2001 $ 7,865 $ 7,865 Continental Assurance Group Annuity Contract Insurance Contracts #GP24022, 6.58%, 12/31/2001 7,800 7,800 Transamerica Group Annuity Contract Insurance Company #76620, 7.05% - STIF 20,499 20,499 ---------------- ----------------- SUB-TOTAL 266,352 266,352 ---------------- ----------------- Fund D: ------- * Bankers Trust Company BT Pyramid Directed Account Cash Fund- STIF 25,950 $ 25,950 ---------------- ----------------- SUB-TOTAL 25,950 25,950 ---------------- ----------------- Fund F: ------- ITT Corporation Common Stock 81,556 155,906 * Bankers Trust Company BT Pyramid Directed Account Cash Fund- STIF 2,651 2,651 ---------------- ----------------- SUB-TOTAL 84,207 158,557 ---------------- ----------------- Fund G: ------- ITT Industries, Inc. Common Stock 37,940 88,136 * Bankers Trust Company BT Pyramid Directed Account Cash Fund- STIF 1,225 1,225 ---------------- ----------------- SUB-TOTAL 39,165 89,361 ---------------- ----------------- The accompanying notes are an integral part of these financial statements. * - Indicates party-in-interest
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EIN# 13-3317783 PLAN# 100 THE HARTFORD INVESTMENT AND SAVINGS PLAN ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - PART I AS OF DECEMBER 31, 1996 ($ IN THOUSANDS) (continued) DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, RATE OF INTEREST, IDENTITY OF PARTY COLLATERAL, PAR OR MATURITY VALUE COST MARKET VALUE ----------------- --------------------------------- ---- ------------ Loan Fund: ---------- Loans to Participant Loans Receivable from Participants, at various dates bearing interest at rates from 9.25% - 9.75% 24,821 24,821 ---------------- ----------------- SUB-TOTAL 24,821 24,821 ---------------- ----------------- GRAND-TOTAL $ 658,668 $ 1,035,309 ================ ================= The accompanying notes are an integral part of these financial statements. * - Indicates party-in-interest
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EIN# 13-3317783 PLAN# 100 THE HARTFORD INVESTMENT AND SAVINGS PLAN ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1996 ($ IN THOUSANDS) CURRENT VALUE OF ASSETS ON NO. OF PURCHASE SELLING COST OF TRANSACTION NET GAIN IDENTITY OF PARTY DESCRIPTION OF ASSET TRANSACTIONS PRICE PRICE ASSET DATE OR (LOSS) - - ----------------- -------------------- ------------ ----- ----- ----- ---- --------- * Bankers Trust BT Pyramid Discretionary Cash Company Fund - STIF 151 -- $ 85,828 $ 85,828 $ 85,828 -- * Bankers Trust BT Pyramid Directed Account Cash Company Fund - STIF 301 -- 104,731 104,731 104,731 -- * Bankers Trust BT Pyramid Discretionary Cash Company Fund - STIF 125 $ 104,730 -- 104,730 104,730 -- * Bankers Trust BT Pyramid Directed Account Cash Company Fund - STIF 216 138,553 -- 138,553 138,553 -- The accompanying notes are an integral part of these financial statements. * - Indicates party-in-interest
F-14 EXHIBIT 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS To The Hartford Financial Services Group, Inc.: As independent public accountants, we hereby consent to the incorporation of our report included in this Form 11-K, into the Company's previously filed registration statement on Form S-8 (Registration No. 33-80663). ARTHUR ANDERSEN LLP Hartford, Connecticut June 27, 1997 F-15 -----END PRIVACY-ENHANCED MESSAGE-----