485BPOS 1 a09-3300_1485bpos.txt 485BPOS AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 1, 2009. FILE NO. 033-73572 811-07622 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------ FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------ PRE-EFFECTIVE AMENDMENT NO. / / POST-EFFECTIVE AMENDMENT NO. 29 /X/ REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 AMENDMENT NO. 268 /X/ HARTFORD LIFE AND ANNUITY INSURANCE COMPANY SEPARATE ACCOUNT TEN (Exact Name of Registrant) HARTFORD LIFE AND ANNUITY INSURANCE COMPANY (Name of Depositor) P.O. BOX 2999 HARTFORD, CT 06104-2999 (Address of Depositor's Principal Offices) (860) 843-1941 (Depositor's Telephone Number, Including Area Code) RICHARD J. WIRTH HARTFORD LIFE AND ANNUITY INSURANCE COMPANY P.O. BOX 2999 HARTFORD, CT 06104-2999 (Name and Address of Agent for Service) ------------ APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT. ------------ It is proposed that this filing will become effective: / / immediately upon filing pursuant to paragraph (b) of Rule 485 /X/ on May 1, 2009 pursuant to paragraph (b) of Rule 485 / / 60 days after filing pursuant to paragraph (a)(1) of Rule 485 / / on , pursuant to paragraph (a)(1) of Rule 485 / / this post-effective amendment designates a new effective date for a previously filed post-effective amendment. ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ PART A PUTNAM HARTFORD CAPITAL MANAGER HARTFORD LIFE AND ANNUITY INSURANCE COMPANY SEPARATE ACCOUNT TEN (EST. 03/01/93) HARTFORD LIFE INSURANCE COMPANY SEPARATE ACCOUNT TEN (EST. 06/22/87) P.O. BOX 5085 HARTFORD, CONNECTICUT 06102-5085 TELEPHONE: 1-800-521-0538 [THE HARTFORD LOGO] -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- This Prospectus describes information you should know before you purchase Series V of the Putnam Hartford Capital Manager variable annuity. Please read it carefully before you purchase your variable annuity. This variable annuity prospectus describes a contract between each Owner and joint Owner ("you") and Hartford Life and Annuity Insurance Company or Hartford Life Insurance Company ("us," "we" or "our") where you agree to make at least one Premium Payment to us and we agree to make a series of Annuity Payouts at a later date. This Contract is a flexible premium, tax-deferred, variable annuity offered to both individuals and groups. This Contract is closed to new investors. It is: X Flexible, because you may add Premium Payments at any time. X Tax-deferred, which means you don't pay taxes until you take money out or until we start to make Annuity Payouts. X Variable, because the value of your Contract will fluctuate with the performance of the underlying Funds. At the time you purchase your Contract, you allocate your Premium Payment to "Sub-Accounts." These are subdivisions of our Separate Account, an account that keeps your Contract assets separate from our company assets. The Sub-Accounts then purchase shares of mutual funds set up exclusively for variable annuity or variable life insurance products. These are not the same mutual funds that you buy through your stockbroker or through a retail mutual fund. They may have similar investment strategies and the same portfolio managers as retail mutual funds. This Contract offers you Funds with investment strategies ranging from conservative to aggressive and you may pick those Funds that meet your investment goals and risk tolerance. The Funds are part of the following Portfolio companies: Putnam Variable Trust. You may also allocate some or all of your Premium Payment to the Fixed Accumulation Feature, which pays an interest rate guaranteed for a certain time period from the time the Premium Payment is made. Premium Payments allocated to the Fixed Accumulation Feature are not segregated from our company assets like the assets of the Separate Account. If you decide to buy this Contract, you should keep this prospectus for your records. You can also call us at 1-800-521-0538 to get a Statement of Additional Information, free of charge. The Statement of Additional Information contains more information about this Contract, and, like this prospectus, is filed with the Securities and Exchange Commission ("SEC"). We have included the Table of Contents for the Statement of Additional Information at the end of this prospectus. Although we file the prospectus and the Statement of Additional Information with the SEC, the SEC doesn't approve or disapprove these securities or determine if the information in this prospectus is truthful or complete. Anyone who represents that the SEC does these things may be guilty of a criminal offense. This Prospectus and the Statement of Additional Information can also be obtained from the SEC's website (http://www.sec.gov). This Contract IS NOT: - A bank deposit or obligation - Federally insured - Endorsed by any bank or governmental agency This Contract and its features may not be available for sale in all states. -------------------------------------------------------------------------------- PROSPECTUS DATED: MAY 1, 2009 STATEMENT OF ADDITIONAL INFORMATION DATED: MAY 1, 2009 2 ------------------------------------------------------------------------------- TABLE OF CONTENTS
PAGE -------------------------------------------------------------------------------- DEFINITIONS 3 FEE TABLE 5 HIGHLIGHTS 8 GENERAL CONTRACT INFORMATION 9 The Company 9 The Separate Account 9 The Funds 10 PERFORMANCE RELATED INFORMATION 12 FIXED ACCUMULATION FEATURE 13 THE CONTRACT 14 Purchases and Contract Value 14 Charges and Fees 19 Death Benefit 21 Surrenders 23 ANNUITY PAYOUTS 25 OTHER PROGRAMS AVAILABLE 27 OTHER INFORMATION 29 Legal Proceedings 32 More Information 32 FEDERAL TAX CONSIDERATIONS 32 TABLE OF CONTENTS TO STATEMENT OF ADDITIONAL INFORMATION 39 APPENDIX I -- INFORMATION REGARDING TAX-QUALIFIED RETIREMENT PLANS APP I-1 APPENDIX II -- DEATH BENEFIT -- EXAMPLES APP II-1 APPENDIX III -- ACCUMULATION UNIT VALUES APP III-1
3 ------------------------------------------------------------------------------- DEFINITIONS These terms are capitalized when used throughout this prospectus. Please refer to these defined terms if you have any questions as you read your prospectus. ACCOUNT: Any of the Sub-Accounts or the Fixed Accumulation Feature. ACCUMULATION UNITS: If you allocate your Premium Payment to any of the Sub-Accounts, we will convert those payments into Accumulation Units in the selected Sub-Accounts. Accumulation Units are valued at the end of each Valuation Day and are used to calculate the value of your Contract prior to Annuitization. ACCUMULATION UNIT VALUE: The daily price of Accumulation Units on any Valuation Day. ADMINISTRATIVE OFFICE OF THE COMPANY: Our overnight mailing address is: 1 Griffin Road North, Windsor, CT 06095-1512. Our standard mailing address is: Individual Markets Group, P.O. Box 5085, Hartford, Connecticut 06102-5085. ANNIVERSARY VALUE: The value equal to the Contract Value as of a Contract Anniversary, adjusted for subsequent Premium Payments and partial Surrenders. ANNUAL MAINTENANCE FEE: An annual $30 charge deducted on a Contract Anniversary or upon full Surrender if the Contract Value at either of those times is less than $50,000. The charge is deducted proportionately from each Account in which you are invested. ANNUAL WITHDRAWAL AMOUNT: This is the amount you can Surrender per Contract Year without paying a Contingent Deferred Sales Charge. This amount is non- cumulative, meaning that it cannot be carried over from one year to the next. ANNUITANT: The person on whose life the Contract is issued. The Annuitant may not be changed after your Contract is issued. ANNUITY CALCULATION DATE: The date we calculate the first Annuity Payout. ANNUITY COMMENCEMENT DATE: The later of the 10th Contract Anniversary or the date the Annuitant reaches age 90, unless you elect an earlier date or we, in our sole discretion, agree to postpone to another date following our receipt of an extension request. ANNUITY PAYOUT: The money we pay out after the Annuity Commencement Date for the duration and frequency you select. ANNUITY PAYOUT OPTION: Any of the options available for payout after the Annuity Commencement Date or death of the Contract Owner or Annuitant. ANNUITY UNIT: The unit of measure we use to calculate the value of your Annuity Payouts under a variable dollar amount Annuity Payout Option. ANNUITY UNIT VALUE: The daily price of Annuity Units on any Valuation Day. BENEFICIARY: The person(s) entitled to receive benefits pursuant to the terms of the Contract upon the death of any Contract Owner, joint Contract Owner or Annuitant. CHARITABLE REMAINDER TRUST: An irrevocable trust, where an individual donor makes a gift to the trust, and in return receives an income tax deduction. In addition, the individual donor has the right to receive a percentage of the trust earnings for a specified period of time. CODE: The Internal Revenue Code of 1986, as amended. COMMUTED VALUE: The present value of any remaining guaranteed Annuity Payouts. This amount is calculated using the Assumed Investment Return for variable dollar amount Annuity Payouts and a rate of return determined by us for fixed dollar amount Annuity Payouts. CONTINGENT ANNUITANT: The person you may designate to become the Annuitant if the original Annuitant dies before the Annuity Commencement Date. You must name a Contingent Annuitant before the original Annuitant's death. CONTINGENT DEFERRED SALES CHARGE: The deferred sales charge that may apply when you make a full or partial Surrender. CONTRACT: The individual Annuity Contract and any endorsements or riders. Group participants and some individuals will receive a certificate rather than a Contract. CONTRACT ANNIVERSARY: The anniversary of the date we issued your Contract. If the Contract Anniversary falls on a Non-Valuation Day, then the Contract Anniversary will be the next Valuation Day. CONTRACT OWNER, OWNER OR YOU: The owner or holder of the Contract described in this prospectus including any joint Owner(s). We do not capitalize "you" in the prospectus. CONTRACT VALUE: The total value of the Accounts on any Valuation Day. CONTRACT YEAR: Any 12 month period between Contract Anniversaries, beginning with the date the Contract was issued. DEATH BENEFIT: The amount payable if the Contract Owner, joint Contract Owner or the Annuitant dies before the Annuity Commencement Date. DOLLAR COST AVERAGING: A program that allows you to systematically make transfers between Accounts available in your Contract. FIXED ACCUMULATION FEATURE: Part of our General Account, where you may allocate all or a portion of your Contract Value. In your Contract, this is defined as the "Fixed Account." 4 ------------------------------------------------------------------------------- GENERAL ACCOUNT: The General Account includes our company assets including any money you have invested in the Fixed Accumulation Feature. JOINT ANNUITANT: The person on whose life Annuity Payouts are based if the Annuitant dies after Annuitization. You may name a Joint Annuitant only if your Annuity Payout Option provides for a survivor. The Joint Annuitant may not be changed. MAXIMUM ANNIVERSARY VALUE: This is the highest Anniversary Value, adjusted for subsequent Premium Payments and withdrawals, prior to the deceased's 81st birthday or the date of death, if earlier. NET INVESTMENT FACTOR: This is used to measure the investment performance of a Sub-Account from one Valuation Day to the next, and is also used to calculate your Annuity Payout amount. NON-VALUATION DAY: Any day the New York Stock Exchange is not open for trading. PAYEE: The person or party you designate to receive Annuity Payouts. PREMIUM PAYMENT: Money sent to us to be invested in your Contract. PREMIUM TAX: A tax charged by a state or municipality on Premium Payments. REQUIRED MINIMUM DISTRIBUTION: A federal requirement that individuals age 70 1/2 and older must take a distribution from their tax-qualified retirement account by December 31, each year. For employer sponsored qualified Contracts, the individual must begin taking distributions at the age of 70 1/2 or upon retirement, whichever comes later. SUB-ACCOUNT VALUE: The value on or before the Annuity Calculation Date, which is determined on any day by multiplying the number of Accumulation Units by the Accumulation Unit Value for that Sub-Account. SURRENDER: A complete or partial withdrawal from your Contract. SURRENDER VALUE: The amount we pay you if you terminate your Contract before the Annuity Commencement Date. The Surrender Value is equal to the Contract Value minus any applicable charges (subject to rounding). VALUATION DAY: Every day the New York Stock Exchange is open for trading. Values of the Separate Account are determined as of the close of the New York Stock Exchange, generally 4:00 p.m. Eastern Time. VALUATION PERIOD: The time span between the close of trading on the New York Stock Exchange from one Valuation Day to the next. 5 ------------------------------------------------------------------------------- FEE TABLE THE FOLLOWING TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY WHEN BUYING, OWNING, AND SURRENDERING THE CONTRACT. THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU WILL PAY AT THE TIME THAT YOU PURCHASE THE CONTRACT OR SURRENDER THE CONTRACT. CHARGES FOR STATE PREMIUM TAXES MAY ALSO BE DEDUCTED WHEN YOU PURCHASE THE CONTRACT, UPON SURRENDER OR WHEN WE START TO MAKE ANNUITY PAYOUTS. CONTRACT OWNER TRANSACTION EXPENSES Sales Charge Imposed on Purchases (as a percentage of Premium Payments) None Contingent Deferred Sales Charge (as a percentage of Premium Payments) (1) First Year (2) 6% Second Year 6% Third Year 5% Fourth Year 5% Fifth Year 4% Sixth Year 3% Seventh Year 2% Eighth Year 0%
(1) Each Premium Payment has its own Contingent Deferred Sales Charge schedule. The Contingent Deferred Sales Charge is not assessed on partial Surrenders which do not exceed the Annual Withdrawal Amount. We waive the Contingent Deferred Sales Charge on certain types of Surrenders. See the Contingent Deferred Sales Charge in the Charges and Fees Section of this prospectus. (2) Length of time from each Premium Payment. CONTRACT OWNER PERIODIC EXPENSES THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU WILL PAY PERIODICALLY AND ON A DAILY BASIS DURING THE TIME THAT YOU OWN THE CONTRACT, NOT INCLUDING FEES AND EXPENSES OF THE UNDERLYING FUNDS. ANNUAL MAINTENANCE FEE (3) $30 SEPARATE ACCOUNT ANNUAL EXPENSES (as a percentage of average daily Sub-Account Value) Mortality and Expense Risk Charge 1.25% Administrative Fees 0.15% Total Separate Account Annual Expenses 1.40% OPTIONAL CHARGES (as a percentage of average daily Sub-Account Value) Optional Death Benefit Charge 0.15% Total Separate Account Annual Expenses with the Optional Death Benefit Charge 1.55%
(3) An annual $30 charge deducted on a Contract Anniversary or upon Surrender if the Contract Value at either of those times is less than $50,000. It is deducted proportionately from the Sub-Accounts in which you are invested at the time of the charge. THIS TABLE SHOWS THE MINIMUM AND MAXIMUM TOTAL ANNUAL FUND OPERATING EXPENSES CHARGED BY THE UNDERLYING FUNDS THAT YOU MAY PAY ON A DAILY BASIS DURING THE TIME THAT YOU OWN THE CONTRACT. MORE DETAIL CONCERNING EACH UNDERLYING FUND'S FEES AND EXPENSES IS CONTAINED IN THE PROSPECTUS FOR EACH FUND.
MINIMUM MAXIMUM --------------------------------------------------------------------------------------------------------------------------------- TOTAL ANNUAL FUND OPERATING EXPENSES 0.55% 1.21% (these are expenses that are deducted from Fund assets, including management fees, Rule 12b-1 distribution and/or service fees, and other expenses)
6 ------------------------------------------------------------------------------- EXAMPLE THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE CONTRACT WITH THE COST OF INVESTING IN OTHER VARIABLE ANNUITY CONTRACTS. THE EXAMPLE REFLECTS A DEDUCTION FOR ANY CONTINGENT DEFERRED SALES CHARGE, ANNUAL MAINTENANCE FEE, MAXIMUM SEPARATE ACCOUNT ANNUAL EXPENSES INCLUDING ALL OPTIONAL CHARGES, AND THE HIGHEST TOTAL ANNUAL FUND OPERATING EXPENSES OF THE UNDERLYING FUNDS. THE EXAMPLE DOES NOT REFLECT THE DEDUCTION OF ANY APPLICABLE PREMIUM TAXES, INCOME TAXES OR TAX PENALTIES YOU MAY BE REQUIRED TO PAY IF YOU SURRENDER YOUR CONTRACT. IF YOU DO NOT SELECT ALL OF THE OPTIONAL BENEFITS, YOUR EXPENSES WOULD BE LOWER THAN THOSE SHOWN IN THE EXAMPLE. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. IN THE FOLLOWING EXAMPLE TABLE, HARTFORD ASSUMES A CONTRACT VALUE OF $40,000 TO ILLUSTRATE THE CHARGES THAT WOULD BE DEDUCTED. OUR AVERAGE CONTRACT VALUE IS $80,000, BUT WE USE A SMALLER CONTRACT VALUE SO THAT WE CAN SHOW YOU THE HIGHEST POSSIBLE DEDUCTIONS. THE EXAMPLE ASSUMES THE ANNUAL MAINTENANCE FEE WILL ALWAYS BE DEDUCTED IF THE CONTRACT IS SURRENDERED. IF YOUR CONTRACT VALUE IS $50,000 OR MORE, HARTFORD WAIVES THE ANNUAL MAINTENANCE FEE, SO THE EXAMPLE SHOWS CHARGES THAT ARE HIGHER THAN YOU WOULD HAVE TO PAY. WE CHANGE THE ANNUAL MAINTENANCE FEE FOR A $40,000 CONTRACT VALUE INTO A PERCENTAGE TO MORE EASILY CALCULATE THE CHARGES. THE PERCENTAGE WE USE IS 0.075%. THE EXAMPLE ASSUMES THAT YOU INVEST $10,000 IN THE CONTRACT FOR THE TIME PERIODS INDICATED. THE EXAMPLE ALSO ASSUMES THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR AND ASSUMES THE HIGHEST TOTAL ANNUAL FUND OPERATING EXPENSES. ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER, BASED ON THESE ASSUMPTIONS, YOUR COSTS WOULD BE: (1) If you Surrender your Contract at the end of the applicable time period: 1 year $881 3 years $1,448 5 years $2,019 10 years $3,382
(2) If you annuitize at the end of the applicable time period: 1 year $283 3 years $925 5 years $1,589 10 years $3,352
(3) If you do not Surrender your Contract: 1 year $313 3 years $955 5 years $1,619 10 years $3,382
CONDENSED FINANCIAL INFORMATION -------------------------------------------------------------------------------- When Premium Payments are credited to your Sub-Accounts, they are converted into Accumulation Units by dividing the amount of your Premium Payments, minus any Premium Taxes, by the Accumulation Unit Value for that day. For more information on how Accumulation Unit Values are calculated see "How is the value of my Contract calculated before the Annuity Commencement Date?". Please refer to Appendix III for information regarding the minimum and maximum class of Accumulation Unit Values. All classes of Accumulation Unit Values may be obtained, free of charge, by calling us at 1-800-521-0538. AVAILABLE INFORMATION We provide information about our financial strength in reports filed with the SEC and state insurance departments. For example, we file annual reports (Form 10-K), quarterly reports (Form 10-Q) and periodic reports (Form 8-K) with the SEC. Forms 10-K and 10-Q include information such as our financial statements, management discussion and analysis of the previous year of operations, risk 7 ------------------------------------------------------------------------------- factors, and other information. Form 8-K reports are used to communicate important developments that are not otherwise disclosed in the other forms described above. You may read or copy these reports at the SEC's Public Reference Room at 100 F. Street N.E., Room 1580, Washington, D.C. 20549-2001. You may also obtain reports and other information about us by contacting us using the information stated on the cover page of this prospectus, visiting our website at www.hartfordinvestor.com or visiting at the SEC's website at www.sec.gov. You may also obtain reports and other financial information about us by contacting your state insurance department. 8 ------------------------------------------------------------------------------- HIGHLIGHTS HOW DO I PURCHASE THIS CONTRACT? You must complete our application or order request and submit it to us for approval with your first Premium Payment. Your first Premium Payment must be at least $1,000 and subsequent Premium Payments must be at least $500, unless you take advantage of our InvestEase(R) Program or are part of certain retirement plans. - For a limited time, usually within ten days after you receive your Contract, you may cancel your Contract without paying a Contingent Deferred Sales Charge. You may bear the investment risk for your Premium Payment prior to our receipt of your request for cancellation. WHAT TYPE OF SALES CHARGE WILL I PAY? You don't pay a sales charge when you purchase your Contract. We may charge you a Contingent Deferred Sales Charge when you partially or fully Surrender your Contract. The Contingent Deferred Sales Charge will depend on the amount you choose to Surrender and the length of time the Premium Payment you made has been in your Contract. The percentage used to calculate the Contingent Deferred Sales Charge is equal to:
NUMBER OF YEARS FROM CONTINGENT DEFERRED PREMIUM PAYMENT SALES CHARGE ----------------------------------------------- 1 6% 2 6% 3 5% 4 5% 5 4% 6 3% 7 2% 8 or more 0%
You won't be charged a Contingent Deferred Sales Charge on: X The Annual Withdrawal Amount X Premium Payments or earnings that have been in your Contract for more than seven years. X Distributions made due to death X Distributions under a program for substantially equal periodic payments made for your life expectancy X Most payments we make to you as part of your Annuity Payout IS THERE AN ANNUAL MAINTENANCE FEE? We deduct this $30 fee each year on your Contract Anniversary or when you fully Surrender your Contract, if, on either of those dates, the value of your Contract is less than $50,000. WHAT CHARGES WILL I PAY ON AN ANNUAL BASIS? In addition to the Annual Maintenance Fee, you pay the following charges each year: - MORTALITY AND EXPENSE RISK CHARGE -- This charge is deducted daily and is equal to an annual charge of 1.25% of your Contract Value invested in the Sub-Accounts. - ADMINISTRATIVE CHARGE -- This charge is for administration. It is deducted daily and is equal to an annual charge of 0.15% of your Contract Value invested in the Sub-Accounts. - ANNUAL FUND OPERATING EXPENSES -- These are charges for the underlying Funds. See Funds' prospectuses for more complete information. - OPTIONAL DEATH BENEFIT CHARGE -- If you elect the Optional Death Benefit, we will deduct an additional charge on a daily basis until we begin to make Annuity Payouts that is equal to an annual charge of 0.15% of your Contract Value invested in the Sub-Accounts. Charges and fees may have a significant impact on Contract Values and the investment performance of the Sub-Accounts. This impact may be more significant with Contracts with lower Contract Values. CAN I TAKE OUT ANY OF MY MONEY? You may Surrender all or part of the amounts you have invested at any time before we start making Annuity Payouts. Once Annuity Payouts begin, you may take full or partial Surrenders under the Payments for a Period Certain, Life Annuity with Payments for a Period Certain or the Joint and Last Survivor Life Annuity with Payments for a Period Certain Annuity Options, but only if you selected the variable dollar amount Annuity Payouts. - You may have to pay income tax on the money you take out and, if you Surrender before you are age 59 1/2, you may have to pay a federal income tax penalty. - You may have to pay a Contingent Deferred Sales Charge on the money you Surrender. WILL HARTFORD PAY A DEATH BENEFIT? There is a Death Benefit if the Contract Owner, joint Contract Owner or the Annuitant die before we begin to make Annuity Payouts. The Death Benefit will be calculated as of the date we receive a certified death certificate or other legal document acceptable to us. This Death Benefit amount will remain invested in the Sub-Accounts and Fixed Accumulation Feature according to your last instructions and will fluctuate with the performance of the underlying Funds. If death occurs before the Annuity Commencement Date, the Death Benefit is the greatest of: - The total Premium Payments you have made to us minus the dollar amount of any partial Surrenders, or any amounts you have Surrendered, or - The Contract Value of your Contract, or - Your Maximum Anniversary Value, which is described below. The Maximum Anniversary Value is based on a series of calculations on Contract Anniversaries of Contract Values, Premium Payments and partial Surrenders. We will calculate an Anniversary Value for each Contract Anniversary prior to the deceased's 81st birthday or date of death, whichever is earlier. 9 ------------------------------------------------------------------------------- The Anniversary Value is equal to the Contract Value as of a Contract Anniversary, increased by the dollar amount of any Premium Payments made since that anniversary and reduced by the dollar amount of any partial Surrenders since that anniversary. The Maximum Anniversary Value is equal to the greatest Anniversary Value attained from this series of calculations. OPTIONAL DEATH BENEFIT -- If you elect the Optional Death Benefit at an additional charge, the Death Benefit will be the greatest of: - the total Premium Payments you have made to us minus the dollar amount of any partial Surrenders; - the Contract Value of your Contract; - your Maximum Anniversary Value; or - your Interest Accumulation Value from the date your Optional Death Benefit is added to your Contract. The Optional Death Benefit may not be available if the Contract Owner or Annuitant is age 76 or older. For Contracts issued in Washington or New York, the Optional Death Benefit is not available. Once you elect the Optional Death Benefit, you cannot cancel it. If you purchase your Contract after September 30, 1999, you must elect the Optional Death Benefit at the time you send us your initial Premium Payment. WHAT ANNUITY PAYOUT OPTIONS ARE AVAILABLE? When it comes time for us to make payouts, you may choose one of the following Annuity Payout Options: Life Annuity, Life Annuity with 120, 180 or 240 Monthly Payments Certain, Life Annuity with a Cash Refund, Joint and Last Survivor Life Annuity and Payments For a Designated Period. We may make other Annuity Payout Options available at any time. You must begin to take payments before the Annuitant's 90th birthday or the end of the 10th Contract Year, whichever comes later, unless you elect a later date to begin receiving payments subject to the laws and regulations then in effect and our approval. If you do not tell us what Annuity Payout Option you want before that time, we will pay you under the variable Life Annuity with 120, 180, or 240 Monthly Payments Certain Annuity Payout Option with period certain payments for 120 months. Depending on the investment allocation of your Contract in effect on the Annuity Commencement Date, we will make Automatic Annuity Payouts that are: - fixed dollar amount Automatic Annuity Payouts, - variable dollar amount Automatic Annuity Payouts, or - a combination of fixed dollar amount and variable dollar amount Automatic Annuity Payouts. GENERAL CONTRACT INFORMATION THE COMPANY We are a stock life insurance company engaged in the business of writing life insurance and individual and group annuities. Hartford Life Insurance Company is authorized to do business in all states of the United States and the District of Columbia. Hartford Life and Annuity Insurance Company is authorized to do business in all states of the United States except New York and the District of Columbia and Puerto Rico. Hartford Life and Annuity Insurance Company was originally incorporated under the laws of Wisconsin on January 9, 1956, and subsequently redomiciled to Connecticut. Hartford Life Insurance Company was originally incorporated under the laws of Massachusetts on June 5, 1902, and subsequently redomiciled to Connecticut. Our offices are located in Simsbury, Connecticut. Not all Contracts are available from each issuing company. Neither company cross guarantees the obligations of the other. We are ultimately controlled by The Hartford Financial Services Group, Inc., one of the largest financial service providers in the United States. THE SEPARATE ACCOUNT The Separate Account is where we set aside and invest the assets of some of our annuity contracts, including this Contract. The Separate Account was established on June 22, 1987 and is registered as a unit investment trust under the Investment Company Act of 1940. This registration does not involve supervision by the Commission of the management or the investment practices of the Separate Account or Hartford. The Separate Account meets the definition of "Separate Account" under federal securities law. This Separate Account holds only assets for variable annuity contracts. The Separate Account: - Holds assets for the benefit of you and other Contract Owners, and the persons entitled to the payments described in the Contract. - Is not subject to the liabilities arising out of any other business Hartford may conduct. The General Account is subject to the Company's claims-paying ability. Investors must look to the strength of the insurance company with regard to insurance company guarantees. Our ability to honor all guarantees under the Contract is subject to our claims-paying capabilities and/or financial strength. - Is not affected by the rate of return of Hartford's General Account or by the investment performance of any of Hartford's other Separate Accounts. - May be subject to liabilities from a Sub-Account of the Separate Account which holds assets of other variable annuity contracts offered by the Separate Account which are not described in this Prospectus. - Is credited with income and gains, and takes losses, whether or not realized, from the assets it holds. 10 ------------------------------------------------------------------------------- We do not guarantee the investment results of the Separate Account. There is no assurance that the value of your Contract will equal the total of the payments you make to us. In a low interest rate environment, yields for Money Market Sub-Accounts, after deduction of the Mortality and Expense Risk Charge and Charges for Optional Benefits (if applicable), may be negative even though the underlying Fund's yield, before deducting for such charges, is positive. If you allocate a portion of your Contract Value to a Money Market Sub-Account or participate in an Asset Allocation Program where Contract Value is allocated to a Money Market Sub-Account under the applicable asset allocation model, that portion of your Contract Value may decrease in value. THE FUNDS
FUNDING OPTION INVESTMENT OBJECTIVE SUMMARY INVESTMENT ADVISER/SUB-ADVISER --------------------------------------------------------------------------------------------------------------------------------- PUTNAM VARIABLE TRUST PUTNAM VT AMERICAN GOVERNMENT INCOME High current income with preservation of Putnam Investment Management, LLC FUND -- CLASS IA capital as its secondary objective PUTNAM VT CAPITAL OPPORTUNITIES FUND Long-term capital growth Putnam Investment Management, LLC -- CLASS IA PUTNAM VT DIVERSIFIED INCOME FUND -- As high a level of current income as Putnam Putnam Investment Management, LLC CLASS IA Management believes is consistent with preservation of capital PUTNAM VT EQUITY INCOME FUND -- CLASS Capital growth and current income Putnam Investment Management, LLC IA PUTNAM VT GLOBAL ASSET ALLOCATION FUND High level of long-term total return Putnam Investment Management, LLC Putnam -- CLASS IA consistent with preservation of capital Advisory Company, LLC PUTNAM VT GLOBAL EQUITY FUND -- CLASS Seeks capital appreciation Putnam Investment Management, LLC Putnam IA Advisory Company, LLC PUTNAM VT GLOBAL HEALTH CARE FUND -- Seeks capital appreciation Putnam Investment Management, LLC Putnam CLASS IA (1) + Advisory Company, LLC PUTNAM VT GLOBAL UTILITIES FUND -- Capital growth and current income Putnam Investment Management, LLC Putnam CLASS IA (2) + Advisory Company, LLC PUTNAM VT GROWTH AND INCOME FUND -- Capital growth and current income Putnam Investment Management, LLC CLASS IA PUTNAM VT GROWTH OPPORTUNITIES FUND -- Seeks capital appreciation Putnam Investment Management, LLC CLASS IA PUTNAM VT HIGH YIELD FUND -- CLASS IA High current income. Capital growth is a Putnam Investment Management, LLC secondary goal when consistent with achieving high current income PUTNAM VT INCOME FUND -- CLASS IA High current income consistent with what Putnam Investment Management, LLC Putnam Management believes to be prudent risk PUTNAM VT INTERNATIONAL EQUITY FUND -- Seeks capital appreciation Putnam Investment Management, LLC Putnam CLASS IA Advisory Company, LLC PUTNAM VT INTERNATIONAL GROWTH AND Capital growth. Current income is a Putnam Investment Management, LLC Putnam INCOME FUND -- CLASS IA secondary objective Advisory Company, LLC PUTNAM VT INTERNATIONAL NEW Seeks long-term capital appreciation Putnam Investment Management, LLC Putnam OPPORTUNITIES FUND -- CLASS IA Advisory Company, LLC PUTNAM VT INVESTORS FUND -- CLASS IA Long-term growth of capital and any Putnam Investment Management, LLC increased income that results from this growth PUTNAM VT MID CAP VALUE FUND -- CLASS Capital appreciation and, as a secondary Putnam Investment Management, LLC IA objective, current income PUTNAM VT MONEY MARKET FUND -- CLASS As high a rate of current income as Putnam Putnam Investment Management, LLC IA* Management believes is consistent with preservation of capital and maintenance of liquidity
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FUNDING OPTION INVESTMENT OBJECTIVE SUMMARY INVESTMENT ADVISER/SUB-ADVISER --------------------------------------------------------------------------------------------------------------------------------- PUTNAM VT NEW OPPORTUNITIES FUND -- Seeks long-term capital appreciation Putnam Investment Management, LLC CLASS IA PUTNAM VT RESEARCH FUND -- CLASS IA Seeks capital appreciation Putnam Investment Management, LLC Putnam Advisory Company, LLC PUTNAM VT SMALL CAP VALUE FUND -- Seeks capital appreciation Putnam Investment Management, LLC CLASS IA PUTNAM VT THE GEORGE PUTNAM FUND OF A balanced investment composed of a well Putnam Investment Management, LLC BOSTON -- CLASS IA diversified portfolio of stocks and bonds which provide both capital growth and current income PUTNAM VT VISTA FUND -- CLASS IA Seeks capital appreciation Putnam Investment Management, LLC PUTNAM VT VOYAGER FUND -- CLASS IA Seeks capital appreciation Putnam Investment Management, LLC FIXED ACCUMULATION FEATURE** Preservation of Capital General Account
+ Closed to new and subsequent Premium Payments and transfers of Contract Value. * In a low interest rate environment, yields for money market funds, after deduction of Contract charges may be negative even though the fund's yield, before deducting for such charges, is positive. If you allocate a portion of your Contract Value to a money market Sub-Account or participate in an Asset Allocation Program where Contract Value is allocated to a money market Sub-Account, that portion of your Contract Value may decrease in value. ** The Fixed Accumulation Feature is not a Sub-Account and the Company does not provide investment advice in connection with this feature. NOTES (1) Formerly Putnam VT Health Sciences Fund -- Class IA (2) Formerly Putnam VT Utilities Growth and Income Fund -- Class IA We do not guarantee the investment results of any of the underlying Funds. Since each underlying Fund has different investment objectives, each is subject to different risks. These risks and the Funds' expenses are more fully described in the Funds' prospectus, and the Funds' Statement of Additional Information which may be ordered from us. The Funds' prospectus should be read in conjunction with this Prospectus before investing. The Funds may not be available in all states. MIXED AND SHARED FUNDING -- Shares of the Funds may be sold to our other separate accounts and our insurance company affiliates or other unaffiliated insurance companies to serve as the underlying investment for both variable annuity contracts and variable life insurance policies, a practice known as "mixed and shared funding." As a result, there is a possibility that a material conflict may arise between the interests of Contract Owners, and of owners of other contracts whose contract values are allocated to one or more of these other separate accounts investing in any one of the Funds. In the event of any such material conflicts, we will consider what action may be appropriate, including removing the Fund from the Separate Account or replacing the Fund with another underlying fund. There are certain risks associated with mixed and shared funding. These risks are disclosed in the Funds' prospectus. VOTING RIGHTS -- We are the legal owners of all Fund shares held in the Separate Account and we have the right to vote at the Fund's shareholder meetings. To the extent required by federal securities laws or regulations, we will: - Notify you of any Fund shareholders' meeting if the shares held for your Contract may be voted. - Send proxy materials and a form of instructions that you can use to tell us how to vote the Fund shares held for your Contract. - Arrange for the handling and tallying of proxies received from Contract Owners. - Vote all Fund shares attributable to your Contract according to instructions received from you, and - Vote all Fund shares for which no voting instructions are received in the same proportion as shares for which instructions have been received. If any federal securities laws or regulations, or their present interpretation, change to permit us to vote Fund shares on our own, we may decide to do so. You may attend any Shareholder Meeting at which shares held for your Contract may be voted. After we begin to make Annuity Payouts to you, the number of votes you have will decrease. As a result of proportional voting, a small number of Contract Owners could determine the outcome of a proposition subject to shareholder vote. SUBSTITUTIONS, ADDITIONS, OR DELETIONS OF FUNDS -- We reserve the right, subject to any applicable law, to make certain changes to the Funds offered under your contract. We may, in 12 ------------------------------------------------------------------------------- our sole discretion, establish new Funds. New Funds will be made available to existing Contract Owners as we determine appropriate. We may also close one or more Funds to additional Payments or transfers from existing Sub-Accounts. Unless otherwise directed, investment instructions will be automatically updated to reflect the Fund surviving after any merger, substitution or liquidation. We reserve the right to eliminate the shares of any of the Funds for any reason and to substitute shares of another registered investment company for the shares of any Fund already purchased or to be purchased in the future by the Separate Account. To the extent required by the Investment Company Act of 1940 (the "1940 Act"), substitutions of shares attributable to your interest in a Fund will not be made until we have the approval of the Commission and we have notified you of the change. In the event of any substitution or change, we may, by appropriate endorsement, make any changes in the Contract necessary or appropriate to reflect the substitution or change. If we decide that it is in the best interest of the Contract Owners, the Separate Account may be operated as a management company under the 1940 Act or any other form permitted by law, may be de-registered under the 1940 Act in the event such registration is no longer required, or may be combined with one or more other Separate Accounts. FEES WE RECEIVE FROM FUNDS AND RELATED PARTIES -- We receive substantial and varying administrative service payments and Rule 12b-1 fees from certain Funds or related parties. These types of payments and fees are sometimes referred to as "revenue sharing" payments. We consider these payments and fees among a number of factors when deciding to add or keep a fund on the menu of Funds that we offer through the Contract. We collect these payments and fees under agreements between us and a Fund's principal underwriter, transfer agent, investment adviser and/or other entities related to the Fund. We expect to make a profit on these fees. The availability of these types of arrangements creates an incentive for us to seek and offer Funds (and classes of shares of such Funds) that pay us revenue sharing. Other funds (or available classes of shares) may have lower fees and better overall investment performance. As of December 31, 2008, we have entered into arrangements to receive administrative service payments and/or Rule 12b-1 fees from each of the following Fund complexes (or affiliated entities): AIM Advisors, Inc., AllianceBernstein Variable Products Series Funds & Alliance Bernstein Investments, American Variable Insurance Series & Capital Research and Management Company, Branch Banking & Trust Company, Evergreen Investment Services Inc., Fidelity Distributors Corporation, Fidelity Investments Institutional Operations Company, Franklin Templeton Services, LLC, The Huntington Funds, Lord Abbett Series Fund & Lord Abbett Distributor, LLC, MFS Fund Distributors, Inc. & Massachusetts Financial Services Company, Merrill Lynch Asset Management & Princeton Funds Distributor, Morgan Stanley Distribution, Inc. & Morgan Stanley Investment Management & The Universal Institutional Funds, MTB Investment Advisors, Inc., Banc of America Advisors, LLC, JPMorgan Investment Advisors, Inc., Oppenheimer Variable Account Funds & Oppenheimer Funds Distributor, Inc., Pioneer Variable Contracts Trust & Pioneer Investment Management, Inc. & Pioneer Funds Distributor, Inc., Prudential Investment Management Services, LLC, Putnam Retail Management Limited Partnership, SunTrust Securities, Inc. & Trusco Capital Management, Inc., UBS Financial Services, Inc., Van Kampen Life Investment Trust & Van Kampen Asset Management, Van Kampen Funds, The Victory Variable Insurance Funds & Victory Capital Management, Inc. & Victory Capital Advisers, Inc. and Wells Fargo Variable Trust & Wells Fargo Fund Management, LLC. We are affiliated with Hartford Series Fund, Inc. and Hartford HLS Series Fund II, Inc. (collectively, the "HLS Funds") based on our affiliation with their investment advisers HL Investment Advisors, LLC and Hartford Investment Management Company. In addition to investment advisory fees, we, or our other insurance company affiliates, receive fees to provide, among other things, administrative, processing, accounting and shareholder services for the HLS Funds. Not all Fund complexes pay the same amounts of revenue sharing payments and/or Rule 12b-1 fees. Therefore, the amount of fees we collect may be greater or smaller based on the Funds you select. Revenue sharing and Rule 12b-1 fees did not exceed 0.50% and 0.35%, respectively, in 2008, and are not expected to exceed 0.50% and 0.35%, respectively, in 2009, of the annual percentage of the average daily net assets (for instance, in 2008, assuming that you invested in a Fund that paid us the maximum fees and you maintained a hypothetical average balance of $10,000, we would collect $85 from that Fund). We will endeavor to update this listing annually and interim arrangements may not be reflected. For the fiscal year ended December 31, 2008, revenue sharing and Rule 12b-1 fees did not exceed approximately $145.6 million. These fees do not take into consideration indirect benefits received by offering HLS Funds as investment options. PERFORMANCE RELATED INFORMATION The Separate Account may advertise certain performance-related information concerning the Sub-Accounts. Performance information about a Sub-Account is based on the Sub-Account's past performance only and is no indication of future performance. When a Sub-Account advertises its standardized total return, it will usually be calculated from the date of either the Separate Account's inception or the Sub-Account's inception, whichever is later, for one year, five years, and ten years or some other relevant periods if the Sub-Account has not been in existence 13 ------------------------------------------------------------------------------- for at least ten years. Total return is measured by comparing the value of an investment in the Sub-Account at the beginning of the relevant period to the value of the investment at the end of the period. Total return calculations reflect a deduction for Total Annual Fund Operating Expenses, any Contingent Deferred Sales Charge, Separate Account Annual Expenses without any optional charge deductions, and the Annual Maintenance Fee. The Separate Account may also advertise non-standard total returns that pre-date the inception date of the Separate Account. These non-standardized total returns are calculated by assuming that the Sub-Accounts have been in existence for the same periods as the underlying Funds and by taking deductions for charges equal to those currently assessed against the Sub-Accounts. Non-standardized total return calculations reflect a deduction for Total Annual Fund Operating Expenses and Separate Account Annual Expenses without any optional charge deductions, and do not include deduction for Contingent Deferred Sales Charge or the Annual Maintenance Fee. This means the non-standardized total return for a Sub-Account is higher than the standardized total return for a Sub-Account. These non-standardized returns must be accompanied by standardized returns. If applicable, the Sub-Accounts may advertise yield in addition to total return. This yield is based on the 30-day SEC yield of the underlying Fund less the recurring charges at the Separate Account level. A money market Sub-Account may advertise yield and effective yield. The yield of a Sub-Account is based upon the income earned by the Sub-Account over a seven-day period and then annualized, i.e. the income earned in the period is assumed to be earned every seven days over a 52-week period and stated as a percentage of the investment. Effective yield is calculated similarly but when annualized, the income earned by the investment is compounded in the course of a 52-week period. Yield and effective yield include the recurring charges at the Separate Account level. We may provide information on various topics to Contract Owners and prospective Contract Owners in advertising, sales literature or other materials. These topics may include the relationship between sectors of the economy and the economy as a whole and its effect on various securities markets, investment strategies and techniques (such as systematic investing, Dollar Cost Averaging and asset allocation), the advantages and disadvantages of investing in tax-deferred and taxable instruments, customer profiles and hypothetical purchase scenarios, financial management and tax and retirement planning, and other investment alternatives, including comparisons between the Contract and the characteristics of and market for such alternatives. FIXED ACCUMULATION FEATURE IMPORTANT INFORMATION YOU SHOULD KNOW: THIS PORTION OF THE PROSPECTUS RELATING TO THE FIXED ACCUMULATION FEATURE IS NOT REGISTERED UNDER THE SECURITIES ACT OF 1933 ("1933 ACT") AND THE FIXED ACCUMULATION FEATURE IS NOT REGISTERED AS AN INVESTMENT COMPANY UNDER THE 1940 ACT. THE FIXED ACCUMULATION FEATURE OR ANY OF ITS INTERESTS ARE NOT SUBJECT TO THE PROVISIONS OR RESTRICTIONS OF THE 1933 ACT OR THE 1940 ACT, AND THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION HAS NOT REVIEWED THE DISCLOSURE REGARDING THE FIXED ACCUMULATION FEATURE. THE FOLLOWING DISCLOSURE ABOUT THE FIXED ACCUMULATION FEATURE MAY BE SUBJECT TO CERTAIN GENERALLY APPLICABLE PROVISIONS OF THE FEDERAL SECURITIES LAWS REGARDING THE ACCURACY AND COMPLETENESS OF DISCLOSURE. Premium Payments and Contract Values allocated to the Fixed Accumulation Feature become a part of our General Account assets. We invest the assets of the General Account according to the laws governing the investments of insurance company General Accounts. The General Account is not a bank account and is not insured by the FDIC or any other government agency. We receive a benefit from all amounts held in the General Account. Premium Payments and Contract Values allocated to the Fixed Accumulation Feature are available to our general creditors. We guarantee that we will credit interest to amounts you allocate to the Fixed Accumulation Feature at a minimum rate that meets your State's minimum non-forfeiture requirements. We reserve the right to prospectively declare different rates of excess interest depending on when amounts are allocated or transferred to the Fixed Accumulation Feature. This means that amounts at any designated time may be credited with a different rate of excess interest than the rate previously credited to such amounts and to amounts allocated or transferred at any other designated time. We will periodically publish the Fixed Accumulation Feature interest rates currently in effect. There is no specific formula for determining interest rates and no assurances are offered as to future rates. Some of the factors that we may consider in determining whether to credit excess interest are: general economic trends, rates of return currently available for the types of investments and durations that match our liabilities and anticipated yields on our investments; regulatory and tax requirements; and competitive factors. We will account for any deductions, Surrenders or transfers from the Fixed Accumulation Feature on a "first-in first-out" basis. For Contracts issued in the state of New York, the Fixed Accumulation Feature interest rates may vary from other states. IMPORTANT: ANY INTEREST CREDITED TO AMOUNTS YOU ALLOCATE TO THE FIXED ACCUMULATION FEATURE IN EXCESS OF 3% PER YEAR WILL BE DETERMINED AT OUR SOLE DISCRETION. YOU ASSUME THE RISK THAT INTEREST CREDITED TO THE FIXED ACCUMULATION FEATURE MAY NOT EXCEED THE MINIMUM GUARANTEE OF 3% FOR ANY GIVEN YEAR. 14 ------------------------------------------------------------------------------- From time to time, we may credit increased interest rates under certain programs established in our sole discretion. DOLLAR COST AVERAGING PLUS ("DCA PLUS") PROGRAMS -- You may enroll in one or more special pre-authorized transfer programs known as our DCA Plus Programs (the "Programs"). Under these Programs, Contract Owners who enroll may allocate a minimum of $5,000 of their Premium Payment into a Program (we may allow a lower minimum Premium Payment for qualified plan transfers or rollovers, including IRAs) and pre-authorize transfers from our Fixed Accumulation Feature to any of the Sub-Accounts under either a 6-Month Transfer Program or 12-Month Transfer Program subject to Program rules. The 6-Month Transfer Program and the 12-Month Transfer Program will generally have different credited interest rates. Under the 6-Month Transfer Program, the interest rate can accrue up to 6 months and all Premium Payments and accrued interest must be transferred from the Program to the selected Sub-Accounts in 3 to 6 months. Under the 12-Month Transfer Program, the interest rate can accrue up to 12 months and all Premium Payments and accrued interest must be transferred to the selected Sub-Accounts in 7 to 12 months. This will be accomplished by monthly transfers for the period selected and with the final transfer of the entire amount remaining in the Program. The pre-authorized transfers will begin within 15 days of receipt of the Program payment provided we receive complete enrollment instructions. If we do not receive complete Program enrollment instructions within 15 days of receipt of the initial Program payment, the Program will be voided and the entire balance in the Program will be transferred to the Accounts designated by you. If you do not designate an Account, we will return your Program payment to you for further instruction. If your Program payment is less than the required minimum amount, we will apply it to your Contract according to your instructions on record for a subsequent Premium Payment. Under the DCA Plus Programs, the credited interest rate is not earned on the full amount of your Premium Payment for the entire length of the Program. This is because Program transfers to the Sub-Accounts decrease the amount of your Premium Payment remaining in the Program. All Program payments, including any subsequent Program payment, must meet the Program minimum. Any subsequent Program payments we receive during an active Program transfer period which are received during the same interest rate effective period will be credited to the current Program. Any subsequent Program payments we receive during an active Program transfer period which are received during a different interest rate effective period will be used to start a new Program. That Program will be credited with the interest rate in effect on the date we start the new Program. Unless you send us different instructions, the new Program will be the same length of time as your current Program and will allocate the subsequent Program payments to the same Sub-Accounts. The DCA Plus Program may credit a higher interest rate but it does not ensure a profit or protect you against a loss in declining markets. Hartford may limit the total number of DCA Programs and DCA Plus Programs to 5 Programs open at any one time. We determine, in our sole discretion, the interest rates credited to the Program. These interest rates may vary depending on the Contract you purchased. Please consult your Registered Representative to determine the interest rate for your Program. You may elect to terminate the transfers by calling or writing us of your intent to cancel enrollment in the Program. Upon cancellation, all the amounts remaining in the Program will be immediately transferred to the Sub-Accounts you selected for the Program unless you provide us with different instructions. We may discontinue, modify or amend the Programs or any other interest rate program we establish. Any change to a Program will not affect Contract Owners currently enrolled in the Program. If you make systematic transfers from the Fixed Accumulation Feature under a Dollar Cost Averaging Program or DCA Plus Program, you must wait 6 months after your last systematic transfer before moving Sub-Account Values back to the Fixed Accumulation Feature. In Oregon, you may only sign up for DCA Plus Programs that are six months or longer. THE CONTRACT PURCHASES AND CONTRACT VALUE WHAT TYPES OF CONTRACTS ARE AVAILABLE? The Contract is an individual or group tax-deferred variable annuity contract. It is designed for retirement planning purposes and may be purchased by any individual, group or trust, including: - Any trustee or custodian for a retirement plan qualified under Sections 401(a) or 403(a) of the Code; - Annuity purchase plans adopted by public school systems and certain tax-exempt organizations according to Section 403(b) of the Code. We no longer accept any incoming 403(b) exchanges or applications for 403(b) individual annuity contracts or additional Premium Payments into any individual annuity contract funded through a 403(b) plan; - Individual Retirement Annuities adopted according to Section 408 of the Code; - Employee pension plans established for employees by a state, a political subdivision of a state, or an agency of either a state or a political subdivision of a state, and - Certain eligible deferred compensation plans as defined in Section 457 of the Code. 15 ------------------------------------------------------------------------------- The examples above represent qualified Contracts, as defined by the Code. In addition, individuals and trusts can also purchase Contracts that are not part of a tax qualified retirement plan. These are known as non-qualified Contracts. If you are purchasing the Contract for use in an IRA or other qualified retirement plan, you should consider other features of the Contract besides tax deferral, since any investment vehicle used within an IRA or other qualified plan receives tax deferred treatment under the Code. HOW DO I PURCHASE A CONTRACT? You may purchase a Contract through a Financial Intermediary. A Registered Representative will work with you to complete and submit an application or an order request form. Part of this process will include an assessment whether this variable annuity may be suitable for you. Prior to recommending the purchase or exchange of a deferred variable annuity, your Registered Representative shall make reasonable efforts to obtain certain information about you and your investment needs. This recommendation will be independently reviewed by a principal within your Financial Intermediary before an application or order will be sent to us. Your Premium Payment will not be invested in any Fund during this period. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. When you open an account, your Financial Intermediary will ask for your name, address, date of birth and other information that will allow us to identify you. They may also ask to see your driver's license or other identifying documents. Non-Resident Alien ("NRA") application submissions require our prior approval. The minimum initial Premium Payment required to buy this Contract varies based on the type of purchaser, variable annuity variation chosen and whether you enroll in a systematic investment program such as the InvestEase(R) Program. Financial Intermediaries may impose other requirements regarding the form of payment they will accept. Premium Payments not actually received by us within the time period provided below will result in the rejection of your application or order request. Premium Payments sent to us must be made in U.S. dollars and checks must be drawn on U.S. banks. We do not accept cash, third party checks or double endorsed checks. We reserve the right to limit the number of checks processed at one time. If your check does not clear, your purchase will be cancelled and you could be liable for any losses or fees incurred. A check must clear our account through our Administrative Office to be considered to be in good order. We will not accept Premium Payments of $1 million or more unless we provide prior approval. We reserve the right to impose special conditions on anyone who seeks our prior approval to purchase a Contract with Premium Payments of $1 million or more. In order to request prior approval, you must submit a completed enhanced due diligence form prior to the submission of your application: - if you are seeking to purchase a Contract with an initial Premium Payment of $1 million or more; - if total Premium Payments aggregated by social security number or taxpayer identification number equal $1 million or more; and - for all applications where the Owner or joint Owner are non-resident aliens. You and your Annuitant must not be older than age 85 on the date that your Contract is issued. You must be of minimum legal age in the state where the Contract is being purchased or a guardian must act on your behalf. Optional riders are subject to additional maximum issue age restrictions. HOW ARE PREMIUM PAYMENTS APPLIED TO MY CONTRACT? Your initial Premium Payment will be invested within two Valuation Days of our receipt of a properly completed application or an order request and the Premium Payment. If we receive your subsequent Premium Payment before the close of the New York Stock Exchange, it will be priced on the same Valuation Day. If we receive your Premium Payment after the close of the New York Stock Exchange, it will be processed on the next Valuation Day. If we receive your Premium Payment on a Non-Valuation Day, the amount will be invested on the next Valuation Day. Unless we receive new instructions, we will invest the Premium Payment based on your last allocation instructions on record. We will send you a confirmation when we invest your Premium Payment. If the request or other information accompanying the initial Premium Payment is incomplete when received, we will hold the money in a non-interest bearing account for up to five Valuation Days while we try to obtain complete information. If we cannot obtain the information within five Valuation Days, we will either return the Premium Payment and explain why the Premium Payment could not be processed or keep the Premium Payment if you authorize us to keep it until your provide the necessary information. For examples of how we calculate the Death Benefit, see Appendix II. CAN I CANCEL MY CONTRACT AFTER I PURCHASE IT? If, for any reason, you are not satisfied with your Contract, simply return it within ten days after you receive it with a written request for cancellation that indicates your tax-withholding instructions. In some states, you may be allowed more time to cancel your Contract. We may require additional information, including a signature guarantee, before we can cancel your Contract. Unless otherwise required by state law, we will pay you your Contract Value as of the Valuation Date we receive your request to cancel and will refund any sales or contract charges incurred during the period you owned the Contract. The Contract Value may be more or less than your Premium Payments depending upon the investment performance of your Account. This means that you bear the risk of any decline in your Contract Value until we receive your notice of 16 ------------------------------------------------------------------------------- cancellation. In certain states, however, we are required to return your Premium Payment without deduction for any fees or charges. HOW IS THE VALUE OF MY CONTRACT CALCULATED BEFORE THE ANNUITY COMMENCEMENT DATE? The Contract Value is the sum of all Accounts. There are two things that affect your Sub-Account value: (1) the number of Accumulation Units and (2) the Accumulation Unit Value. The Sub-Account value is determined by multiplying the number of Accumulation Units by the Accumulation Unit Value. On any Valuation Day your Contract Value reflects the investment performance of the Sub-Accounts and will fluctuate with the performance of the underlying Funds. When Premium Payments are credited to your Sub-Accounts, they are converted into Accumulation Units by dividing the amount of your Premium Payments, minus any Premium Taxes, by the Accumulation Unit Value for that day. The more Premium Payments you make to your Contract, the more Accumulation Units you will own. You decrease the number of Accumulation Units you have by requesting Surrenders, transferring money out of a Sub-Account, settling a Death Benefit claim or by annuitizing your Contract. To determine the current Accumulation Unit Value, we take the prior Valuation Day's Accumulation Unit Value and multiply it by the Net Investment Factor for the current Valuation Day. The Net Investment Factor is used to measure the investment performance of a Sub-Account from one Valuation Day to the next. The Net Investment Factor for each Sub-Account equals: - The net asset value per share plus applicable distributions per share of each Fund at the end of the current Valuation Day divided by - The net asset value per share of each Fund at the end of the prior Valuation Day; multiplied by - Contract charges including the daily expense factor for the mortality and expense risk charge and any other periodic expenses, including charges for optional benefits, adjusted for the number of days in the period. We will send you a statement at least annually, which tells you how many Accumulation Units you have, their value and your total Contract Value. CAN I TRANSFER FROM ONE SUB-ACCOUNT TO ANOTHER? You may make transfers between the Sub-Accounts offered in this Contract according to our policies and procedures as amended from time to time. WHAT IS A SUB-ACCOUNT TRANSFER? A Sub-Account transfer is a transaction requested by you that involves reallocating part or all of your Contract Value among the Funds available in your Contract. Your transfer request will be processed as of the end of the Valuation Day that it received is in good order. Otherwise, your request will be processed on the following Valuation Day. We will send you a confirmation when we process your transfer. You are responsible for verifying transfer confirmations and promptly advising us of any errors within 30 days of receiving the confirmation. WHAT HAPPENS WHEN I REQUEST A SUB-ACCOUNT TRANSFER? Many Contract Owners request Sub-Account transfers. Some request transfers into (purchases) a particular Sub-Account, and others request transfers out of (redemptions) a particular Sub-Account. In addition, some Contract Owners allocate new Premium Payments to Sub-Accounts, and others request Surrenders. We combine all the daily requests to transfer out of a Sub-Account along with all Surrenders from that Sub-Account and determine how many shares of that Fund we would need to sell to satisfy all Contract Owners' "transfer-out" requests. At the same time, we also combine all the daily requests to transfer into a particular Sub-Account or new Premium Payments allocated to that Sub-Account and determine how many shares of that Fund we would need to buy to satisfy all Contract Owners' "transfer-in" requests. In addition, many of the Funds that are available as investment options in our variable annuity products are also available as investment options in variable life insurance policies, retirement plans, funding agreements and other products offered by us or our affiliates. Each day, investors and participants in these other products engage in similar transfer transactions. We take advantage of our size and available technology to combine sales of a particular Fund for many of the variable annuities, variable life insurance policies, retirement plans, funding agreements or other products offered by us or our affiliates. We also combine many of the purchases of that particular Fund for many of the products we offer. We then "net" these trades by offsetting purchases against redemptions. Netting trades has no impact on the net asset value of the Fund shares that you purchase or sell. This means that we sometimes reallocate shares of a Fund rather than buy new shares or sell shares of the Fund. For example, if we combine all transfer-out (redemption) requests and Surrenders of a stock Fund Sub-Account with all other sales of that Fund from all our other products, we may have to sell $1 million dollars of that Fund on any particular day. However, if other Contract Owners and the owners of other products offered by us, want to transfer-in (purchase) an amount equal to $300,000 of that same Fund, then we would send a sell order to the Fund for $700,000 (a $1 million sell order minus the purchase order of $300,000) rather than making two or more transactions. WHAT RESTRICTIONS ARE THERE ON MY ABILITY TO MAKE A SUB-ACCOUNT TRANSFER? FIRST, YOU MAY MAKE ONLY ONE SUB-ACCOUNT TRANSFER REQUEST EACH DAY. We limit each Contract Owner to one Sub-Account transfer request each Valuation Day. We count all Sub-Account transfer activity that occurs on any one Valuation Day as one "Sub-Account transfer;" however, you cannot transfer the same Contract Value more than once a Valuation Day. 17 ------------------------------------------------------------------------------- EXAMPLES
TRANSFER REQUEST PER VALUATION DAY PERMISSIBLE? -------------------------------------------------------------------------------- Transfer $10,000 from a money market Sub-Account to a growth Yes Sub-Account Transfer $10,000 from a money market Sub-Account to any number Yes of other Sub-Accounts (dividing the $10,000 among the other Sub-Accounts however you chose) Transfer $10,000 from any number of different Sub-Accounts to Yes any number of other Sub-Accounts Transfer $10,000 from a money market Sub-Account to a growth No Sub-Account and then, before the end of that same Valuation Day, transfer the same $10,000 from the growth Sub-Account to an international Sub-Account
SECOND, YOU ARE ALLOWED TO SUBMIT A TOTAL OF 20 SUB-ACCOUNT TRANSFERS EACH CONTRACT YEAR (THE "TRANSFER RULE") BY U.S. MAIL, VOICE RESPONSE UNIT, INTERNET OR TELEPHONE.Once you have reached the maximum number of Sub-Account transfers, you may only submit any additional Sub-Account transfer requests and any trade cancellation requests in writing through U.S. Mail or overnight delivery service. In other words, Voice Response Unit, Internet or telephone transfer requests will not be honored. We may, but are not obligated to, notify you when you are in jeopardy of approaching these limits. For example, we will send you a letter after your 10th Sub-Account transfer to remind you about the Transfer Rule. After your 20th transfer request, our computer system will not allow you to do another Sub-Account transfer by telephone, Voice Response Unit or via the Internet. You will then be instructed to send your Sub-Account transfer request by U.S. Mail or overnight delivery service. We reserve the right to aggregate your Contracts (whether currently existing or those recently surrendered) for the purposes of enforcing these restrictions. The Transfer Rule does not apply to Sub-Account transfers that occur automatically as part of a Company-sponsored asset allocation or Dollar Cost Averaging program. Reallocations made based on a Fund merger, substitution or liquidation also do not count toward this transfer limit. Restrictions may vary based on state law. We make no assurances that the Transfer Rule is or will be effective in detecting or preventing market timing. THIRD, POLICIES HAVE BEEN DESIGNED TO RESTRICT EXCESSIVE SUB-ACCOUNT TRANSFERS. You should not purchase this Contract if you want to make frequent Sub-Account transfers for any reason. In particular, don't purchase this Contract if you plan to engage in "market timing," which includes frequent transfer activity into and out of the same Fund, or frequent Sub-Account transfers in order to exploit any inefficiencies in the pricing of a Fund. Even if you do not engage in market timing, certain restrictions may be imposed on you, as discussed below: Generally, you are subject to Fund trading policies, if any. We are obligated to provide, at the Fund's request, tax identification numbers and other shareholder identifying information contained in our records to assist Funds in identifying any pattern or frequency of Sub-Account transfers that may violate their trading policy. In certain instances, we have agreed to serve as a Fund's agent to help monitor compliance with that Fund's trading policy. We are obligated to follow each Fund's instructions regarding enforcement of their trading policy. Penalties for violating these policies may include, among other things, temporarily or permanently limiting or banning you from making Sub-Account transfers into a Fund or other funds within that fund complex. We are not authorized to grant exceptions to a Fund's trading policy. Please refer to each Fund's prospectus for more information. Transactions that cannot be processed because of Fund trading policies will be considered not in good order. In certain circumstances, Fund trading policies do not apply or may be limited. For instance: - Certain types of financial intermediaries may not be required to provide us with shareholder information. - "Excepted funds" such as money market funds and any Fund that affirmatively permits short-term trading of its securities may opt not to adopt this type of policy. This type of policy may not apply to any financial intermediary that a Fund treats as a single investor. - A Fund can decide to exempt categories of contract holders whose contracts are subject to inconsistent trading restrictions or none at all. - Non-shareholder initiated purchases or redemptions may not always be monitored. These include Sub-Account transfers that are executed: (i) automatically pursuant to a company- sponsored contractual or systematic program such as transfers of assets as a result of "dollar cost averaging" programs, asset allocation programs, automatic rebalancing programs, annuity payouts, loans, or systematic withdrawal programs; (ii) as a result of the payment of a Death Benefit; (iii) as a step-up in Contract Value pursuant to a Contract Death Benefit or guaranteed minimum withdrawal benefit; (iv) as a result of any deduction of charges or fees under a Contract; or (v) as a result of payments such as loan repayments, scheduled contributions, scheduled withdrawals or surrenders, retirement plan salary reduction contributions, or planned premium payments. POSSIBILITY OF UNDETECTED ABUSIVE TRADING OR MARKET TIMING. We may not be able to detect or prevent all abusive trading or market timing activities. For instance, - Since we net all the purchases and redemptions for a particular Fund for this and many of our other products, transfers by any specific market timer could be inadvertently overlooked. - Certain forms of variable annuities and types of Funds may be attractive to market timers. We cannot provide assurances that we will be capable of addressing possible abuses in a timely manner. 18 ------------------------------------------------------------------------------- - These policies apply only to individuals and entities that own this Contract or have the right to make transfers (regardless of whether requests are made by you or anyone else acting on your behalf). However, the Funds that make up the Sub-Accounts of this Contract are also available for use with many different variable life insurance policies, variable annuity products and funding agreements, and are offered directly to certain qualified retirement plans. Some of these products and plans may have less restrictive transfer rules or no transfer restrictions at all. - In some cases, we are unable to count the number of Sub-Account transfers requested by group annuity participants co-investing in the same Funds ("Participants") or enforce the Transfer Rule because we do not keep Participants' account records for a Contract. In those cases, the Participant account records and Participant Sub-Account transfer information are kept by such owners or its third party service provider. These owners and third party service providers may provide us with limited information or no information at all regarding Participant Sub-Account transfers. HOW AM I AFFECTED BY FREQUENT SUB-ACCOUNT TRANSFERS? We are not responsible for losses or lost investment opportunities associated with the effectuation of these policies. Frequent Sub-Account transfers may result in the dilution of the value of the outstanding securities issued by a Fund as a result of increased transaction costs and lost investment opportunities typically associated with maintaining greater cash positions. This can adversely impact Fund performance and, as a result, the performance of your Contract. This may also lower the Death Benefit paid to your Beneficiary or lower Annuity Payouts for your Payee as well as reduce value of other optional benefits available under your Contract. Separate Account investors could be prevented from purchasing Fund shares if we reach an impasse on the execution of a Fund's trading instructions. In other words, a Fund complex could refuse to allow new purchases of shares by all our variable product investors if the Fund and we cannot reach a mutually acceptable agreement on how to treat an investor who, in a Fund's opinion, has violated the Fund's trading policy. In some cases, we do not have the tax identification number or other identifying information requested by a Fund in our records. In those cases, we rely on the Contract Owner to provide the information. If the Contract Owner does not provide the information, we may be directed by the Fund to restrict the Contract Owner from further purchases of Fund shares. In those cases, all participants under a plan funded by the Contract will also be precluded from further purchases of Fund shares. FIXED ACCUMULATION FEATURE TRANSFERS -- During each Contract Year, you may make transfers out of the Fixed Accumulation Feature to the Sub-Accounts, subject to the transfer restrictions discussed below. All transfer allocations must be in whole numbers (e.g., 1%). FIXED ACCUMULATION FEATURE TRANSFER RESTRICTIONS -- Each Contract Year, you may transfer the greater of: - 30% of the Contract Value in the Fixed Accumulation Feature as of the last Contract Anniversary or Contract issue date or the largest sum of any prior transfers. When we calculate the 30%, we add Premium Payments made after that date but before the next Contract Anniversary. These restrictions also apply to systematic transfers except for certain programs specified by us. The 30% does not include Contract Value in any DCA Plus Program; or - An amount equal to your largest previous transfer from the Fixed Accumulation Feature in any one Contract Year. We apply these restrictions to all transfers from the Fixed Accumulation Feature, including all systematic transfers and Dollar Cost Averaging Programs, except for transfers under our DCA Plus Program. If your interest rate renews at a rate at least 1% lower than your prior interest rate, you may transfer an amount equal to up to 100% of the amount to be invested at the renewal rate. You must make this transfer request within 60 days of being notified of the renewal rate. We may defer transfers and Surrenders from the Fixed Accumulation Feature for up to 6 months from the date of your request. You must wait 6 months after your most recent transfer from the Fixed Accumulation Feature before moving Sub-Account Values back to the Fixed Accumulation Feature. If you make systematic transfers from the Fixed Accumulation Feature under a Dollar Cost Averaging Program or DCA Plus Program, you must wait 6 months after your last systematic transfer before moving Sub-Account Values back to the Fixed Accumulation Feature. TELEPHONE AND INTERNET TRANSFERS -- You can make transfers by contacting us. Transfer instructions received by telephone on any Valuation Day before the close of the New York Stock Exchange will be carried out that day. Otherwise, the instructions will be carried out at the end of the next Valuation Day. Transfer instructions you send electronically are considered to be received by Hartford at the time and date stated on the electronic acknowledgement Hartford returns to you. If the time and date indicated on the acknowledgement is before the end of any Valuation Day, the instructions will be carried out that day. Otherwise, the instructions will be carried out at the end of the next Valuation Day. If you do not receive an electronic acknowledgement, you should telephone us as soon as possible. We will send you a confirmation when we process your transfer. You are responsible for verifying transfer confirmations and promptly reporting any inaccuracy or discrepancy to us and your Registered Representative. Any oral communication should be re-confirmed in writing. 19 ------------------------------------------------------------------------------- Telephone or Internet transfer requests may currently only be cancelled by calling us at (800) 521-0538 before the close of the New York Stock Exchange on the day you made your transfer request. Hartford, our agents or our affiliates are not responsible for losses resulting from telephone or electronic requests that we believe are genuine. We will use reasonable procedures to confirm that instructions received by telephone or through our website are genuine, including a requirement that contract owners provide certain identification information, including a personal identification number. We record all telephone transfer instructions. We reserve the right to suspend, modify, or terminate telephone or electronic transfer privileges at any time. POWER OF ATTORNEY -- You may authorize another person to conduct financial and other transactions on your behalf by submitting a completed power of attorney form that meets the power of attorney requirements of your resident state law. Once we have the completed form on file, we will accept transaction requests, including transfer instructions, subject to our transfer restrictions, from your designated third party until we receive new instructions in writing from you. CHARGES AND FEES The following charges and fees are associated with the Contract: THE CONTINGENT DEFERRED SALES CHARGE The Contingent Deferred Sales Charge covers some of the expenses relating to the sale and distribution of the Contract, including commissions paid to registered representatives and the cost of preparing sales literature and other promotional activities. We may assess a Contingent Deferred Sales Charge when you request a full or partial Surrender. The Contingent Deferred Sales Charge is based on the amount you choose to Surrender and how long your Premium Payments have been in the Contract. Each Premium Payment has its own Contingent Deferred Sales Charge schedule. Premium Payments are Surrendered in the order in which they were received. The longer you leave your Premium Payments in the Contract, the lower the Contingent Deferred Sales Charge will be when you Surrender. The amount assessed a Contingent Deferred Sales Charge will not exceed your total Premium Payments. The percentage used to calculate the Contingent Deferred Sales Charge is equal to:
NUMBER OF YEARS FROM CONTINGENT DEFERRED PREMIUM PAYMENT SALES CHARGE ----------------------------------------------- 1 6% 2 6% 3 5% 4 5% 5 4% 6 3% 7 2% 8 or more 0%
SURRENDER ORDER -- During the Contract Years when a Contingent Deferred Sales Charge applies to the initial Premium Payment, all Surrenders in excess of the Annual Withdrawal Amount (which is equal to 10% of total Premium Payments) will be taken first from Premium Payments, then from earnings. Surrenders from Premium Payments in excess of the Annual Withdrawal Amount will be subject to a Contingent Deferred Sales Charge. Thereafter, Surrenders will be taken first from earnings, then from Premium Payments not subject to a Contingent Deferred Sales Charge, then from 10% of Premium Payments still subject to a Contingent Deferred Sales Charge and then from Premium Payments subject to a Contingent Deferred Sales Charge on a first-in-first-out basis. THE FOLLOWING SURRENDERS ARE NOT SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE: - ANNUAL WITHDRAWAL AMOUNT -- During the first seven years from each Premium Payment, you may, each Contract Year, take partial Surrenders up to 10% of the total Premium Payments. If you do not take 10% one year, you may not take more than 10% the next year. These amounts are different for group unallocated Contracts and Contracts issued to a Charitable Remainder Trust. UNDER THE FOLLOWING SITUATIONS, THE CONTINGENT DEFERRED SALES CHARGE IS WAIVED: - UPON ELIGIBLE CONFINEMENT AS DESCRIBED IN THE WAIVER OF SALES CHARGE RIDER -- For Contracts purchased on or after September 29, 1997, we will waive any Contingent Deferred Sales Charge applicable to a partial or full Surrender if you, the joint Contract Owner or the Annuitant, is confined for at least 180 calendar days to a: (a) facility recognized as a general hospital by the proper authority of the state in which it is located; or (b) facility recognized as a general hospital by the Joint Commission on the Accreditation of Hospitals; or (c) facility certified as a hospital or long-term care facility; or (d) nursing home licensed by the state in which it is located and offers the services of a registered nurse 24 hours a day. If you, the joint Contract Owner or the Annuitant is confined when you purchase or upgrade the Contract, this waiver is not available. For it to apply, you must: (a) have owned the Contract continuously since it was issued, (b) provide written proof of confinement satisfactory to us, and (c) request the 20 ------------------------------------------------------------------------------- Surrender within 91 calendar days of the last day of confinement. This waiver may not be available in all states. Please contact your Registered Representative or us to determine if it is available for you. - FOR REQUIRED MINIMUM DISTRIBUTIONS -- This allows Annuitants who are age 70 1/2 or older, with a Contract held under an Individual Retirement Account or 403(b) plan, to Surrender an amount equal to the Required Minimum Distribution for the Contract without a Contingent Deferred Sales Charge for one year's required minimum distribution for that Contract Year. All requests for Required Minimum Distributions must be in writing. - ON OR AFTER THE ANNUITANT'S 90TH BIRTHDAY. - FOR DISABLED PARTICIPANTS ENROLLED IN A GROUP UNALLOCATED, TAX QUALIFIED RETIREMENT PLAN. With our approval and under certain conditions, participants who become disabled can receive Surrenders free of Contingent Deferred Sales Charge. THE FOLLOWING SITUATIONS ARE NOT SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE: - UPON DEATH OF THE ANNUITANT, CONTRACT OWNER OR JOINT CONTRACT OWNER -- No Contingent Deferred Sales Charge will be deducted if the Annuitant, Contract Owner or joint Contract Owner dies. - UPON ANNUITIZATION -- The Contingent Deferred Sales Charge is not deducted when you annuitize the Contract. However, we will charge a Contingent Deferred Sales Charge if the Contract is fully Surrendered during the Contingent Deferred Sales Charge period under an Annuity Payout Option which allows Surrenders. - FOR SUBSTANTIALLY EQUAL PERIODIC PAYMENTS -- We will waive the Contingent Deferred Sales Charge if you take partial Surrenders under the Automatic Income Program where you receive a scheduled series of substantially equal periodic payments for the greater of five years or to age 59 1/2. - UPON CANCELLATION DURING THE RIGHT TO CANCEL PERIOD. MORTALITY AND EXPENSE RISK CHARGE For assuming mortality and expense risks under the Contract, we deduct a daily charge at an annual rate of 1.25% of Sub-Account Value. The mortality and expense risk charge is broken into charges for mortality risks and for an expense risk: - MORTALITY RISK -- There are two types of mortality risks that we assume, those made while your Premium Payments are accumulating and those made once Annuity Payouts have begun. During the period your Premium Payments are accumulating, we are required to cover any difference between the Death Benefit paid and the Surrender Value. These differences may occur during periods of declining value or in periods where the Contingent Deferred Sales Charges would have been applicable. The risk that we bear during this period is that actual mortality rates, in aggregate, may exceed expected mortality rates. Once Annuity Payouts have begun, we may be required to make Annuity Payouts as long as the Annuitant is living, regardless of how long the Annuitant lives. The risk that we bear during this period is that the actual mortality rates, in aggregate, may be lower than the expected mortality rates. - EXPENSE RISK -- We also bear an expense risk that the Contingent Deferred Sales Charges and the Annual Maintenance Fee collected before the Annuity Commencement Date may not be enough to cover the actual cost of selling, distributing and administering the Contract. Although variable Annuity Payouts will fluctuate with the performance of the underlying Fund selected, your Annuity Payouts will NOT be affected by (a) the actual mortality experience of our Annuitants, or (b) our actual expenses if they are greater than the deductions stated in the Contract. Because we cannot be certain how long our Annuitants will live, we charge this percentage fee based on the mortality tables currently in use. The mortality and expense risk charge enables us to keep our commitments and to pay you as planned. If the mortality and expense risk charge under a Contract is insufficient to cover our actual costs, we will bear the loss. If the mortality and expense risk charge exceeds these costs, we keep the excess as profit. We may use these profits for any proper corporate purpose including, among other things, payment of sales expenses. We expect to make a profit from the mortality and expense risk charge. ANNUAL MAINTENANCE FEE The Annual Maintenance Fee is a flat fee that is deducted from your Contract Value to reimburse us for expenses relating to the administrative maintenance of the Contract and the Accounts. The annual $30 charge is deducted on a Contract Anniversary or when the Contract is fully Surrendered if the Contract Value at either of those times is less than $50,000. The charge is deducted proportionately from each Account in which you are invested. WHEN IS THE ANNUAL MAINTENANCE FEE WAIVED? We will waive the Annual Maintenance Fee if your Contract Value is $50,000 or more on your Contract Anniversary or when you fully Surrender your Contract. In addition, we will waive one Annual Maintenance Fee for Contract Owners who own more than one Contract with a combined Contract Value between $50,000 and $100,000. If you have multiple Contracts with a combined Contract Value of $100,000 or greater, we will waive the Annual Maintenance Fee on all Contracts. However, we reserve the right to limit the number of waivers to a total of six Contracts. We also reserve the right to waive the Annual Maintenance Fee under certain other conditions. We do not include contracts from our Putnam Hartford line of variable annuity contracts with the Contracts when we combine Contract Value for purposes of this waiver. ADMINISTRATIVE CHARGE For administration, we apply a daily charge at the rate of .15% per year against all Contract Values held in the Separate Account during both the accumulation and annuity phases of the 21 ------------------------------------------------------------------------------- Contract. There is not necessarily a relationship between the amount of administrative charge imposed on a given Contract and the amount of expenses that may be attributable to that Contract; expenses may be more or less than the charge. PREMIUM TAXES We deduct Premium Taxes, if required, by a state or other government agency. Some states collect the taxes when Premium Payments are made; others collect at Annuitization. Since we pay Premium Taxes when they are required by applicable law, we may deduct them from your Contract when we pay the taxes, upon Surrender, or on the Annuity Commencement Date. The Premium Tax rate varies by state or municipality and currently ranges from 0% - 3.5%. CHARGES AGAINST THE FUNDS ANNUAL FUND OPERATING EXPENSES -- The Separate Account purchases shares of the Funds at net asset value. The net asset value of the Fund reflects investment advisory fees and administrative expenses already deducted from the assets of the Funds. These charges are described in the Funds' prospectuses. OPTIONAL DEATH BENEFIT RIDER CHARGE If you elect the Optional Death Benefit Rider, we will deduct an additional charge on a daily basis until we begin to make Annuity Payouts that is equal to an annual charge of 0.15% of your Contract Value invested in the Sub-Accounts. REDUCED CHARGES AND FEES WE MAY OFFER, IN OUR DISCRETION, REDUCED FEES AND CHARGES INCLUDING, BUT NOT LIMITED TO CONTINGENT DEFERRED SALES CHARGES, THE MORTALITY AND EXPENSE RISK CHARGE, AND THE ANNUAL MAINTENANCE FEE, FOR CERTAIN CONTRACTS (INCLUDING EMPLOYER SPONSORED SAVINGS PLANS) WHICH MAY RESULT IN DECREASED COSTS AND EXPENSES. REDUCTIONS IN THESE FEES AND CHARGES WILL NOT BE UNFAIRLY DISCRIMINATORY AGAINST ANY CONTRACT OWNER. DEATH BENEFIT WHAT IS THE DEATH BENEFIT AND HOW IS IT CALCULATED? The Death Benefit is the amount we will pay upon the death of the Contract Owner, joint Contract Owner or the Annuitant before we begin to make Annuity Payouts. The Death Benefit is calculated when we receive a certified death certificate or other legal document acceptable to us. Unless the Beneficiary provides us with instructions to reallocate the Death Benefit among the Accounts, the calculated Death Benefit will remain invested in the same Accounts, according to the Contract Owner's last instructions until we receive complete written settlement instructions from the Beneficiary. Therefore, the Death Benefit amount will fluctuate with the performance of the underlying Funds. When there is more than one Beneficiary, we will calculate the Accumulation Units for each Sub-account and the dollar amount for the Fixed Accumulation Feature for each Beneficiary's portion of the proceeds. If death occurs before the Annuity Commencement Date, the Death Benefit is the greatest of: - The total Premium Payments you have made to us minus the dollar amount of any partial Surrenders; or - The Contract Value of your Contract; or - The Maximum Anniversary Value, which is described below. The Maximum Anniversary Value is based on a series of calculations on Contract Anniversaries of Contract Values, Premium Payments and partial Surrenders. We will calculate an Anniversary Value for each Contract Anniversary prior to the deceased's 81st birthday or date of death, whichever is earlier. The Anniversary Value is equal to the Contract Value as of a Contract Anniversary, increased by the dollar amount of any Premium Payments made since that anniversary and reduced by the dollar amount of any partial Surrenders since that anniversary. The Maximum Anniversary Value is equal to the greatest Anniversary Value attained from this series of calculations. You may also elect the Optional Death Benefit Rider for an additional charge. The Optional Death Benefit adds the Interest Accumulation Value to the Death Benefit calculation. The Interest Accumulation Value will be: - Your Contract Value on the date the Optional Death Benefit Rider is added; - Plus any Premium Payments made after the date the Optional Death Benefit Rider is added; - Minus any proportional adjustments for any partial Surrenders taken after the Optional Death Benefit Rider was added; - Compounded daily at an annual rate of 5.0%. If you have taken any partial Surrenders, the Interest Accumulation Value will be adjusted to reduce the Optional Death Benefit proportionally for any partial Surrenders. On or after the deceased's 81st birthday or date of death, the Interest Accumulation Value will not continue to compound, but will be adjusted to add any Premium Payments or subtract any proportional adjustments for any partial Surrenders. The Optional Death Benefit is limited to a maximum of 200% of the Contract Value on the date the Optional Death Benefit Rider was added, plus 200% of any Premium Payments made since the addition of the Optional Death Benefit Rider minus any proportional adjustments for any Surrenders from that date. For examples on how the Optional Death Benefit is calculated see "Appendix II." The Optional Death Benefit Rider may not be available if the Contract Owner or Annuitant is age 76 or older. The Optional Death Benefit Rider is not available in Washington and New York. Once you elect the Optional Death Benefit Rider, you cannot cancel it. 22 ------------------------------------------------------------------------------- If you purchase your Contract after September 30, 1999, you must elect the Optional Death Benefit at the time you send us your initial Premium Payment. HOW IS THE DEATH BENEFIT PAID? The Death Benefit may be taken in one lump sum or under any of the Annuity Payout Options then being offered by us, unless the Contract Owner has designated the manner in which the Beneficiary will receive the Death Benefit. On the date we receive complete instructions from the Beneficiary, we will compute the Death Benefit amount to be paid out or applied to a selected Annuity Payout Option. When there is more than one Beneficiary, we will calculate the Death Benefit amount for each Beneficiary's portion of the proceeds and then pay it out or apply it to a selected Annuity Payout Option according to each Beneficiary's instructions. If we receive the complete instructions on a Non-Valuation Day, computations will take place on the next Valuation Day. The Beneficiary may elect under the Annuity Payout Option "Death Benefit Remaining with the Company" to leave proceeds from the Death Benefit invested with us for up to five years from the date of death if death occurred before the Annuity Commencement Date. Once we receive a certified death certificate or other legal documents acceptable to us, the Beneficiary can: (a) make Sub-Account transfers and (b) take Surrenders without paying Contingent Deferred Sales Charges. If the Death Benefit payment is $5,000 or more, the Beneficiary may elect to have their Death Benefit paid through our "Safe Haven Program." Under this program, the proceeds remain in our General Account and the Beneficiary will receive a draft book. The Beneficiary can write one draft for total payment of the Death Benefit, or keep the money in the General Account and write drafts as needed. We will credit interest at a rate determined periodically in our sole discretion. For federal income tax purposes, the Beneficiary will be deemed to have received the lump sum payment on transfer of the Death Benefit amount to the General Account. The interest will be taxable to the Beneficiary in the tax year that it is credited. We may not offer the Safe Haven Program in all states and we reserve the right to discontinue offering it at any time. Although there are no direct charges for this program, we earn investment income from the proceeds. The investment income we earn is likely more than the amount of interest we credit; therefore, we make a profit from the difference. The Beneficiary of a non-qualified Contract or IRA may also elect the "Single Life Expectancy Only" option. This option allows the Beneficiary to take the Death Benefit in a series of payments spread over a period equal to the Beneficiary's remaining life expectancy. Distributions are calculated based on IRS life expectancy tables. This option is subject to different limitations and conditions depending on whether the Contract is non-qualified or an IRA. REQUIRED DISTRIBUTIONS -- If the Contract Owner dies before the Annuity Commencement Date, the Death Benefit must be distributed within five years after death, or be distributed under a distribution option or Annuity Payout Option that satisfies the Alternatives to the Required Distributions described below. If the Contract Owner dies on or after the Annuity Commencement Date under an Annuity Payout Option that permits the Beneficiary to elect to continue Annuity Payouts or receive the Commuted Value, any remaining value must be distributed at least as rapidly as under the payment method being used as of the Contract Owner's death. If the Contract Owner is not an individual (e.g. a trust), then the original Annuitant will be treated as the Contract Owner in the situations described above and any change in the original Annuitant will be treated as the death of the Contract Owner. WHAT SHOULD THE BENEFICIARY CONSIDER? ALTERNATIVES TO THE REQUIRED DISTRIBUTIONS -- The selection of an Annuity Payout Option and the timing of the selection will have an impact on the tax treatment of the Death Benefit. To receive favorable tax treatment, the Annuity Payout Option selected: (a) cannot extend beyond the Beneficiary's life or life expectancy, and (b) must begin within one year of the date of death. If these conditions are NOT met, the Death Benefit will be treated as a lump sum payment for tax purposes. This sum will be taxable in the year in which it is considered received. SPOUSAL CONTRACT CONTINUATION -- If the Beneficiary is the Contract Owner's spouse, the Beneficiary may elect to continue the Contract as the Contract Owner, receive the death benefit in one lump sum payment or elect an Annuity Payout Option. If you elect the Optional Death Benefit Rider for an additional charge and the Contract continues with the spouse as Contract Owner, we will adjust the Contract Value to the amount that we would have paid as the Death Benefit, if the Spouse had elected to receive the Death Benefit. This is available only once for each Contract. WHO WILL RECEIVE THE DEATH BENEFIT? The distribution of the Death Benefit applies only when death is before the Annuity Commencement Date. If death occurs on or after the Annuity Commencement Date, there may be no payout at death unless the Contract Owner has elected an Annuity Payout Option that permits the Beneficiary to elect to continue Annuity Payouts or receive the Commuted Value. 23 ------------------------------------------------------------------------------- IF DEATH OCCURS BEFORE THE ANNUITY COMMENCEMENT DATE: IF THE DECEASED IS THE . . . AND . . . AND . . . THEN THE . . . Contract Owner There is a surviving joint The Annuitant is living or Joint Contract Owner receives Contract Owner deceased the Death Benefit. Contract Owner There is no surviving joint The Annuitant is living or Designated Beneficiary receives Contract Owner deceased the Death Benefit. Contract Owner There is no surviving joint The Annuitant is living or Contract Owner's estate Contract Owner and the deceased receives the Death Benefit. Beneficiary predeceases the Contract Owner Annuitant The Contract Owner is living There is no named Contingent The Contract Owner becomes the Annuitant Contingent Annuitant and the Contract continues. Annuitant The Contract Owner is living The Contingent Annuitant is Contingent Annuitant becomes living the Annuitant, and the Contract continues.
IF DEATH OCCURS ON OR AFTER THE ANNUITY COMMENCEMENT DATE: IF THE DECEASED IS THE . . . AND . . . THEN THE . . . Contract Owner The Annuitant is living Designated Beneficiary becomes the Contract Owner Annuitant The Contract Owner is living Contract Owner receives a payout at death, if any. Annuitant The Annuitant is also the Contract Owner Designated Beneficiary receives a payout at death, if any.
THESE ARE THE MOST COMMON DEATH BENEFIT SCENARIOS, HOWEVER, THERE ARE OTHERS. SOME OF THE ANNUITY PAYOUT OPTIONS MAY NOT RESULT IN A PAYOUT AT DEATH. FOR MORE INFORMATION ON ANNUITY PAYOUT OPTIONS THAT MAY NOT RESULT IN A PAYOUT AT DEATH PLEASE SEE THE SECTION ENTITLED "ANNUITY PAYOUTS." IF YOU HAVE QUESTIONS ABOUT THESE AND ANY OTHER SCENARIOS, PLEASE CONTACT YOUR REGISTERED REPRESENTATIVE OR US. SURRENDERS WHAT KINDS OF SURRENDERS ARE AVAILABLE? FULL SURRENDERS BEFORE THE ANNUITY COMMENCEMENT DATE -- When you Surrender your Contract before the Annuity Commencement Date, the Surrender Value of the Contract will be made in a lump sum payment. The Surrender Value is the Contract Value minus any applicable Premium Taxes, Contingent Deferred Sales Charges and the Annual Maintenance Fee. The Surrender Value may be more or less than the amount of the Premium Payments made to a Contract. PARTIAL SURRENDERS BEFORE THE ANNUITY COMMENCEMENT DATE -- You may request a partial Surrender of Contract Values at any time before the Annuity Commencement Date. We will deduct any applicable Contingent Deferred Sales Charge. You can ask us to deduct the Contingent Deferred Sales Charge from the amount you are Surrendering or from your remaining Contract Value. If we deduct the Contingent Deferred Sales Charge from your remaining Contract Value, that amount will also be subject to Contingent Deferred Sales Charge. This is our default option. Both full and partial Surrenders are taken proportionally from the Sub-Accounts and the Fixed Accumulation Feature. There are two restrictions on partial Surrenders before the Annuity Commencement Date: - The partial Surrender amount must be at least equal to $100, our current minimum for partial Surrenders, and - The Contract must have a minimum Contract Value of $500 after the Surrender. The minimum Contract Value in New York must be $1000 after the Surrender. We reserve the right to close your Contract and pay the full Surrender Value if the Contract Value is under the minimum after the Surrender. The minimum Contract Value in Texas must be $1,000 after the Surrender with no Premium Payments made during the prior two Contract Years. FULL SURRENDERS AFTER THE ANNUITY COMMENCEMENT DATE -- You may Surrender your Contract on or after the Annuity Commencement Date only if you selected variable dollar amount Annuity Payouts under the Payments For a Period Certain Annuity Payout Option. Under this option, we pay you the Commuted Value of your Contract minus any applicable Contingent Deferred Sales Charges. The Commuted Value is determined on the day we receive your written request for Surrender. 24 ------------------------------------------------------------------------------- PARTIAL SURRENDERS AFTER THE ANNUITY COMMENCEMENT DATE -- Partial Surrenders are permitted after the Annuity Commencement Date if you select the Life Annuity with 120, 180 or 240 Monthly Payments Certain or the Payments for a Designated Period Annuity Payout Option. You may take partial Surrenders of amounts equal to the Commuted Value of the payments that we would have made during the "Period Certain" for the number of years you select under the Annuity Payout Option that we guarantee to make Annuity Payouts. To qualify for partial Surrenders under these Annuity Payout Options you must elect a variable dollar amount Annuity Payout and you must make the Surrender request during the Period Certain. Both full and partial Surrenders are taken proportionally from the Sub-Accounts and the Fixed Accumulation Feature. Hartford will deduct any applicable Contingent Deferred Sales Charges. If you elect to take the entire Commuted Value of the Annuity Payouts we would have made during the Period Certain, Hartford will not make any Annuity Payouts during the remaining Period Certain. If you elect to take only some of the Commuted Value of the Annuity Payouts we would have made during the Period Certain, Hartford will reduce the remaining Annuity Payouts during the remaining Period Certain. Annuity Payouts that are to be made after the Period Certain is over will not change. Please check with your tax adviser because there could be adverse tax consequences for Partial Surrenders after the Annuity Commencement Date. HOW DO I REQUEST A SURRENDER? Requests for full Surrenders must be in writing. Requests for partial Surrenders can be made in writing or by telephone. We will send your money within seven days of receiving complete instructions. However, we may postpone payment of Surrenders whenever: (a) the New York Stock Exchange is closed, (b) trading on the New York Stock Exchange is restricted by the SEC, (b) the SEC permits and orders postponement or (c) the SEC determines that an emergency exists to restrict valuation. WRITTEN REQUESTS -- To request a full or partial Surrender, complete a Surrender Form or send us a letter, signed by you, stating: - the dollar amount that you want to receive, either before or after we withhold taxes and deduct for any applicable charges, - your tax withholding amount or percentage, if any, and - your mailing address. If there are joint Contract Owners, both must authorize all Surrenders. For a partial Surrender, specify the Accounts that you want your Surrender to come from, otherwise, the Surrender will be taken in proportion to the value in each Account. TELEPHONE REQUESTS -- To request a partial Surrender by telephone, we must have received your completed Telephone Redemption Program Enrollment Form. If there are joint Contract Owners, both must sign this form. By signing the form, you authorize us to accept telephone instructions for partial Surrenders from either Contract Owner. Telephone authorization will remain in effect until we receive a written cancellation notice from you or your joint Contract Owner, we discontinue the program; or you are no longer the owner of the Contract. There are some restrictions on telephone surrenders, please call us with any questions. We may record telephone calls and use other procedures to verify information and confirm that instructions are genuine. We will not be liable for losses or expenses arising from telephone instructions reasonably believed to be genuine. WE MAY MODIFY THE REQUIREMENTS FOR TELEPHONE REDEMPTIONS AT ANY TIME. Telephone Surrender instructions received before the close of the New York Stock Exchange will be processed on that Valuation Day. Otherwise, your request will be processed on the next Valuation Day. COMPLETING A POWER OF ATTORNEY FORM FOR ANOTHER PERSON TO ACT ON YOUR BEHALF MAY PREVENT YOU FROM MAKING SURRENDERS VIA TELEPHONE. WHAT SHOULD BE CONSIDERED ABOUT TAXES? There are certain tax consequences associated with Surrenders: PRIOR TO AGE 59 1/2 -- If you make a Surrender prior to age 59 1/2, there may be adverse tax consequences including a 10% federal income tax penalty on the taxable portion of the Surrender payment. Surrendering before age 59 1/2 may also affect the continuing tax-qualified status of some Contracts. WE DO NOT MONITOR SURRENDER REQUESTS. TO DETERMINE WHETHER A SURRENDER IS PERMISSIBLE, WITH OR WITHOUT FEDERAL INCOME TAX PENALTY, PLEASE CONSULT YOUR PERSONAL TAX ADVISER. MORE THAN ONE CONTRACT ISSUED IN THE SAME CALENDAR YEAR -- If you own more than one contract issued by us or our affiliates in the same calendar year, then these contracts may be treated as one contract for the purpose of determining the taxation of distributions prior to the Annuity Commencement Date. Please consult your tax adviser for additional information. INTERNAL REVENUE CODE SECTION 403(b) ANNUITIES -- As of December 31, 1988, all section 403(b) annuities have limits on full and partial Surrenders. Contributions to your Contract made after December 31, 1988 and any increases in cash value after December 31, 1988 may not be distributed unless you are: (a) age 59 1/2, (b) no longer employed, (c) deceased, (d) disabled, or (e) experiencing a financial hardship (cash value increases may not be distributed for hardships prior to age 59 1/2). Distributions prior to age 59 1/2 due to financial hardship; unemployment or retirement may still be subject to a penalty tax of 10%. We will no longer accept any incoming 403(b) exchanges or applications for 403(b) individual annuity contracts. WE ENCOURAGE YOU TO CONSULT WITH YOUR QUALIFIED TAX ADVISER BEFORE MAKING ANY SURRENDERS. PLEASE SEE THE "FEDERAL TAX CONSIDERATIONS" SECTION FOR MORE INFORMATION. 25 ------------------------------------------------------------------------------- ANNUITY PAYOUTS THIS SECTION DESCRIBES WHAT HAPPENS WHEN WE BEGIN TO MAKE REGULAR ANNUITY PAYOUTS FROM YOUR CONTRACT. YOU, AS THE CONTRACT OWNER, SHOULD ANSWER FIVE QUESTIONS: - When do you want Annuity Payouts to begin? - Which Annuity Payout Option do you want to use? - How often do you want to receive Annuity Payouts? - What is the Assumed Investment Return? - Do you want fixed dollar amount or variable dollar amount Annuity Payouts? Please check with your Registered Representative to select the Annuity Payout Option that best meets your income needs. 1. WHEN DO YOU WANT ANNUITY PAYOUTS TO BEGIN? You select an Annuity Commencement Date when you purchase your Contract or at any time before you begin receiving Annuity Payouts. If the annuity reaches the maximum Annuity Commencement Date, which is the later of the 10th Contract Anniversary or the date the annuitant reaches age 90, the Contract will automatically be annuitized unless we and the Owner(s) agree to extend the Annuity Commencement Date, which approval may be withheld or delayed for any reason. If you purchase your Contract in New York, you must begin Annuity Payouts before your Annuitant's 91st birthday. If this Contract is issued to the trustee of a Charitable Remainder Trust, the Annuity Commencement Date may be deferred to the Annuitant's 100th birthday. The Annuity Calculation Date is when the amount of your Annuity Payout is determined. This occurs within five Valuation Days before your selected Annuity Commencement Date. All Annuity Payouts, regardless of frequency, will occur on the same day of the month as the Annuity Commencement Date. After the initial payout, if an Annuity Payout date falls on a Non-Valuation Day, the Annuity Payout is computed on the prior Valuation Day. If the Annuity Payout date does not occur in a given month due to a leap year or months with only 28 days (i.e. the 31st), the Annuity Payout will be computed on the last Valuation Day of the month. 2. WHICH ANNUITY PAYOUT OPTION DO YOU WANT TO USE? Your Contract contains the Annuity Payout Options described below. The Annuity Proceeds Settlement Option is an option that can be elected by the Beneficiary and is described in the "Death Benefit" section. We may at times offer other Annuity Payout Options. Once we begin to make Annuity Payouts, the Annuity Payout Option cannot be changed. LIFE ANNUITY We make Annuity Payouts as long as the Annuitant is living. When the Annuitant dies, we stop making Annuity Payouts. A Payee would receive only one Annuity Payout if the Annuitant dies after the first payout, two Annuity Payouts if the Annuitant dies after the second payout, and so forth. LIFE ANNUITY WITH A CASH REFUND We will make Annuity Payouts as long as the Annuitant is living. When the Annuitant dies, if the Annuity Payouts already made are less than the Contract Value on the Annuity Commencement Date minus any Premium Tax, the remaining value will be paid to the Beneficiary. The remaining value is equal to the Contract Value minus any Premium Tax minus all Annuity Payouts already made. This option is only available for fixed dollar amount Annuity Payouts. LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS CERTAIN We make monthly Annuity Payouts during the lifetime of the Annuitant but Annuity Payouts are at least guaranteed for a minimum of 120, 180 or 240 months, as you elect. If, at the death of the Annuitant, Annuity Payouts have been made for less than the minimum elected number of months, then the Commuted Value as of the date of the Annuitant's death will be paid in one sum to the Beneficiary. JOINT AND LAST SURVIVOR LIFE ANNUITY We will make Annuity Payouts as long as the Annuitant and Joint Annuitant are living. When one Annuitant dies, we continue to make Annuity Payouts until that second Annuitant dies. When choosing this option, you must decide what will happen to the Annuity Payouts after the first Annuitant dies. You must select Annuity Payouts that: - Remain the same at 100%, or - Decrease to 66.67%, or - Decrease to 50%. For variable Annuity Payouts, these percentages represent Annuity Units; for fixed Annuity Payouts, they represent actual dollar amounts. The percentage will also impact the Annuity Payout amount we pay while both Annuitants are living. If you pick a lower percentage, your original Annuity Payouts will be higher while both Annuitants are alive. PAYMENTS FOR A PERIOD CERTAIN We agree to make payments for a specified time. The minimum period that you can select is 5 years. The maximum period that you can select is 100 years minus your Annuitant's age. If, at the death of the Annuitant, Annuity Payouts have been made for less that the time period selected, then the Beneficiary may elect to continue the remaining Annuity Payouts or receive the Commuted Value in one sum. IMPORTANT INFORMATION: - YOU CANNOT SURRENDER YOUR CONTRACT ONCE ANNUITY PAYOUTS BEGIN, UNLESS YOU HAVE SELECTED LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS CERTAIN, JOINT AND LAST SURVIVOR LIFE ANNUITY WITH PAYMENTS CERTAIN, OR PAYMENTS PERIOD CERTAIN VARIABLE DOLLAR AMOUNT ANNUITY PAYOUT OPTION. A CONTINGENT DEFERRED SALES CHARGE MAY BE DEDUCTED. 26 ------------------------------------------------------------------------------- - For qualified Contracts, if you elect an Annuity Payout Option with a Period Certain, the guaranteed number of years must be less than the life expectancy of the Annuitant at the time the Annuity Payouts begin. We compute life expectancy using the IRS mortality tables. - AUTOMATIC ANNUITY PAYOUTS -- If you do not elect an Annuity Payout Option, Annuity Payouts will automatically begin on the Annuity Commencement Date under the Life Annuity with 120 Monthly Payments Certain Annuity Payout Option. Automatic Annuity Payouts will be fixed dollar amount Annuity Payouts, variable dollar amount Annuity Payouts, or a combination of fixed or variable dollar amount Annuity Payouts, depending on the investment allocation of your Account in effect on the Annuity Commencement Date. Automatic Variable Annuity Payouts will be based on an assumed investment return according to state law. 3. HOW OFTEN DO YOU WANT THE PAYEE TO RECEIVE ANNUITY PAYOUTS? In addition to selecting an Annuity Commencement Date and an Annuity Payout Option, you must also decide how often you want the Payee to receive Annuity Payouts. You may choose to receive Annuity Payouts: - monthly, - quarterly, - semi-annually, or - annually. Once you select a frequency, it cannot be changed. If you do not make a selection, the Payee will receive monthly Annuity Payouts. You must select a frequency that results in an Annuity Payout of at least $50. If the amount falls below $50, we have the right to change the frequency to bring the Annuity Payout up to at least $50. For Contracts issued in New York, the minimum monthly Annuity Payout is $20. 4. WHAT IS THE ASSUMED INVESTMENT RETURN? The Assumed Investment Return is the investment return used to calculate variable Annuity Payouts. The Assumed Investment Return for your Annuity is 5%. The first Annuity Payout will be based upon a 5% Assumed Investment Return. The remaining Annuity Payouts will fluctuate based on the actual investment results of the Sub-Accounts. 5. DO YOU WANT ANNUITY PAYOUTS TO BE FIXED-DOLLAR AMOUNT OR VARIABLE-DOLLAR AMOUNT? You may choose an Annuity Payout Option with fixed-dollar amounts or variable- dollar amounts, depending on your income needs. FIXED-DOLLAR AMOUNT ANNUITY PAYOUTS -- Once a fixed-dollar amount Annuity Payout begins, you cannot change your selection to receive variable-dollar amount Annuity Payouts. You will receive equal fixed-dollar amount Annuity Payouts throughout the Annuity Payout period. Fixed-dollar amount Annuity Payout amounts are determined by multiplying the Contract Value, minus any applicable Premium Taxes, by an Annuity rate. The annuity rate is set by us and is not less than the rate specified in the Fixed Payment Annuity tables in your Contract. VARIABLE-DOLLAR AMOUNT ANNUITY PAYOUTS -- Once a variable dollar amount Annuity Payout begins, you cannot change your selection to receive a fixed dollar amount Annuity Payout. A variable-dollar amount Annuity Payout is based on the investment performance of the Sub-Accounts. The variable-dollar amount Annuity Payouts may fluctuate with the performance of the underlying Funds. To begin making variable-dollar amount Annuity Payouts, we convert the first Annuity Payout amount to a set number of Annuity Units and then price those units to determine the Annuity Payout amount. The number of Annuity Units that determines the Annuity Payout amount remains fixed unless you transfer units between Sub-Accounts. The dollar amount of the first variable Annuity Payout depends on: - the Annuity Payout Option chosen, - the Annuitant's attained age and gender (if applicable),and, - the applicable annuity purchase rates based on the 1983a Individual Annuity Mortality table - the Assumed Investment Return The total amount of the first variable-dollar amount Annuity Payout is determined by dividing the Contract Value minus any applicable Premium Taxes, by $1,000 and multiplying the result by the payment factor defined in the Contract for the selected Annuity Payout Option. The dollar amount of each subsequent variable-dollar amount Annuity Payout is equal to the total of Annuity Units for each Sub-Account multiplied by Annuity Unit Value of each Sub-Account. The Annuity Unit Value of each Sub-Account for any Valuation Period is equal to the Accumulation Unit Value Net Investment Factor for the current Valuation Period multiplied by the Annuity Unit factor, multiplied by the Annuity Unit Value for the preceding Valuation Period. The Annuity Unit Factor offsets the AIR used to calculate your first variable dollar amount Annuity Payout. The Annuity Unit Factor for a 5% AIR is 0.999866%. COMBINATION ANNUITY PAYOUT -- You may choose to receive a combination of fixed dollar amount and variable dollar amount Annuity Payouts as long as they total 100% of your Annuity Payout. For example, you may choose to use 40% fixed dollar amount and 60% variable dollar amount to meet your income needs. Combination Annuity Payouts are not available during the first two Contract Years. TRANSFER OF ANNUITY UNITS -- After the Annuity Calculation Date, you may transfer dollar amounts of Annuity Units from one Sub-Account to another. On the day you make a transfer, the dollar amounts are equal for both Sub-Accounts and the number of Annuity Units will be different. We will transfer the dollar amount of your Annuity Units the day we receive your written request if received before the close of the New York 27 ------------------------------------------------------------------------------- Stock Exchange. Otherwise, the transfer will be made on the next Valuation Day. All Sub-Account transfers must comply with our Sub-Account transfer restriction policies. For more information on Sub-Account transfer restrictions please see the sub-section entitled "Can I transfer from one Sub-Account to another?" under the section entitled "The Contract." OTHER PROGRAMS AVAILABLE We may discontinue, modify or amend any of these Programs or any other programs we establish. Any change other than termination of a Program will not affect Contract Owners currently enrolled in the Program. There is no additional charge for these programs. If you are enrolled in any of these programs while a fund merger, substitution or liquidation takes place, unless otherwise noted in any communication from us; your Contract Value invested in such underlying Fund will be transferred automatically to the designated surviving Fund in the case of mergers and any available Money Market Fund in the case of Fund liquidations. Your enrollment instructions will be automatically updated to reflect the surviving Fund or a Money Market Fund for any continued and future investments. INVESTEASE PROGRAM -- InvestEase is an electronic transfer program that allows you to have money automatically transferred from your checking or savings account, and invested in your Contract. It is available for Premium Payments made after your initial Premium Payment. The minimum amount for each transfer is $50. You can elect to have transfers occur either monthly or quarterly, and they can be made into any Account available in your Contract excluding the DCA Plus Programs. AUTOMATIC INCOME PROGRAM -- The Automatic Income Program allows you to Surrender up to 10% of your total Premium Payments each Contract Year without a Contingent Deferred Sales charge. We can Surrender from the Accounts you select systematically on a monthly, quarterly, semiannual, or annual basis. The minimum amount of each Surrender is $100. The Automatic Income Program may change based on your instructions after your seventh Contract Year. Amounts taken under this Program will count towards the Annual Withdrawal Amount, and if received prior to age 59 1/2, may have adverse tax consequences, including a 10% federal income tax penalty on the taxable portion of the Surrender payment. Please see Federal Tax Considerations and Appendix I for more information regarding the tax consequences associated with your Contract. STATIC ASSET ALLOCATION MODELS This feature allows you to select an asset allocation model of Funds based on several potential factors including your risk tolerance, time horizon, investment objectives, or your preference to invest in certain funds or fund families. Based on these factors, you can select one of several asset allocation models, with each specifying percentage allocations among various Funds available under your Contract. Asset allocation models can be based on generally accepted investment theories that take into account the historic returns of different asset classes (e.g., equities, bonds or cash) over different time periods, or can be based on certain potential investment strategies that could possibly be achieved by investing in particular funds or fund families and are not based on such investment theories. If you choose to participate in one of these asset allocation models, you must invest all of your Premium Payment into one model. You may invest in an asset allocation model through the Dollar Cost Averaging Program where the Fixed Accumulation Feature, or a Dollar Cost Averaging Plus Program is the source of the assets to be invested in the asset allocation model you have chosen. You can also participate in these asset allocation models while enrolled in the Automatic Income Program. You may participate in only one asset allocation model at a time. Asset allocation models cannot be combined with other asset allocation models or with individual sub-account elections. You can switch asset allocation models up to twelve times per year. Your ability to elect or switch into and between asset allocation models may be restricted based on fund abusive trading restrictions. You may be required to invest in an acceptable asset allocation model as a condition for electing and maintaining certain guaranteed minimum withdrawal benefits. Your investments in an asset allocation model will be rebalanced quarterly to reflect the model's original percentages and you may cancel your model at any time. We have no discretionary authority or control over your investment decisions. These asset allocation models are based on then available Funds and do not include the Fixed Accumulation Feature. We make available educational information and materials (e.g., risk tolerance questionnaire, pie charts, graphs, or case studies) that can help you select an asset allocation model, but we do not recommend asset allocation models or otherwise provide advice as to what asset allocation model may be appropriate for you. While we will not alter allocation percentages used in any asset allocation model, allocation weightings could be affected by mergers, liquidations, fund substitutions or closures. Individual availability of these models is subject to fund company restrictions. Please refer to WHAT RESTRICTIONS ARE THERE ON YOUR ABILITY TO MAKE A SUB-ACCOUNT TRANSFER? for more information. You will not be provided with information regarding periodic updates to the Funds and allocation percentages in the asset allocation models, and we will not reallocate your Account Value based on those updates. Information on updated asset allocation models may be obtained by contacting your Registered Representative. If you wish to update your asset allocation model, you may do so by terminating your existing model and re-enrolling into a new one. Investment alternatives other than these asset allocation models are available that may 28 ------------------------------------------------------------------------------- enable you to invest your Contract Value with similar risk and return characteristics. When considering an asset allocation model for your individual situation, you should consider your other assets, income and investments in addition to this annuity. AUTOMATIC REBALANCING PROGRAM -- Automatic Rebalancing is a program that allows you to choose an allocation for your Sub-Accounts to help you reach your investment goals. The Contract offers model allocations with pre-selected Sub-Accounts and percentages that have been established for each type of investor-ranging from conservative to aggressive. Over time, Sub-Account performance may cause your Contract's allocation percentages to change, but under the Automatic Rebalancing Program, your Sub-Account allocations are rebalanced to the percentages in the current model you have chosen. You can transfer freely between allocation models up to twelve times per year. You can only participate in one asset allocation model at a time. DCA PLUS -- These programs allow you to earn a fixed rate of interest on investments. These programs are different from the Fixed Accumulation Feature. We determine, in our sole discretion, the interest rates to be credited. These interest rates may vary depending on the Contract you purchased and the date business is received. Please consult your Registered Representative to determine the interest rate for your Program. You may elect to lock in a rate of interest using either the "12-Month Transfer Program" or the "6-Month Transfer Program". - Under the 12-Month Transfer Program, new Premium Payments will be credited with an interest rate that will not change for 12 months. You must then transfer these investments into available Funds (and not the Fixed Accumulation Feature) during this 12 month period. You must make at least 7 but no more than 12 transfers to fully deplete sums invested in this Program. Transfers out will occur monthly. - Under the 6-Month Transfer Program, new Premium Payments will be credited with an interest rate that will not change for 6 months. You must then transfer these investments into available Funds (and not the Fixed Accumulation Feature) during this 6 month period. You must make at least 3 but no more than 6 transfers to fully deplete sums invested in this Program. Transfers out will occur monthly. - Each time you make a subsequent Premium Payment, you can invest in a different rate lock program. Any subsequent investments made in a month (or other interest rate effective period) other than your last program investment are considered a separate rate lock program investment. You can invest in up to 5 different rate lock programs at one time. - You must invest at least $5,000 in each rate lock program ($2,000 for qualified plan transfers or rollovers, including IRAs). We may pre-authorize transfers from our Fixed Accumulation Feature subject to restrictions. This minimum amount applies to the initial and all subsequent Premium Payments in a given rate lock program. - Pre-authorized transfers will begin within 15 days of receipt of the Program payment provided we receive complete enrollment instructions in good order. - If a DCA Plus payment is received without enrollment instructions and a DCA Plus program is active on the contract, we will set up the new Program to mirror the existing one. If a DCA Plus payment is received without enrollment instructions and a DCA Plus program is not active on the contract, but is the future investment allocation and a Static Model Portfolio Plan is active on the contract, we will set up the new Program to move funds to the Static Model Portfolio Plan. Otherwise, we will contact your investment professional to obtain complete instructions. If we do not receive in good order enrollment instructions within the 15 day timeframe noted above, we will refund the Program payment for further instruction. - If your Program payment is less than the required minimum amount, we will invest into the destination funds indicated on the Program instructions accompanying the payment. If Program instructions were not provided and a DCA Plus Program is active on the contract, we will apply the payment to the destination funds of the current DCA Plus program. Otherwise, we will contact your investment professional to obtain further investment instructions. - The credited interest rate used under the DCA Plus Programs is not earned on the full amount of your Premium Payment for the entire length of the Program because Program transfers to Funds decrease the amount of your Premium Payment remaining in the Program. - You may elect to terminate your involvement in this Program at any time. Upon cancellation, all the amounts remaining in the Program will be immediately transferred to the Funds you designated. FIXED AMOUNT DCA -- This feature allows you to regularly transfer (monthly or quarterly) a fixed amount from the Fixed Accumulation Feature (if available based on the form of Contract selected) or any Fund into a different Fund. This program begins approximately 15 days following the next monthly Contract Anniversary from the day the enrollment requested is established unless you instruct us otherwise. You must make at least three transfers in order to remain in this program. EARNINGS/INTEREST DCA -- This feature allows you to regularly transfer (monthly or quarterly) the interest earned from your investment in the Fixed Accumulation Feature (if available based on the form of Contract selected) or any Fund into another Fund. This program begins two business days plus the frequency selected unless you instruct us otherwise. You must make at least three transfers in order to remain in this program. OTHER PROGRAM CONSIDERATIONS - You may terminate your enrollment in any Program (other than Dollar Cost Averaging Programs) at any time. 29 ------------------------------------------------------------------------------- - We may discontinue, modify or amend any of these Programs at any time. We will automatically and unilaterally amend your enrollment instructions if: - any Fund is merged or substituted into another Fund -- then your allocations will be directed to the surviving Fund; - any Fund is liquidated -- then your allocations will be directed to any available money market Fund; or You may always provide us with updated instructions following any of these events. - Continuous or periodic investment neither insures a profit nor protects against a loss in declining markets. Because these Programs involve continuous investing regardless of fluctuating price levels, you should carefully consider your ability to continue investing through periods of fluctuating prices. - If you make systematic transfers from the Fixed Accumulation Feature under a Dollar Cost Averaging Program or DCA Plus Program, you must wait 6 months after your last systematic transfer before moving Sub-Account Values back to the Fixed Accumulation Feature. - We make available educational information and materials (e.g., pie charts, graphs, or case studies) that can help you select a model portfolio, but we do not recommend models or otherwise provide advice as to what model portfolio may be appropriate for you. - Asset allocation does not guarantee that your Contract Value will increase nor will it protect against a decline if market prices fall. If you choose to participate in an asset allocation program, you are responsible for determining which model portfolio is best for you. Tools used to assess your risk tolerance may not be accurate and could be useless if your circumstances change over time. Although each model portfolio is intended to maximize returns given various levels of risk tolerance, a model portfolio may not perform as intended. Market, asset class or allocation option class performance may differ in the future from historical performance and from the assumptions upon which the model portfolio is based, which could cause a model portfolio to be ineffective or less effective in reducing volatility. A model portfolio may perform better or worse than any single Fund, allocation option or any other combination of Funds or allocation options. In addition, the timing of your investment and automatic rebalancing may affect performance. Quarterly rebalancing and periodic updating of model portfolios can cause their component Funds to incur transactional expenses to raise cash for money flowing out of Funds or to buy securities with money flowing into the Funds. Moreover, large outflows of money from the Funds may increase the expenses attributable to the assets remaining in the Funds. These expenses can adversely affect the performance of the relevant Funds and of the model portfolios. In addition, these inflows and outflows may cause a Fund to hold a large portion of its assets in cash, which could detract from the achievement of the Fund's investment objective, particularly in periods of rising market prices. For additional information regarding the risks of investing in a particular fund, see that Fund's prospectus. - Additional considerations apply for qualified Contracts with respect to Static Asset Allocation Model programs. Neither we, nor any third party service provider, nor any of their respective affiliates, is acting as a fiduciary under The Employee Retirement Income Security Act of 1974, as amended (ERISA) or the Code, in providing any information or other communication contemplated by any Program, including, without limitation, any model portfolios. That information and communications are not intended, and may not serve as a primary basis for your investment decisions with respect to your participation in a Program. Before choosing to participate in a Program, you must determine that you are capable of exercising control and management of the assets of the plan and of making an independent and informed decision concerning your participation in the Program. Also, you are solely responsible for determining whether and to what extent the Program is appropriate for you and the assets contained in the qualified Contract. Qualified Contracts are subject to additional rules regarding participation in these Programs. It is your responsibility to ensure compliance of any recommendation in connection with any model portfolio with governing plan documents. - These Programs may be adversely affected by Fund trading policies. OTHER INFORMATION ASSIGNMENT -- A non-qualified Contract may be assigned. We must be properly notified in writing of an assignment. Any Annuity Payouts or Surrenders requested or scheduled before we record an assignment will be made according to the instructions we have on record. We are not responsible for determining the validity of an assignment. Assigning a non-qualified Contract may require the payment of income taxes and certain penalty taxes. Please consult a qualified tax advisor before assigning your Contract. A qualified Contract may not be transferred or otherwise assigned, unless allowed by applicable law. SPECULATIVE INVESTING -- Do not purchase this Contract if you plan to use it, or any of its riders, for speculation, arbitrage, viatication or any other type of collective investment scheme. By purchasing this Contract you represent and warrant that you are not using this Contract, or any of its riders, for speculation, arbitrage, viatication or any other type of collective investment scheme. CONTRACT MODIFICATION -- The Annuitant may not be changed. However, if the Annuitant is still living, the Contingent Annuitant may be changed at any time prior to the Annuity Commencement Date by sending us written notice. 30 ------------------------------------------------------------------------------- We may modify the Contract, but no modification will affect the amount or term of any Contract unless a modification is required to conform the Contract to applicable federal or state law. No modification will affect the method by which Contract Values are determined. HOW CONTRACTS ARE SOLD -- We have entered into a distribution agreement with our affiliate Hartford Securities Distribution Company, Inc. ("HSD") under which HSD serves as the principal underwriter for the Contracts, which are offered on a continuous basis. HSD is registered with the Securities and Exchange Commission under the 1934 Act as a broker-dealer and is a member of Financial Industry Regulatory Authority (FINRA). The principal business address of HSD is the same as ours. PLANCO Financial Services, LLC, a subsidiary of Hartford Life Insurance Company, provides marketing support for us. Woodbury Financial Services, Inc. is another affiliated broker-dealer that sells this Contract. HSD has entered into selling agreements with affiliated and unaffiliated broker-dealers, and financial institutions ("Financial Intermediaries") for the sale of the Contracts. We pay compensation to HSD for sales of the Contracts by Financial Intermediaries. HSD, in its role as principal underwriter, did not retain any underwriting commissions for the fiscal year ended December 31, 2008. Contracts will be sold by individuals who have been appointed by us as insurance agents and who are registered representatives of Financial Intermediaries ("Registered Representatives"). Core Contracts may be sold directly to the following individuals free of any commission ("Employee Gross-Up" on Core): 1) current or retired officers, directors, trustees and employees (and their families) of our ultimate corporate parent and affiliates; and 2) employees and Registered Representatives (and their families) of Financial Intermediaries. If applicable, we will credit the Core Contract with a credit of 5.0% of the initial Premium Payment and each subsequent Premium Payment, if any. This additional percentage of Premium Payment in no way affects current or future charges, rights, benefits or account values of other Contract Owners. We list below types of arrangements that help to incentivize sales people to sell our suite of variable annuities. Not all arrangements necessarily affect each variable annuity. These types of arrangements could be viewed as creating conflicts of interest. Financial Intermediaries receive commissions (described below under "Commissions"). Certain selected Financial Intermediaries also receive additional compensation (described below under "Additional Payments"). All or a portion of the payments we make to Financial Intermediaries may be passed on to Registered Representatives according to a Financial Intermediary's internal compensation practices. Affiliated broker-dealers also employ individuals called "wholesalers" in the sales process. Wholesalers typically receive commissions based on the type of Contract or optional benefits sold. Commissions are based on a specified amount of Premium Payments or Contract Value. COMMISSIONS Upfront commissions paid to Financial Intermediaries generally range from 1% to up to 7% of each Premium Payment you pay for your Contract. Trail commissions (fees paid for customers that maintain their Contracts generally for more than 1 year) range up to 1.20% of your Contract Value. We pay different commissions based on the Contract variation that you buy. We may pay a lower commission for sales to people over age 80. Commission arrangements vary from one Financial Intermediary to another. We are not involved in determining your Registered Representative's compensation. Under certain circumstances, your Registered Representative may be required to return all or a portion of the commissions paid. Check with your Registered Representative to verify whether your account is a brokerage or an advisory account. Your interests may differ from ours and your Registered Representative (or the Financial Intermediary with which they are associated). Please ask questions to make sure you understand your rights and any potential conflicts of interest. If you are an advisory client, your Registered Representative (or the Financial Intermediary with which they are associated) can be paid both by you and by us based on what you buy. Therefore, profits, and your Registered Representative's (or their Financial Intermediary's) compensation, may vary by product and over time. Contact an appropriate person at your Financial Intermediary with whom you can discuss these differences. 31 ------------------------------------------------------------------------------- ADDITIONAL PAYMENTS Subject to FINRA and Financial Intermediary rules, we (or our affiliates) also pay the following types of fees to among other things encourage the sale of this Contract. These additional payments could create an incentive for your Registered Representative, and the Financial Intermediary with which they are associated, to recommend products that pay them more than others, which may not necessarily be to your benefit.
ADDITIONAL PAYMENT TYPE WHAT IT'S USED FOR --------------------------------------------------------------------------------------------------------------------------------- Access Access to Registered Representatives and/or Financial Intermediaries such as one-on-one wholesaler visits or attendance at national sales meetings or similar events. Gifts & Entertainment Occasional meals and entertainment, tickets to sporting events and other gifts. Marketing Joint marketing campaigns and/or Financial Intermediary event advertising/participation; sponsorship of Financial Intermediary sales contests and/or promotions in which participants (including Registered Representatives) receive prizes such as travel awards, merchandise and recognition; client generation expenses. Marketing Expense Allowances Pay Fund related parties for wholesaler support, training and marketing activities for certain Funds. Support Sales support through such things as providing hardware and software, operational and systems integration, links to our website from a Financial Intermediary's websites; shareholder services (including sub-accounting sponsorship of Financial Intermediary due diligence meetings; and/or expense allowances and reimbursements. Training Educational (due diligence), sales or training seminars, conferences and programs, sales and service desk training, and/or client or prospect seminar sponsorships. Visibility Inclusion of our products on a Financial Intermediary's "preferred list"; participation in, or visibility at, national and regional conferences; and/or articles in Financial Intermediary publications highlighting our products and services. Volume Pay for the overall volume of their sales or the amount of money investing in our products.
As of December 31, 2008, we have entered into ongoing contractual arrangements to make Additional Payments to the following Financial Intermediaries for our entire suite of variable annuities: AIG Advisors Group, Inc., (Advantage Capital, AIG Financial Advisors, American General, FSC Securities Corporation, Royal Alliance Assoc., Inc.), Allen & Company, AMTrust Investment Svcs Inc., Associated Securities, Banc of America Investment Services Inc., Bancwest Investment Services, Inc., Cadaret, Grant & Co., Inc., Cambridge Investment Research Inc., Capital Analyst Inc., Centaurus Financial, Inc., CCO Investment Services Corp., Citigroup, Inc. (various divisions and affiliates), Comerica Securities, Commonwealth Financial Network, Compass Brokerage, Inc., Crown Capital Securities, L.P., Cuna Brokerage Services, Inc., Cuso Financial Services, L.P., Edward D. Jones & Co., L.P., FFP Securities, Inc., First Allied Securities, Inc., First Citizens Investor Services, First Montauk Securities Corp., First Tennessee Brokerage Inc., Frost Brokerage Services, Inc., Great American Advisors, Inc., H. Beck, Inc., H.D. Vest Investment Services (subsidiary of Wells Fargo & Company), Harbour Investments, Inc., Heim & Young Securities, Huntington Investment Company, Independent Financial Group LLC, Infinex Financial Group, ING Advisors Network, (Financial Network Services (or Investment) Corp., ING Financial Partners, Multi-Financial Securities, Primevest Financial Services, Inc.,), Inter-Securities Inc., Investacorp, Inc., Investment Professionals, Inc., Investors Capital Corp., J.J.B. Hilliard, James T. Borello & Co., Janney Montgomery Scott, Inc., Jefferson Pilot Securities Corporation, Key Investment Services, LaSalle Financial Services, Inc., Lincoln Financial Advisors Corp. (marketing name for Lincoln National Corp.), Lincoln Financial Securities Corp., Lincoln Investment Planning, LPL Financial Corporation, M&T Securities, Inc., Merrill Lynch Pierce Fenner & Smith, MML Investor Services Inc., Morgan Keegan & Company, Inc., Morgan Stanley & Co., Inc. (various divisions and affiliates), Mutual Service Corporation, NatCity Investments, National Planning Holdings (Invest Financial Corp., Investment Centers of America, Inc., National Planning Corp., SII Investments, Inc.), Newbridge Securities Corp., NEXT Financial Group, Inc., NFP Securities, Inc., Pension Planners Securities, Inc., Prime Capital Services, Inc., Prospera Financial Services, Inc., Raymond James & Associates, Inc., Raymond James Financial Services, RBC Capital Markets., Robert W. Baird & Co. Inc., Rogan & Associates, Securities America, Inc., Sigma Financial Corporation, Sorrento Pacific, Stifel Nicolaus & Company, Incorporated, Summit Brokerage Services Inc., Sun Trust Bank, TFS Securities, Inc., The Investment Center, Inc., Thurston, Springer, Miller, Herd & Titak, Inc., Triad Advisors, Inc., U.S. Bancorp Investments, Inc., UBOC Investment Services, Inc. (Union Bank of California, N.A.), UBS Financial Services, Inc., Uvest Financial Services Group Inc., Vanderbilt Securities, LLC, Wachovia Securities, LLC (various divisions), Walnut Street Securities, Inc., Waterstone Financial Group, Wells Fargo Brokerage Services, L.L.C., WaMu Investments, Inc., Woodbury Financial Services, Inc. (an affiliate of ours). Inclusion on this list does not imply that these sums necessarily constitute "special cash compensation" as defined by FINRA Conduct Rule 2830(l)(4). We will endeavor to update this listing 32 ------------------------------------------------------------------------------- annually and interim arrangements may not be reflected. We assume no duty to notify any investor whether their Registered Representative is or should be included in any such listing. As of December 31, 2008, we have entered into arrangements to pay Marketing Expense Allowances to the following Fund Companies (or affiliated parties) for our entire suite of variable annuities: AIM Advisors, Inc., AllianceBernstein Variable Products Series Funds & Alliance Bernstein Investment Research and Management, Inc., American Variable Insurance Series & Capital Research and Management Company, Franklin Templeton Services, LLC, Oppenheimer Variable Account Funds & Oppenheimer Funds Distributor, Inc., Putnam Retail Management Limited Partnership. Marketing Expense Allowances may vary based on the form of Contract sold and the age of the purchaser. We will endeavor to update this listing annually and interim arrangements may not be reflected. We assume no duty to notify you whether any Financial Intermediary is or should be included in any such listing. You are encouraged to review the prospectus for each Fund for any other compensation arrangements pertaining to the distribution of Fund shares. For the fiscal year ended December 31, 2008, Additional Payments did not in the aggregate exceed approximately $55.8 million (excluding corporate-sponsorship related perquisites and Marketing Expense Allowances) or approximately 0.06% of average total individual variable annuity assets. Marketing Expense Allowances for this period did not exceed $7.9 million or approximately 0.25% of the Premium Payments invested in a particular Fund during this period. Financial Intermediaries that received Additional Payments in 2008, but do not have an ongoing contractual relationship, are listed in the Statement of Additional Information. Financial Intermediaries that received Additional Payments in 2008, but do not have an ongoing contractual relationship, are listed in the SAI. LEGAL PROCEEDINGS There continues to be significant federal and state regulatory activity relating to financial services companies. Like other insurance companies, we are involved in lawsuits, arbitrations, and regulatory/legal proceedings. Certain of the lawsuits and legal actions the Company is involved in assert claims for substantial amounts. While it is not possible to predict with certainty the ultimate outcome of any pending or future case, legal proceeding or regulatory action, we do not expect the ultimate result of any of these actions to result in a material adverse effect on the Company or its Separate Accounts. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation, an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company's results of operations or cash flows in particular quarterly or annual periods. MORE INFORMATION You may call your Registered Representative if you have any questions or write or call us at the address below: The Hartford Attn: Individual Markets Group P.O. Box 5085 Hartford, Connecticut 06102-5085 Telephone: (800) 521-0538 FINANCIAL STATEMENTS You can find financial statements of the Separate Account and Hartford in the Statement of Additional Information. To receive a copy of the Statement of Additional Information free of charge, call your representative or complete the form at the end of this prospectus and mail the form to us at the address indicated on the form. FEDERAL TAX CONSIDERATIONS A. INTRODUCTION The following summary of tax rules does not provide or constitute any tax advice. It provides only a general discussion of certain of the expected federal income tax consequences with respect to amounts contributed to, invested in or received from a Contract, based on our understanding of the existing provisions of the Internal Revenue Code ("Code"), Treasury Regulations thereunder, and public interpretations thereof by the IRS (e.g., Revenue Rulings, Revenue Procedures or Notices) or by published court decisions. This summary discusses only certain federal income tax consequences to United States Persons, and does not discuss state, local or foreign tax consequences. The term United States Persons means citizens or residents of the United States, domestic corporations, domestic partnerships, trust or estates that are subject to United States federal income tax, regardless of the source of their income. See "Annuity Purchases by Nonresident Aliens and Foreign Corporations," regarding annuity purchases by non-U.S. Persons or residents. This summary has been prepared by us after consultation with tax counsel, but no opinion of tax counsel has been obtained. We do not make any guarantee or representation regarding any tax status (e.g., federal, state, local or foreign) of any Contract or any transaction involving a Contract. In addition, there is always a possibility that the tax treatment of an annuity contract could change by legislation or other means (such as regulations, rulings or judicial decisions). Moreover, it is always possible that any such change in tax treatment could be made retroactive (that is, made effective prior to the date of the change). Accordingly, you should consult a qualified tax adviser for complete information and advice before purchasing a Contract. In addition, although this discussion addresses certain tax consequences if you use the Contract in various arrangements, including Charitable Remainder Trusts, tax-qualified retirement 33 ------------------------------------------------------------------------------- arrangements, deferred compensation plans, split-dollar insurance arrangements, or other employee benefit arrangements, this discussion is not exhaustive. The tax consequences of any such arrangement may vary depending on the particular facts and circumstances of each individual arrangement and whether the arrangement satisfies certain tax qualification or classification requirements. In addition, the tax rules affecting such an arrangement may have changed recently, e.g., by legislation or regulations that affect compensatory or employee benefit arrangements. Therefore, if you are contemplating the use of a Contract in any arrangement the value of which to you depends in part on its tax consequences, you should consult a qualified tax adviser regarding the tax treatment of the proposed arrangement and of any Contract used in it. THE DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL PURPOSES ONLY. SPECIAL TAX RULES MAY APPLY WITH RESPECT TO CERTAIN SITUATIONS THAT ARE NOT DISCUSSED HEREIN. EACH POTENTIAL PURCHASER OF A CONTRACT IS ADVISED TO CONSULT WITH A QUALIFIED TAX ADVISER AS TO THE CONSEQUENCES OF ANY AMOUNTS INVESTED IN A CONTRACT UNDER APPLICABLE FEDERAL, STATE, LOCAL OR FOREIGN TAX LAW. B. TAXATION OF THE COMPANY AND THE SEPARATE ACCOUNT The Separate Account is taxed as part of the Company which is taxed as a life insurance company under Subchapter L of Chapter 1 of the Code. Accordingly, the Separate Account will not be taxed as a "regulated investment company" under Subchapter M of Chapter 1 of the Code. Investment income and any realized capital gains on assets of the Separate Account are reinvested and taken into account in determining the value of the Accumulation and Annuity Units. As a result, such investment income and realized capital gains are automatically applied to increase reserves under the Contract. Currently, no taxes are due on interest, dividends and short-term or long-term capital gain earned by the Separate Account with respect to the Contracts. The Company is entitled to certain tax benefits related to the investment of company assets, including assets of the Separate Account. These tax benefits, which may include the foreign tax credit and the corporate dividends received deduction, are not passed back to you since the Company is the owner of the assets from which the tax benefits are derived. C. TAXATION OF ANNUITIES -- GENERAL PROVISIONS AFFECTING CONTRACTS NOT HELD IN TAX-QUALIFIED RETIREMENT PLANS Section 72 of the Code governs the taxation of annuities in general. 1. NON-NATURAL PERSONS AS OWNERS Pursuant to Code Section 72(u), an annuity contract held by a taxpayer other than a natural person generally is not treated as an annuity contract under the Code. Instead, such a non-natural Contract Owner generally could be required to include in gross income currently for each taxable year the excess of (a) the sum of the Contract Value as of the close of the taxable year and all previous distributions under the Contract over (b) the sum of net premiums paid for the taxable year and any prior taxable year and the amount includable in gross income for any prior taxable year with respect to the Contract under Section 72(u). However, Section 72(u) does not apply to: - A contract the nominal owner of which is a non-natural person but the beneficial owner of which is a natural person (e.g., where the non-natural owner holds the contract as an agent for the natural person), - A contract acquired by the estate of a decedent by reason of such decedent's death, - Certain contracts acquired with respect to tax-qualified retirement arrangements, - Certain contracts held in structured settlement arrangements that may qualify under Code Section 130, or - A single premium immediate annuity contract under Code Section 72(u)(4), which provides for substantially equal periodic payments and an annuity starting date that is no later than 1 year from the date of the contract's purchase. A non-natural Contract Owner that is a tax-exempt entity for federal tax purposes (e.g., a tax-qualified retirement trust or a Charitable Remainder Trust) generally would not be subject to federal income tax as a result of such current gross income under Code Section 72(u). However, such a tax-exempt entity, or any annuity contract that it holds, may need to satisfy certain tax requirements in order to maintain its qualification for such favorable tax treatment. See, e.g., IRS Tech. Adv. Memo. 9825001 for certain Charitable Remainder Trusts. Pursuant to Code Section 72(s), if the Contract Owner is a non-natural person, the primary annuitant is treated as the "holder" in applying the required distribution rules described below. These rules require that certain distributions be made upon the death of a "holder." In addition, for a non-natural owner, a change in the primary annuitant is treated as the death of the "holder." However, the provisions of Code Section 72(s) do not apply to certain contracts held in tax-qualified retirement arrangements or structured settlement arrangements. 2. OTHER CONTRACT OWNERS (NATURAL PERSONS). A Contract Owner is not taxed on increases in the value of the Contract until an amount is received or deemed received, e.g., in the form of a lump sum payment (full or partial value of a Contract) or as Annuity payments under the settlement option elected. 34 ------------------------------------------------------------------------------- The provisions of Section 72 of the Code concerning distributions are summarized briefly below. Also summarized are special rules affecting distributions from Contracts obtained in a tax-free exchange for other annuity contracts or life insurance contracts which were purchased prior to August 14, 1982. a. DISTRIBUTIONS PRIOR TO THE ANNUITY COMMENCEMENT DATE. i. Total premium payments less amounts received which were not includable in gross income equal the "investment in the contract" under Section 72 of the Code. ii. To the extent that the value of the Contract (ignoring any surrender charges except on a full surrender) exceeds the "investment in the contract," such excess constitutes the "income on the contract." It is unclear what value should be used in determining the "income on the contract." We believe that the current Contract Value (determined without regard to surrender charges) generally is an appropriate measure. However, in some instances the IRS could take the position that the value should be the current Contract Value (determined without regard to surrender charges) increased by some measure of the value of certain future cash-value type benefits. iii. Any amount received or deemed received prior to the Annuity Commencement Date (e.g., upon a withdrawal or partial surrender) is deemed to come first from any such "income on the contract" and then from "investment in the contract," and for these purposes such "income on the contract" shall be computed by reference to any aggregation rule in subparagraph 2.c. below. As a result, any such amount received or deemed received (1) shall be includable in gross income to the extent that such amount does not exceed any such "income on the contract," and (2) shall not be includable in gross income to the extent that such amount does exceed any such "income on the contract." If at the time that any amount is received or deemed received there is no "income on the contract" (e.g., because the gross value of the Contract does not exceed the "investment in the contract" and no aggregation rule applies), then such amount received or deemed received will not be includable in gross income, and will simply reduce the "investment in the contract." iv. The receipt of any amount as a loan under the Contract or the assignment or pledge of any portion of the value of the Contract shall be treated as an amount received for purposes of this subparagraph a. and the next subparagraph b. v. In general, the transfer of the Contract, without full and adequate consideration, will be treated as an amount received for purposes of this subparagraph a. and the next subparagraph b. This transfer rule does not apply, however, to certain transfers of property between Spouses or incident to divorce. vi. In general, any amount actually received under the Contract as a Death Benefit, including an optional Death Benefit, if any, will be treated as an amount received for purposes of this subparagraph a. and the next subparagraph b. b. DISTRIBUTIONS AFTER ANNUITY COMMENCEMENT DATE. Annuity payments made periodically after the Annuity Commencement Date are includable in gross income to the extent the payments exceed the amount determined by the application of the ratio of the "investment in the contract" to the total amount of the payments to be made after the Annuity Commencement Date (the "exclusion ratio"). i. When the total of amounts excluded from income by application of the exclusion ratio is equal to the investment in the contract as of the Annuity Commencement Date, any additional payments (including surrenders) will be entirely includable in gross income. ii. If the annuity payments cease by reason of the death of the Annuitant and, as of the date of death, the amount of annuity payments excluded from gross income by the exclusion ratio does not exceed the investment in the contract as of the Annuity Commencement Date, then the remaining portion of unrecovered investment shall be allowed as a deduction for the last taxable year of the Annuitant. iii. Generally, non-periodic amounts received or deemed received after the Annuity Commencement Date are not entitled to any exclusion ratio and shall be fully includable in gross income. However, upon a full surrender after such date, only the excess of the amount received (after any surrender charge) over the remaining "investment in the contract" shall be includable in gross income (except to the extent that the aggregation rule referred to in the next subparagraph c. may apply). c. AGGREGATION OF TWO OR MORE ANNUITY CONTRACTS. Contracts issued after October 21, 1988 by the same insurer (or affiliated insurer) to the same owner within the same calendar year (other than certain contracts held in connection with tax-qualified retirement arrangements) will be aggregated and treated as one annuity contract for the purpose of determining the taxation of distributions prior to the Annuity Commencement Date. An annuity contract received in a tax-free exchange for another annuity contract or life insurance contract may be treated as a new contract for this purpose. We believe that for any Contracts subject to such aggregation, the values under the Contracts and the investment in the contracts will be added together to determine the taxation under subparagraph 2.a., above, of amounts received or deemed received prior to the Annuity Commencement Date. Withdrawals will first be treated first as withdrawals of income until all of the income from all such Contracts is withdrawn. In addition, the Treasury Department has specific authority under 35 ------------------------------------------------------------------------------- the aggregation rules in Code Section 72(e)(12) to issue regulations to prevent the avoidance of the income-out-first rules for non-periodic distributions through the serial purchase of annuity contracts or otherwise. As of the date of this prospectus, there are no regulations interpreting these aggregation provisions. d. 10% PENALTY TAX -- APPLICABLE TO CERTAIN WITHDRAWALS AND ANNUITY PAYMENTS. i. If any amount is received or deemed received on the Contract (before or after the Annuity Commencement Date), the Code applies a penalty tax equal to ten percent of the portion of the amount includable in gross income, unless an exception applies. ii. The 10% penalty tax will not apply to the following distributions: 1. Distributions made on or after the date the recipient has attained the age of 59 1/2. 2. Distributions made on or after the death of the holder or where the holder is not an individual, the death of the primary annuitant. 3. Distributions attributable to a recipient's becoming disabled. 4. A distribution that is part of a scheduled series of substantially equal periodic payments (not less frequently than annually) for the life (or life expectancy) of the recipient (or the joint lives or life expectancies of the recipient and the recipient's designated Beneficiary). 5. Distributions made under certain annuities issued in connection with structured settlement agreements. 6. Distributions of amounts which are allocable to the "investment in the contract" prior to August 14, 1982 (see next subparagraph e.). 7. Distributions purchased by an employer upon termination of certain qualified plans and held by the employer until the employee separates from service. If the taxpayer avoids this 10% penalty tax by qualifying for the substantially equal periodic payments exception and later such series of payments is modified (other than by death or disability), the 10% penalty tax will be applied retroactively to all the prior periodic payments (i.e., penalty tax plus interest thereon), unless such modification is made after both (a) the taxpayer has reached age 59 1/2 and (b) 5 years have elapsed since the first of these periodic payments. e. SPECIAL PROVISIONS AFFECTING CONTRACTS OBTAINED THROUGH A TAX-FREE EXCHANGE OF OTHER ANNUITY OR LIFE INSURANCE CONTRACTS PURCHASED PRIOR TO AUGUST 14, 1982. If the Contract was obtained by a tax-free exchange of a life insurance or annuity Contract purchased prior to August 14, 1982, then any amount received or deemed received prior to the Annuity Commencement Date shall be deemed to come (1) first from the amount of the "investment in the contract" prior to August 14, 1982 ("pre-8/14/82 investment") carried over from the prior Contract, (2) then from the portion of the "income on the contract" (carried over to, as well as accumulating in, the successor Contract) that is attributable to such pre-8/14/82 investment, (3) then from the remaining "income on the contract" and (4) last from the remaining "investment in the contract." As a result, to the extent that such amount received or deemed received does not exceed such pre-8/14/82 investment, such amount is not includable in gross income. In addition, to the extent that such amount received or deemed received does not exceed the sum of (a) such pre-8/14/82 investment and (b) the "income on the contract" attributable thereto, such amount is not subject to the 10% penalty tax. In all other respects, amounts received or deemed received from such post-exchange Contracts are generally subject to the rules described in this subparagraph e. f. REQUIRED DISTRIBUTIONS i. Death of Contract Owner or Primary Annuitant Subject to the alternative election or Spouse beneficiary provisions in ii or iii below: 1. If any Contract Owner dies on or after the Annuity Commencement Date and before the entire interest in the Contract has been distributed, the remaining portion of such interest shall be distributed at least as rapidly as under the method of distribution being used as of the date of such death; 2. If any Contract Owner dies before the Annuity Commencement Date, the entire interest in the Contract shall be distributed within 5 years after such death; and 3. If the Contract Owner is not an individual, then for purposes of 1. or 2. above, the primary annuitant under the Contract shall be treated as the Contract Owner, and any change in the primary annuitant shall be treated as the death of the Contract Owner. The primary annuitant is the individual, the events in the life of whom are of primary importance in affecting the timing or amount of the payout under the Contract. ii. Alternative Election to Satisfy Distribution Requirements If any portion of the interest of a Contract Owner described in i. above is payable to or for the benefit of a designated beneficiary, such beneficiary may elect to have the portion distributed over a period that does not extend beyond the life or life expectancy of the beneficiary. Such distributions must begin within a year of the Contract Owner's death. iii. Spouse Beneficiary If any portion of the interest of a Contract Owner is payable to or for the benefit of his or her Spouse, and the 36 ------------------------------------------------------------------------------- Annuitant or Contingent Annuitant is living, such Spouse shall be treated as the Contract Owner of such portion for purposes of section i. above. This spousal contract continuation shall apply only once for this Contract. iv. Civil Union or Domestic Partner Upon the death of the Contract Owner prior to the Annuity Commencement Date, if the designated beneficiary is the surviving civil union or domestic partner of the Contract Owner pursuant to a civil union or domestic partnership recognized under state law, then such designated beneficiary's right to continue the Contract as the succeeding Contract Owner will be contingent, among other things, upon the treatment of such designated beneficiary as the spouse of the Contract Owner under Code Section 72(s) (or any successor provision). Currently, Federal tax law only recognizes spouses if they are married individuals of the opposite sex. Consequently, such designated beneficiary who is not recognized as a "spouse" under Federal tax law will not be able to continue the Contract and the entire interest in the Contract must be distributed within five years of the Contract Owner's death or under the Alternative Election. g. ADDITION OF RIDER OR MATERIAL CHANGE. The addition of a rider to the Contract, or a material change in the Contract's provisions, could cause it to be considered newly issued or entered into for tax purposes, and thus could cause the Contract to lose certain grandfathered tax status. Please contact your tax adviser for more information. h. PARTIAL EXCHANGES. The IRS in Rev. Rul. 2003-76 confirmed that the owner of an annuity contract can direct its insurer to transfer a portion of the contract's cash value directly to another annuity contract (issued by the same insurer or by a different insurer), and such a direct transfer can qualify for tax-free exchange treatment under Code Section 1035 (a "partial exchange"). However, Rev. Rul. 2003-76 also refers to caveats and additional guidance in the companion Notice 2003-51, which discusses cases in which a partial exchange is followed by a surrender, withdrawal or other distribution from either the old contract or the new contract. Notice 2003-51 specifically indicates that the IRS is considering (1) under what circumstances it should treat a partial exchange followed by such a distribution within 24 months as presumptively for "tax avoidance" purposes (e.g., to avoid the income-out-first rules on amounts received under Code Section 72) and (2) what circumstances it should treat as rebutting such a presumption (e.g., death, disability, reaching age 59 1/2, divorce or loss of employment). Notice 2003-51 was superseded by Revenue Procedure 2008-24, effective for partial exchanges completed on or after June 30, 2008. Partial exchanges completed on or after this date will qualify for tax free treatment if: (1) no amounts are withdrawn from, or received in surrender of, either of the contracts involved in the exchange during the 12 months beginning on the date on which amounts are treated as received as premiums or other consideration paid for the contract received in the exchange (the date of transfer); or (2) the taxpayer demonstrates that certain conditions (e.g., death, disability, reaching age 59 1/2, divorce, loss of employment) occurred between the date of transfer and the date of the withdrawal or surrender. A transfer within the scope of the revenue procedure, but not treated as a tax-free exchange, will be treated as a taxable distribution, followed by a payment for a second contract. Two annuity contracts that are the subject of a tax-free exchange pursuant to the revenue procedure will not be aggregated, even if issued by the same insurance company. We advise you to consult with a qualified tax adviser as to potential tax consequences before attempting any partial exchange. The applicability of the IRS's partial exchange guidance to the splitting of an annuity contract is not clear. You should consult with a tax adviser if you plan to split an annuity contract as part of an exchange of annuity contracts. 3. DIVERSIFICATION REQUIREMENTS. The Code requires that investments supporting your Contract be adequately diversified. Code Section 817(h) provides that a variable annuity contract will not be treated as an annuity contract for any period during which the investments made by the separate account or Fund are not adequately diversified. If a contract is not treated as an annuity contract, the contract owner will be subject to income tax on annual increases in cash value. The Treasury Department's diversification regulations under Code Section 817(h) require, among other things, that: - no more than 55% of the value of the total assets of the segregated asset account underlying a variable contract is represented by any one investment, - no more than 70% is represented by any two investments, - no more than 80% is represented by any three investments and - no more than 90% is represented by any four investments. In determining whether the diversification standards are met, all securities of the same issuer, all interests in the same real property project, and all interests in the same commodity are each treated as a single investment. In the case of government securities, each government agency or instrumentality is treated as a separate issuer. A separate account must be in compliance with the diversification standards on the last day of each calendar quarter or within 30 days after the quarter ends. If an insurance company inadvertently fails to meet the diversification requirements, the company may still comply within a reasonable period and avoid the taxation of contract income on an ongoing basis. However, either the insurer or the contract owner must agree to make adjustments or pay such amounts as may be required by the IRS for the period during which the diversification requirements were not met. Fund shares may also be sold to tax-qualified plans pursuant to an exemptive order and applicable tax laws. If Fund shares are 37 ------------------------------------------------------------------------------- sold to non-qualified plans, or to tax-qualified plans that later lose their tax-qualified status, the affected Funds may fail the diversification requirements of Code Section 817(h), which could have adverse tax consequences for Contract Owners with premiums allocated to affected Funds. In order to prevent a Fund diversification failure from such an occurrence, the Company obtained a private letter ruling ("PLR") from the IRS. As long as the Funds comply with certain terms and conditions contained in the PLR, Fund diversification will not be prevented if purported tax-qualified plans invest in the Funds. The Company and the Funds will monitor the Funds' compliance with the terms and conditions contained in the PLR. 4. TAX OWNERSHIP OF THE ASSETS IN THE SEPARATE ACCOUNT. In order for a variable annuity contract to qualify for tax income deferral, assets in the separate account supporting the contract must be considered to be owned by the insurance company, and not by the contract owner, for tax purposes. The IRS has stated in published rulings that a variable contract owner will be considered the "owner" of separate account assets for income tax purposes if the contract owner possesses sufficient incidents of ownership in those assets, such as the ability to exercise investment control over the assets. In circumstances where the variable contract owner is treated as the "tax owner" of certain separate account assets, income and gain from such assets would be includable in the variable contract owner's gross income. The Treasury Department indicated in 1986 that it would provide guidance on the extent to which contract owners may direct their investments to particular Sub-Accounts without being treated as tax owners of the underlying shares. Although no such regulations have been issued to date, the IRS has issued a number of rulings that indicate that this issue remains subject to a facts and circumstances test for both variable annuity and life insurance contracts. Rev. Rul. 2003-92, amplified by Rev. Rul. 2007-7, indicates that, where interests in a partnership offered in an insurer's separate account are not available exclusively through the purchase of a variable insurance contract (e.g., where such interests can be purchased directly by the general public or others without going through such a variable contract), such "public availability" means that such interests should be treated as owned directly by the contract owner (and not by the insurer) for tax purposes, as if such contract owner had chosen instead to purchase such interests directly (without going through the variable contract). None of the shares or other interests in the fund choices offered in our Separate Account for your Contract are available for purchase except through an insurer's variable contracts or by other permitted entities. Rev. Rul. 2003-91 indicates that an insurer could provide as many as 20 fund choices for its variable contract owners (each with a general investment strategy, e.g., a small company stock fund or a special industry fund) under certain circumstances, without causing such a contract owner to be treated as the tax owner of any of the Fund assets. The ruling does not specify the number of fund options, if any, that might prevent a variable contract owner from receiving favorable tax treatment. As a result, although the owner of a Contract has more than 20 fund choices, we believe that any owner of a Contract also should receive the same favorable tax treatment. However, there is necessarily some uncertainty here as long as the IRS continues to use a facts and circumstances test for investor control and other tax ownership issues. Therefore, we reserve the right to modify the Contract as necessary to prevent you from being treated as the tax owner of any underlying assets. D. FEDERAL INCOME TAX WITHHOLDING The portion of an amount received under a Contract that is taxable gross income to the Payee is also subject to federal income tax withholding, pursuant to Code Section 3405, which requires the following: 1. Non-Periodic Distributions. The portion of a non-periodic distribution that is includable in gross income is subject to federal income tax withholding unless an individual elects not to have such tax withheld ("election out"). We will provide such an "election out" form at the time such a distribution is requested. If the necessary "election out" form is not submitted to us in a timely manner, generally we are required to withhold 10 percent of the includable amount of distribution and remit it to the IRS. 2. Periodic Distributions (payable over a period greater than one year). The portion of a periodic distribution that is includable in gross income is generally subject to federal income tax withholding as if the Payee were a married individual claiming 3 exemptions, unless the individual elects otherwise. An individual generally may elect out of such withholding, or elect to have income tax withheld at a different rate, by providing a completed election form. We will provide such an election form at the time such a distribution is requested. If the necessary "election out" forms are not submitted to us in a timely manner, we are required to withhold tax as if the recipient were married claiming 3 exemptions, and remit this amount to the IRS. Generally no "election out" is permitted if the distribution is delivered outside the United States and any possession of the United States. Regardless of any "election out" (or any amount of tax actually withheld) on an amount received from a Contract, the Payee is generally liable for any failure to pay the full amount of tax due on the includable portion of such amount received. A Payee also may be required to pay penalties under estimated income tax rules, if the withholding and estimated tax payments are insufficient to satisfy the Payee's total tax liability. E. GENERAL PROVISIONS AFFECTING QUALIFIED RETIREMENT PLANS The Contract may be used for a number of qualified retirement plans. If the Contract is being purchased with respect to some form of qualified retirement plan, please refer to the section entitled "Information Regarding Tax-Qualified Retirement 38 ------------------------------------------------------------------------------- Plans" for information relative to the types of plans for which it may be used and the general explanation of the tax features of such plans. F. ANNUITY PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS The discussion above provides general information regarding U.S. federal income tax consequences to annuity purchasers that are U.S. citizens or residents. Purchasers that are not U.S. citizens or residents will generally be subject to U.S. federal income tax and mandatory withholding on U.S. source taxable annuity distributions at a 30% rate, unless a lower treaty rate applies and any required tax forms are submitted to us. If withholding applies, we are required to withhold tax at the 30% rate, or a lower treaty rate if applicable, and remit it to the IRS. In addition, purchasers may be subject to state premium tax, other state and/or municipal taxes, and taxes that may be imposed by the purchaser's country of citizenship or residence. G. ESTATE, GIFT AND GENERATION-SKIPPING TAX AND RELATED TAX CONSIDERATIONS Any amount payable upon a Contract Owner's death, whether before or after the Annuity Commencement Date, is generally includable in the Contract Owner's estate for federal estate tax purposes. Similarly, prior to the Contract Owner's death, the payment of any amount from the Contract, or the transfer of any interest in the Contract, to a beneficiary or other person for less than adequate consideration may have federal gift tax consequences. In addition, any transfer to, or designation of, a non-Spouse beneficiary who either is (1) 37 1/2 or more years younger than a Contract Owner or (2) a grandchild (or more remote further descendent) of a Contract Owner may have federal generation-skipping-transfer ("GST") tax consequences under Code Section 2601. Regulations under Code Section 2662 may require us to deduct any such GST tax from your Contract, or from any applicable payment, and pay it directly to the IRS. However, any federal estate, gift or GST tax payment with respect to a Contract could produce an offsetting income tax deduction for a beneficiary or transferee under Code Section 691(c) (partially offsetting such federal estate or GST tax) or a basis increase for a beneficiary or transferee under Code Section 691(c) or Section 1015(d). In addition, as indicated above in "Distributions Prior to the Annuity Commencement Date," the transfer of a Contract for less than adequate consideration during the Contract Owner's lifetime generally is treated as producing an amount received by such Contract Owner that is subject to both income tax and the 10% penalty tax. To the extent that such an amount deemed received causes an amount to be includable currently in such Contract Owner's gross income, this same income amount could produce a corresponding increase in such Contract Owner's tax basis for such Contract that is carried over to the transferee's tax basis for such Contract under Code Section 72(e)(4)(C)(iii) and Section 1015. H. TAX DISCLOSURE OBLIGATIONS In some instances certain transactions must be disclosed to the IRS or penalties could apply. See, for example, IRS Notice 2004-67. The Code also requires certain "material advisers" to maintain a list of persons participating in such "reportable transactions," which list must be furnished to the IRS upon request. It is possible that such disclosures could be required by The Company, the Owner(s) or other persons involved in transactions involving annuity contracts. It is the responsibility of each party, in consultation with their tax and legal advisers, to determine whether the particular facts and circumstances warrant such disclosures. 39 ------------------------------------------------------------------------------- TABLE OF CONTENTS TO STATEMENT OF ADDITIONAL INFORMATION GENERAL INFORMATION Safekeeping of Assets Experts Non-Participating Misstatement of Age or Sex Principal Underwriter Additional Payments PERFORMANCE RELATED INFORMATION Total Return for all Sub-Accounts Yield for Sub-Accounts Money Market Sub-Accounts Additional Materials Performance Comparisons FINANCIAL STATEMENTS
APP I-1 ------------------------------------------------------------------------------- APPENDIX I -- INFORMATION REGARDING TAX-QUALIFIED RETIREMENT PLANS This summary does not attempt to provide more than general information about the federal income tax rules associated with use of a Contract by a tax-qualified retirement plan. State income tax rules applicable to tax-qualified retirement plans often differ from federal income tax rules, and this summary does not describe any of these differences. Because of the complexity of the tax rules, owners, participants and beneficiaries are encouraged to consult their own tax advisors as to specific tax consequences. The Contracts are available to a variety of tax-qualified retirement plans and arrangements (a "Qualified Plan" or "Plan"). Tax restrictions and consequences for Contracts or accounts under each type of Qualified Plan differ from each other and from those for Non-Qualified Contracts. In addition, individual Qualified Plans may have terms and conditions that impose additional rules. Therefore, no attempt is made herein to provide more than general information about the use of the Contract with the various types of Qualified Plans. Participants under such Qualified Plans, as well as Contract Owners, annuitants and beneficiaries, are cautioned that the rights of any person to any benefits under such Qualified Plans may be subject to terms and conditions of the Plans themselves or limited by applicable law, regardless of the terms and conditions of the Contract issued in connection therewith. Qualified Plans generally provide for the tax deferral of income regardless of whether the Qualified Plan invests in an annuity or other investment. You should consider if the Contract is a suitable investment if you are investing through a Qualified Plan. THE FOLLOWING IS ONLY A GENERAL DISCUSSION ABOUT TYPES OF QUALIFIED PLANS FOR WHICH THE CONTRACTS MAY BE AVAILABLE. WE ARE NOT THE PLAN ADMINISTRATOR FOR ANY QUALIFIED PLAN. THE PLAN ADMINISTRATOR OR CUSTODIAN, WHICHEVER IS APPLICABLE, (BUT NOT US) IS RESPONSIBLE FOR ALL PLAN ADMINISTRATIVE DUTIES INCLUDING, BUT NOT LIMITED TO, NOTIFICATION OF DISTRIBUTION OPTIONS, DISBURSEMENT OF PLAN BENEFITS, HANDLING ANY PROCESSING AND ADMINISTRATION OF QUALIFIED PLAN LOANS, COMPLIANCE WITH REGULATORY REQUIREMENTS AND FEDERAL AND STATE TAX REPORTING OF INCOME/DISTRIBUTIONS FROM THE PLAN TO PLAN PARTICIPANTS AND, IF APPLICABLE, BENEFICIARIES OF PLAN PARTICIPANTS AND IRA CONTRIBUTIONS FROM PLAN PARTICIPANTS. OUR ADMINISTRATIVE DUTIES ARE LIMITED TO ADMINISTRATION OF THE CONTRACT AND ANY DISBURSEMENTS OF ANY CONTRACT BENEFITS TO THE OWNER, ANNUITANT OR BENEFICIARY OF THE CONTRACT, AS APPLICABLE. OUR TAX REPORTING RESPONSIBILITY IS LIMITED TO FEDERAL AND STATE TAX REPORTING OF INCOME/DISTRIBUTIONS TO THE APPLICABLE PAYEE AND IRA CONTRIBUTIONS FROM THE OWNER OF A CONTRACT, AS RECORDED ON OUR BOOKS AND RECORDS. IF YOU ARE PURCHASING A CONTRACT THROUGH A QUALIFIED PLAN, YOU SHOULD CONSULT WITH YOUR PLAN ADMINISTRATOR AND/OR A QUALIFIED TAX ADVISER. YOU ALSO SHOULD CONSULT WITH A QUALIFIED TAX ADVISER AND/OR PLAN ADMINISTRATOR BEFORE YOU WITHDRAW ANY PORTION OF YOUR CONTRACT VALUE. The tax rules applicable to Qualified Contracts and Qualified Plans, including restrictions on contributions and distributions, taxation of distributions and tax penalties, vary according to the type of Qualified Plan, as well as the terms and conditions of the Plan itself. Various tax penalties may apply to contributions in excess of specified limits, plan distributions (including loans) that do not comply with specified limits, and certain other transactions relating to such Plans. Accordingly, this summary provides only general information about the tax rules associated with use of a Qualified Contract in such a Qualified Plan. In addition, some Qualified Plans are subject to distribution and other requirements that are not incorporated into our administrative procedures. Owners, participants, and beneficiaries are responsible for determining that contributions, distributions and other transactions comply with applicable tax (and non-tax) law and any applicable Qualified Plan terms. Because of the complexity of these rules, Owners, participants and beneficiaries are advised to consult with a qualified tax adviser as to specific tax consequences. We do not currently offer the Contracts in connection with all of the types of Qualified Plans discussed below, and may not offer the Contracts for all types of Qualified Plans in the future. 1. INDIVIDUAL RETIREMENT ANNUITIES ("IRAS"). In addition to "traditional" IRAs governed by Code Sections 408(a) and (b) ("Traditional IRAs"), there are Roth IRAs governed by Code Section 408A, SEP IRAs governed by Code Section 408(k), and SIMPLE IRAs governed by Code Section 408(p). Also, Qualified Plans under Code Section 401, 403(b) or 457(b) that include after-tax employee contributions may be treated as deemed IRAs subject to the same rules and limitations as Traditional IRAs. Contributions to each of these types of IRAs are subject to differing limitations. The following is a very general description of each type of IRA for which a Contract is available. a. TRADITIONAL IRAS Traditional IRAs are subject to limits on the amounts that may be contributed each year, the persons who may be eligible, and the time when minimum distributions must begin. Depending upon the circumstances of the individual, contributions to a Traditional IRA may be made on a deductible or non-deductible basis. Failure to make required minimum distributions ("RMDs") when the Owner reaches age 70 1/2 or dies, as described below, may result in imposition of a 50% penalty tax on any excess of the RMD amount over the amount actually distributed. In addition, any amount received before the Owner reaches age 59 1/2 or dies is subject to a 10% penalty tax on premature distributions, unless a special exception applies, as described below. Under Code Section 408(e), an IRA may not be used for borrowing (or as security for any loan) or in certain prohibited transactions, and such a transaction could lead to the complete tax disqualification of an IRA. You (or your surviving spouse if you die) may rollover funds tax-free from certain existing Qualified Plans (such as proceeds from existing insurance contracts, annuity contracts or securities) into a Traditional IRA under certain circumstances, as indicated below. However, mandatory tax withholding of 20% APP I-2 ------------------------------------------------------------------------------- may apply to any eligible rollover distribution from certain types of Qualified Plans if the distribution is not transferred directly to the Traditional IRA. In addition, under Code Section 402(c)(11) a non-spouse "designated beneficiary" of a deceased Plan participant may make a tax-free "direct rollover" (in the form of a direct transfer between Plan fiduciaries, as described below in "Rollover Distributions") from certain Qualified Plans to a Traditional IRA for such beneficiary, but such Traditional IRA must be designated and treated as an "inherited IRA" that remains subject to applicable RMD rules (as if such IRA had been inherited from the deceased Plan participant). In addition, such a Plan is not required to permit such a rollover. IRAs generally may not invest in life insurance contracts. However, an annuity contract that is used as an IRA may provide a death benefit that equals the greater of the premiums paid or the contract's cash value. The Contract offers an enhanced death benefit that may exceed the greater of the Contract Value or total premium payments. The tax rules are unclear as to what extent an IRA can provide a death benefit that exceeds the greater of the IRA's cash value or the sum of the premiums paid and other contributions into the IRA. Please note that the IRA rider for the Contract has provisions that are designed to maintain the Contract's tax qualification as an IRA, and therefore could limit certain benefits under the Contract (including endorsement, rider or option benefits) to maintain the Contract's tax qualification. b. SEP IRAS Code Section 408(k) provides for a Traditional IRA in the form of an employer-sponsored defined contribution plan known as a Simplified Employee Pension ("SEP") or a SEP IRA. A SEP IRA can have employer, and in limited circumstances employee and salary reduction contributions, as well as higher overall contribution limits than a Traditional IRA, but a SEP is also subject to special tax-qualification requirements (e.g., on participation, nondiscrimination and withdrawals) and sanctions. Otherwise, a SEP IRA is generally subject to the same tax rules as for a Traditional IRA, which are described above. Please note that the IRA rider for the Contract has provisions that are designed to maintain the Contract's tax qualification as an IRA, and therefore could limit certain benefits under the Contract (including endorsement, rider or option benefits) to maintain the Contract's tax qualification. c. SIMPLE IRAS The Savings Incentive Match Plan for Employees of small employers ("SIMPLE Plan") is a form of an employer-sponsored Qualified Plan that provides IRA benefits for the participating employees ("SIMPLE IRAs"). Depending upon the SIMPLE Plan, employers may make plan contributions into a SIMPLE IRA established by each eligible participant. Like a Traditional IRA, a SIMPLE IRA is subject to the 50% penalty tax for failure to make a full RMD, and to the 10% penalty tax on premature distributions, as described below. In addition, the 10% penalty tax is increased to 25% for amounts received during the 2-year period beginning on the date you first participated in a qualified salary reduction arrangement pursuant to a SIMPLE Plan maintained by your employer under Code Section 408(p)(2). Contributions to a SIMPLE IRA may be either salary deferral contributions or employer contributions, and these are subject to different tax limits from those for a Traditional IRA. Please note that the SIMPLE IRA rider for the Contract has provisions that are designed to maintain the Contract's tax qualification as an SIMPLE IRA, and therefore could limit certain benefits under the Contract (including endorsement, rider or option benefits) to maintain the Contract's tax qualification. A SIMPLE Plan may designate a single financial institution (a Designated Financial Institution) as the initial trustee, custodian or issuer (in the case of an annuity contract) of the SIMPLE IRA set up for each eligible participant. However, any such Plan also must allow each eligible participant to have the balance in his SIMPLE IRA held by the Designated Financial Institution transferred without cost or penalty to a SIMPLE IRA maintained by a different financial institution. Absent a Designated Financial Institution, each eligible participant must select the financial institution to hold his SIMPLE IRA, and notify his employer of this selection. If we do not serve as the Designated Financial Institution for your employer's SIMPLE Plan, for you to use one of our Contracts as a SIMPLE IRA, you need to provide your employer with appropriate notification of such a selection under the SIMPLE Plan. If you choose, you may arrange for a qualifying transfer of any amounts currently held in another SIMPLE IRA for your benefit to your SIMPLE IRA with us. d. ROTH IRAS Code Section 408A permits eligible individuals to establish a Roth IRA. Contributions to a Roth IRA are not deductible, but withdrawals of amounts contributed and the earnings thereon that meet certain requirements are not subject to federal income tax. In general, Roth IRAs are subject to limitations on the amounts that may be contributed by the persons who may be eligible to contribute, certain Traditional IRA restrictions, and certain RMD rules on the death of the Contract Owner. Unlike a Traditional IRA, Roth IRAs are not subject to RMD rules during the Contract Owner's lifetime. Generally, however, upon the Owner's death the amount remaining in a Roth IRA must be distributed by the end of the fifth year after such death or distributed over the life expectancy of a designated beneficiary. The Owner of a Traditional IRA may convert a Traditional IRA into a Roth IRA under certain circumstances. The conversion of a Traditional IRA to a Roth IRA will subject the fair market value of the converted Traditional IRA to federal income tax in the year of conversion. In addition to the amount held in the converted Traditional IRA, the fair market value may include the value of additional benefits provided by the annuity contract on the date of conversion, based on reasonable actuarial assumptions. Tax-free rollovers from a Roth IRA can be made only to another Roth IRA under limited circumstances, as indicated below. Distributions from eligible Qualified Plans can be "rolled over" directly (subject to tax) into a Roth IRA under certain circumstances. Anyone considering the purchase of a Qualified Contract as a Roth IRA or a "conversion" Roth IRA APP I-3 ------------------------------------------------------------------------------- should consult with a qualified tax adviser. Please note that the Roth IRA rider for the Contract has provisions that are designed to maintain the Contract's tax qualification as a Roth IRA, and therefore could limit certain benefits under the Contract (including endorsement, rider or option benefits) to maintain the Contract's tax qualification. 2. QUALIFIED PENSION OR PROFIT-SHARING PLAN OR SECTION 401(k) PLAN Provisions of the Code permit eligible employers to establish a tax-qualified pension or profit sharing plan (described in Section 401(a), and Section 401(k) if applicable, and exempt from taxation under Section 501(a)). Such a Plan is subject to limitations on the amounts that may be contributed, the persons who may be eligible to participate, the amounts of "incidental" death benefits, and the time when RMDs must commence. In addition, a Plan's provision of incidental benefits may result in currently taxable income to the participant for some or all of such benefits. Amounts may be rolled over tax-free from a Qualified Plan to another Qualified Plan under certain circumstances, as described below. Anyone considering the use of a Qualified Contract in connection with such a Qualified Plan should seek competent tax and other legal advice. In particular, please note that these tax rules provide for limits on death benefits provided by a Qualified Plan (to keep such death benefits "incidental" to qualified retirement benefits), and a Qualified Plan (or a Qualified Contract) often contains provisions that effectively limit such death benefits to preserve the tax qualification of the Qualified Plan (or Qualified Contract). In addition, various tax-qualification rules for Qualified Plans specifically limit increases in benefits once RMDs begin, and Qualified Contracts are subject to such limits. As a result, the amounts of certain benefits that can be provided by any option under a Qualified Contract may be limited by the provisions of the Qualified Contract or governing Qualified Plan that are designed to preserve its tax qualification. 3. TAX SHELTERED ANNUITY UNDER SECTION 403(b) ("TSA") Code Section 403(b) permits public school employees and employees of certain types of charitable, educational and scientific organizations described in Code Section 501(c)(3) to purchase a "tax-sheltered annuity" ("TSA") contract and, subject to certain limitations, exclude employer contributions to a TSA from such an employee's gross income. Generally, total contributions may not exceed the lesser of an annual dollar limit or 100% of the employee's "includable compensation" for the most recent full year of service, subject to other adjustments. There are also legal limits on annual elective deferrals that a participant may be permitted to make under a TSA. In certain cases, such as when the participant is age 50 or older, those limits may be increased. A TSA participant should contact his plan administrator to determine applicable elective contribution limits. Special provisions may allow certain employees different overall limitations. A TSA is subject to a prohibition against distributions from the TSA attributable to contributions made pursuant to a salary reduction agreement, unless such distribution is made: a. after the employee reaches age 59 1/2; b. upon the employee's separation from service; c. upon the employee's death or disability; d. in the case of hardship (as defined in applicable law and in the case of hardship, any income attributable to such contributions may not be distributed); or e. as a qualified reservist distribution upon certain calls to active duty. An employer sponsoring a TSA may impose additional restrictions on your TSA through its plan document. Please note that the TSA rider for the Contract has provisions that are designed to maintain the Contract's tax qualification as a TSA, and therefore could limit certain benefits under the Contract (including endorsement, rider or option benefits) to maintain the Contract's tax qualification. In particular, please note that tax rules provide for limits on death benefits provided by a Qualified Plan (to keep such death benefits "incidental" to qualified retirement benefits), and a Qualified Plan (or a Qualified Contract) often contains provisions that effectively limit such death benefits to preserve the tax qualification of the Qualified Plan (or Qualified Contract). In addition, various tax-qualification rules for Qualified Plans specifically limit increases in benefits once RMDs begin, and Qualified Contracts are subject to such limits. As a result, the amounts of certain benefits that can be provided by any option under a Qualified Contract may be limited by the provisions of the Qualified Contract or governing Qualified Plan that are designed to preserve its tax qualification. In addition, a life insurance contract issued after September 23, 2007 is generally ineligible to qualify as a TSA under Reg. Section 1.403(b)-8(c)(2). Amounts may be rolled over tax-free from a TSA to another TSA or Qualified Plan (or from a Qualified Plan to a TSA) under certain circumstances, as described below. However, effective for TSA contract exchanges after September 24, 2007, Reg. ' 1.403(b)-10(b) allows a TSA contract of a participant or beneficiary under a TSA Plan to be exchanged tax-free for another eligible TSA contract under that same TSA Plan, but only if all of the following conditions are satisfied: (1) such TSA Plan allows such an exchange, (2) the participant or beneficiary has an accumulated benefit after such exchange that is no less than such participant's or beneficiary's accumulated benefit immediately before such exchange (taking into account such participant's or beneficiary's accumulated benefit under both TSA contracts immediately before such exchange), (3) the second TSA contract is subject to distribution restrictions with respect to the participant that are no less stringent than those imposed on the TSA contract being exchanged, and (4) the employer for such TSA Plan enters into an agreement with the issuer of the second TSA contract under which such issuer and employer will provide each other from time to time with APP I-4 ------------------------------------------------------------------------------- certain information necessary for such second TSA contract (or any other TSA contract that has contributions from such employer) to satisfy the TSA requirements under Code Section 403(b) and other federal tax requirements (e.g., plan loan conditions under Code Section 72(p) to avoid deemed distributions). Such necessary information could include information about the participant's employment, information about other Qualified Plans of such employer, and whether a severance has occurred, or hardship rules are satisfied, for purposes of the TSA distribution restrictions. Consequently, you are advised to consult with a qualified tax advisor before attempting any such TSA exchange, particularly because it requires an agreement between the employer and issuer to provide each other with certain information. We are no longer accepting any incoming exchange request, or new contract application, for any individual TSA contract. 4. DEFERRED COMPENSATION PLANS UNDER SECTION 457 ("SECTION 457 PLANS") Certain governmental employers, or tax-exempt employers other than a governmental entity, can establish a Deferred Compensation Plan under Code Section 457. For these purposes, a "governmental employer" is a State, a political subdivision of a State, or an agency or an instrumentality of a State or political subdivision of a State. A Deferred Compensation Plan that meets the requirements of Code Section 457(b) is called an "Eligible Deferred Compensation Plan" or "Section 457(b) Plan." Code Section 457(b) limits the amount of contributions that can be made to an Eligible Deferred Compensation Plan on behalf of a participant. Generally, the limitation on contributions is the lesser of (1) 100% of a participant's includible compensation or (2) the applicable dollar amount ($16,500 for 2009). The Plan may provide for additional "catch-up" contributions. In addition, under Code Section 457(d) a Section 457(b) Plan may not make amounts available for distribution to participants or beneficiaries before (1) the calendar year in which the participant attains age 70 1/2, (2) the participant has a severance from employment (including death), or (3) the participant is faced with an unforeseeable emergency (as determined in accordance with regulations). Under Code Section 457(g) all of the assets and income of an Eligible Deferred Compensation Plan for a governmental employer must be held in trust for the exclusive benefit of participants and their beneficiaries. For this purpose, annuity contracts and custodial accounts described in Code Section 401(f) are treated as trusts. This trust requirement does not apply to amounts under an Eligible Deferred Compensation Plan of a tax-exempt (non-governmental) employer. In addition, this trust requirement does not apply to amounts held under a Deferred Compensation Plan of a governmental employer that is not a Section 457(b) Plan. Where the trust requirement does not apply, amounts held under a Section 457 Plan must remain subject to the claims of the employer's general creditors under Code Section 457(b)(6). 5. TAXATION OF AMOUNTS RECEIVED FROM QUALIFIED PLANS Except under certain circumstances in the case of Roth IRAs or Roth accounts in Qualified plans, amounts received from Qualified Contracts or Plans generally are taxed as ordinary income under Code Section 72, to the extent that they are not treated as a tax-free recovery of after-tax contributions or other "investment in the contract." For annuity payments and other amounts received after the Annuity Commencement Date from a Qualified Contract or Plan, the tax rules for determining what portion of each amount received represents a tax-free recovery of "investment in the contract" are generally the same as for Non-Qualified Contracts, as described above. For non-periodic amounts from certain Qualified Contracts or Plans, Code Section 72(e)(8) provides special rules that generally treat a portion of each amount received as a tax-free recovery of the "investment in the contract," based on the ratio of the "investment in the contract" over the Contract Value at the time of distribution. However, in determining such a ratio, certain aggregation rules may apply and may vary, depending on the type of Qualified Contract or Plan. For instance, all Traditional IRAs owned by the same individual are generally aggregated for these purposes, but such an aggregation does not include any IRA inherited by such individual or any Roth IRA owned by such individual. In addition, penalty taxes, mandatory tax withholding or rollover rules may apply to amounts received from a Qualified Contract or Plan, as indicated below, and certain exclusions may apply to certain distributions (e.g., distributions from an eligible Government Plan to pay qualified health insurance premiums of an eligible retired public safety officer). Accordingly, you are advised to consult with a qualified tax adviser before taking or receiving any amount (including a loan) from a Qualified Contract or Plan. 6. PENALTY TAXES FOR QUALIFIED PLANS Unlike Non-Qualified Contracts, Qualified Contracts are subject to federal penalty taxes not just on premature distributions, but also on excess contributions and failures to make required minimum distributions ("RMDs"). Penalty taxes on excess contributions can vary by type of Qualified Plan and which person made the excess contribution (e.g., employer or an employee). The penalty taxes on premature distributions and failures to make timely RMDs are more uniform, and are described in more detail below. a. PENALTY TAXES ON PREMATURE DISTRIBUTIONS Code Section 72(t) imposes a penalty income tax equal to 10% of the taxable portion of a distribution from certain types of Qualified Plans that is made before the employee reaches age 59 1/2. However, this 10% penalty tax does not apply to a distribution that is either: (i) made to a beneficiary (or to the employee's estate) on or after the employee's death; (ii) attributable to the employee's becoming disabled under Code Section 72(m)(7); APP I-5 ------------------------------------------------------------------------------- (iii) part of a series of substantially equal periodic payments (not less frequently than annually -- "SEPPs") made for the life (or life expectancy) of the employee or the joint lives (or joint life expectancies) of such employee and a designated beneficiary ("SEPP Exception"), and for certain Qualified Plans (other than IRAs) such a series must begin after the employee separates from service; (iv) (except for IRAs) made to an employee after separation from service after reaching age 55 (or made after age 50 in the case of a qualified public safety employee separated from certain government plans); (v) (except for IRAs) made to an alternate payee pursuant to a qualified domestic relations order under Code Section 414(p) (a similar exception for IRAs in Code Section 408(d)(6) covers certain transfers for the benefit of a spouse or ex-spouse); (vi) not greater than the amount allowable as a deduction to the employee for eligible medical expenses during the taxable year; or (vii) certain qualified reservist distributions under Code Section 72(t)(2)(G) upon a call to active duty. In addition, the 10% penalty tax does not apply to a distribution from an IRA that is either: (viii) made after separation from employment to an unemployed IRA owner for health insurance premiums, if certain conditions are met; (ix) not in excess of the amount of certain qualifying higher education expenses, as defined by Code Section 72(t)(7); or (x) for a qualified first-time home buyer and meets the requirements of Code Section 72(t)(8). If the taxpayer avoids this 10% penalty tax by qualifying for the SEPP Exception and later such series of payments is modified (other than by death or disability), the 10% penalty tax will be applied retroactively to all the prior periodic payments (i.e., penalty tax plus interest thereon), unless such modification is made after both (a) the employee has reached age 59 1/2 and (b) 5 years have elapsed since the first of these periodic payments. For any premature distribution from a SIMPLE IRA during the first 2 years that an individual participates in a salary reduction arrangement maintained by that individual's employer under a SIMPLE Plan, the 10% penalty tax rate is increased to 25%. b. RMDS AND 50% PENALTY TAX The RMD rules generally do not apply for the 2009 tax year. However, individuals who deferred 2008 RMDs until April 1, 2009, must still take an RMD by that date. Please consult with a qualified tax advisor or your Qualified Plan Administrator to determine how this change may affect you. If the amount distributed from a Qualified Contract or Plan is less than the amount of the required minimum distribution ("RMD") for the year, the participant is subject to a 50% penalty tax on the amount that has not been timely distributed. An individual's interest in a Qualified Plan generally must be distributed, or begin to be distributed, not later than the Required Beginning Date. Generally, the Required Beginning Date is April 1 of the calendar year following the later of -- (i) the calendar year in which the individual attains age 70 1/2, or (ii) (except in the case of an IRA or a 5% owner, as defined in the Code) the calendar year in which a participant retires from service with the employer sponsoring a Qualified Plan that allows such a later Required Beginning Date. The entire interest of the individual must be distributed beginning no later than the Required Beginning Date over -- (a) the life of the individual or the lives of the individual and a designated beneficiary (as specified in the Code), or (b) over a period not extending beyond the life expectancy of the individual or the joint life expectancy of the individual and a designated beneficiary. If an individual dies before reaching the Required Beginning Date, the individual's entire interest generally must be distributed within 5 years after the individual's death. However, this RMD rule will be deemed satisfied if distributions begin before the close of the calendar year following the individual's death to a designated beneficiary and distribution is over the life of such designated beneficiary (or over a period not extending beyond the life expectancy of such beneficiary). If such beneficiary is the individual's surviving spouse, distributions may be delayed until the deceased individual would have attained age 70 1/2. If an individual dies after RMDs have begun for such individual, any remainder of the individual's interest generally must be distributed at least as rapidly as under the method of distribution in effect at the time of the individual's death. The RMD rules that apply while the Contract Owner is alive do not apply with respect to Roth IRAs. The RMD rules applicable after the death of the Owner apply to all Qualified Plans, including Roth IRAs. In addition, if the Owner of a Traditional or Roth IRA dies and the Owner's surviving spouse is the sole designated beneficiary, this surviving spouse may elect to treat the Traditional or Roth IRA as his or her own. The RMD amount for each year is determined generally by dividing the account balance by the applicable life expectancy. This account balance is generally based upon the account value as of the close of business on the last day of the previous calendar year. RMD incidental benefit rules also may require a larger annual RMD amount, particularly when distributions are made over the joint lives of the Owner and an individual other than his or her spouse. RMDs also can be made in the form of annuity payments that satisfy the rules set forth in Regulations under the Code relating to RMDs. APP I-6 ------------------------------------------------------------------------------- In addition, in computing any RMD amount based on a contract's account value, such account value must include the actuarial value of certain additional benefits provided by the contract. As a result, electing an optional benefit under a Qualified Contract may require the RMD amount for such Qualified Contract to be increased each year, and expose such additional RMD amount to the 50% penalty tax for RMDs if such additional RMD amount is not timely distributed. 7. TAX WITHHOLDING FOR QUALIFIED PLANS Distributions from a Qualified Contract or Qualified Plan generally are subject to federal income tax withholding requirements. These federal income tax withholding requirements, including any "elections out" and the rate at which withholding applies, generally are the same as for periodic and non-periodic distributions from a Non-Qualified Contract, as described above, except where the distribution is an "eligible rollover distribution" from a Qualified Plan (described below in "ROLLOVER DISTRIBUTIONS"). In the latter case, tax withholding is mandatory at a rate of 20% of the taxable portion of the "eligible rollover distribution," to the extent it is not directly rolled over to an IRA or other Eligible Retirement Plan (described below in "ROLLOVER DISTRIBUTIONS"). Payees cannot elect out of this mandatory 20% withholding in the case of such an "eligible rollover distribution." Also, special withholding rules apply with respect to distributions from non-governmental Section 457(b) Plans, and to distributions made to individuals who are neither citizens nor resident aliens of the United States. Regardless of any "election out" (or any actual amount of tax actually withheld) on an amount received from a Qualified Contract or Plan, the payee is generally liable for any failure to pay the full amount of tax due on the includable portion of such amount received. A payee also may be required to pay penalties under estimated income tax rules, if the withholding and estimated tax payments are insufficient to satisfy the payee's total tax liability. 8. ROLLOVER DISTRIBUTIONS The current tax rules and limits for tax-free rollovers and transfers between Qualified Plans vary according to (1) the type of transferor Plan and transferee Plan, (2) whether the amount involved is transferred directly between Plan (a "direct transfer" or a "direct rollover") or is distributed first to a participant or beneficiary who then transfers that amount back into another eligible Plan within 60 days (a "60-day rollover"), and (3) whether the distribution is made to a participant, spouse or other beneficiary. Accordingly, we advise you to consult with a qualified tax adviser before receiving any amount from a Qualified Contract or Plan or attempting some form of rollover or transfer with a Qualified Contract or Plan. For instance, generally any amount can be transferred directly from one type of Qualified Plan (e.g., a TSA) to the same type of Plan for the benefit of the same individual, without limit (or federal income tax), if the transferee Plan is subject to the same kinds of restrictions as the transferor Plan (e.g., a TSA that is subject to the same kinds of salary reduction restrictions) and certain other conditions to maintain the applicable tax qualification are satisfied (e.g., as described above for TSA exchanges after September 24, 2007). Such a "direct transfer" between the same kinds of Plan is generally not treated as any form of "distribution" out of such a Plan for federal income tax purposes. By contrast, an amount distributed from one type of Plan (e.g., a TSA) into a different type of Plan (e.g., a Traditional IRA) generally is treated as a "distribution" out of the first Plan for federal income tax purposes, and therefore to avoid being subject to such tax, such a distribution must qualify either as a "direct rollover" (made directly to another Plan) or as a "60-day rollover." The tax restrictions and other rules for a "direct rollover" and a "60-day rollover" are similar in many ways, but if any "eligible rollover distribution" made from certain types of Qualified Plan is not transferred directly to another Plan by a "direct rollover," then it is subject to mandatory 20% withholding, even if it is later contributed to that same Plan in a "60-day rollover" by the recipient. If any amount less than 100% of such a distribution (e.g., the net amount after the 20% withholding) is transferred to another Plan in a "60-day rollover", the missing amount that is not rolled over remains subject to normal income tax plus any applicable penalty tax. Under Code Sections 402(f)(2)(A) and 3405(c)(3) an "eligible rollover distribution" (which is both eligible for rollover treatment and subject to 20% mandatory withholding absent a "direct rollover") is generally any distribution to an employee of any portion (or all) of the balance to the employee's credit in any of the following types of "Eligible Retirement Plan": (1) a Qualified Plan under Code Section 401(a) ("Qualified 401(a) Plan"), (2) a qualified annuity plan under Code Section 403(a) ("Qualified Annuity Plan"), (3) a TSA under Code Section 403(b), or (4) a governmental Section 457(b) Plan. However, an "eligible rollover distribution" does not include any distribution that is either -- a. an RMD amount; b. one of a series of substantially equal periodic payments (not less frequently than annually) made either (i) for the life (or life expectancy) of the employee or the joint lives (or joint life expectancies) of the employee and a designated beneficiary, or (ii) for a specified period of 10 years or more; or c. any distribution made upon hardship of the employee. Before making an "eligible rollover distribution," a Plan administrator generally is required under Code Section 402(f) to provide the recipient with advance written notice of the "direct rollover" and "60-day rollover" rules and the distribution's exposure to the 20% mandatory withholding if it is not made by "direct rollover." Generally, under Code Sections 402(c), 403(b)(8) and 457 (e)(16), a "direct rollover" or a "60-day rollover" of an "eligible rollover distribution" can be made to a Traditional IRA or to another Eligible Retirement Plan that agrees to accept such a rollover. However, the maximum amount of an "eligible rollover distribution" that can qualify for APP I-7 ------------------------------------------------------------------------------- a tax-free "60-day rollover" is limited to the amount that otherwise would be includable in gross income. By contrast, a "direct rollover" of an "eligible rollover distribution" can include after-tax contributions as well, if the direct rollover is made either to a Traditional IRA or to another form of Eligible Retirement Plan that agrees to account separately for such a rollover, including accounting for such after-tax amounts separately from the otherwise taxable portion of this rollover. Separate accounting also is required for all amounts (taxable or not) that are rolled into a governmental Section 457(b) Plan from either a Qualified Section 401(a) Plan, Qualified Annuity Plan, TSA or IRA. These amounts, when later distributed from the governmental Section 457(b) Plan, are subject to any premature distribution penalty tax applicable to distributions from such a "predecessor" Qualified Plan. Rollover rules for distributions from IRAs under Code Sections 408(d)(3) and 408A(d)(3) also vary according to the type of transferor IRA and type of transferee IRA or other Plan. For instance, generally no tax-free "direct rollover" or "60-day rollover" can be made between a "NonRoth IRA" (Traditional, SEP or SIMPLE IRA) and a Roth IRA, and a transfer from NonRoth IRA to a Roth IRA, or a "conversion" of a NonRoth IRA to a Roth IRA, is subject to special rules. In addition, generally no tax-free "direct rollover" or "60-day rollover" can be made between an "inherited IRA" (NonRoth or Roth) for a beneficiary and an IRA set up by that same individual as the original owner. Generally, any amount other than an RMD distributed from a Traditional or SEP IRA is eligible for a "direct rollover" or a "60-day rollover" to another Traditional IRA for the same individual. Similarly, any amount other than an RMD distributed from a Roth IRA is generally eligible for a "direct rollover" or a "60-day rollover" to another Roth IRA for the same individual. However, in either case such a tax-free 60-day rollover is limited to 1 per year (365-day period); whereas no 1-year limit applies to any such "direct rollover." Similar rules apply to a "direct rollover" or a "60-day rollover" of a distribution from a SIMPLE IRA to another SIMPLE IRA or a Traditional IRA, except that any distribution of employer contributions from a SIMPLE IRA during the initial 2-year period in which the individual participates in the employer's SIMPLE Plan is generally disqualified (and subject to the 25% penalty tax on premature distributions) if it is not rolled into another SIMPLE IRA for that individual. Amounts other than RMDs distributed from a Traditional or SEP IRA (or SIMPLE IRA after the initial 2-year period) also are eligible for a "direct rollover" or a "60-day rollover" to an Eligible Retirement Plan (e.g., a TSA) that accepts such a rollover, but any such rollover is limited to the amount of the distribution that otherwise would be includable in gross income (i.e., after-tax contributions are not eligible). Special rules also apply to transfers or rollovers for the benefit of a spouse (or ex-spouse) or a nonspouse designated beneficiary, Plan distributions of property, and obtaining a waiver of the 60-day limit for a tax-free rollover from the IRS. The Katrina Emergency Tax Relief Act of 2005 (KETRA) allows certain amounts to be recontributed within three years as a rollover contribution to a plan from which a KETRA distribution was taken. APP II-1 ------------------------------------------------------------------------------- APPENDIX II -- DEATH BENEFIT -- EXAMPLES ASSET PROTECTION DEATH BENEFIT EXAMPLES EXAMPLE 1 Assume that: - You purchased your Contract with the Asset Protection Death Benefit, - You made an initial Premium Payment of $100,000, - In your fourth Contract Year, you made a withdrawal of $8,000, - Your Contract Value in your fourth Contract Year immediately before your withdrawal was $109,273, - On the day we calculate the Death Benefit, your Contract Value was $117,403, - Your Maximum Anniversary Value was $117,403. CALCULATION OF ASSET PROTECTION DEATH BENEFIT To calculate the Asset Protection Death Benefit, we calculate the following three values: - The Contract Value of your Contract on the day we calculate the Death Benefit [$117,403], - The Contract Value of your Contract, plus 25% of the total Premium Payments you have made to us minus any Premium Payments we receive within 12 months of death and an adjustment for any partial Surrenders. [$117,403 + 25% ($100,000 - $8,000) = $140,403], - The Contract Value of your Contract, plus 25% of your Maximum Anniversary Value minus an adjustment for any partial Surrenders. [$117,403 + 25% ($117,403 - $8,000) = $144,754]. The Asset Protection Death Benefit is the greatest of these three values but it cannot exceed the greatest of: - The Contract Value of your Contract on the day we calculate the Death Benefit [$117,403], - the total Premium Payments you have made to us minus any Premium Payments we receive within 12 months of death and an adjustment for any partial Surrenders [$100,000 - $8,000 = $92,000], or - your Maximum Anniversary Value adjusted for any partial Surrenders [$117,403 - $8,000 = $109,403]. Because the Contract Value of your Contract [$117,403] is greater than your Maximum Anniversary Value adjusted for partial Surrenders [$109,403] and your adjusted total Premium Payments [$92,000], the amount of the Death Benefit cannot exceed $117,403. AMOUNT OF ASSET PROTECTION DEATH BENEFIT Because the Asset Protection Death Benefit cannot exceed $117, 403, the amount of the Death Benefit is equal to your Contract Value of $117,403. APP II-2 ------------------------------------------------------------------------------- EXAMPLE 2 Assume that: - You purchased your Contract with the Asset Protection Death Benefit, - You made an initial Premium Payment of $100,000, - In your fourth Contract Year, you made a partial Surrender of $60,000, - Your Contract Value in the fourth year immediately before your Surrender was $150,000, - On the day we calculate the Death Benefit, your Contract Value was $120,000, - Your Maximum Anniversary Value is $140,000. CALCULATION OF ASSET PROTECTION DEATH BENEFIT To calculate the Asset Protection Death Benefit, we calculate the following three values: - The Contract Value of your Contract on the day we calculate the Death Benefit [$120,000], - The Contract Value of your Contract, plus 25% of the total Premium Payments you have made to us minus any Premium Payments we receive within 12 months of death and an adjustment for any partial Surrenders. [$120,000 + 25% of $57,857 = $134,464 (See below)], - The Contract Value of your Contract, plus 25% of your Maximum Anniversary Value adjusted for any partial Surrenders. [$120,000 + 25% ($83,571) = $140,893 (See below)]. The Asset Protection Death Benefit is the greatest of these three values but it cannot exceed the greatest of: - The Contract Value of your Contract on the day we calculate the Death Benefit [$120,000], - The total Premium Payments you have made to us minus any Premium Payments we receive within 12 months of death and the adjustment for any partial Surrenders [$57,857 (See below)], or - Your Maximum Anniversary Value minus an adjustment for any partial surrenders [$83,571 (See below)]. ADJUSTMENT FOR PARTIAL SURRENDER FOR TOTAL PREMIUM PAYMENTS The adjustment to your total Premium Payments for partial Surrenders is on a dollar for dollar basis up to 10% of total Premium Payments. 10% of total Premium Payments is $10,000. Total Premium Payments adjusted for dollar for dollar partial Surrenders is $90,000. The remaining partial Surrenders equal $50,000. This amount will reduce your total Premium Payments by a factor. To determine this factor, we take your Contract Value immediately before the Surrender [$150,000] and subtract the $10,000 dollar for dollar adjustment to get $140,000. The proportional factor is 1 - (50,000/140,000) = .64286. This factor is multiplied by $90,000. The result is an adjusted total Premium Payment of $57,857. ADJUSTMENT FOR PARTIAL SURRENDER FOR MAXIMUM ANNIVERSARY VALUE The adjustment to your Maximum Anniversary Value for partial Surrenders is on a dollar for dollar basis up to 10% of total Premium Payments. 10% of Premium Payments is $10,000. Your Maximum Anniversary Value adjusted for partial Surrenders on a dollar for dollar basis up to 10% of Premium Payments is $130,000. Remaining partial Surrenders are $50,000. We use this amount to reduce your Maximum Anniversary Value by a factor. To determine this factor, we take your Contract Value immediately before the Surrender [$150,000] and subtract the $10,000 dollar for dollar adjustment to get $140,000. The proportional factor is 1 - (50,000/140,000) = .64286. This factor is multiplied by $130,000. The result is an adjusted Maximum Anniversary Value of $83,571. AMOUNT OF ASSET PROTECTION DEATH BENEFIT Your Asset Protection Death Benefit is $120,000. This is because your Contract Value at death [$120,000] was the greatest of: - The Contract Value of your Contract on the day we calculate the Death Benefit [$120,000], - The total Premium Payments you have made to us minus any Premium Payments we receive within 12 months of death and the adjustment for any partial Surrenders [$57,857], or - Your Maximum Anniversary Value minus an adjustment for any partial surrenders [$83,571]. So, your Asset Protection Death Benefit cannot exceed $120,000. APP II-3 ------------------------------------------------------------------------------- PREMIUM PROTECTION DEATH BENEFIT EXAMPLES EXAMPLE 1 Assume that: - You purchased your Contract with the Premium Protection Death Benefit instead of the Asset Protection Death Benefit, - You made an initial Premium Payment of $100,000, - In your fourth Contract Year, you made a withdrawal of $8,000, - Your Contract Value in your fourth Contract Year immediately before your withdrawal was $109,273, - On the day we calculate the Death Benefit, your Contract Value was $117,403. ADJUSTMENT FOR PARTIAL SURRENDER FOR TOTAL PREMIUM PAYMENTS The adjustment to your total Premium Payments for partial Surrenders is on a dollar for dollar basis up to 10% of total Premium Payments. The withdrawal of $8,000 is less than 10% of premiums. Your adjusted total Premium Payments is $92,000. DEATH BENEFIT AMOUNT Because your Contract Value at death was greater than the adjusted total Premium Payments, your Death Benefit is $117,403. EXAMPLE 2 Assume that: - You purchased your Contract with the Premium Protection Death Benefit instead of the Asset Protection Death Benefit, - You made an initial Premium Payment of $100,000, - In your fourth contract year, you made a partial Surrender of $60,000, - Your Contract Value in the fourth year immediately before your surrender was $150,000, - On the day we calculate the Death Benefit, your Contract Value was $120,000. ADJUSTMENT FOR PARTIAL SURRENDER FOR TOTAL PREMIUM PAYMENTS The adjustment to your total Premium Payments for partial Surrenders is on a dollar for dollar basis up to 10% of total Premium Payments. 10% of total Premium Payments is $10,000. Total Premium Payments adjusted for dollar for dollar partial Surrenders is $90,000. The remaining partial Surrenders equal $50,000. This amount will reduce your total Premium Payments by a factor. To determine this factor, we take your Contract Value immediately before the Surrender [$150,000] and subtract the $10,000 dollar for dollar adjustment to get $140,000. The proportional factor is 1 - (50,000/140,000) = .64286. This factor is multiplied by $90,000. The result is an adjusted total Premium Payments of $57,857. DEATH BENEFIT AMOUNT Because your Contract Value at death was greater than the adjusted total Premium Payments, your Death Benefit is $120,000. APP II-4 ------------------------------------------------------------------------------- MAV/EPB DEATH BENEFIT WITH ASSET PROTECTION DEATH BENEFIT EXAMPLES EXAMPLE 1 Assume that: - You elected the MAV/EPB Death Benefit when you purchased your Contract with the Asset Protection Death Benefit, - You made a single Premium Payment of $100,000, - In your fourth Contract Year, you made a withdrawal of $8,000, - Your Contract Value in your fourth Contract Year immediately before your withdrawal was $109,273, - On the day we calculate the Death Benefit, your Contract Value was $117,403, - Your Maximum Anniversary Value was $117,403, - The Contract Value on the date we calculate the Death Benefit plus 40% of the Contract gain was greater than the Asset Protection Death Benefit, your adjusted total Premium Payments, and your Maximum Anniversary Value. ADJUSTMENT FOR PARTIAL SURRENDERS FOR EARNINGS PROTECTION BENEFIT To calculate the Earnings Protection Benefit, we make an adjustment for partial Surrenders if the amount of a Surrender is greater than the Contract gain in the Contract immediately prior to the Surrender. To determine if the partial Surrender is greater than the Contract gain: - Add the amount of the partial Surrender ($8,000) to - The Contract Value on the date the MAV/EPB Death Benefit is added to your Contract ($100,000), - Add Premium Payments made after the MAV/EPB Death Benefit is added to your Contract before you make the partial Surrender ($0), - Subtract the Contract Value on the Valuation Day immediately before you make the partial Surrender ($109,273), - Subtract the sum of any prior adjustments for all prior partial Surrenders made after the MAV/EPB Death Benefit is added to your Contract ($0), Which equals -$1,273, which is less than zero, so there is no adjustment for the partial Surrender in this case. CALCULATION OF CONTRACT GAIN Hartford would calculate the Contract gain as follows: - Contract Value on the date we receive proof of death ($117,403), - Subtract the Contract Value on the date the MAV/EPB Death Benefit was added to your Contract ($100,000), - Add any adjustments for partial Surrenders ($0), So the Contract gain equals $17,403. CALCULATION OF EARNINGS PROTECTION BENEFIT CAP To determine if the cap applies: - Hartford calculates the Contract Value on the date the MAV/EPB Death Benefit was added to your Contract ($100,000), - plus Premium Payments made since that date ($0), - minus Premium Payments made in the 12 months prior to death ($0), - minus any adjustments for partial Surrenders ($0), Which equals $100,000. The cap is 200% of $100,000, which is $200,000. ADJUSTMENT FOR PARTIAL SURRENDERS FOR MAXIMUM ANNIVERSARY VALUE The adjustment to your Maximum Anniversary Value for partial Surrenders is on a dollar for dollar basis up to 10% of total Premium Payments. The withdrawal of $8,000 is less than 10% of premiums. YOUR ADJUSTED MAXIMUM ANNIVERSARY VALUE IS $109,403. ASSET PROTECTION DEATH BENEFIT AMOUNT IS $117,403. (See Example 1 under Asset Protection Death Benefit for details of calculation.) ADJUSTED TOTAL PREMIUM PAYMENT AMOUNT IS $92,000. (See Example 1 under Asset Protection Death Benefit for details of calculation.) MAV/EPB DEATH BENEFIT In this situation the cap does not apply, so Hartford takes 40% of $17,403 or $6,961 and adds that to the Contract Value on the date we receive proof of death and the total Death Benefit with the Earnings Protection Benefit is $124,364. This is the greatest of the four values compared. APP II-5 ------------------------------------------------------------------------------- EXAMPLE 2 Assume that: - You elected the MAV/EPB Death Benefit when you purchased your Contract with the Asset Protection Death Benefit, - You made a single Premium Payment of $100,000, - In your fourth Contract Year, you made a partial Surrender of $60,000, - Your Contract Value in the fourth year immediately before your Surrender was $150,000, - Your Maximum Anniversary Value is $140,000, - On the day we calculate the Death Benefit, your Contract Value was $120,000, - The Contract Value on the date we calculate the Death Benefit plus 40% of the Contract gain was the greatest of the Death Benefit calculations. ADJUSTMENT FOR PARTIAL SURRENDERS To calculate the MAV/EPB Death Benefit, we make an adjustment for partial Surrenders if the amount of a Surrender is greater than the Contract gain in the Contract immediately prior to the Surrender. To determine if the partial Surrender is greater than the Contract gain: - Add the amount of the partial Surrender ($60,000) to - The Contract Value on the date the MAV/EPB Death Benefit is added to your Contract ($100,000), - Add Premium Payments made after the MAV/EPB Death Benefit is added to your Contract before you make the partial Surrender ($0), - Subtract the Contract Value on the Valuation Day immediately before you make the partial Surrender ($150,000), - Subtract the sum of any prior adjustments for all prior partial Surrenders made after the MAV/EPB Death Benefit is added to your Contract ($0), Which equals +$10,000, which is greater than zero, so there is a $10,000 adjustment for the partial Surrender in this case. CALCULATION OF CONTRACT GAIN Hartford would calculate the Contract gain as follows: - Contract Value on the date we receive proof of death ($120,000), - Subtract the Contract Value on the date the MAV/EPB Death Benefit was added to your Contract ($100,000), - Add any adjustments for partial Surrenders ($10,000), So the Contract gain equals $30,000. CALCULATION OF EARNINGS PROTECTION BENEFIT CAP To determine if the cap applies: - Hartford calculates the Contract Value on the date the MAV/EPB Death Benefit was added to your Contract ($100,000), - plus Premium Payments made since that date ($0), - minus Premium Payments made in the 12 months prior to death ($0), - minus any adjustments for partial Surrenders ($10,000), Which equals $90,000. The cap is 200% of $90,000, which is $180,000. ADJUSTMENT FOR PARTIAL SURRENDERS FOR MAXIMUM ANNIVERSARY VALUE The adjustment to your Maximum Anniversary Value for partial Surrenders is on a dollar for dollar basis up to 10% of total Premium Payments. 10% of Premium Payments is $10,000. Maximum Anniversary Value adjusted for dollar for dollar Surrenders is $130,000. Remaining Surrenders equal $50,000. This amount will reduce the Maximum Anniversary Value proportionally. Contract Value immediately before Surrender is $150,000 minus $10,000 = $140,000. The proportional factor is 1 - (50,000/140,000) = .64286. This factor is multiplied by $130,000. The result is an adjusted Maximum Anniversary Value of $83,571. DEATH BENEFIT WITH EARNINGS PROTECTION BENEFIT In this situation the cap does not apply, so Hartford takes 40% of $30,000 or $12,000 and adds that to the Contract Value on the date we receive proof of death and the total Death Benefit with the Earnings Protection Benefit is $132,000. APP II-6 ------------------------------------------------------------------------------- MAV/EPB DEATH BENEFIT WITH PREMIUM PROTECTION DEATH BENEFIT EXAMPLES EXAMPLE 1 Assume that: - You elected the MAV/EPB Death Benefit when you purchased your Contract, - You elected the Premium Protection Death Benefit and opted out of the Asset Protection Death Benefit when you purchased your Contract, - You made a single Premium Payment of $100,000, - In your fourth Contract Year, you made a withdrawal of $8,000, - Your Contract Value in your fourth Contract Year immediately before your withdrawal was $109,273, - On the day we calculate the Death Benefit, your Contract Value was $117,403, - Your Maximum Anniversary Value was $117,403, - The Contract Value on the date we calculate the Death Benefit plus 40% of the Contract gain was the greatest of the three Death Benefit calculations (Premium Protection Death Benefit, Maximum Anniversary Value and Earnings Protection Benefit). EARNINGS PROTECTION BENEFIT AMOUNT IS $124,364. (See Example 1 under MAV/EPB Death Benefit with Asset Protection Benefit for details of calculation.) MAXIMUM ANNIVERSARY VALUE IS $109,403. (See Example 1 under MAV/EPB Death Benefit with Asset Protection Benefit for details of calculation.) PREMIUM PROTECTION DEATH BENEFIT AMOUNT IS $92,000. (See Example 1 under Premium Protection Death Benefit for details of calculation.) DEATH BENEFIT WITH EARNINGS PROTECTION BENEFIT The total Death Benefit with the Earnings Protection Benefit is $124,364. This is the greatest of the three values compared. EXAMPLE 2 Assume that: - You elected the MAV/EPB Death Benefit when you purchased your Contract, - You elected the Premium Protection Death Benefit and opted out of the Asset Protection Death Benefit when you purchased your Contract, - You made a single Premium Payment of $100,000, - In your fourth Contract Year, you made a withdrawal of $60,000, - Your Contract Value in your fourth Contract Year immediately before your withdrawal was $150,000, - On the day we calculate the Death Benefit, your Contract Value was $120,000, - Your Maximum Anniversary Value was $140,000, - The Contract Value on the date we calculate the Death Benefit plus 40% of the Contract gain was the greatest of the three Death Benefit calculations (Premium Protection Death Benefit, Maximum Anniversary Value and Earnings Protection Benefit). EARNINGS PROTECTION BENEFIT AMOUNT IS $132,000. (See Example 2 under MAV/EPB Death Benefit with Asset Protection Death Benefit for details of calculation.) MAXIMUM ANNIVERSARY VALUE IS $83,571. (See Example 2 under MAV/EPB Death Benefit with Asset Protection Death Benefit for details of calculation.) PREMIUM PROTECTION DEATH BENEFIT AMOUNT IS $57,857. (See Example 2 under Premium Protection Death Benefit for details of calculation.) DEATH BENEFIT WITH EARNINGS PROTECTION BENEFIT The total Death Benefit with the Earnings Protection Benefit is $132,000. This is the greatest of the three values compared. APP III-1 ------------------------------------------------------------------------------- APPENDIX III -- ACCUMULATION UNIT VALUES (FOR AN ACCUMULATION UNIT OUTSTANDING THROUGHOUT THE PERIOD) The following information should be read in conjunction with the financial statements for the Separate Account included in the Statement of Additional Information, which is incorporated by reference in this Prospectus. There are several classes of Accumulation Unit Values under the Contract depending on the number of optional benefits you select. The table below shows all possible Accumulation Unit Values corresponding to all combinations of optional benefits. There is no information for Hartford Global Equity HLS Fund, Hartford LargeCap Growth HLS Fund or Hartford SmallCap Value HLS Fund because as of December 31, 2007, the Funds had not commenced operations. HARTFORD LIFE INSURANCE COMPANY
AS OF DECEMBER 31, SUB-ACCOUNT 2008 2007 2006 2005 2004 ----------------------------------------------------------------------------------------------------------------- PUTNAM VT AMERICAN GOVERNMENT INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $13.993 $13.063 $12.798 $12.768 $12.589 Accumulation Unit Value at end of period $13.873 $13.993 $13.063 $12.798 $12.768 Number of Accumulation Units outstanding at end of period (in thousands) 2,881 2,623 3,206 4,201 5,599 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $13.828 $12.928 $12.685 $12.674 $12.515 Accumulation Unit Value at end of period $13.689 $13.828 $12.928 $12.685 $12.674 Number of Accumulation Units outstanding at end of period (in thousands) 32 21 32 65 59 PUTNAM VT CAPITAL APPRECIATION FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $9.465 $10.291 $9.268 $8.688 $7.660 Accumulation Unit Value at end of period $5.760 $9.465 $10.291 $9.268 $8.688 Number of Accumulation Units outstanding at end of period (in thousands) 676 843 1,131 1,283 1,260 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $9.364 $10.197 $9.196 $8.633 $7.623 Accumulation Unit Value at end of period $5.690 $9.364 $10.197 $9.196 $8.633 Number of Accumulation Units outstanding at end of period (in thousands) 6 12 29 28 17 PUTNAM VT CAPITAL OPPORTUNITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $16.767 $18.745 $16.466 $15.114 $12.940 Accumulation Unit Value at end of period $10.744 $16.767 $18.745 $16.466 $15.114 Number of Accumulation Units outstanding at end of period (in thousands) 390 447 546 432 345 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $16.650 $18.642 $16.400 $15.077 $12.927 Accumulation Unit Value at end of period $10.653 $16.650 $18.642 $16.400 $15.077 Number of Accumulation Units outstanding at end of period (in thousands) 2 4 7 6 1 PUTNAM VT DISCOVERY GROWTH FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $6.594 $6.051 $5.514 $5.198 $4.893 Accumulation Unit Value at end of period $3.707 $6.594 $6.051 $5.514 $5.198 Number of Accumulation Units outstanding at end of period (in thousands) 699 910 834 1,022 1,399 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $6.523 $5.995 $5.471 $5.166 $4.870 Accumulation Unit Value at end of period $3.662 $6.523 $5.995 $5.471 $5.166 Number of Accumulation Units outstanding at end of period (in thousands) 2 16 7 7 8 AS OF DECEMBER 31, SUB-ACCOUNT 2003 2002 2001 2000 1999 -------------------------------------- -------------------------------------------------------------------- PUTNAM VT AMERICAN GOVERNMENT INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $12.540 $11.649 $11.069 $10.000 -- Accumulation Unit Value at end of period $12.589 $12.540 $11.649 $11.069 -- Number of Accumulation Units outstanding at end of period (in thousands) 8,643 14,565 5,645 669 -- WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $12.485 $11.616 $11.053 $10.000 -- Accumulation Unit Value at end of period $12.515 $12.485 $11.616 $11.053 -- Number of Accumulation Units outstanding at end of period (in thousands) 81 115 68 9 -- PUTNAM VT CAPITAL APPRECIATION FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $6.212 $8.090 $9.505 $10.000 -- Accumulation Unit Value at end of period $7.660 $6.212 $8.090 $9.505 -- Number of Accumulation Units outstanding at end of period (in thousands) 1,264 772 473 6 -- WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $6.192 $8.076 $9.503 -- -- Accumulation Unit Value at end of period $7.623 $6.192 $8.076 -- -- Number of Accumulation Units outstanding at end of period (in thousands) 26 14 10 -- -- PUTNAM VT CAPITAL OPPORTUNITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $10.000 -- -- -- -- Accumulation Unit Value at end of period $12.940 -- -- -- -- Number of Accumulation Units outstanding at end of period (in thousands) 142 -- -- -- -- WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $10.000 -- -- -- -- Accumulation Unit Value at end of period $12.927 -- -- -- -- Number of Accumulation Units outstanding at end of period (in thousands) -- -- -- -- -- PUTNAM VT DISCOVERY GROWTH FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $3.748 $5.378 $7.863 $10.000 -- Accumulation Unit Value at end of period $4.893 $3.748 $5.378 $7.863 -- Number of Accumulation Units outstanding at end of period (in thousands) 1,657 1,165 481 48 -- WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $3.736 $5.368 $7.861 $10.000 -- Accumulation Unit Value at end of period $4.870 $3.736 $5.368 $7.861 -- Number of Accumulation Units outstanding at end of period (in thousands) 17 27 17 2 --
APP III-2 -------------------------------------------------------------------------------
AS OF DECEMBER 31, SUB-ACCOUNT 2008 2007 2006 2005 2004 ----------------------------------------------------------------------------------------------------------------- PUTNAM VT DIVERSIFIED INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $18.693 $18.194 $17.308 $16.995 $15.727 Accumulation Unit Value at end of period $12.720 $18.693 $18.194 $17.308 $16.995 Number of Accumulation Units outstanding at end of period (in thousands) 4,539 6,128 7,544 9,367 11,242 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $18.452 $17.986 $17.136 $16.851 $15.618 Accumulation Unit Value at end of period $12.537 $18.452 $17.986 $17.136 $16.851 Number of Accumulation Units outstanding at end of period (in thousands) 51 79 112 133 151 PUTNAM VT EQUITY INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $16.676 $16.345 $13.911 $13.345 $12.068 Accumulation Unit Value at end of period $11.343 $16.676 $16.345 $13.911 $13.345 Number of Accumulation Units outstanding at end of period (in thousands) 1,987 2,365 2,475 2,372 1,962 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $16.560 $16.255 $13.855 $13.311 $12.056 Accumulation Unit Value at end of period $11.247 $16.560 $16.255 $13.855 $13.311 Number of Accumulation Units outstanding at end of period (in thousands) 22 26 31 28 14 PUTNAM VT GLOBAL ASSET ALLOCATION FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $37.976 $37.331 $33.490 $31.682 $29.406 Accumulation Unit Value at end of period $25.030 $37.976 $37.331 $33.490 $31.682 Number of Accumulation Units outstanding at end of period (in thousands) 2,389 2,992 3,587 4,239 4,888 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $37.486 $36.904 $33.157 $31.414 $29.201 Accumulation Unit Value at end of period $24.669 $37.486 $36.904 $33.157 $31.414 Number of Accumulation Units outstanding at end of period (in thousands) 7 13 17 14 14 PUTNAM VT GLOBAL EQUITY FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $30.394 $28.183 $23.141 $21.512 $19.146 Accumulation Unit Value at end of period $16.412 $30.394 $28.183 $23.141 $21.512 Number of Accumulation Units outstanding at end of period (in thousands) 5,057 6,431 7,609 9,326 11,161 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $30.002 $27.861 $22.911 $21.330 $19.013 Accumulation Unit Value at end of period $16.176 $30.002 $27.861 $22.911 $21.330 Number of Accumulation Units outstanding at end of period (in thousands) 38 57 71 78 87 PUTNAM VT GLOBAL HEALTH CARE FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $12.196 $12.413 $12.214 $10.913 $10.314 Accumulation Unit Value at end of period $9.994 $12.196 $12.413 $12.214 $10.913 Number of Accumulation Units outstanding at end of period (in thousands) 2,165 2,789 3,885 5,422 6,382 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $12.038 $12.271 $12.092 $10.821 $10.242 Accumulation Unit Value at end of period $9.850 $12.038 $12.271 $12.092 $10.821 Number of Accumulation Units outstanding at end of period (in thousands) 37 46 71 93 106 AS OF DECEMBER 31, SUB-ACCOUNT 2003 2002 2001 2000 1999 -------------------------------------- -------------------------------------------------------------------- PUTNAM VT DIVERSIFIED INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $13.261 $12.663 $12.369 $12.532 $12.489 Accumulation Unit Value at end of period $15.727 $13.261 $12.663 $12.369 $12.532 Number of Accumulation Units outstanding at end of period (in thousands) 13,126 15,184 18,982 21,753 25,272 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $13.188 $12.612 $12.338 $12.520 $12.713 Accumulation Unit Value at end of period $15.618 $13.188 $12.612 $12.338 $12.520 Number of Accumulation Units outstanding at end of period (in thousands) 182 166 170 121 47 PUTNAM VT EQUITY INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $10.000 -- -- -- -- Accumulation Unit Value at end of period $12.068 -- -- -- -- Number of Accumulation Units outstanding at end of period (in thousands) 1,103 -- -- -- -- WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $10.000 -- -- -- -- Accumulation Unit Value at end of period $12.056 -- -- -- -- Number of Accumulation Units outstanding at end of period (in thousands) 9 -- -- -- -- PUTNAM VT GLOBAL ASSET ALLOCATION FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $24.435 $28.276 $31.287 $33.370 $30.256 Accumulation Unit Value at end of period $29.406 $24.435 $28.276 $31.287 $33.370 Number of Accumulation Units outstanding at end of period (in thousands) 5,759 7,044 9,138 11,495 13,933 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $24.301 $28.163 $31.209 $33.337 $31.376 Accumulation Unit Value at end of period $29.201 $24.301 $28.163 $31.209 $33.337 Number of Accumulation Units outstanding at end of period (in thousands) 17 26 25 19 2 PUTNAM VT GLOBAL EQUITY FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $14.988 $19.527 $28.154 $40.580 $24.940 Accumulation Unit Value at end of period $19.146 $14.988 $19.527 $28.154 $40.580 Number of Accumulation Units outstanding at end of period (in thousands) 13,458 16,756 22,635 28,837 31,887 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $14.906 $19.449 $28.084 $40.540 $25.979 Accumulation Unit Value at end of period $19.013 $14.906 $19.449 $28.084 $40.540 Number of Accumulation Units outstanding at end of period (in thousands) 104 140 182 151 16 PUTNAM VT GLOBAL HEALTH CARE FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $8.804 $11.189 $14.101 $10.277 $10.849 Accumulation Unit Value at end of period $10.314 $8.804 $11.189 $14.101 $10.277 Number of Accumulation Units outstanding at end of period (in thousands) 7,699 9,319 12,343 14,591 8,510 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $8.755 $11.144 $14.066 $10.267 $9.840 Accumulation Unit Value at end of period $10.242 $8.755 $11.144 $14.066 $10.267 Number of Accumulation Units outstanding at end of period (in thousands) 133 167 200 157 51
APP III-3 -------------------------------------------------------------------------------
AS OF DECEMBER 31, SUB-ACCOUNT 2008 2007 2006 2005 2004 ----------------------------------------------------------------------------------------------------------------- PUTNAM VT GLOBAL UTILITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $35.441 $29.889 $23.808 $22.162 $18.441 Accumulation Unit Value at end of period $24.349 $35.441 $29.889 $23.808 $22.162 Number of Accumulation Units outstanding at end of period (in thousands) 3,573 4,532 5,324 6,628 7,655 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $34.984 $29.548 $23.572 $21.974 $18.313 Accumulation Unit Value at end of period $23.998 $34.984 $29.548 $23.572 $21.974 Number of Accumulation Units outstanding at end of period (in thousands) 26 34 50 62 71 PUTNAM VT GROWTH AND INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $55.213 $59.436 $51.874 $49.863 $45.405 Accumulation Unit Value at end of period $33.447 $55.213 $59.436 $51.874 $49.863 Number of Accumulation Units outstanding at end of period (in thousands) 15,309 19,907 24,905 31,393 38,625 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $54.500 $58.756 $51.358 $49.441 $45.089 Accumulation Unit Value at end of period $32.965 $54.500 $58.756 $51.358 $49.441 Number of Accumulation Units outstanding at end of period (in thousands) 91 141 198 276 303 PUTNAM VT GROWTH OPPORTUNITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $5.079 $4.867 $4.539 $4.411 $4.383 Accumulation Unit Value at end of period $3.124 $5.079 $4.867 $4.539 $4.411 Number of Accumulation Units outstanding at end of period (in thousands) 1,055 1,374 1,788 2,231 2,931 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $5.019 $4.817 $4.499 $4.379 $4.357 Accumulation Unit Value at end of period $3.082 $5.019 $4.817 $4.499 $4.379 Number of Accumulation Units outstanding at end of period (in thousands) 18 22 32 35 48 PUTNAM VT HIGH YIELD FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $34.907 $34.266 $31.418 $30.794 $28.136 Accumulation Unit Value at end of period $25.469 $34.907 $34.266 $31.418 $30.794 Number of Accumulation Units outstanding at end of period (in thousands) 2,428 3,056 4,018 5,103 6,645 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $34.456 $33.874 $31.106 $30.533 $27.940 Accumulation Unit Value at end of period $25.102 $34.456 $33.874 $31.106 $30.533 Number of Accumulation Units outstanding at end of period (in thousands) 23 37 57 67 81 PUTNAM VT INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $28.713 $27.613 $26.713 $26.404 $25.569 Accumulation Unit Value at end of period $21.579 $28.713 $27.613 $26.713 $26.404 Number of Accumulation Units outstanding at end of period (in thousands) 4,833 6,370 7,864 10,114 12,220 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $28.342 $27.298 $26.448 $26.181 $25.391 Accumulation Unit Value at end of period $21.269 $28.342 $27.298 $26.448 $26.181 Number of Accumulation Units outstanding at end of period (in thousands) 57 91 107 131 155 AS OF DECEMBER 31, SUB-ACCOUNT 2003 2002 2001 2000 1999 -------------------------------------- -------------------------------------------------------------------- PUTNAM VT GLOBAL UTILITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $14.960 $19.919 $25.946 $22.360 $22.826 Accumulation Unit Value at end of period $18.441 $14.960 $19.919 $25.946 $22.360 Number of Accumulation Units outstanding at end of period (in thousands) 8,910 10,956 15,142 18,525 21,802 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $14.878 $19.839 $25.882 $22.338 $22.609 Accumulation Unit Value at end of period $18.313 $14.878 $19.839 $25.882 $22.338 Number of Accumulation Units outstanding at end of period (in thousands) 77 101 119 85 21 PUTNAM VT GROWTH AND INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $36.059 $45.028 $48.663 $45.646 $45.567 Accumulation Unit Value at end of period $45.405 $36.059 $45.028 $48.663 $45.646 Number of Accumulation Units outstanding at end of period (in thousands) 46,246 56,162 71,243 82,533 101,229 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $35.861 $44.848 $48.542 $45.601 $50.800 Accumulation Unit Value at end of period $45.089 $35.861 $44.848 $48.542 $45.601 Number of Accumulation Units outstanding at end of period (in thousands) 345 395 440 367 99 PUTNAM VT GROWTH OPPORTUNITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $3.600 $5.169 $7.701 $10.000 -- Accumulation Unit Value at end of period $4.383 $3.600 $5.169 $7.701 -- Number of Accumulation Units outstanding at end of period (in thousands) 3,698 3,699 4,403 4,377 -- WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $3.584 $5.154 $7.690 $10.000 -- Accumulation Unit Value at end of period $4.357 $3.584 $5.154 $7.690 -- Number of Accumulation Units outstanding at end of period (in thousands) 52 48 53 70 -- PUTNAM VT HIGH YIELD FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $22.492 $22.932 $22.388 $24.799 $23.742 Accumulation Unit Value at end of period $28.136 $22.492 $22.932 $22.388 $24.799 Number of Accumulation Units outstanding at end of period (in thousands) 8,151 9,122 11,614 13,446 16,729 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $22.368 $22.841 $22.332 $24.774 $24.985 Accumulation Unit Value at end of period $27.940 $22.368 $22.841 $22.332 $24.774 Number of Accumulation Units outstanding at end of period (in thousands) 89 95 92 65 21 PUTNAM VT INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $24.767 $23.235 $21.913 $20.574 $21.305 Accumulation Unit Value at end of period $25.569 $24.767 $23.235 $21.913 $20.574 Number of Accumulation Units outstanding at end of period (in thousands) 15,178 19,130 20,633 21,182 26,918 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $24.631 $23.143 $21.858 $20.554 $21.164 Accumulation Unit Value at end of period $25.391 $24.631 $23.143 $21.858 $20.554 Number of Accumulation Units outstanding at end of period (in thousands) 180 204 191 122 27
APP III-4 -------------------------------------------------------------------------------
AS OF DECEMBER 31, SUB-ACCOUNT 2008 2007 2006 2005 2004 ----------------------------------------------------------------------------------------------------------------- PUTNAM VT INTERNATIONAL EQUITY FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $26.412 $24.661 $19.531 $17.613 $15.333 Accumulation Unit Value at end of period $14.626 $26.412 $24.661 $19.531 $17.613 Number of Accumulation Units outstanding at end of period (in thousands) 3,585 4,677 5,715 6,654 7,902 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $26.071 $24.379 $19.337 $17.464 $15.226 Accumulation Unit Value at end of period $14.415 $26.071 $24.379 $19.337 $17.464 Number of Accumulation Units outstanding at end of period (in thousands) 42 68 99 107 115 PUTNAM VT INTERNATIONAL GROWTH AND INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $25.893 $24.473 $19.446 $17.248 $14.418 Accumulation Unit Value at end of period $13.826 $25.893 $24.473 $19.446 $17.248 Number of Accumulation Units outstanding at end of period (in thousands) 2,886 3,985 4,658 4,961 5,326 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $25.559 $24.194 $19.252 $17.102 $14.317 Accumulation Unit Value at end of period $13.627 $25.559 $24.194 $19.252 $17.102 Number of Accumulation Units outstanding at end of period (in thousands) 30 42 52 67 60 PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $19.730 $17.625 $14.138 $12.084 $10.785 Accumulation Unit Value at end of period $11.213 $19.730 $17.625 $14.138 $12.084 Number of Accumulation Units outstanding at end of period (in thousands) 1,897 2,713 2,889 3,116 3,068 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $19.475 $17.423 $13.997 $11.982 $10.709 Accumulation Unit Value at end of period $11.051 $19.475 $17.423 $13.997 $11.982 Number of Accumulation Units outstanding at end of period (in thousands) 18 25 33 32 23 PUTNAM VT INVESTORS FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $10.484 $11.181 $9.925 $9.232 $8.280 Accumulation Unit Value at end of period $6.261 $10.484 $11.181 $9.925 $9.232 Number of Accumulation Units outstanding at end of period (in thousands) 5,926 8,023 10,726 13,815 16,476 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $10.349 $11.053 $9.827 $9.154 $8.222 Accumulation Unit Value at end of period $6.171 $10.349 $11.053 $9.827 $9.154 Number of Accumulation Units outstanding at end of period (in thousands) 123 152 227 310 369 PUTNAM VT MID CAP VALUE FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $18.580 $18.475 $16.246 $14.618 $12.807 Accumulation Unit Value at end of period $10.499 $18.580 $18.475 $16.246 $14.618 Number of Accumulation Units outstanding at end of period (in thousands) 879 1,200 1,432 1,510 1,074 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $18.450 $18.374 $16.181 $14.581 $12.794 Accumulation Unit Value at end of period $10.410 $18.450 $18.374 $16.181 $14.581 Number of Accumulation Units outstanding at end of period (in thousands) 21 25 33 29 8 AS OF DECEMBER 31, SUB-ACCOUNT 2003 2002 2001 2000 1999 -------------------------------------- -------------------------------------------------------------------- PUTNAM VT INTERNATIONAL EQUITY FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $12.064 $11.360 -- -- -- Accumulation Unit Value at end of period $15.333 $12.064 -- -- -- Number of Accumulation Units outstanding at end of period (in thousands) 9,283 11,237 -- -- -- WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $11.998 $14.774 $18.853 $21.143 $14.721 Accumulation Unit Value at end of period $15.226 $11.998 $14.774 $18.853 $21.143 Number of Accumulation Units outstanding at end of period (in thousands) 128 156 154 142 53 PUTNAM VT INTERNATIONAL GROWTH AND INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $10.567 $12.413 $15.868 $15.876 $12.922 Accumulation Unit Value at end of period $14.418 $10.567 $12.413 $15.868 $15.876 Number of Accumulation Units outstanding at end of period (in thousands) 5,578 6,700 8,181 9,605 9,695 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $10.509 $12.363 $15.829 $15.861 $14.490 Accumulation Unit Value at end of period $14.317 $10.509 $12.363 $15.829 $15.861 Number of Accumulation Units outstanding at end of period (in thousands) 56 30 43 45 8 PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $8.187 $9.593 $13.611 $22.468 $11.226 Accumulation Unit Value at end of period $10.785 $8.187 $9.593 $13.611 $22.468 Number of Accumulation Units outstanding at end of period (in thousands) 3,574 4,304 5,733 7,445 6,013 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $8.142 $9.555 $13.577 $22.445 $12.423 Accumulation Unit Value at end of period $10.709 $8.142 $9.555 $13.577 $22.445 Number of Accumulation Units outstanding at end of period (in thousands) 24 32 46 47 6 PUTNAM VT INVESTORS FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $6.598 $8.767 $11.793 $14.669 $11.432 Accumulation Unit Value at end of period $8.280 $6.598 $8.767 $11.793 $14.669 Number of Accumulation Units outstanding at end of period (in thousands) 19,469 23,197 31,300 35,711 26,923 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $6.562 $8.732 $11.764 $14.655 $12.179 Accumulation Unit Value at end of period $8.222 $6.562 $8.732 $11.764 $14.655 Number of Accumulation Units outstanding at end of period (in thousands) 442 529 639 557 215 PUTNAM VT MID CAP VALUE FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $10.000 -- -- -- -- Accumulation Unit Value at end of period $12.807 -- -- -- -- Number of Accumulation Units outstanding at end of period (in thousands) 565 -- -- -- -- WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $10.000 -- -- -- -- Accumulation Unit Value at end of period $12.794 -- -- -- -- Number of Accumulation Units outstanding at end of period (in thousands) 4 -- -- -- --
APP III-5 -------------------------------------------------------------------------------
AS OF DECEMBER 31, SUB-ACCOUNT 2008 2007 2006 2005 2004 ----------------------------------------------------------------------------------------------------------------- PUTNAM VT MONEY MARKET FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $1.828 $1.765 $1.710 $1.687 $1.696 Accumulation Unit Value at end of period $1.854 $1.828 $1.765 $1.710 $1.687 Number of Accumulation Units outstanding at end of period (in thousands) 60,529 56,224 55,022 59,907 73,137 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $1.805 $1.745 $1.693 $1.673 $1.684 Accumulation Unit Value at end of period $1.827 $1.805 $1.745 $1.693 $1.673 Number of Accumulation Units outstanding at end of period (in thousands) 446 565 491 564 980 PUTNAM VT NEW OPPORTUNITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $24.946 $23.862 $22.236 $20.439 $18.746 Accumulation Unit Value at end of period $15.099 $24.946 $23.862 $22.236 $20.439 Number of Accumulation Units outstanding at end of period (in thousands) 7,428 9,403 12,111 15,316 19,162 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $24.624 $23.589 $22.015 $20.266 $18.615 Accumulation Unit Value at end of period $14.882 $24.624 $23.589 $22.015 $20.266 Number of Accumulation Units outstanding at end of period (in thousands) 44 54 75 98 117 PUTNAM VT NEW VALUE FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $20.876 $22.195 $19.355 $18.494 $16.199 Accumulation Unit Value at end of period $11.404 $20.876 $22.195 $19.355 $18.494 Number of Accumulation Units outstanding at end of period (in thousands) 3,291 4,616 6,015 7,551 8,586 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $20.606 $21.941 $19.163 $18.337 $16.086 Accumulation Unit Value at end of period $11.240 $20.606 $21.941 $19.163 $18.337 Number of Accumulation Units outstanding at end of period (in thousands) 29 53 78 81 85 PUTNAM VT OTC & EMERGING GROWTH FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $7.350 $6.604 $5.944 $5.576 $5.188 Accumulation Unit Value at end of period $3.950 $7.350 $6.604 $5.944 $5.576 Number of Accumulation Units outstanding at end of period (in thousands) 1,687 2,366 2,838 3,516 4,565 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $7.255 $6.528 $5.884 $5.529 $5.152 Accumulation Unit Value at end of period $3.893 $7.255 $6.528 $5.884 $5.529 Number of Accumulation Units outstanding at end of period (in thousands) 22 46 50 57 86 PUTNAM VT RESEARCH FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $14.047 $14.128 $12.835 $12.366 $11.634 Accumulation Unit Value at end of period $8.530 $14.047 $14.128 $12.835 $12.366 Number of Accumulation Units outstanding at end of period (in thousands) 1,196 1,568 2,107 2,767 3,335 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $13.866 $13.967 $12.707 $12.261 $11.553 Accumulation Unit Value at end of period $8.407 $13.866 $13.967 $12.707 $12.261 Number of Accumulation Units outstanding at end of period (in thousands) 26 34 50 70 80 AS OF DECEMBER 31, SUB-ACCOUNT 2003 2002 2001 2000 1999 -------------------------------------- -------------------------------------------------------------------- PUTNAM VT MONEY MARKET FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $1.707 $1.706 $1.663 $1.591 $1.538 Accumulation Unit Value at end of period $1.696 $1.707 $1.706 $1.663 $1.591 Number of Accumulation Units outstanding at end of period (in thousands) 124,168 213,143 255,416 184,583 232,287 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $1.697 $1.699 $1.659 $1.589 $1.555 Accumulation Unit Value at end of period $1.684 $1.697 $1.699 $1.659 $1.589 Number of Accumulation Units outstanding at end of period (in thousands) 1,339 2,165 1,942 492 335 PUTNAM VT NEW OPPORTUNITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $14.325 $20.841 $30.190 $41.424 $24.805 Accumulation Unit Value at end of period $18.746 $14.325 $20.841 $30.190 $41.424 Number of Accumulation Units outstanding at end of period (in thousands) 23,586 28,740 38,503 46,654 45,291 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $14.247 $20.758 $30.114 $41.383 $26.455 Accumulation Unit Value at end of period $18.615 $14.247 $20.758 $30.114 $41.383 Number of Accumulation Units outstanding at end of period (in thousands) 146 178 219 206 59 PUTNAM VT NEW VALUE FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $12.364 $14.828 $14.513 $12.014 $12.151 Accumulation Unit Value at end of period $16.199 $12.364 $14.828 $14.513 $12.014 Number of Accumulation Units outstanding at end of period (in thousands) 9,208 10,596 11,207 7,894 8,045 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $12.296 $14.769 $14.477 $12.002 $13.957 Accumulation Unit Value at end of period $16.086 $12.296 $14.769 $14.477 $12.002 Number of Accumulation Units outstanding at end of period (in thousands) 84 89 76 32 16 PUTNAM VT OTC & EMERGING GROWTH FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $3.870 $5.777 $10.765 $22.292 $9.980 Accumulation Unit Value at end of period $5.188 $3.870 $5.777 $10.765 $22.292 Number of Accumulation Units outstanding at end of period (in thousands) 5,609 5,929 7,503 8,677 3,871 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $3.849 $5.754 $10.738 $22.270 $11.045 Accumulation Unit Value at end of period $5.152 $3.849 $5.754 $10.738 $22.270 Number of Accumulation Units outstanding at end of period (in thousands) 88 106 118 99 18 PUTNAM VT RESEARCH FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $9.386 $12.213 $15.218 $15.712 $12.497 Accumulation Unit Value at end of period $11.634 $9.386 $12.213 $15.218 $15.712 Number of Accumulation Units outstanding at end of period (in thousands) 4,040 4,959 6,111 5,894 3,376 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $9.335 $12.164 $15.180 $15.696 $13.682 Accumulation Unit Value at end of period $11.553 $9.335 $12.164 $15.180 $15.696 Number of Accumulation Units outstanding at end of period (in thousands) 109 112 121 113 41
APP III-6 -------------------------------------------------------------------------------
AS OF DECEMBER 31, SUB-ACCOUNT 2008 2007 2006 2005 2004 ----------------------------------------------------------------------------------------------------------------- PUTNAM VT SMALL CAP VALUE FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $23.236 $26.924 $23.222 $21.948 $17.588 Accumulation Unit Value at end of period $13.924 $23.236 $26.924 $23.222 $21.948 Number of Accumulation Units outstanding at end of period (in thousands) 1,952 2,855 4,136 5,281 6,842 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $22.936 $26.616 $22.991 $21.762 $17.466 Accumulation Unit Value at end of period $13.723 $22.936 $26.616 $22.991 $21.762 Number of Accumulation Units outstanding at end of period (in thousands) 27 38 59 72 73 PUTNAM VT THE GEORGE PUTNAM FUND OF BOSTON WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $13.705 $13.742 $12.417 $12.083 $11.295 Accumulation Unit Value at end of period $8.045 $13.705 $13.742 $12.417 $12.083 Number of Accumulation Units outstanding at end of period (in thousands) 4,233 6,102 8,213 10,716 12,840 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $13.528 $13.585 $12.293 $11.980 $11.216 Accumulation Unit Value at end of period $7.929 $13.528 $13.585 $12.293 $11.980 Number of Accumulation Units outstanding at end of period (in thousands) 65 83 135 203 227 PUTNAM VT VISTA FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $16.870 $16.438 $15.767 $14.215 $12.124 Accumulation Unit Value at end of period $9.081 $16.870 $16.438 $15.767 $14.215 Number of Accumulation Units outstanding at end of period (in thousands) 2,754 3,620 4,874 6,348 7,669 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $16.652 $16.250 $15.610 $14.095 $12.039 Accumulation Unit Value at end of period $8.950 $16.652 $16.250 $15.610 $14.095 Number of Accumulation Units outstanding at end of period (in thousands) 31 52 72 89 110 PUTNAM VT VOYAGER FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $57.812 $55.420 $53.169 $50.896 $48.999 Accumulation Unit Value at end of period $35.987 $57.812 $55.420 $53.169 $50.896 Number of Accumulation Units outstanding at end of period (in thousands) 7,053 8,880 11,445 14,668 18,488 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $57.066 $54.786 $52.640 $50.466 $48.657 Accumulation Unit Value at end of period $35.469 $57.066 $54.786 $52.640 $50.466 Number of Accumulation Units outstanding at end of period (in thousands) 52 64 89 113 132 AS OF DECEMBER 31, SUB-ACCOUNT 2003 2002 2001 2000 1999 -------------------------------------- -------------------------------------------------------------------- PUTNAM VT SMALL CAP VALUE FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $11.886 $14.711 $12.598 $10.251 $10.000 Accumulation Unit Value at end of period $17.588 $11.886 $14.711 $12.598 $10.251 Number of Accumulation Units outstanding at end of period (in thousands) 6,986 7,550 6,503 1,878 390 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $11.821 $14.652 $12.566 $10.241 $10.000 Accumulation Unit Value at end of period $17.466 $11.821 $14.652 $12.566 $10.241 Number of Accumulation Units outstanding at end of period (in thousands) 76 89 73 46 17 PUTNAM VT THE GEORGE PUTNAM FUND OF BOSTON WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $9.760 $10.826 $10.898 $10.063 $10.242 Accumulation Unit Value at end of period $11.295 $9.760 $10.826 $10.898 $10.063 Number of Accumulation Units outstanding at end of period (in thousands) 14,293 15,220 14,354 12,338 12,226 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $9.707 $10.782 $10.871 $10.053 $10.984 Accumulation Unit Value at end of period $11.216 $9.707 $10.782 $10.871 $10.053 Number of Accumulation Units outstanding at end of period (in thousands) 251 282 283 205 84 PUTNAM VT VISTA FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $9.215 $13.422 $20.439 $21.587 $14.316 Accumulation Unit Value at end of period $12.124 $9.215 $13.422 $20.439 $21.587 Number of Accumulation Units outstanding at end of period (in thousands) 8,774 9,982 13,244 15,373 9,972 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $9.164 $13.369 $20.388 $21.566 $15.604 Accumulation Unit Value at end of period $12.039 $9.164 $13.369 $20.388 $21.566 Number of Accumulation Units outstanding at end of period (in thousands) 119 129 160 124 35 PUTNAM VT VOYAGER FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $39.701 $54.656 $71.280 $86.479 $55.426 Accumulation Unit Value at end of period $48.999 $39.701 $54.656 $71.280 $86.479 Number of Accumulation Units outstanding at end of period (in thousands) 22,411 27,290 35,523 43,490 46,130 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $39.483 $54.437 $71.102 $86.393 $60.816 Accumulation Unit Value at end of period $48.657 $39.483 $54.437 $71.102 $86.393 Number of Accumulation Units outstanding at end of period (in thousands) 162 181 223 187 39
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
AS OF DECEMBER 31, SUB-ACCOUNT 2008 2007 2006 2005 2004 ----------------------------------------------------------------------------------------------------------------- PUTNAM VT AMERICAN GOVERNMENT INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $13.993 $13.063 $12.798 $12.768 $12.589 Accumulation Unit Value at end of period $13.873 $13.993 $13.063 $12.798 $12.768 Number of Accumulation Units outstanding at end of period (in thousands) 3,239 2,526 2,857 3,726 5,180 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $13.828 $12.928 $12.685 $12.674 $12.515 Accumulation Unit Value at end of period $13.689 $13.828 $12.928 $12.685 $12.674 Number of Accumulation Units outstanding at end of period (in thousands) 50 32 38 43 82 AS OF DECEMBER 31, SUB-ACCOUNT 2003 2002 2001 2000 1999 -------------------------------------- -------------------------------------------------------------------- PUTNAM VT AMERICAN GOVERNMENT INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $12.540 $11.649 $11.069 $10.000 -- Accumulation Unit Value at end of period $12.589 $12.540 $11.649 $11.069 -- Number of Accumulation Units outstanding at end of period (in thousands) 8,638 15,450 5,739 939 -- WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $12.485 $11.616 $11.053 $10.000 -- Accumulation Unit Value at end of period $12.515 $12.485 $11.616 $11.053 -- Number of Accumulation Units outstanding at end of period (in thousands) 132 198 52 3 --
APP III-7 -------------------------------------------------------------------------------
AS OF DECEMBER 31, SUB-ACCOUNT 2008 2007 2006 2005 2004 ----------------------------------------------------------------------------------------------------------------- PUTNAM VT CAPITAL APPRECIATION FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $9.465 $10.291 $9.268 $8.688 $7.660 Accumulation Unit Value at end of period $5.760 $9.465 $10.291 $9.268 $8.688 Number of Accumulation Units outstanding at end of period (in thousands) 902 1,155 1,510 1,630 1,640 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $9.364 $10.197 $9.196 $8.633 $7.623 Accumulation Unit Value at end of period $5.690 $9.364 $10.197 $9.196 $8.633 Number of Accumulation Units outstanding at end of period (in thousands) 17 26 30 24 21 PUTNAM VT CAPITAL OPPORTUNITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $16.767 $18.745 $16.466 $15.114 $12.940 Accumulation Unit Value at end of period $10.744 $16.767 $18.745 $16.466 $15.114 Number of Accumulation Units outstanding at end of period (in thousands) 426 638 803 679 529 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $16.650 $18.642 $16.400 $15.077 $12.927 Accumulation Unit Value at end of period $10.653 $16.650 $18.642 $16.400 $15.077 Number of Accumulation Units outstanding at end of period (in thousands) 9 10 12 7 6 PUTNAM VT DISCOVERY GROWTH FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $6.594 $6.051 $5.514 $5.198 $4.893 Accumulation Unit Value at end of period $3.707 $6.594 $6.051 $5.514 $5.198 Number of Accumulation Units outstanding at end of period (in thousands) 696 924 953 1,287 1,761 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $6.523 $5.995 $5.471 $5.166 $4.870 Accumulation Unit Value at end of period $3.662 $6.523 $5.995 $5.471 $5.166 Number of Accumulation Units outstanding at end of period (in thousands) 13 19 18 27 36 PUTNAM VT DIVERSIFIED INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $18.693 $18.194 $17.308 $16.995 $15.727 Accumulation Unit Value at end of period $12.720 $18.693 $18.194 $17.308 $16.995 Number of Accumulation Units outstanding at end of period (in thousands) 4,679 6,207 7,354 9,306 11,186 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $18.452 $17.986 $17.136 $16.851 $15.618 Accumulation Unit Value at end of period $12.537 $18.452 $17.986 $17.136 $16.851 Number of Accumulation Units outstanding at end of period (in thousands) 56 75 93 120 116 PUTNAM VT EQUITY INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $16.676 $16.345 $13.911 $13.345 $12.068 Accumulation Unit Value at end of period $11.343 $16.676 $16.345 $13.911 $13.345 Number of Accumulation Units outstanding at end of period (in thousands) 4,535 5,061 5,125 5,062 3,861 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $16.560 $16.255 $13.855 $13.311 $12.056 Accumulation Unit Value at end of period $11.247 $16.560 $16.255 $13.855 $13.311 Number of Accumulation Units outstanding at end of period (in thousands) 55 76 82 55 46 AS OF DECEMBER 31, SUB-ACCOUNT 2003 2002 2001 2000 1999 -------------------------------------- -------------------------------------------------------------------- PUTNAM VT CAPITAL APPRECIATION FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $6.212 $8.090 $9.505 $10.000 -- Accumulation Unit Value at end of period $7.660 $6.212 $8.090 $9.505 -- Number of Accumulation Units outstanding at end of period (in thousands) 1,660 1,336 651 38 -- WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $6.192 $8.076 $9.503 -- -- Accumulation Unit Value at end of period $7.623 $6.192 $8.076 -- -- Number of Accumulation Units outstanding at end of period (in thousands) 33 15 10 -- -- PUTNAM VT CAPITAL OPPORTUNITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $10.000 -- -- -- -- Accumulation Unit Value at end of period $12.940 -- -- -- -- Number of Accumulation Units outstanding at end of period (in thousands) 212 -- -- -- -- WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $10.000 -- -- -- -- Accumulation Unit Value at end of period $12.927 -- -- -- -- Number of Accumulation Units outstanding at end of period (in thousands) 5 -- -- -- -- PUTNAM VT DISCOVERY GROWTH FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $3.748 $5.378 $7.863 $10.000 -- Accumulation Unit Value at end of period $4.893 $3.748 $5.378 $7.863 -- Number of Accumulation Units outstanding at end of period (in thousands) 2,254 1,998 593 79 -- WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $3.736 $5.368 $7.861 $10.000 -- Accumulation Unit Value at end of period $4.870 $3.736 $5.368 $7.861 -- Number of Accumulation Units outstanding at end of period (in thousands) 41 33 12 112 -- PUTNAM VT DIVERSIFIED INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $13.261 $12.663 $12.369 $12.532 $12.489 Accumulation Unit Value at end of period $15.727 $13.261 $12.663 $12.369 $12.532 Number of Accumulation Units outstanding at end of period (in thousands) 13,433 15,267 17,466 19,284 22,092 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $13.188 $12.612 $12.338 $12.520 $12.713 Accumulation Unit Value at end of period $15.618 $13.188 $12.612 $12.338 $12.520 Number of Accumulation Units outstanding at end of period (in thousands) 138 136 137 115 42 PUTNAM VT EQUITY INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $10.000 -- -- -- -- Accumulation Unit Value at end of period $12.068 -- -- -- -- Number of Accumulation Units outstanding at end of period (in thousands) 2,036 -- -- -- -- WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $10.000 -- -- -- -- Accumulation Unit Value at end of period $12.056 -- -- -- -- Number of Accumulation Units outstanding at end of period (in thousands) 25 -- -- -- --
APP III-8 -------------------------------------------------------------------------------
AS OF DECEMBER 31, SUB-ACCOUNT 2008 2007 2006 2005 2004 ----------------------------------------------------------------------------------------------------------------- PUTNAM VT GLOBAL ASSET ALLOCATION FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $37.976 $37.331 $33.490 $31.682 $29.406 Accumulation Unit Value at end of period $25.030 $37.976 $37.331 $33.490 $31.682 Number of Accumulation Units outstanding at end of period (in thousands) 2,705 3,378 4,101 4,974 6,156 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $37.486 $36.904 $33.157 $31.414 $29.201 Accumulation Unit Value at end of period $24.669 $37.486 $36.904 $33.157 $31.414 Number of Accumulation Units outstanding at end of period (in thousands) 21 28 36 38 37 PUTNAM VT GLOBAL EQUITY FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $30.394 $28.183 $23.141 $21.512 $19.146 Accumulation Unit Value at end of period $16.412 $30.394 $28.183 $23.141 $21.512 Number of Accumulation Units outstanding at end of period (in thousands) 5,886 7,501 9,299 11,621 14,744 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $30.002 $27.861 $22.911 $21.330 $19.013 Accumulation Unit Value at end of period $16.176 $30.002 $27.861 $22.911 $21.330 Number of Accumulation Units outstanding at end of period (in thousands) 45 59 79 87 100 PUTNAM VT GLOBAL HEALTH CARE FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $12.196 $12.413 $12.214 $10.913 $10.314 Accumulation Unit Value at end of period $9.994 $12.196 $12.413 $12.214 $10.913 Number of Accumulation Units outstanding at end of period (in thousands) 2,583 3,250 4,731 6,675 8,213 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $12.038 $12.271 $12.092 $10.821 $10.242 Accumulation Unit Value at end of period $9.850 $12.038 $12.271 $12.092 $10.821 Number of Accumulation Units outstanding at end of period (in thousands) 56 73 108 137 149 PUTNAM VT GLOBAL UTILITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $35.441 $29.889 $23.808 $22.162 $18.441 Accumulation Unit Value at end of period $24.349 $35.441 $29.889 $23.808 $22.162 Number of Accumulation Units outstanding at end of period (in thousands) 3,272 4,076 4,893 6,239 7,562 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $34.984 $29.548 $23.572 $21.974 $18.313 Accumulation Unit Value at end of period $23.998 $34.984 $29.548 $23.572 $21.974 Number of Accumulation Units outstanding at end of period (in thousands) 31 35 50 63 66 PUTNAM VT GROWTH AND INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $55.213 $59.436 $51.874 $49.863 $45.405 Accumulation Unit Value at end of period $33.447 $55.213 $59.436 $51.874 $49.863 Number of Accumulation Units outstanding at end of period (in thousands) 15,225 20,697 26,758 35,014 45,058 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $54.500 $58.756 $51.358 $49.441 $45.089 Accumulation Unit Value at end of period $32.965 $54.500 $58.756 $51.358 $49.441 Number of Accumulation Units outstanding at end of period (in thousands) 134 210 292 347 392 AS OF DECEMBER 31, SUB-ACCOUNT 2003 2002 2001 2000 1999 -------------------------------------- -------------------------------------------------------------------- PUTNAM VT GLOBAL ASSET ALLOCATION FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $24.435 $28.276 $31.287 $33.370 $30.256 Accumulation Unit Value at end of period $29.406 $24.435 $28.276 $31.287 $33.370 Number of Accumulation Units outstanding at end of period (in thousands) 7,571 9,257 11,419 13,483 15,126 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $24.301 $28.163 $31.209 $33.337 $31.376 Accumulation Unit Value at end of period $29.201 $24.301 $28.163 $31.209 $33.337 Number of Accumulation Units outstanding at end of period (in thousands) 43 47 49 43 5 PUTNAM VT GLOBAL EQUITY FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $14.988 $19.527 $28.154 $40.580 $24.940 Accumulation Unit Value at end of period $19.146 $14.988 $19.527 $28.154 $40.580 Number of Accumulation Units outstanding at end of period (in thousands) 18,820 24,035 32,035 39,251 40,918 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $14.906 $19.449 $28.084 $40.540 $25.979 Accumulation Unit Value at end of period $19.013 $14.906 $19.449 $28.084 $40.540 Number of Accumulation Units outstanding at end of period (in thousands) 112 125 168 151 22 PUTNAM VT GLOBAL HEALTH CARE FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $8.804 $11.189 $14.101 $10.277 $10.849 Accumulation Unit Value at end of period $10.314 $8.804 $11.189 $14.101 $10.277 Number of Accumulation Units outstanding at end of period (in thousands) 10,217 12,927 16,343 19,344 12,308 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $8.755 $11.144 $14.066 $10.267 $9.840 Accumulation Unit Value at end of period $10.242 $8.755 $11.144 $14.066 $10.267 Number of Accumulation Units outstanding at end of period (in thousands) 176 201 246 228 69 PUTNAM VT GLOBAL UTILITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $14.960 $19.919 $25.946 $22.360 $22.826 Accumulation Unit Value at end of period $18.441 $14.960 $19.919 $25.946 $22.360 Number of Accumulation Units outstanding at end of period (in thousands) 9,178 11,416 15,072 16,906 19,114 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $14.878 $19.839 $25.882 $22.338 $22.609 Accumulation Unit Value at end of period $18.313 $14.878 $19.839 $25.882 $22.338 Number of Accumulation Units outstanding at end of period (in thousands) 76 82 90 69 18 PUTNAM VT GROWTH AND INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $36.059 $45.028 $48.663 $45.646 $45.567 Accumulation Unit Value at end of period $45.405 $36.059 $45.028 $48.663 $45.646 Number of Accumulation Units outstanding at end of period (in thousands) 55,276 66,339 79,620 86,628 100,158 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $35.861 $44.848 $48.542 $45.601 $50.800 Accumulation Unit Value at end of period $45.089 $35.861 $44.848 $48.542 $45.601 Number of Accumulation Units outstanding at end of period (in thousands) 458 479 504 402 142
APP III-9 -------------------------------------------------------------------------------
AS OF DECEMBER 31, SUB-ACCOUNT 2008 2007 2006 2005 2004 ----------------------------------------------------------------------------------------------------------------- PUTNAM VT GROWTH OPPORTUNITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $5.079 $4.867 $4.539 $4.411 $4.383 Accumulation Unit Value at end of period $3.124 $5.079 $4.867 $4.539 $4.411 Number of Accumulation Units outstanding at end of period (in thousands) 1,547 1,832 2,378 2,899 3,810 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $5.019 $4.817 $4.499 $4.379 $4.357 Accumulation Unit Value at end of period $3.082 $5.019 $4.817 $4.499 $4.379 Number of Accumulation Units outstanding at end of period (in thousands) 17 30 48 69 46 PUTNAM VT HIGH YIELD FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $34.907 $34.266 $31.418 $30.794 $28.136 Accumulation Unit Value at end of period $25.469 $34.907 $34.266 $31.418 $30.794 Number of Accumulation Units outstanding at end of period (in thousands) 2,787 3,639 4,753 6,191 8,493 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $34.456 $33.874 $31.106 $30.533 $27.940 Accumulation Unit Value at end of period $25.102 $34.456 $33.874 $31.106 $30.533 Number of Accumulation Units outstanding at end of period (in thousands) 22 31 75 97 103 PUTNAM VT INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $28.713 $27.613 $26.713 $26.404 $25.569 Accumulation Unit Value at end of period $21.579 $28.713 $27.613 $26.713 $26.404 Number of Accumulation Units outstanding at end of period (in thousands) 3,748 4,872 5,912 7,582 9,652 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $28.342 $27.298 $26.448 $26.181 $25.391 Accumulation Unit Value at end of period $21.269 $28.342 $27.298 $26.448 $26.181 Number of Accumulation Units outstanding at end of period (in thousands) 43 67 83 102 110 PUTNAM VT INTERNATIONAL EQUITY FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $26.412 $24.661 $19.531 $17.613 $15.333 Accumulation Unit Value at end of period $14.626 $26.412 $24.661 $19.531 $17.613 Number of Accumulation Units outstanding at end of period (in thousands) 4,721 6,247 7,581 8,988 10,921 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $26.071 $24.379 $19.337 $17.464 $15.226 Accumulation Unit Value at end of period $14.415 $26.071 $24.379 $19.337 $17.464 Number of Accumulation Units outstanding at end of period (in thousands) 62 89 126 132 158 PUTNAM VT INTERNATIONAL GROWTH AND INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $25.893 $24.473 $19.446 $17.248 $14.418 Accumulation Unit Value at end of period $13.826 $25.893 $24.473 $19.446 $17.248 Number of Accumulation Units outstanding at end of period (in thousands) 4,629 6,159 7,161 7,801 8,822 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $25.559 $24.194 $19.252 $17.102 $14.317 Accumulation Unit Value at end of period $13.627 $25.559 $24.194 $19.252 $17.102 Number of Accumulation Units outstanding at end of period (in thousands) 49 67 98 98 89 AS OF DECEMBER 31, SUB-ACCOUNT 2003 2002 2001 2000 1999 -------------------------------------- -------------------------------------------------------------------- PUTNAM VT GROWTH OPPORTUNITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $3.600 $5.169 $7.701 $10.000 -- Accumulation Unit Value at end of period $4.383 $3.600 $5.169 $7.701 -- Number of Accumulation Units outstanding at end of period (in thousands) 4,703 4,912 5,980 5,402 -- WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $3.584 $5.154 $7.690 $10.000 -- Accumulation Unit Value at end of period $4.357 $3.584 $5.154 $7.690 -- Number of Accumulation Units outstanding at end of period (in thousands) 48 58 75 59 -- PUTNAM VT HIGH YIELD FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $22.492 $22.932 $22.388 $24.799 $23.742 Accumulation Unit Value at end of period $28.136 $22.492 $22.932 $22.388 $24.799 Number of Accumulation Units outstanding at end of period (in thousands) 10,916 12,404 14,797 16,616 20,315 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $22.368 $22.841 $22.332 $24.774 $24.985 Accumulation Unit Value at end of period $27.940 $22.368 $22.841 $22.332 $24.774 Number of Accumulation Units outstanding at end of period (in thousands) 122 116 128 99 36 PUTNAM VT INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $24.767 $23.235 $21.913 $20.574 $21.305 Accumulation Unit Value at end of period $25.569 $24.767 $23.235 $21.913 $20.574 Number of Accumulation Units outstanding at end of period (in thousands) 12,283 15,434 15,106 13,817 16,827 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $24.631 $23.143 $21.858 $20.554 $21.164 Accumulation Unit Value at end of period $25.391 $24.631 $23.143 $21.858 $20.554 Number of Accumulation Units outstanding at end of period (in thousands) 129 176 171 100 26 PUTNAM VT INTERNATIONAL EQUITY FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $12.064 $14.833 $18.900 $21.164 $13.403 Accumulation Unit Value at end of period $15.333 $12.064 $14.833 $18.900 $21.164 Number of Accumulation Units outstanding at end of period (in thousands) 13,173 17,113 17,276 18,898 16,044 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $11.998 $11.301 -- -- -- Accumulation Unit Value at end of period $15.226 $11.998 -- -- -- Number of Accumulation Units outstanding at end of period (in thousands) 183 199 -- -- -- PUTNAM VT INTERNATIONAL GROWTH AND INCOME FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $10.567 $12.413 $15.868 $15.876 $12.922 Accumulation Unit Value at end of period $14.418 $10.567 $12.413 $15.868 $15.876 Number of Accumulation Units outstanding at end of period (in thousands) 9,254 11,021 12,808 14,447 14,449 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $10.509 $12.363 $15.829 $15.861 $14.490 Accumulation Unit Value at end of period $14.317 $10.509 $12.363 $15.829 $15.861 Number of Accumulation Units outstanding at end of period (in thousands) 74 79 83 60 24
APP III-10 -------------------------------------------------------------------------------
AS OF DECEMBER 31, SUB-ACCOUNT 2008 2007 2006 2005 2004 ----------------------------------------------------------------------------------------------------------------- PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $19.730 $17.625 $14.138 $12.084 $10.785 Accumulation Unit Value at end of period $11.213 $19.730 $17.625 $14.138 $12.084 Number of Accumulation Units outstanding at end of period (in thousands) 2,159 3,046 3,481 3,692 3,944 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $19.475 $17.423 $13.997 $11.982 $10.709 Accumulation Unit Value at end of period $11.051 $19.475 $17.423 $13.997 $11.982 Number of Accumulation Units outstanding at end of period (in thousands) 28 32 46 48 43 PUTNAM VT INVESTORS FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $10.484 $11.181 $9.925 $9.232 $8.280 Accumulation Unit Value at end of period $6.261 $10.484 $11.181 $9.925 $9.232 Number of Accumulation Units outstanding at end of period (in thousands) 5,749 8,114 10,865 13,742 16,783 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $10.349 $11.053 $9.827 $9.154 $8.222 Accumulation Unit Value at end of period $6.171 $10.349 $11.053 $9.827 $9.154 Number of Accumulation Units outstanding at end of period (in thousands) 161 221 292 359 400 PUTNAM VT MID CAP VALUE FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $18.580 $18.475 $16.246 $14.618 $12.807 Accumulation Unit Value at end of period $10.499 $18.580 $18.475 $16.246 $14.618 Number of Accumulation Units outstanding at end of period (in thousands) 1,062 1,570 1,896 2,015 1,326 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $18.450 $18.374 $16.181 $14.581 $12.794 Accumulation Unit Value at end of period $10.410 $18.450 $18.374 $16.181 $14.581 Number of Accumulation Units outstanding at end of period (in thousands) 25 33 36 30 18 PUTNAM VT MONEY MARKET FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $1.828 $1.765 $1.710 $1.687 $1.696 Accumulation Unit Value at end of period $1.854 $1.828 $1.765 $1.710 $1.687 Number of Accumulation Units outstanding at end of period (in thousands) 66,179 54,602 52,280 54,112 71,282 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $1.805 $1.745 $1.693 $1.673 $1.684 Accumulation Unit Value at end of period $1.827 $1.805 $1.745 $1.693 $1.673 Number of Accumulation Units outstanding at end of period (in thousands) 1,229 1,126 776 547 715 PUTNAM VT NEW OPPORTUNITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $24.946 $23.862 $22.236 $20.439 $18.746 Accumulation Unit Value at end of period $15.099 $24.946 $23.862 $22.236 $20.439 Number of Accumulation Units outstanding at end of period (in thousands) 8,524 10,785 13,936 18,236 24,382 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $24.624 $23.589 $22.015 $20.266 $18.615 Accumulation Unit Value at end of period $14.882 $24.624 $23.589 $22.015 $20.266 Number of Accumulation Units outstanding at end of period (in thousands) 54 73 102 123 150 AS OF DECEMBER 31, SUB-ACCOUNT 2003 2002 2001 2000 1999 -------------------------------------- -------------------------------------------------------------------- PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $8.187 $9.593 $13.611 $22.468 $11.226 Accumulation Unit Value at end of period $10.785 $8.187 $9.593 $13.611 $22.468 Number of Accumulation Units outstanding at end of period (in thousands) 4,801 5,822 7,716 10,072 8,347 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $8.142 $9.555 $13.577 $22.445 $12.423 Accumulation Unit Value at end of period $10.709 $8.142 $9.555 $13.577 $22.445 Number of Accumulation Units outstanding at end of period (in thousands) 52 48 66 59 16 PUTNAM VT INVESTORS FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $6.598 $8.767 $11.793 $14.669 $11.432 Accumulation Unit Value at end of period $8.280 $6.598 $8.767 $11.793 $14.669 Number of Accumulation Units outstanding at end of period (in thousands) 20,471 24,848 33,076 37,893 30,741 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $6.562 $8.732 $11.764 $14.655 $12.179 Accumulation Unit Value at end of period $8.222 $6.562 $8.732 $11.764 $14.655 Number of Accumulation Units outstanding at end of period (in thousands) 451 521 627 584 228 PUTNAM VT MID CAP VALUE FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $10.000 -- -- -- -- Accumulation Unit Value at end of period $12.807 -- -- -- -- Number of Accumulation Units outstanding at end of period (in thousands) 693 -- -- -- -- WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $10.000 -- -- -- -- Accumulation Unit Value at end of period $12.794 -- -- -- -- Number of Accumulation Units outstanding at end of period (in thousands) 13 -- -- -- -- PUTNAM VT MONEY MARKET FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $1.707 $1.706 $1.663 $1.591 $1.538 Accumulation Unit Value at end of period $1.696 $1.707 $1.706 $1.663 $1.591 Number of Accumulation Units outstanding at end of period (in thousands) 128,493 228,352 244,882 179,303 266,227 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $1.697 $1.699 $1.659 $1.589 $1.555 Accumulation Unit Value at end of period $1.684 $1.697 $1.699 $1.659 $1.589 Number of Accumulation Units outstanding at end of period (in thousands) 1,249 2,493 2,111 2,321 377 PUTNAM VT NEW OPPORTUNITIES FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $14.325 $20.841 $30.190 $41.424 $24.805 Accumulation Unit Value at end of period $18.746 $14.325 $20.841 $30.190 $41.424 Number of Accumulation Units outstanding at end of period (in thousands) 31,644 39,838 53,656 63,956 62,624 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $14.247 $20.758 $30.114 $41.383 $26.455 Accumulation Unit Value at end of period $18.615 $14.247 $20.758 $30.114 $41.383 Number of Accumulation Units outstanding at end of period (in thousands) 177 190 253 256 59
APP III-11 -------------------------------------------------------------------------------
AS OF DECEMBER 31, SUB-ACCOUNT 2008 2007 2006 2005 2004 ----------------------------------------------------------------------------------------------------------------- PUTNAM VT NEW VALUE FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $20.876 $22.195 $19.355 $18.494 $16.199 Accumulation Unit Value at end of period $11.404 $20.876 $22.195 $19.355 $18.494 Number of Accumulation Units outstanding at end of period (in thousands) 5,380 7,792 10,051 12,737 14,071 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $20.606 $21.941 $19.163 $18.337 $16.086 Accumulation Unit Value at end of period $11.240 $20.606 $21.941 $19.163 $18.337 Number of Accumulation Units outstanding at end of period (in thousands) 55 90 122 143 127 PUTNAM VT OTC & EMERGING GROWTH FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $7.350 $6.604 $5.944 $5.576 $5.188 Accumulation Unit Value at end of period $3.950 $7.350 $6.604 $5.944 $5.576 Number of Accumulation Units outstanding at end of period (in thousands) 1,765 2,453 2,632 3,512 4,720 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $7.255 $6.528 $5.884 $5.529 $5.152 Accumulation Unit Value at end of period $3.893 $7.255 $6.528 $5.884 $5.529 Number of Accumulation Units outstanding at end of period (in thousands) 64 86 120 154 239 PUTNAM VT RESEARCH FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $14.047 $14.128 $12.835 $12.366 $11.634 Accumulation Unit Value at end of period $8.530 $14.047 $14.128 $12.835 $12.366 Number of Accumulation Units outstanding at end of period (in thousands) 1,484 2,060 2,731 3,682 5,113 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $13.866 $13.967 $12.707 $12.261 $11.553 Accumulation Unit Value at end of period $8.407 $13.866 $13.967 $12.707 $12.261 Number of Accumulation Units outstanding at end of period (in thousands) 26 50 77 96 107 PUTNAM VT SMALL CAP VALUE FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $23.236 $26.924 $23.222 $21.948 $17.588 Accumulation Unit Value at end of period $13.924 $23.236 $26.924 $23.222 $21.948 Number of Accumulation Units outstanding at end of period (in thousands) 2,247 3,290 4,823 6,397 8,120 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $22.936 $26.616 $22.991 $21.762 $17.466 Accumulation Unit Value at end of period $13.723 $22.936 $26.616 $22.991 $21.762 Number of Accumulation Units outstanding at end of period (in thousands) 40 66 89 107 138 PUTNAM VT THE GEORGE PUTNAM FUND OF BOSTON WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $13.705 $13.742 $12.417 $12.083 $11.295 Accumulation Unit Value at end of period $8.045 $13.705 $13.742 $12.417 $12.083 Number of Accumulation Units outstanding at end of period (in thousands) 7,598 10,407 13,466 18,161 21,935 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $13.528 $13.585 $12.293 $11.980 $11.216 Accumulation Unit Value at end of period $7.929 $13.528 $13.585 $12.293 $11.980 Number of Accumulation Units outstanding at end of period (in thousands) 111 157 239 324 323 AS OF DECEMBER 31, SUB-ACCOUNT 2003 2002 2001 2000 1999 -------------------------------------- -------------------------------------------------------------------- PUTNAM VT NEW VALUE FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $12.364 $14.828 $14.513 $12.014 $12.151 Accumulation Unit Value at end of period $16.199 $12.364 $14.828 $14.513 $12.014 Number of Accumulation Units outstanding at end of period (in thousands) 14,950 16,840 17,623 12,045 12,278 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $12.296 $14.769 $14.477 $12.002 $13.957 Accumulation Unit Value at end of period $16.086 $12.296 $14.769 $14.477 $12.002 Number of Accumulation Units outstanding at end of period (in thousands) 123 135 156 58 20 PUTNAM VT OTC & EMERGING GROWTH FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $3.870 $5.777 $10.765 $22.292 $9.980 Accumulation Unit Value at end of period $5.188 $3.870 $5.777 $10.765 $22.292 Number of Accumulation Units outstanding at end of period (in thousands) 6,211 6,659 8,763 9,835 5,012 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $3.849 $5.754 $10.738 $22.270 $11.045 Accumulation Unit Value at end of period $5.152 $3.849 $5.754 $10.738 $22.270 Number of Accumulation Units outstanding at end of period (in thousands) 211 234 245 205 45 PUTNAM VT RESEARCH FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $9.386 $12.213 $15.218 $15.712 $12.497 Accumulation Unit Value at end of period $11.634 $9.386 $12.213 $15.218 $15.712 Number of Accumulation Units outstanding at end of period (in thousands) 6,474 7,998 9,462 8,335 4,978 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $9.335 $12.164 $15.180 $15.696 $13.682 Accumulation Unit Value at end of period $11.553 $9.335 $12.164 $15.180 $15.696 Number of Accumulation Units outstanding at end of period (in thousands) 115 135 178 128 65 PUTNAM VT SMALL CAP VALUE FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $11.886 $14.711 $12.598 $10.251 $10.000 Accumulation Unit Value at end of period $17.588 $11.886 $14.711 $12.598 $10.251 Number of Accumulation Units outstanding at end of period (in thousands) 8,747 9,857 8,798 2,707 676 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $11.821 $14.652 $12.566 $10.241 $10.000 Accumulation Unit Value at end of period $17.466 $11.821 $14.652 $12.566 $10.241 Number of Accumulation Units outstanding at end of period (in thousands) 126 128 112 65 6 PUTNAM VT THE GEORGE PUTNAM FUND OF BOSTON WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $9.760 $10.826 $10.898 $10.063 $10.242 Accumulation Unit Value at end of period $11.295 $9.760 $10.826 $10.898 $10.063 Number of Accumulation Units outstanding at end of period (in thousands) 24,535 25,071 19,770 14,689 14,825 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $9.707 $10.782 $10.871 $10.053 $10.984 Accumulation Unit Value at end of period $11.216 $9.707 $10.782 $10.871 $10.053 Number of Accumulation Units outstanding at end of period (in thousands) 335 363 343 255 110
APP III-12 -------------------------------------------------------------------------------
AS OF DECEMBER 31, SUB-ACCOUNT 2008 2007 2006 2005 2004 ----------------------------------------------------------------------------------------------------------------- PUTNAM VT VISTA FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $16.870 $16.438 $15.767 $14.215 $12.124 Accumulation Unit Value at end of period $9.081 $16.870 $16.438 $15.767 $14.215 Number of Accumulation Units outstanding at end of period (in thousands) 3,002 3,976 5,467 7,353 9,369 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $16.652 $16.250 $15.610 $14.095 $12.039 Accumulation Unit Value at end of period $8.950 $16.652 $16.250 $15.610 $14.095 Number of Accumulation Units outstanding at end of period (in thousands) 56 72 87 135 114 PUTNAM VT VOYAGER FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $57.812 $55.420 $53.169 $50.896 $48.999 Accumulation Unit Value at end of period $35.987 $57.812 $55.420 $53.169 $50.896 Number of Accumulation Units outstanding at end of period (in thousands) 6,821 8,907 12,132 16,443 22,445 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $57.066 $54.786 $52.640 $50.466 $48.657 Accumulation Unit Value at end of period $35.469 $57.066 $54.786 $52.640 $50.466 Number of Accumulation Units outstanding at end of period (in thousands) 62 86 117 149 177 AS OF DECEMBER 31, SUB-ACCOUNT 2003 2002 2001 2000 1999 -------------------------------------- -------------------------------------------------------------------- PUTNAM VT VISTA FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $9.215 $13.422 $20.439 $21.587 $14.316 Accumulation Unit Value at end of period $12.124 $9.215 $13.422 $20.439 $21.587 Number of Accumulation Units outstanding at end of period (in thousands) 11,313 13,188 17,371 20,369 14,524 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $9.164 $13.369 $20.388 $21.566 $15.604 Accumulation Unit Value at end of period $12.039 $9.164 $13.369 $20.388 $21.566 Number of Accumulation Units outstanding at end of period (in thousands) 133 144 181 175 36 PUTNAM VT VOYAGER FUND WITHOUT ANY OPTIONAL BENEFITS Accumulation Unit Value at beginning of period $39.701 $54.656 $71.280 $86.479 $55.426 Accumulation Unit Value at end of period $48.999 $39.701 $54.656 $71.280 $86.479 Number of Accumulation Units outstanding at end of period (in thousands) 28,507 34,829 44,335 51,763 52,779 WITH OPTIONAL DEATH BENEFIT Accumulation Unit Value at beginning of period $39.483 $54.437 $71.102 $86.393 $60.816 Accumulation Unit Value at end of period $48.657 $39.483 $54.437 $71.102 $86.393 Number of Accumulation Units outstanding at end of period (in thousands) 207 235 287 257 72
To obtain a Statement of Additional Information, please complete the form below and mail to: The Hartford Attn: Individual Markets Group P.O. Box 5085 Hartford, Connecticut 06102-5085 Please send a Statement of Additional Information for the Putnam Hartford Capital Manager Series V Variable Annuity to me at the following address: ---------------------------------------------------------------- Name ---------------------------------------------------------------- Address ---------------------------------------------------------------- City/State Zip Code PART B STATEMENT OF ADDITIONAL INFORMATION HARTFORD LIFE AND ANNUITY INSURANCE COMPANY SEPARATE ACCOUNT TEN SERIES V OF PUTNAM HARTFORD CAPITAL MANAGER This Statement of Additional Information is not a prospectus. The information contained in this document should be read in conjunction with the Prospectus. To obtain a Prospectus, send a written request to Hartford Life and Annuity Insurance Company, Attn: Individual Markets Group, P.O. Box 5085, Hartford, CT 06102-5085. Date of Prospectus: May 1, 2009 Date of Statement of Additional Information: May 1, 2009 TABLE OF CONTENTS GENERAL INFORMATION 2 Safekeeping of Assets 2 Experts 2 Non-Participating 2 Misstatement of Age or Sex 2 Principal Underwriter 2 Additional Payments 2 PERFORMANCE RELATED INFORMATION 6 Total Return for all Sub-Accounts 6 Yield for Sub-Accounts 6 Money Market Sub-Accounts 6 Additional Materials 7 Performance Comparisons 7 FINANCIAL STATEMENTS SA-1
2 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ------------------------------------------------------------------------------- GENERAL INFORMATION SAFEKEEPING OF ASSETS Hartford holds title to the assets of the Separate Account. The assets are kept physically segregated and are held separate and apart from Hartford's general corporate assets. Records are maintained of all purchases and redemptions of the underlying fund shares held in each of the Sub-Accounts. EXPERTS The statutory basis balance sheets of Hartford Life and Annuity Insurance Company (the "Company") as of December 31, 2008 and 2007, and the related statutory basis statements of operations, changes in capital and surplus, and cash flows for each of the three years in the period ended December 31, 2008 have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report dated April 27, 2009 and the statements of assets and liabilities of Hartford Life and Annuity Insurance Company Separate Account Ten (the "Account") as of December 31, 2008, and the related statements of operations for the year then ended and changes in net assets for each of the two years then ended have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report dated February 18, 2009, which reports are both included in this Statement of Additional Information. Such reports are included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. The principal business address of Deloitte & Touche LLP is City Place, 32nd Floor, 185 Asylum Street, Hartford, Connecticut 06103-3402. ADDITIONAL FINANCIAL INFORMATION We have included the unaudited quarterly statutory filing for the Company for the period ended March 31, 2009. This statement is included herein as additional information on the financial condition of the issuer. Deloitte & Touche, LLP has not audited, reviewed, or compiled the financial statements and assumes no responsibility for them. NON-PARTICIPATING The Contract is non-participating and we pay no dividends. MISSTATEMENT OF AGE OR SEX If an Annuitant's age or sex was misstated on the Contract, any Contract payments or benefits will be determined using the correct age and sex. If we have overpaid Annuity Payouts, an adjustment, including interest on the amount of the overpayment, will be made to the next Annuity Payout or Payouts. If we have underpaid due to a misstatement of age or sex, we will credit the next Annuity Payout with the amount we underpaid and credit interest. PRINCIPAL UNDERWRITER The Contracts, which are offered continuously, are distributed by Hartford Securities Distribution Company, Inc. ("HSD"). HSD serves as Principal Underwriter for the securities issued with respect to the Separate Account. HSD is registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 as a Broker-Dealer and is a member of the National Association of Securities Dealers, Inc. HSD is an affiliate of ours. Both HSD and Hartford are ultimately controlled by The Hartford Financial Services Group, Inc. The principal business address of HSD is the same as ours. Hartford currently pays HSD underwriting commissions for its role as Principal Underwriter of all variable annuities associated with this Separate Account. For the past three years, the aggregate dollar amount of underwriting commissions paid to HSD in its role as Principal Underwriter has been: 2008: $1,704,718; 2007: $2,396,800; and 2006: $2,451,548. ADDITIONAL PAYMENTS TO FINANCIAL INTERMEDIARIES As stated in the prospectus, we (or our affiliates) pay Additional Payments to Financial Intermediaries. In addition to the Financial Intermediaries listed in the prospectus with whom we have an ongoing contractual arrangement to make Additional Payments, listed below are all Financial Intermediaries that received Additional Payments in 2008 of items such as sponsorship of meetings, education seminars, and travel and entertainment, whether or not an ongoing contractual relationship exists. A.G. Edwards & Sons, Inc., Abacus Investments, Inc., ABD Financial Services, Inc., Access Financial Group, Inc., Access Investments, Inc., Acument Securities, Inc., Addison Avenue Federal Credit Union, ADP Broker-Dealer, Inc., Advanced Advisor Group, Advanced Equities, Inc., Advantage Capital Corp., Advisory Group Equity Services Ltd., AFA Financial Group, LLC., Affinity Bank, AFS Brokerage, Inc., AIG Equity Sales Corp., AIG Financial Advisors, AIG Retirement Advisors, Inc., AIM Distributors, Inc., Aim Investments, Alamo Capital, All Nevada Insurance, Allegacy Federal Credit Union, Allegheny Investments Ltd., Allen & Co. of Florida, Inc., Alliance Bank, AllianceBernstein, AllianceBernstein Investment Research, AllState Financial Services, LLC., Altura Credit HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 3 ------------------------------------------------------------------------------- Union, AMCORE Bank, NA., Amcore Investment Services, Inc., American Bank, NA., American Classic Securities, American Funds & Trusts, Inc., American General Securities Inc., American Heritage Federal Credit Union, American Independent Securities Group, American Independent Securities, Inc., American Investors Company, American Investors Group, American Municipal Securities, Inc., American Portfolios Financial Services, American Securities Group, Inc., American Trust & Savings Bank, Ameriprise Financial Services, Inc., Ameritas Investment Corp., Ameritrade, Inc., Ames Community Bank, Amsouth Bank, Amsouth Investment Services, AmTrust Bank, Amtrust Investment Services, Inc., Anchor Bank, Anderson & Strudwick, Inc., Andrew Garrett, Inc., Arlington Securities, Inc., Arrowhead Central Credit Union, Arvest Asset Management, Arvest Bank, Ascend Financial Services, Inc., Askar Corp., Asset Management Securities Corp., Associated Bank, NA., Associated Financial Services, Inc., Associated Investment Services, Inc., Associated Securities Corp., Astoria Federal Savings & Loan Association, Atlantic Securities, Inc., Avisen Securities, Inc., AXA Advisors, LLC., Ayre Investments, B.B. Graham & Co., B.C. Ziegler and Company, Banc of America Investment Services, Inc., Bancnorth Investment Group, Inc., Bancorpsouth Investment Services, Inc., BancWest Investment Services, Inc., Bank of Albuquerque, NA., Bank of America, Bank of Clarendon, Bank of Clarke County, Bank of Stockton, Bank of Texas, Bank of the Commonwealth, Bank of the South, Bank of the West, Bankers & Investors Co., Bankers Life and Casualty, Banknorth, BankUnited, FSB, BankWest, Inc., Bannon, Ohanesian & Lecours, Inc., Banorte Securities, Banorte Securities International, Bates Securities, Inc., BB&T Investment Services, Inc., BCG Securities, Inc., Beaconsfield Financial Services., Inc., Benchmark Investments, Inc., Beneficial Investment Services, Bernard Herold & Co., Inc., Berthel, Fisher & Co. Financial Services, Inc., Bethpage Federal Credit Union, BI Investments, LLC., Bodell Overcash Anderson & Co., Boeing Employees Credit Union, BOSC, Inc., Brecek & Young Advisors, Inc., Brighton Securities Corp., Britton & Koontz Bank, N.A., Broad Street Securities, Inc., Broker Dealer Financial Services Corp., Brokersxpress LLC., Brookstone Securities, Inc., Brookstreet Securities Corp., Brown Advisory Securities Inc., Brown, Lisle/Cummings, Inc., Bruce A Lefavi Securities, Inc., Busey Bank, Butler, Wick & Co., Inc., C.R.I. Securities, Inc., Cadaret, Grant & Co., Inc., California Bank & Trust, California Credit Union, California National Bank, Calton & Associates, Inc., Cambridge Investment Research, Inc., Cambridge Legacy Sec., LLC., Cambridge State Bank, Cantella & Co., Inc., Capital Analysts, Inc., Capital Bank, Capital Brokerage Corporation, Capital Choice, Capital City Bank, Capital Financial Services, Inc., Capital Growth Resources, Capital Investment Group, Inc., Capital Investment Services, Inc., Capital One Investments Services, LLC., Capital Securities Investment Corp., Capital Securities Management, Capital Select Investments Corp., Capital Wealth Advisors, Inc., Capital West Securities, Inc., CapitalBank, Capitol Federal Savings Bank, Capitol Securities Management, Inc., Carolina First Bank, Carolinas Investment Consulting LLC., Cary Street Partners, LLC., Cascade Investment Group, Inc., CCF Investments, Inc., CCO Investment Services Corp., Centaurus Financial, Inc., Centennial Securities Co., Inc., Central State Bank, Central Virginia Bank, Century National Bank, Century Securities Associates, Inc., CFD Investments, Inc., Chapin, Davis, Charles Schwab, Chase Investments Services Corp., Chemical Bank West, Chevy Chase Financial Services, CIBC World Markets Corp., Citadel Federal Credit Union, Citi Bank, Citicorp Investment Services, Citigroup Global Markets, Inc., Citizens & Farmers Bank, Citizens Bank, Citizens Business Bank, City Bank, City Securities Corporation, Coastal Federal Credit Union, Coburn & Meredith, Inc., Colonial Bank, N.A., Colonial Brokerage, Inc., Comerica Bank, Comerica Securities, Commerce Bank, N.A., Commerce Brokerage Services, Inc., Commerce Capital Markets, Inc., Commercial & Savings Bank/Mllrsbrg, Commercial Federal Bank, Commonwealth Bank & Trust Co., Commonwealth Financial Network, Commonwealth Investment Services, Inc., Community Bank, Community Bank & Trust, Community Credit Union, Community Investment Services, Inc., Compass Bank, Compass Brokerage, Inc., Comprehensive Financial Services, Conservative Financial Services., Inc., Coordinated Capital Securities, Inc., Country Club Financial Services., Inc., Countrywide Bank, Countrywide Investment Services, Inc., Credit Union West, Crews & Associates, Inc., Crowell, Weedon & Co., Crown Capital Securities, LLP, CUE, Cullum & Burks Securities, Inc., Cumberland Brokerage Corp., Cuna Brokerage Services, Inc., Cuso Financial Services, LLP., CW Securities, LLC., D.A. Davidson & Company, Davenport & Company LLC., David A. Noyes & Company, David Lerner Associates, Inc., DaVinci Capital Management, Inc., Dawson James Securities, Inc., Delta Equity Services Corp., Delta Trust Investment, Inc., Deutsche Bank Securities, Inc., DeWaay Financial Network, DFCU Financial Federal Credit Union, Dilworth, Diversified Securities, Inc., Dominion Investor Services., Inc., Dorsey & Company, Inc., Dougherty & Company LLC., Dubuque Bank & Trust Co., Dumon Financial, Duncan-Williams, Inc., Dupaco Community Credit Union, Eagle Bank, Eagle One Financial, Eagle One Investments, LLC., Eastern Bank, Eastern Financial Florida Credit Union, ECM Securities Corporation, EDI Financial, Inc., Edward Jones, Effex National Security, Eisner Securities, Inc., Emclaire Financial Corp., Emerson Equity, LLC., Empire Bank, Empire Financial Group, Inc., Empire Securities Corporation, Emporia State Bank & Trust Co., Ensemble Financial Services, Inc., EPlanning Securities, Inc., Equitable Bank, Equitas America, LLC, Equity Services, Inc., ESL Federal Credit Union, Essex Financial Services, Inc., Essex National Securities, Inc., Essex Securities, LLC., Evans National Bank, EVB, Evolve Securities, Inc., Excel Securities & Assoc., Inc., Fairport Capital, Inc., Fairwinds Credit Union, Farmers National Bank, Farmers National Bank/Canfield, Feltl & Company, Ferris/Baker Watts, FFP Securities, Inc., Fidelity Bank, Fidelity Brokerage Services., LLC., Fidelity Federal Bank & Trust, Fidelity Investments, Fifth Third Bank, Fifth Third Securities, FIMCO Securities Group, Inc., Financial Center Credit Union, Financial Network Investment Corp., Financial Partners Credit Union, Financial Planning Consultants, Financial Security Management, Inc., Financial West Group, Fintegra LLC., First Allied Securities, First America Bank, First American Bank, First Bank, First Brokerage America, First Citizens Bank, First Citizens Financial Plus, Inc., First Citizens Investor Services, First Command Financial Planning, First Commonwealth Bank, First Commonwealth Federal Credit Union, First Community Bank, First Community Bank, N.A., First Federal Bank, First Federal Savings & Loan of Charlston, First Financial Bank, First Financial Equity Corp., First Global Securities, Inc., First 4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ------------------------------------------------------------------------------- Harrison Bank, First Heartland Capital Inc., First Hope Bank, First Investment Services, First MidAmerica Investment Corp., First Midwest Bank, First Midwest Securities, First Montauk Securities, First National Bank, First National Investments Inc, First Niagara Bank, First Northern Bank of Dixon, First Place Bank, First Southeast Investment Services, First St. Louis Securities, Inc., First Tennessee Bank, First Tennessee Brokerage, Inc., First Wall Street Corporation, First Western Securities Inc., FirstMerit Securities, Inc., FiServ Investor Services, Inc., Flagstar Bank, FSB, Florida Investment Advisers, Flushing Savings Bank, FSB, FMN Capital Corporation, FNB Brokerage Services, Inc., FNIC F.I.D. Div., Folger Nolan Fleming Douglas, Foothill Securities, Inc., Foresters Equity Services, Inc., Fortune Financial Services, Founders Financial Securities, LLC., Fox and Company, Franklin Bank, Franklin/Templeton Dist., Inc., Freedom Financial, Inc., Fremont Bank, Frontier Bank, Frost Brokerage Services Inc., Frost National Bank, FSC Securities Corporation, FSIC, Fulcrum Securities, Inc., Gateway Bank and Trust Company, Geneos Wealth Management, Inc., Genworth Financial Securities Corp., GIA Financial Group, L.L.C., Girard Securities Inc., Global Brokerage Services, Gold Coast Securities, Inc., Golden One Credit Union, Great American Advisors, Inc., Great American Investors, Inc., Great Lakes Capital, Inc., Greenberg Financial Group, Gregory J Schwartz & Co., Inc., Gunnallen Financial, Inc., GWN Securities, Inc., H&R Block Financial Advisers, Inc., H. Beck, Inc., H.D.Vest Investment Services, Haas Financial Products, Inc., Hancock Bank, Hancock Investments Services, Harbor Financial Services, LLC., Harbour Investments, Inc., Harger and Company, Inc., Harold Dance Investments, Harris Investor Services, Inc., Harvest Capital LLC, Hawthorne Securities Corp., Hazard & Siegel, Inc., Hazlett, Burt & Watson, Inc., HBW Securities, LLC, HCSB, Heartland Investment Associates, Inc., Heim & Young Securities, Inc., Heim Young & Associates, Inc., Hibernia Investments, LLC, Hibernia National Bank, High Country Bank, High Ridge Insurance Services, Hilliard Lyons, HNB National Bank, Home Savings & Loan Company of Youngstown, Home Savings Bank, Horizon Bank, Hornor, Townsend & Kent, Inc., Horwitz & Associates, Inc., Howe Barnes Investments, Inc., HRC Investment Services, Inc., HSBC Bank USA, National Associates, HSBC International, HSBC Securities (USA) Inc., Huntingdon Securities Corp., Huntington Investment Co., Huntington National Bank, Huntington Valley Bank, Huntleigh Securities Corp., IBC Investments, IBN Financial Services, Inc., ICBA Financial Services Corp., IFG Network Securities, Inc., IFMG Securities, Inc., IMS Securities, Inc., Independent Financial Securities Inc., Independent Financial Group, LLC., Indiana Merchant Banking & Brokerage, Infinex Investment, Inc., Infinity Securities, Co., Inc., ING Financial Advisors, LLC, ING Financial Partners, Innovative Solutions, Integrated Financial Inc., Intercarolina Financial Services, Inc., Interpacific Investor Services, InterSecurities, Inc., INTRUST Bank, NA., Intrust Brokerage Inc., Invesmart Securities, LLC., INVEST Financial Corporation, Investacorp, Inc., Investment Center, Inc., Investment Centers of America, Investment Management Corp., Investment Network, Inc., Investment Planners, Inc., Investment Professionals, Inc., Investment Security Corp., Investors Capital Corp., Investors Resources Group, Inc., Iowa State Bank, ISG Equity Sales Corporation, J.B. Hanauer & Co., J.J.B Hilliard, W.L.Lyons LLC., J.P. Turner & Co., J.W. Cole Financial, Inc., Jack V Butterfield Investment Co., Jackson Securities, LLC., Jacksonville Savings Bank, James C. Butterfield, Inc., Janney Montgomery Scott, Inc., Jefferson Pilot Securities Corp., Jesup & Lamont Securities Corp., JHW Financial Services, Inc., JHW Securities, JJB Hilliard/WL Lyons, Inc., Jones Bains Sides Investments Group, Joseph James Financial Services, Kalos Capital, Inc., Kaplan & Co., Securities Inc., KCD Financial, Inc., Keesler Federal Credit Union, Kern National Federal Credit Union, Kern Schools Federal Credit Union, Key Bank, Key Investment Services, LLC., Key Investor Services, KeyBank, NA., KeyPoint Credit Union, Kinecta Credit Union, Kirkwood Bank & Trust Co., KleinBank, KMS Financial Services, Inc., Kovack Securities, Inc., L.F. Financial, LLC., L.M. Kohn & Company, LaBrunerie Financial Services, Inc., Lake Area Bank, Lake Community Bank, Landmark Credit Union, Lara, Shull & May, LTD., LaSalle Financial Services, Inc., LaSalle Street Securities, Inc., Lawrence Jorgenson, Legacy Asset Securities, Inc., Legacy Financial Services, Inc., Legend Equities Corporation, Legends Bank, Legg Mason/Citigroup Global Market, Leigh Baldwin & Co., LLC., Leonard & Company, Lesko Securities Inc., Leumi Investment Services, Inc., Lexington Investment Co., Inc., LFA, Liberty Group, LLC., Liberty Securities Corporation, Lifemark Securities Corp., Lincoln Financial Advisors Corp., Lincoln Investment Planning, Inc., Linsco/Private Ledger, LOC Federal Credit Union, Lockheed Federal Credit Union, Lombard Securities, Inc., Long Island Financial Group, Lord, Abbett & Co., Lowell & Company, Inc., LPL Financial, M Holdings Securities, Inc., M&I Bank, M&I Brokerage Services, Inc., M&I Financial Advisors, Inc., M&T Bank, M&T Securities, Inc., M. Griffith, Inc., M.L. Stern & Co. Inc., Madison Avenue Securities, Inc., Madison Bank & Trust, Main Street Securities, LLC., Manarin Securities Corp., Manna Financial Services Corp., Mascoma Savings Bank, Mass Institute of Technology Credit Union, Mass Mutual, Maxim Group LLC., McGinn, Smith & Co., Inc., McNally Financial Services Corp.; Means Investment Co., Inc., Medallion Equities, Inc., Medallion Investment Services Inc., Mercantile Bank, Mercantile Brokerage Services Inc., Mercantile Trust & Savings Bank, Merrill Lynch Inc., Merrimac Corporate Securities, Inc., Mesirow Financial, Inc., MetLife Securities, Inc., MFS Fund Distributors, Inc., MICG Investment Management, Michigan Catholic Credit Union, Michigan Securities, Inc., Mid Atlantic Capital Corp., MidAmerica Financial Services Inc., Mid-Atlantic Securities, Inc., Midwestern Sec Trading CO, LLC., Milkie/Ferguson Investments, Mission Federal Credit Union, MMC Securities Corp., MML Investor Services, Inc., Moloney Securities Co., Inc., Money Concepts Capital Corp, Money Management Advisory Inc., Moors & Cabot, Inc., Morgan Keegan & Co., Inc., Morgan Peabody, Inc., Morgan Stanley & Co., Inc., MSCS Financial Services, LLC., MTL Equity Products, Inc., Multi-Financial Securities Corp., Multiple Financial Services., Inc., Mutual Funds Assoc., Inc., Mutual Securities, Inc., Mutual Service Corp., NatCity Investments, National Bank & Trust, National City Bank of Midwest, National Financial Services Corp., National Investors Services, National Pension & Group Consultant, National Planning Corporation, National Securities Corp., Nations Financial Group, Inc., Nationwide Investment Service Corp., Navy Federal Brokerage Services, Navy Federal Credit Union, NBC Financial Services, NBC Securities, Inc., NBT Bank, Neidiger, Tucker, Bruner, Inc., Nelson Securities, Inc., Networth Strategic, New England Securities Corp., New Horizon Asset HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 5 ------------------------------------------------------------------------------- Management Group, LLC., NewAlliance Bank, NewAlliance Investments, Inc., Newbridge Securities Corp., Nexity Financial Services, Inc., Next Financial Group, NFB Investment Services Corp., NFP Securities, Inc., NIA Securities, LLC., Nodaway Valley Bank, Nollenberger Capital Partners, North Ridge Securities Corp., Northeast Securities, Inc., Northern Trust Company, Northern Trust Securities, Inc., Northridge Capital Corp., Northwestern Mutual Investment Services, Inc., Nutmeg Securities, Ltd., NYLIFE Securities Inc., O.N. Equity Sales Co., Oak Tree Securities, Inc., Oakbrook Financial Group, Inc., Oberlin Financial Corporation, OFG Financial Services, Inc., Ogilvie Security Advisors Corp., Ohio National Equities, Inc., O'Keefe Shaw & Company, Old National Bank, ON Equity Sales Co., OneAmerica Securities Inc., Oppenheimer and Co., Inc., Orange County Teachers Federal Credit Union, P & A Financial Sec's Inc., Pacific Cascade Federal Credit Union, Pacific Financial Assoc., Pacific West Securities, Inc., Packerland Brokerage Services, Inc., Paragon Bank & Trust, Park Avenue Securities, Parsonex Securities, Inc., Partnervest Securities, Inc., Patapsco Bank, Patelco Credit Union, Paulson Investment Company Inc., Peachtree Capital Corporation, Penn Plaza Brokerage, Pension Planners Securities Inc., Pentagon Federal Credit Union, Peoples Bank, Peoples Community Bank, Peoples Securities, Inc., Peoples United Bank, PFIC Securities Corp, Pillar Financial Services, Pimco Funds, PlanMember Securities Corp., PMK Securities & Research Inc., PNC Bank Corp., PNC Investments LLC., Premier America Credit Union, Prime Capital Services, Inc., PrimeSolutions Securities, Inc, PrimeVest Financial Services, Princor Financial Service Corp., ProEquities, Inc., Professional Asset Management, Inc., Prospera Financial Services, Protected Investors of America, Provident Bank, Provident Savings Bank, F.S.B., Pruco Securities Corp., Purshe, Kaplin & Sterling, Putnam Investments, Putnam Savings Bank, QA3 Financial Corp., Quest Capital Strategies, Inc., Quest Securities, Inc., Quest Tar, Questar Capital Corp., R.M. Stark & Co., Raymond James & Associates, Inc., Raymond James Financial Services, Inc., RBC Capital Markets Corp., RBC Centura Bank, RBC Centura Securities, Inc., RBC Dain Rauscher Inc., Regal Discount Securities, Inc., Regal Securities, Inc., Regency Securities Inc., Regions Bank, Reliance Securities, LLC., Resource Horizons Group, LLC., R-G Crown Bank, Rhodes Securities, Inc., Rice Pontes Capital, Inc., Ridgeway & Conger, Inc., River City Bank, RiverStone Wealth Management, Inc., RNR Securities LLC., Robert B. Ausdal & Co., Inc., Robert W. Baird & Co. Inc., Robinson & Robinson, Inc., Rogan & Associates, Inc., Rogan, Rosenberg & Assoc., Inc., Rothschild Investment Corp., Royal Alliance Associates, Inc., Royal Securities Company, Rushmore Securities Corp., Rydex Distributors, Inc., S F Police Credit Union, S.C. Parker & Co., Inc., Sage, Rutty & Co., Inc., Sammons Securities Company LLC., San Mateo County Employees Credit Union, Sanders Morris Harris Inc., Sandy Spring Bank, Sawtooth Securities, LLC., Saxony Securities, Inc., SCF Securities, Inc., School Employees Credit Union, Scott & Stringfellow, Inc., Seacoast Investor Services Inc., Seacoast National Bank, Securian Financial Services, Securities America, Inc., Securities Equity Group, Securities Service Network, Inc., Security Service Federal Credit Union, Shields & Company, Sicor Securities Inc., Sigma Financial Corporation, Signator Investors Inc., Signature Bank, Signature Financial Group, Inc., Signature Securities Group, SII Investments, Silicone Valley Securities, SMH Capital, Smith Barney, Smith Barney Bank Advisor, Smith Hayes Financial Services Corp., Sorrento Pacific Financial LLC., Source Capital Group, Inc., South Carolina Bank & Trust, South Valley Bank & Trust, South Valley Wealth Management, Southeast Investments NA Inc., Southern MO Bank of Marshfield, SouthTrust Securities, Inc., Southwest Securities, Inc., Sovereign Bank, Space Coast Credit Union, Spectrum Capital, Inc., Spelman & Co., Inc., Spire Securities, LLC., Stanford Group Company, Stephen A. Kohn & Associates, Stephens, Inc., Sterling Savings Bank, Sterne Agee & Leach, Inc., Stifel, Nicolaus & Co., Inc., Stock Depot Inc, Stockcross, Inc., Stofan, Agazzi & Company, Inc., Strand Atkinson Williams York, Strategic Alliance Corp., Strategic Financial Alliance, Summit Bank, Summit Brokerage Services Inc., Summit Equities, Inc., Summitalliance Securities, LLC., SunAmerica, Sunset Financial Services, Inc., SunTrust Investment Services, Inc., Superior Bank, Surrey Bank & Trust, Susquehanna Bank, SWBC Investment Company, SWS Financial Services, Symetra Investment Services Inc., Synergy Investment Group, Synovus Securities, T.J. Raney & Sons, Inc., Taylor Securities, Inc., TD Bancnorth, National Assoc., TD Waterhouse Investor Services, Inc., Technology Credit Union, Telesis Community Credit Union, Telhio Credit Union, TFS Securities, Inc., The Advisors Group, Inc., The Capital Group Sec. Inc., The Concord Equity Group, LLC., The Golden 1 Credit Union, The Huntington Investment Co., The Huntington Investment Company, The Legend Gray, Thomasville National Bank, Thoroughbred Financial Services, LLC., Thrasher & Company, Thrivent Investment Management, Inc., Thurston, Springer, Miller, Her, TierOne Bank, TimeCapital Securities Corp., Tower Square Securities, Inc., TradeStar Investments, Inc., Transamerica Financial Advisor, TransWest Credit Union, Tri Counties Bank, Triad Advisors, Inc., Tri-County Financial Group, Inc., Triequa Capital Corporation, Triune Capital Advisors, Troy Bank & Trust, Trustmark National Bank, Trustmont Financial Group Inc., U.S Bank, UBS Financial Services, Inc., UBS International; UBS Private Banking, UMB Bank, UMB Financial Services, Inc., UMB Scout Brokerage Services, Union Bank, Union Bank & Trust, Union Bank Company, Union Bank of California, N.A., Union Bank of Chandler, Union Capital Company, Union Savings Bank, UnionBanc Investment Services, United Bank, Inc., United Brokerage Services, Inc., United Community Bank, United Financial Group, United Planners Financial Services of America, United Securities Alliance Inc., Univest Investments, Inc., US Alliance Credit Union, US Bancorp Investments, US Bank, N.A., USA Financial Securities Corp., USAllianz Securities, Inc., USI Securities, UVest Financial Services, V.B.C. Securities, VALIC Financial Advisors, Inc., ValMark Securities, Van Kampen Investments, Inc., VanDerbilt Securities, LLC., Veritrust Financial, LLC., VFinance Investments, Inc., Vinson Assoc., Vision Bank, Vision Invstmnt Services, Inc., Vision Securities, Inc., Vorpahl Wing Securities, VSR Financial Services, Inc., VYstar Credit Union, Waccamaw Bank, Wachovia Bank, Wachovia Securities Inc. Financial Network, Wachovia Securities ISG, Wachovia Securities LLC., Waddell & Reed, Inc., Wakulla Bank, Wald Group, Wall Street Electronica, Inc., Wall Street Financial Group, Walnut Street Securities, Inc., WAMU, WaMu Investments, Inc., Washington Mutual, Wasserman & Associates, Waterstone Financial Group, Wayne Hummer Investments LLC., Wayne Savings Community Bank, Wealth Management Services, Webster Bank, Webster Investments, Wedbush Morgan Securities 6 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ------------------------------------------------------------------------------- Inc., Weitzel Financial Services Inc., Wells Fargo Investments, Wells Fargo Securities Independent, Wells Federal Bank, Wellstone Securities, LLC., WesBanco Bank, Inc., WesBanco Securities, Inc., Wescom Credit Union, Wescom Financial Services, West Alabama Bank & Trust, West Coast Bank, Westamerica Bank, Western Federal Credit Union, Western International Securities, Westfield Bakerink Brozak LLC., Westminster Financial Investment, Westminster Financial Securities, Inc., Westport Securities, L.L.C., WFG Securities Corp., Whitney National Bank, Whitney Securities, LLC., Wilbank Securities, Wiley Bros.-Aintree Capital, William C. Burnside & Company, Wilmington Brokerage Services, Wilmington Trust Co., Windsor Securities, Inc., WM Financial Services, Inc., Woodbury Financial Services, Inc., Woodforest National Bank, Woodlands Securities Corp., Woodmen Financial Services Inc., Woodstock Financial Group, Inc., Workman Securities Corp., World Equity Group Inc., World Group Securities, Inc., Worth Financial Group, Inc., WRP Investments, Inc., Wunderlich Securities Inc., XCU Capital Corp., Inc., Xerox Credit Union, Zeigler Investment Services. PERFORMANCE RELATED INFORMATION The Separate Account may advertise certain performance-related information concerning the Sub-Accounts. Performance information about a Sub-Account is based on the Sub-Account's past performance only and is no indication of future performance. TOTAL RETURN FOR ALL SUB-ACCOUNTS When a Sub-Account advertises its standardized total return, it will usually be calculated from the date of the inception of the Sub-Account for one, five and ten year periods or some other relevant periods if the Sub-Account has not been in existence for at least ten years. Total return is measured by comparing the value of an investment in the Sub-Account at the beginning of the relevant period to the value of the investment at the end of the period. To calculate standardized total return, Hartford uses a hypothetical initial premium payment of $1,000.00 and deducts for the mortality and risk expense charge, the highest possible contingent deferred charge, any applicable administrative charge and the Annual Maintenance Fee. The formula Hartford uses to calculate standardized total return is P(1+T) TO THE POWER OF n = ERV. In this calculation, "P" represents a hypothetical initial premium payment of $1,000.00, "T" represents the average annual total return, "n" represents the number of years and "ERV" represents the redeemable value at the end of the period. In addition to the standardized total return, the Sub-Account may advertise a non-standardized total return. These figures will usually be calculated from the date of inception of the underlying fund for one, five and ten year periods or other relevant periods. Non-standardized total return is measured in the same manner as the standardized total return described above, except that the contingent deferred sales charge and the Annual Maintenance Fee are not deducted. Therefore, non-standardized total return for a Sub-Account is higher than standardized total return for a Sub-Account. YIELD FOR SUB-ACCOUNTS If applicable, the Sub-Accounts may advertise yield in addition to total return. At any time in the future, yields may be higher or lower than past yields and past performance is no indication of future performance. The standardized yield will be computed for periods beginning with the inception of the Sub-Account in the following manner. The net investment income per Accumulation Unit earned during a one-month period is divided by the Accumulation Unit Value on the last day of the period. The formula Hartford uses to calculate yield is: YIELD = 2[(a - b/cd +1) TO THE POWER OF 6 -1]. In this calculation, "a" represents the net investment income earned during the period by the underlying fund, "b" represents the expenses accrued for the period, "c" represents the average daily number of Accumulation Units outstanding during the period and "d" represents the maximum offering price per Accumulation Unit on the last day of the period. MONEY MARKET SUB-ACCOUNTS At any time in the future, current and effective yields may be higher or lower than past yields and past performance is no indication of future performance. Current yield of a money market fund Sub-Account is calculated for a seven-day period or the "base period" without taking into consideration any realized or unrealized gains or losses on shares of the underlying fund. The first step in determining yield is to compute the base period return. Hartford takes a hypothetical account with a balance of one Accumulation Unit of the Sub-Account and calculates the net change in its value from the beginning of the base period to the end of the base period. Hartford then subtracts an amount equal to the total deductions for the Contract and then divides that number by the value of the account at the beginning of the base period. The result is the base period return or "BPR". Once the base period return is calculated, Hartford then multiplies it by 365/7 to compute the current yield. Current yield is calculated to the nearest hundredth of one percent. HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 7 ------------------------------------------------------------------------------- The formula for this calculation is YIELD = BPR x (365/7), where BPR = (A-B)/C. "A" is equal to the net change in value of a hypothetical account with a balance of one Accumulation Unit of the Sub-Account from the beginning of the base period to the end of the base period. "B" is equal to the amount that Hartford deducts for mortality and expense risk charge, any applicable administrative charge and the Annual Maintenance Fee. "C" represents the value of the Sub-Account at the beginning of the base period. Effective yield is also calculated using the base period return. The effective yield is calculated by adding 1 to the base period return and raising that result to a power equal to 365 divided by 7 and subtracting 1 from the result. The calculation Hartford uses is: EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1) TO THE POWER OF 365/7] - 1. ADDITIONAL MATERIALS We may provide information on various topics to Contract Owners and prospective Contract Owners in advertising, sales literature or other materials. These topics may include the relationship between sectors of the economy and the economy as a whole and its effect on various securities markets, investment strategies and techniques (such as value investing, dollar cost averaging and asset allocation), the advantages and disadvantages of investing in tax-deferred and taxable instruments, customer profiles and hypothetical purchase scenarios, financial management and tax and retirement planning, and other investment alternatives, including comparisons between the Contracts and the characteristics of and market for any alternatives. PERFORMANCE COMPARISONS Each Sub-Account may from time to time include in advertisements the ranking of its performance figures compared with performance figures of other annuity contract's sub-accounts with the same investment objectives which are created by Lipper Analytical Services, Morningstar, Inc. or other recognized ranking services. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM THE CONTRACT OWNERS OF HARTFORD LIFE AND ANNUITY INSURANCE COMPANY SEPARATE ACCOUNT TEN AND THE BOARD OF DIRECTORS OF HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ------------------------------------------------------------------------------- We have audited the accompanying statements of assets and liabilities of each of the individual Sub-Accounts disclosed in Note 1 which comprise the Hartford Life and Annuity Insurance Company Separate Account Ten (the "Account"), as of December 31, 2008, and the related statements of operations for the year then ended and changes in net assets for each of the two years in the period then ended. These financial statements are the responsibility of the Account's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Account is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Account's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of investments owned as of December 31, 2008, by correspondence with the mutual fund companies. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the financial position of each of the individual Sub-Accounts constituting Hartford Life and Annuity Insurance Company Separate Account Ten as of December 31, 2008, the results of their operations for the year then ended and the changes in their net assets for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ Deloitte & Touche LLP Hartford, Connecticut February 18, 2009 SA-1 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 2008 -------------------------------------------------------------------------------
PUTNAM VT AMERICAN PUTNAM VT PUTNAM VT GOVERNMENT CAPITAL MID CAP VALUE INCOME APPRECIATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------------------------------------------------------------- ASSETS: Investments: Number of Shares: Class IA 1,533,741 4,112,860 1,196,912 Class IB 308,827 638,837 276,965 ============= ============= ============= 23,565,013 53,432,353 11,203,601 Cost: Class IA $19,407,484 $45,983,231 $9,206,074 Class IB 4,157,529 7,449,122 1,997,527 ============= ============= ============= Market Value: Class IA $11,595,084 $46,351,932 $5,433,983 Class IB 2,322,381 7,174,143 1,246,346 Due from Hartford Life and Annuity Insurance Company 3,473 -- 2,092 Receivable from fund shares sold -- 399,209 -- Other assets 1 -- -- ------------- ------------- ------------- Total Assets 13,920,939 53,925,284 6,682,421 ------------- ------------- ------------- LIABILITIES: Due to Hartford Life and Annuity Insurance Company -- 399,209 -- Payable for fund shares purchased 3,473 -- 2,092 Other liabilities -- -- 2 ------------- ------------- ------------- Total Liabilities 3,473 399,209 2,094 ------------- ------------- ------------- NET ASSETS: For Variable Annuity Contract Liabilities $13,917,466 $53,526,075 $6,680,327 ============= ============= =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. SA-2 -------------------------------------------------------------------------------
PUTNAM VT PUTNAM VT PUTNAM VT PUTNAM VT DIVERSIFIED GLOBAL ASSET GLOBAL GROWTH AND INCOME ALLOCATION EQUITY INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------------------------------------------------------------------------------- ASSETS: Investments: Number of Shares: Class IA 10,653,788 6,363,786 12,632,332 45,102,839 Class IB 1,654,984 511,309 246,420 1,980,004 ============== ============= ============== ============== 121,717,284 96,071,292 170,723,067 825,116,930 Cost: Class IA $107,473,892 $89,127,797 $167,716,053 $780,959,347 Class IB 14,243,392 6,943,495 3,007,014 44,157,583 ============== ============= ============== ============== Market Value: Class IA $60,939,666 $69,174,350 $98,532,191 $520,486,764 Class IB 9,400,308 5,573,275 1,907,294 22,710,652 Due from Hartford Life and Annuity Insurance Company -- -- -- -- Receivable from fund shares sold 26,201 155,616 108,261 415,088 Other assets 2 -- 1 27 -------------- ------------- -------------- -------------- Total Assets 70,366,177 74,903,241 100,547,747 543,612,531 -------------- ------------- -------------- -------------- LIABILITIES: Due to Hartford Life and Annuity Insurance Company 26,201 155,616 108,261 415,088 Payable for fund shares purchased -- -- -- -- Other liabilities -- -- -- -- -------------- ------------- -------------- -------------- Total Liabilities 26,201 155,616 108,261 415,088 -------------- ------------- -------------- -------------- NET ASSETS: For Variable Annuity Contract Liabilities $70,339,976 $74,747,625 $100,439,486 $543,197,443 ============== ============= ============== ============== PUTNAM VT PUTNAM VT GROWTH HEALTH PUTNAM VT OPPORTUNITIES SCIENCES HIGH YIELD SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- -------------------------------------------- ASSETS: Investments: Number of Shares: Class IA 1,456,437 2,413,938 14,384,906 Class IB 384,512 226,242 1,450,022 ============= ============= ============== 17,373,039 26,837,928 178,394,462 Cost: Class IA $15,165,122 $24,171,781 $167,855,243 Class IB 2,207,917 2,666,147 10,539,219 ============= ============= ============== Market Value: Class IA $5,068,401 $26,818,857 $72,212,229 Class IB 1,322,723 2,493,193 7,221,111 Due from Hartford Life and Annuity Insurance Company 22,370 -- -- Receivable from fund shares sold -- 35,340 33,853 Other assets -- 1 1 ------------- ------------- -------------- Total Assets 6,413,494 29,347,391 79,467,194 ------------- ------------- -------------- LIABILITIES: Due to Hartford Life and Annuity Insurance Company -- 35,340 33,853 Payable for fund shares purchased 22,370 -- -- Other liabilities -- -- -- ------------- ------------- -------------- Total Liabilities 22,370 35,340 33,853 ------------- ------------- -------------- NET ASSETS: For Variable Annuity Contract Liabilities $6,391,124 $29,312,051 $79,433,341 ============= ============= ==============
SA-3 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 -------------------------------------------------------------------------------
PUTNAM VT INTERNATIONAL PUTNAM VT PUTNAM VT GROWTH AND INTERNATIONAL INCOME INCOME EQUITY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------------------------------------------------------- ASSETS: Investments: Number of Shares: Class IA 9,241,631 9,147,466 7,918,639 Class IB 1,748,702 893,317 1,164,308 ============== ============== ============= 146,525,477 114,492,991 106,062,750 Cost: Class IA $124,430,859 $103,529,783 $90,146,416 Class IB 22,094,618 10,963,208 15,916,334 ============== ============== ============= Market Value: Class IA $83,359,510 $65,861,758 $70,951,004 Class IB 15,668,376 6,378,287 10,350,706 Due from Hartford Life and Annuity Insurance Company -- -- -- Receivable from fund shares sold 90,872 51,302 23,678 Other assets 1 3 6 -------------- -------------- ------------- Total Assets 99,118,759 72,291,350 81,325,394 -------------- -------------- ------------- LIABILITIES: Due to Hartford Life and Annuity Insurance Company 90,873 51,355 23,678 Payable for fund shares purchased -- -- -- Other liabilities -- -- -- -------------- -------------- ------------- Total Liabilities 90,873 51,355 23,678 -------------- -------------- ------------- NET ASSETS: For Variable Annuity Contract Liabilities $99,027,886 $72,239,995 $81,301,716 ============== ============== =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. SA-4 -------------------------------------------------------------------------------
PUTNAM VT INTERNATIONAL PUTNAM VT NEW PUTNAM VT PUTNAM VT NEW OPPORTUNITIES INVESTORS MONEY MARKET OPPORTUNITIES SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------------------------------------------------------------------------------- ASSETS: Investments: Number of Shares: Class IA 2,114,458 5,447,302 125,808,568 9,872,337 Class IB 150,911 998,841 16,894,362 445,412 ============= ============== ============== ============== 23,999,697 66,173,747 142,702,913 126,351,297 Cost: Class IA $21,829,498 $56,889,653 $125,808,568 $118,519,773 Class IB 2,170,199 9,284,094 16,894,345 7,831,524 ============= ============== ============== ============== Market Value: Class IA $24,675,724 $38,076,645 $125,808,568 $130,216,126 Class IB 1,753,597 6,951,936 16,894,362 5,781,451 Due from Hartford Life and Annuity Insurance Company 938 -- -- -- Receivable from fund shares sold -- 54,380 298,421 74,963 Other assets -- 4 -- 7 ------------- -------------- -------------- -------------- Total Assets 26,430,259 45,082,965 143,001,351 136,072,547 ------------- -------------- -------------- -------------- LIABILITIES: Due to Hartford Life and Annuity Insurance Company -- 54,380 298,497 74,963 Payable for fund shares purchased 938 -- -- -- Other liabilities 1 -- 12 -- ------------- -------------- -------------- -------------- Total Liabilities 939 54,380 298,509 74,963 ------------- -------------- -------------- -------------- NET ASSETS: For Variable Annuity Contract Liabilities $26,429,320 $45,028,585 $142,702,842 $135,997,584 ============= ============== ============== ============== PUTNAM VT PUTNAM VT OTC & EMERGING PUTNAM VT NEW VALUE GROWTH RESEARCH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- ------------------------------------------------------ ASSETS: Investments: Number of Shares: Class IA 9,388,227 1,612,663 1,640,730 Class IB 1,191,995 310,533 444,436 ============== ============= ============= 119,007,332 17,158,560 23,466,167 Cost: Class IA $102,580,799 $14,816,178 $18,418,327 Class IB 16,426,533 2,342,382 5,047,840 ============== ============= ============= Market Value: Class IA $63,088,890 $7,321,489 $13,175,061 Class IB 7,938,693 1,378,768 3,555,491 Due from Hartford Life and Annuity Insurance Company -- -- -- Receivable from fund shares sold 60,085 3,259 12,911 Other assets 4 1 2 -------------- ------------- ------------- Total Assets 71,087,672 8,703,517 16,743,465 -------------- ------------- ------------- LIABILITIES: Due to Hartford Life and Annuity Insurance Company 60,114 3,259 12,911 Payable for fund shares purchased -- -- -- Other liabilities -- -- -- -------------- ------------- ------------- Total Liabilities 60,114 3,259 12,911 -------------- ------------- ------------- NET ASSETS: For Variable Annuity Contract Liabilities $71,027,558 $8,700,258 $16,730,554 ============== ============= =============
SA-5 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 -------------------------------------------------------------------------------
PUTNAM VT PUTNAM VT SMALL CAP THE GEORGE PUTNAM VALUE FUND OF BOSTON SUB-ACCOUNT SUB-ACCOUNT ------------------------------------------------------------------------ ASSETS: Investments: Number of Shares: Class IA 3,778,684 11,034,544 Class IB 519,687 1,759,028 ============== ============== 52,669,055 130,063,990 Cost: Class IA $44,000,532 $111,696,951 Class IB 8,668,523 18,367,039 ============== ============== Market Value: Class IA $32,572,254 $63,448,631 Class IB 4,432,932 10,044,051 Due from Hartford Life and Annuity Insurance Company -- -- Receivable from fund shares sold 12,631 95,004 Other assets 4 -- -------------- -------------- Total Assets 37,017,821 73,587,686 -------------- -------------- LIABILITIES: Due to Hartford Life and Annuity Insurance Company 12,631 95,004 Payable for fund shares purchased -- -- Other liabilities -- 1 -------------- -------------- Total Liabilities 12,631 95,005 -------------- -------------- NET ASSETS: For Variable Annuity Contract Liabilities $37,005,190 $73,492,681 ============== ==============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. SA-6 -------------------------------------------------------------------------------
PUTNAM VT UTILITIES GROWTH PUTNAM VT PUTNAM VT AND INCOME VISTA VOYAGER SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------------------------------------------------------------------------- ASSETS: Investments: Number of Shares: Class IA 5,678,156 3,309,965 12,454,068 Class IB 204,946 452,641 658,533 ============= ============== ============== 70,999,748 40,532,543 291,571,880 Cost: Class IA $68,161,798 $34,428,176 $272,765,041 Class IB 2,837,950 6,104,367 18,806,839 ============= ============== ============== Market Value: Class IA $81,254,420 $28,134,707 $250,824,928 Class IB 2,920,487 3,761,450 13,157,506 Due from Hartford Life and Annuity Insurance Company -- -- -- Receivable from fund shares sold 131,211 62,497 252,626 Other assets 1 -- 4 ------------- -------------- -------------- Total Assets 84,306,119 31,958,654 264,235,064 ------------- -------------- -------------- LIABILITIES: Due to Hartford Life and Annuity Insurance Company 131,211 62,498 252,626 Payable for fund shares purchased -- -- -- Other liabilities -- 4 -- ------------- -------------- -------------- Total Liabilities 131,211 62,502 252,626 ------------- -------------- -------------- NET ASSETS: For Variable Annuity Contract Liabilities $84,174,908 $31,896,152 $263,982,438 ============= ============== ============== PUTNAM VT PUTNAM VT DISCOVERY CAPITAL PUTNAM VT GROWTH OPPORTUNITIES EQUITY INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- --------------------------------------------------------------- ASSETS: Investments: Number of Shares: Class IA 862,881 534,776 5,483,853 Class IB 446,872 234,054 856,505 ============= ============= ============= 6,566,824 10,116,852 77,167,748 Cost: Class IA $4,556,361 $6,918,424 $66,947,864 Class IB 2,010,463 3,198,428 10,219,884 ============= ============= ============= Market Value: Class IA $2,666,304 $4,738,115 $53,303,052 Class IB 1,345,084 2,057,337 8,282,403 Due from Hartford Life and Annuity Insurance Company 4,217 -- -- Receivable from fund shares sold -- 3,368 53,444 Other assets -- -- -- ------------- ------------- ------------- Total Assets 4,015,605 6,798,820 61,638,899 ------------- ------------- ------------- LIABILITIES: Due to Hartford Life and Annuity Insurance Company -- 3,432 53,444 Payable for fund shares purchased 4,217 -- -- Other liabilities -- 2 5 ------------- ------------- ------------- Total Liabilities 4,217 3,434 53,449 ------------- ------------- ------------- NET ASSETS: For Variable Annuity Contract Liabilities $4,011,388 $6,795,386 $61,585,450 ============= ============= =============
SA-7 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 -------------------------------------------------------------------------------
UNITS OWNED BY MINIMUM UNIT MAXIMUM UNIT CONTRACT PARTICIPANTS FAIR VALUE # FAIR VALUE # LIABILITY --------------------------------------------------------------------------------------------------------------------------------- DEFERRED ANNUITY CONTRACTS IN THE ACCUMULATION PERIOD (BY SUB-ACCOUNT): Putnam VT Mid Cap Value -- Class IA 1,095,466 $10.205485 to $10.770278 $11,499,249 Putnam VT Mid Cap Value -- Class IB 228,647 9.759271 to 10.622093 2,322,381 Putnam VT American Government Income -- Class IA 3,332,430 13.344570 to 14.440840 46,213,575 Putnam VT American Government Income -- Class IB 531,593 11.792509 to 13.964183 6,928,796 Putnam VT Capital Appreciation -- Class IA 941,425 5.546677 to 5.975688 5,422,986 Putnam VT Capital Appreciation -- Class IB 227,588 5.226586 to 5.800282 1,246,345 Putnam VT Diversified Income -- Class IA 4,773,957 10.660990 to 12.719646 60,669,486 Putnam VT Diversified Income -- Class IB 877,306 9.231067 to 12.855175 9,322,509 Putnam VT Global Asset Allocation -- Class IA 2,751,952 8.632291 to 25.029607 68,671,951 Putnam VT Global Asset Allocation -- Class IB 537,932 7.102261 to 25.264035 5,573,276 Putnam VT Global Equity -- Class IA 5,971,910 5.901691 to 16.412039 97,727,150 Putnam VT Global Equity -- Class IB 316,077 3.485685 to 16.509053 1,907,294 Putnam VT Growth and Income -- Class IA 15,593,398 7.637219 to 33.446733 516,438,053 Putnam VT Growth and Income -- Class IB 1,744,327 6.636242 to 33.626986 22,652,316 Putnam VT Growth Opportunities -- Class IA 1,605,426 2.994865 to 3.251593 5,014,044 Putnam VT Growth Opportunities -- Class IB 457,195 2.578011 to 3.144022 1,322,723 Putnam VT Health Sciences -- Class IA 2,677,364 9.602254 to 10.960856 26,758,615 Putnam VT Health Sciences -- Class IB 287,919 6.595651 to 10.053643 2,492,938 Putnam VT High Yield -- Class IA 2,831,165 10.920267 to 25.468598 71,896,274 Putnam VT High Yield -- Class IB 490,630 9.110846 to 25.585305 7,195,918 Putnam VT Income -- Class IA 3,849,285 10.823633 to 21.579433 82,770,804 Putnam VT Income -- Class IB 1,281,305 9.156511 to 21.705639 15,634,182 Putnam VT International Growth and Income -- Class IA 4,760,215 9.422186 to 13.826321 65,558,563 Putnam VT International Growth and Income -- Class IB 646,790 8.253865 to 13.887358 6,363,967 Putnam VT International Equity -- Class IA 4,843,363 9.354774 to 14.625921 70,613,185 Putnam VT International Equity -- Class IB 1,196,413 5.823421 to 14.721050 10,293,899 Putnam VT International New Opportunities -- Class IA 2,198,624 7.876161 to 11.212688 24,623,575 Putnam VT International New Opportunities -- Class IB 261,065 4.035269 to 11.268124 1,753,597 Putnam VT Investors -- Class IA 6,077,112 0.544485 to 6.260777 37,678,646 Putnam VT Investors -- Class IB 1,396,023 3.996442 to 6.295855 6,907,546 Putnam VT Money Market -- Class IA 67,875,205 1.205555 to 12.080624 125,677,995 Putnam VT Money Market -- Class IB 12,707,577 1.018279 to 1.863085 16,894,289 Putnam VT New Opportunities -- Class IA 8,611,185 5.453259 to 15.099269 129,745,633 Putnam VT New Opportunities -- Class IB 1,275,092 2.748202 to 15.167592 5,732,438 Putnam VT New Value -- Class IA 5,507,753 10.092600 to 11.404497 62,749,466 Putnam VT New Value -- Class IB 777,781 7.932938 to 11.448862 7,877,775 Putnam VT OTC & Emerging Growth -- Class IA 1,856,997 2.975843 to 3.950066 7,314,137 Putnam VT OTC & Emerging Growth -- Class IB 664,750 1.166875 to 3.973049 1,378,713 Putnam VT Research -- Class IA 1,547,163 6.492605 to 8.529543 13,148,977 Putnam VT Research -- Class IB 580,724 5.055115 to 8.582086 3,555,491 Putnam VT Small Cap Value -- Class IA 2,327,115 13.377914 to 15.357260 32,398,116 Putnam VT Small Cap Value -- Class IB 341,759 11.356564 to 14.001323 4,366,468 Putnam VT The George Putnam Fund of Boston -- Class IA 7,829,922 7.729991 to 8.479938 62,998,252 Putnam VT The George Putnam Fund of Boston -- Class IB 1,278,110 7.086744 to 8.242076 10,044,050 Putnam VT Utilities Growth and Income -- Class IA 3,321,094 11.005333 to 24.348590 80,751,022 Putnam VT Utilities Growth and Income -- Class IB 198,995 8.866021 to 23.992156 2,905,218
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. SA-8 -------------------------------------------------------------------------------
UNITS OWNED BY MINIMUM UNIT MAXIMUM UNIT CONTRACT PARTICIPANTS FAIR VALUE # FAIR VALUE # LIABILITY --------------------------------------------------------------------------------------------------------------------------------- Putnam VT Vista -- Class IA 3,085,475 $5.989925 to $9.081234 $27,974,557 Putnam VT Vista -- Class IB 896,603 2.949993 to 9.121416 3,761,450 Putnam VT Voyager -- Class IA 6,978,697 5.938335 to 35.987445 248,740,120 Putnam VT Voyager -- Class IB 2,120,593 3.366874 to 36.167082 13,108,596 Putnam VT Discovery Growth -- Class IA 719,350 3.603945 to 3.845590 2,665,464 Putnam VT Discovery Growth -- Class IB 383,535 3.354831 to 3.731059 1,345,085 Putnam VT Capital Opportunities -- Class IA 440,918 10.443748 to 11.021650 4,737,079 Putnam VT Capital Opportunities -- Class IB 199,273 9.944019 to 10.850239 2,057,271 Putnam VT Equity Income -- Class IA 4,664,518 11.026258 to 11.636340 52,912,357 Putnam VT Equity Income -- Class IB 742,571 10.538465 to 11.470023 8,199,676 ANNUITY CONTRACTS IN THE ANNUITY PERIOD (BY SUB-ACCOUNT): Putnam VT Mid Cap Value -- Class IA 9,128 10.498958 to 10.498958 95,836 Putnam VT American Government Income -- Class IA 9,973 13.873075 to 13.873075 138,356 Putnam VT American Government Income -- Class IB 18,020 13.615289 to 13.615289 245,348 Putnam VT Capital Appreciation -- Class IA 1,909 5.759988 to 5.759988 10,996 Putnam VT Diversified Income -- Class IA 21,241 12.719646 to 12.719646 270,181 Putnam VT Diversified Income -- Class IB 7,645 10.176870 to 10.176870 77,799 Putnam VT Global Asset Allocation -- Class IA 20,072 25.029607 to 25.029607 502,398 Putnam VT Global Equity -- Class IA 49,052 16.412039 to 16.412039 805,042 Putnam VT Growth and Income -- Class IA 121,050 33.446733 to 33.446733 4,048,738 Putnam VT Growth and Income -- Class IB 4,230 7.543725 to 32.786555 58,335 Putnam VT Growth Opportunities -- Class IA 17,402 3.123597 to 3.123597 54,357 Putnam VT Health Sciences -- Class IA 6,028 9.993908 to 9.993908 60,243 Putnam VT Health Sciences -- Class IB 28 9.061024 to 9.061024 256 Putnam VT High Yield -- Class IA 12,406 25.468598 to 25.468598 315,956 Putnam VT High Yield -- Class IB 2,477 10.171681 to 10.171681 25,193 Putnam VT Income -- Class IA 27,281 21.579433 to 21.579433 588,706 Putnam VT Income -- Class IB 1,616 21.163298 to 21.163298 34,194 Putnam VT International Growth and Income -- Class IA 21,929 13.826321 to 13.826321 303,199 Putnam VT International Growth and Income -- Class IB 1,598 8.929468 to 8.929468 14,266 Putnam VT International Equity -- Class IA 23,098 14.625921 to 14.625921 337,825 Putnam VT International Equity -- Class IB 3,958 14.353153 to 14.353153 56,807 Putnam VT International New Opportunities -- Class IA 4,651 11.212688 to 11.212688 52,147 Putnam VT Investors -- Class IA 63,571 6.260777 to 6.260777 398,003 Putnam VT Investors -- Class IB 7,231 6.138506 to 6.138506 44,390 Putnam VT Money Market -- Class IA 70,420 1.854007 to 1.854007 130,559 Putnam VT New Opportunities -- Class IA 31,160 15.099269 to 15.099269 470,500 Putnam VT New Opportunities -- Class IB 3,314 14.788538 to 14.788538 49,014 Putnam VT New Value -- Class IA 29,763 11.404497 to 11.404497 339,429 Putnam VT New Value -- Class IB 5,455 11.162712 to 11.162712 60,889 Putnam VT OTC & Emerging Growth -- Class IA 1,862 3.950066 to 3.950066 7,353 Putnam VT OTC & Emerging Growth -- Class IB 34 1.598179 to 1.598179 55 Putnam VT Research -- Class IA 3,058 8.529543 to 8.529543 26,086 Putnam VT Small Cap Value -- Class IA 12,507 13.923550 to 13.923550 174,143 Putnam VT Small Cap Value -- Class IB 4,869 13.651420 to 13.651420 66,463 Putnam VT The George Putnam Fund of Boston -- Class IA 55,981 8.045251 to 8.045251 450,378
SA-9 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2008 -------------------------------------------------------------------------------
UNITS OWNED BY MINIMUM UNIT MAXIMUM UNIT CONTRACT PARTICIPANTS FAIR VALUE # FAIR VALUE # LIABILITY --------------------------------------------------------------------------------------------------------------------------------- Putnam VT Utilities Growth and Income -- Class IA 20,675 $24.348590 to $24.348590 $503,400 Putnam VT Utilities Growth and Income -- Class IB 1,428 10.691304 to 10.691304 15,269 Putnam VT Vista -- Class IA 17,635 9.081234 to 9.081234 160,146 Putnam VT Voyager -- Class IA 57,932 35.987445 to 35.987445 2,084,814 Putnam VT Voyager -- Class IB 2,305 4.133437 to 35.263136 48,908 Putnam VT Discovery Growth -- Class IA 226 3.706718 to 3.706718 839 Putnam VT Capital Opportunities -- Class IA 96 10.744034 to 10.744034 1,035 Putnam VT Equity Income -- Class IA 34,442 11.343249 to 11.343249 390,688 Putnam VT Equity Income -- Class IB 7,378 11.212860 to 11.212860 82,730
# Rounded unit values THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. SA-10 ------------------------------------------------------------------------------- [This page intentionally left blank] SA-11 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2008 -------------------------------------------------------------------------------
PUTNAM VT AMERICAN PUTNAM VT PUTNAM VT GOVERNMENT CAPITAL MID CAP VALUE INCOME APPRECIATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends $192,260 $2,406,098 $74,949 -------------- ------------- ------------- EXPENSE: Administrative charges (35,528) (79,373) (15,204) Mortality and expense risk charges (321,904) (690,073) (134,260) -------------- ------------- ------------- Total Expenses (357,432) (769,446) (149,464) -------------- ------------- ------------- Net investment income (loss) (165,172) 1,636,652 (74,515) -------------- ------------- ------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on security transactions (929,213) (290,223) (194,373) Net realized gain on distributions 5,253,064 -- 1,159,726 Net unrealized appreciation (depreciation) of investments during the year (16,706,821) (2,384,018) (5,702,315) -------------- ------------- ------------- Net gain (loss) on investments (12,382,970) (2,674,241) (4,736,962) -------------- ------------- ------------- Net increase (decrease) in net assets resulting from operations $(12,548,142) $(1,037,589) $(4,811,477) ============== ============= =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. SA-12 -------------------------------------------------------------------------------
PUTNAM VT PUTNAM VT PUTNAM VT PUTNAM VT DIVERSIFIED GLOBAL ASSET GLOBAL GROWTH AND INCOME ALLOCATION EQUITY INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME: Dividends $7,165,606 $4,719,769 $4,879,006 $22,780,743 -------------- -------------- -------------- --------------- EXPENSE: Administrative charges (161,321) (167,777) (252,443) (1,275,891) Mortality and expense risk charges (1,420,157) (1,432,535) (2,121,778) (10,801,075) -------------- -------------- -------------- --------------- Total Expenses (1,581,478) (1,600,312) (2,374,221) (12,076,966) -------------- -------------- -------------- --------------- Net investment income (loss) 5,584,128 3,119,457 2,504,785 10,703,777 -------------- -------------- -------------- --------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on security transactions (10,419,327) (691,235) (7,523,201) (20,913,803) Net realized gain on distributions -- -- -- 165,742,923 Net unrealized appreciation (depreciation) of investments during the year (31,792,864) (45,389,102) (91,276,419) (567,552,421) -------------- -------------- -------------- --------------- Net gain (loss) on investments (42,212,191) (46,080,337) (98,799,620) (422,723,301) -------------- -------------- -------------- --------------- Net increase (decrease) in net assets resulting from operations $(36,628,063) $(42,960,880) $(96,294,835) $(412,019,524) ============== ============== ============== =============== PUTNAM VT PUTNAM VT GROWTH HEALTH PUTNAM VT OPPORTUNITIES SCIENCES HIGH YIELD SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- ---------------------------------------------------------------- INVESTMENT INCOME: Dividends $ -- $ -- $11,613,960 ------------- ------------- -------------- EXPENSE: Administrative charges (14,908) (54,306) (170,411) Mortality and expense risk charges (133,095) (478,319) (1,466,020) ------------- ------------- -------------- Total Expenses (148,003) (532,625) (1,636,431) ------------- ------------- -------------- Net investment income (loss) (148,003) (532,625) 9,977,529 ------------- ------------- -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on security transactions (2,056,803) 1,424,905 (18,659,723) Net realized gain on distributions -- 352,560 -- Net unrealized appreciation (depreciation) of investments during the year (2,325,067) (8,445,462) (22,446,968) ------------- ------------- -------------- Net gain (loss) on investments (4,381,870) (6,667,997) (41,106,691) ------------- ------------- -------------- Net increase (decrease) in net assets resulting from operations $(4,529,873) $(7,200,622) $(31,129,162) ============= ============= ==============
SA-13 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 -------------------------------------------------------------------------------
PUTNAM VT INTERNATIONAL PUTNAM VT PUTNAM VT GROWTH AND INTERNATIONAL INCOME INCOME EQUITY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends $10,829,015 $2,882,968 $3,472,890 -------------- -------------- -------------- EXPENSE: Administrative charges (216,730) (189,899) (203,398) Mortality and expense risk charges (1,902,442) (1,626,431) (1,766,880) -------------- -------------- -------------- Total Expenses (2,119,172) (1,816,330) (1,970,278) -------------- -------------- -------------- Net investment income (loss) 8,709,843 1,066,638 1,502,612 -------------- -------------- -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on security transactions (3,964,375) (6,665,893) (2,171,826) Net realized gain on distributions -- 27,223,534 23,367,240 Net unrealized appreciation (depreciation) of investments during the year (40,620,620) (94,753,265) (97,532,907) -------------- -------------- -------------- Net gain (loss) on investments (44,584,995) (74,195,624) (76,337,493) -------------- -------------- -------------- Net increase (decrease) in net assets resulting from operations $(35,875,152) $(73,128,986) $(74,834,881) ============== ============== ==============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. SA-14 -------------------------------------------------------------------------------
PUTNAM VT INTERNATIONAL PUTNAM VT NEW PUTNAM VT PUTNAM VT NEW OPPORTUNITIES INVESTORS MONEY MARKET OPPORTUNITIES SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ---------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends $879,793 $375,495 $3,661,655 $638,152 -------------- -------------- ------------- --------------- EXPENSE: Administrative charges (66,467) (105,661) (196,526) (314,250) Mortality and expense risk charges (570,394) (938,345) (1,714,650) (2,668,592) -------------- -------------- ------------- --------------- Total Expenses (636,861) (1,044,006) (1,911,176) (2,982,842) -------------- -------------- ------------- --------------- Net investment income (loss) 242,932 (668,511) 1,750,479 (2,344,690) -------------- -------------- ------------- --------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on security transactions 5,069,757 (392,459) 893 8,733,662 Net realized gain on distributions -- -- -- -- Net unrealized appreciation (depreciation) of investments during the year (29,174,452) (34,933,641) (31) (105,001,951) -------------- -------------- ------------- --------------- Net gain (loss) on investments (24,104,695) (35,326,100) 862 (96,268,289) -------------- -------------- ------------- --------------- Net increase (decrease) in net assets resulting from operations $(23,861,763) $(35,994,611) $1,751,341 $(98,612,979) ============== ============== ============= =============== PUTNAM VT PUTNAM VT OTC & EMERGING PUTNAM VT NEW VALUE GROWTH RESEARCH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- ----------------------------------------------------------------- INVESTMENT INCOME: Dividends $2,880,908 $ -- $368,829 -------------- ------------- -------------- EXPENSE: Administrative charges (182,285) (21,414) (39,754) Mortality and expense risk charges (1,580,266) (196,260) (356,746) -------------- ------------- -------------- Total Expenses (1,762,551) (217,674) (396,500) -------------- ------------- -------------- Net investment income (loss) 1,118,357 (217,674) (27,671) -------------- ------------- -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on security transactions (2,340,167) (2,831,078) (1,364,605) Net realized gain on distributions 29,605,217 -- -- Net unrealized appreciation (depreciation) of investments during the year (99,773,370) (5,416,471) (11,249,356) -------------- ------------- -------------- Net gain (loss) on investments (72,508,320) (8,247,549) (12,613,961) -------------- ------------- -------------- Net increase (decrease) in net assets resulting from operations $(71,389,963) $(8,465,223) $(12,641,632) ============== ============= ==============
SA-15 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 -------------------------------------------------------------------------------
PUTNAM VT PUTNAM VT SMALL CAP THE GEORGE PUTNAM VALUE FUND OF BOSTON SUB-ACCOUNT SUB-ACCOUNT ----------------------------------------------------------------------------- INVESTMENT INCOME: Dividends $1,205,180 $6,490,309 -------------- -------------- EXPENSE: Administrative charges (90,345) (185,840) Mortality and expense risk charges (792,066) (1,608,704) -------------- -------------- Total Expenses (882,411) (1,794,544) -------------- -------------- Net investment income (loss) 322,769 4,695,765 -------------- -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on security transactions 459,773 (6,746,514) Net realized gain on distributions 16,320,134 11,889,349 Net unrealized appreciation (depreciation) of investments during the year (45,937,795) (68,406,877) -------------- -------------- Net gain (loss) on investments (29,157,888) (63,264,042) -------------- -------------- Net increase (decrease) in net assets resulting from operations $(28,835,119) $(58,568,277) ============== ==============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. SA-16 -------------------------------------------------------------------------------
PUTNAM VT UTILITIES GROWTH PUTNAM VT PUTNAM VT AND INCOME VISTA VOYAGER SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends $3,015,534 $ -- $1,160,299 -------------- -------------- --------------- EXPENSE: Administrative charges (176,289) (82,042) (601,225) Mortality and expense risk charges (1,492,188) (717,248) (5,100,558) -------------- -------------- --------------- Total Expenses (1,668,477) (799,290) (5,701,783) -------------- -------------- --------------- Net investment income (loss) 1,347,057 (799,290) (4,541,484) -------------- -------------- --------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on security transactions 6,725,071 2,541,562 13,025,015 Net realized gain on distributions -- -- -- Net unrealized appreciation (depreciation) of investments during the year (51,552,952) (32,398,341) (191,023,480) -------------- -------------- --------------- Net gain (loss) on investments (44,827,881) (29,856,779) (177,998,465) -------------- -------------- --------------- Net increase (decrease) in net assets resulting from operations $(43,480,824) $(30,656,069) $(182,539,949) ============== ============== =============== PUTNAM VT PUTNAM VT DISCOVERY CAPITAL PUTNAM VT GROWTH OPPORTUNITIES EQUITY INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- ---------------------------------------------------------------- INVESTMENT INCOME: Dividends $ -- $77,931 $1,881,789 ------------- ------------- -------------- EXPENSE: Administrative charges (10,523) (15,528) (124,178) Mortality and expense risk charges (95,235) (145,440) (1,071,016) ------------- ------------- -------------- Total Expenses (105,758) (160,968) (1,195,194) ------------- ------------- -------------- Net investment income (loss) (105,758) (83,037) 686,595 ------------- ------------- -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on security transactions (165,463) (805,232) (1,706,838) Net realized gain on distributions 824,642 609,808 3,971,817 Net unrealized appreciation (depreciation) of investments during the year (4,168,255) (4,178,446) (33,941,077) ------------- ------------- -------------- Net gain (loss) on investments (3,509,076) (4,373,870) (31,676,098) ------------- ------------- -------------- Net increase (decrease) in net assets resulting from operations $(3,614,834) $(4,456,907) $(30,989,503) ============= ============= ==============
SA-17 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2008 -------------------------------------------------------------------------------
PUTNAM VT AMERICAN PUTNAM VT PUTNAM VT GOVERNMENT CAPITAL MID CAP VALUE INCOME APPRECIATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------------------------------------------------------------------------------- OPERATIONS: Net investment income (loss) $(165,172) $1,636,652 $(74,515) Net realized gain (loss) on security transactions (929,213) (290,223) (194,373) Net realized gain on distribution 5,253,064 -- 1,159,726 Net unrealized appreciation (depreciation) of investments during the year (16,706,821) (2,384,018) (5,702,315) -------------- -------------- ------------- Net increase (decrease) in net assets resulting from operations (12,548,142) (1,037,589) (4,811,477) -------------- -------------- ------------- UNIT TRANSACTIONS: Purchases 184,468 148,562 54,067 Net transfers (3,848,266) 25,434,807 (298,709) Surrenders for benefit payments and fees (5,664,574) (13,325,293) (2,316,294) Net annuity transactions (39,041) (53,039) (3,834) -------------- -------------- ------------- Net increase (decrease) in net assets resulting from unit transactions (9,367,413) 12,205,037 (2,564,770) -------------- -------------- ------------- Net increase (decrease) in net assets (21,915,555) 11,167,448 (7,376,247) NET ASSETS: Beginning of year 35,833,021 42,358,627 14,056,574 -------------- -------------- ------------- End of year $13,917,466 $53,526,075 $6,680,327 ============== ============== =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. SA-18 -------------------------------------------------------------------------------
PUTNAM VT PUTNAM VT PUTNAM VT PUTNAM VT DIVERSIFIED GLOBAL ASSET GLOBAL GROWTH AND INCOME ALLOCATION EQUITY INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------------------------------------------------------------------------------------------------------- OPERATIONS: Net investment income (loss) $5,584,128 $3,119,457 $2,504,785 $10,703,777 Net realized gain (loss) on security transactions (10,419,327) (691,235) (7,523,201) (20,913,803) Net realized gain on distribution -- -- -- 165,742,923 Net unrealized appreciation (depreciation) of investments during the year (31,792,864) (45,389,102) (91,276,419) (567,552,421) -------------- -------------- --------------- ---------------- Net increase (decrease) in net assets resulting from operations (36,628,063) (42,960,880) (96,294,835) (412,019,524) -------------- -------------- --------------- ---------------- UNIT TRANSACTIONS: Purchases 648,681 543,273 986,855 3,979,328 Net transfers (5,224,352) (1,457,840) (11,161,754) (80,217,301) Surrenders for benefit payments and fees (24,275,347) (21,496,351) (30,072,888) (184,548,656) Net annuity transactions 97,804 60,289 60,421 15,175 -------------- -------------- --------------- ---------------- Net increase (decrease) in net assets resulting from unit transactions (28,753,214) (22,350,629) (40,187,366) (260,771,454) -------------- -------------- --------------- ---------------- Net increase (decrease) in net assets (65,381,277) (65,311,509) (136,482,201) (672,790,978) NET ASSETS: Beginning of year 135,721,253 140,059,134 236,921,687 1,215,988,421 -------------- -------------- --------------- ---------------- End of year $70,339,976 $74,747,625 $100,439,486 $543,197,443 ============== ============== =============== ================ PUTNAM VT PUTNAM VT GROWTH HEALTH PUTNAM VT OPPORTUNITIES SCIENCES HIGH YIELD SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- ------------------------------------------------------------ OPERATIONS: Net investment income (loss) $(148,003) $(532,625) $9,977,529 Net realized gain (loss) on security transactions (2,056,803) 1,424,905 (18,659,723) Net realized gain on distribution -- 352,560 -- Net unrealized appreciation (depreciation) of investments during the year (2,325,067) (8,445,462) (22,446,968) ------------- -------------- -------------- Net increase (decrease) in net assets resulting from operations (4,529,873) (7,200,622) (31,129,162) ------------- -------------- -------------- UNIT TRANSACTIONS: Purchases 40,341 113,217 428,380 Net transfers (32,656) (1,067,870) (7,450,528) Surrenders for benefit payments and fees (1,731,556) (7,618,815) (24,281,797) Net annuity transactions (5,704) 11,625 (112,492) ------------- -------------- -------------- Net increase (decrease) in net assets resulting from unit transactions (1,729,575) (8,561,843) (31,416,437) ------------- -------------- -------------- Net increase (decrease) in net assets (6,259,448) (15,762,465) (62,545,599) NET ASSETS: Beginning of year 12,650,572 45,074,516 141,978,940 ------------- -------------- -------------- End of year $6,391,124 $29,312,051 $79,433,341 ============= ============== ==============
SA-19 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 -------------------------------------------------------------------------------
PUTNAM VT INTERNATIONAL PUTNAM VT PUTNAM VT GROWTH AND INTERNATIONAL INCOME INCOME EQUITY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------------------------------------------------------------------------- OPERATIONS: Net investment income (loss) $8,709,843 $1,066,638 $1,502,612 Net realized gain (loss) on security transactions (3,964,375) (6,665,893) (2,171,826) Net realized gain on distribution -- 27,223,534 23,367,240 Net unrealized appreciation (depreciation) of investments during the year (40,620,620) (94,753,265) (97,532,907) -------------- --------------- --------------- Net increase (decrease) in net assets resulting from operations (35,875,152) (73,128,986) (74,834,881) -------------- --------------- --------------- UNIT TRANSACTIONS: Purchases 574,226 486,959 544,759 Net transfers (5,957,972) (9,145,245) (8,500,856) Surrenders for benefit payments and fees (33,899,051) (26,119,687) (29,059,083) Net annuity transactions (58,740) (62,620) (80,880) -------------- --------------- --------------- Net increase (decrease) in net assets resulting from unit transactions (39,341,537) (34,840,593) (37,096,060) -------------- --------------- --------------- Net increase (decrease) in net assets (75,216,689) (107,969,579) (111,930,941) NET ASSETS: Beginning of year 174,244,575 180,209,574 193,232,657 -------------- --------------- --------------- End of year $99,027,886 $72,239,995 $81,301,716 ============== =============== ===============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. SA-20 -------------------------------------------------------------------------------
PUTNAM VT INTERNATIONAL PUTNAM VT NEW PUTNAM VT PUTNAM VT NEW OPPORTUNITIES INVESTORS MONEY MARKET OPPORTUNITIES SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------------------------------------------------------------------------------------------- OPERATIONS: Net investment income (loss) $242,932 $(668,511) $1,750,479 $(2,344,690) Net realized gain (loss) on security transactions 5,069,757 (392,459) 893 8,733,662 Net realized gain on distribution -- -- -- -- Net unrealized appreciation (depreciation) of investments during the year (29,174,452) (34,933,641) (31) (105,001,951) -------------- -------------- --------------- --------------- Net increase (decrease) in net assets resulting from operations (23,861,763) (35,994,611) 1,751,341 (98,612,979) -------------- -------------- --------------- --------------- UNIT TRANSACTIONS: Purchases 193,927 224,121 574,732 1,011,598 Net transfers (7,189,869) (6,979,813) 129,566,085 (16,297,146) Surrenders for benefit payments and fees (8,363,657) (17,333,418) (100,508,913) (33,867,517) Net annuity transactions 31,605 (70,904) (64,202) (94,420) -------------- -------------- --------------- --------------- Net increase (decrease) in net assets resulting from unit transactions (15,327,994) (24,160,014) 29,567,702 (49,247,485) -------------- -------------- --------------- --------------- Net increase (decrease) in net assets (39,189,757) (60,154,625) 31,319,042 (147,860,464) NET ASSETS: Beginning of year 65,619,077 105,183,210 111,383,801 283,858,048 -------------- -------------- --------------- --------------- End of year $26,429,320 $45,028,585 $142,702,842 $135,997,584 ============== ============== =============== =============== PUTNAM VT PUTNAM VT OTC & EMERGING PUTNAM VT NEW VALUE GROWTH RESEARCH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- ------------------------------------------------------------------- OPERATIONS: Net investment income (loss) $1,118,357 $(217,674) $(27,671) Net realized gain (loss) on security transactions (2,340,167) (2,831,078) (1,364,605) Net realized gain on distribution 29,605,217 -- -- Net unrealized appreciation (depreciation) of investments during the year (99,773,370) (5,416,471) (11,249,356) --------------- -------------- -------------- Net increase (decrease) in net assets resulting from operations (71,389,963) (8,465,223) (12,641,632) --------------- -------------- -------------- UNIT TRANSACTIONS: Purchases 526,474 80,188 156,131 Net transfers (16,067,520) (2,188,269) (2,496,562) Surrenders for benefit payments and fees (29,116,494) (2,613,284) (5,737,073) Net annuity transactions (53,319) 1,184 (8,426) --------------- -------------- -------------- Net increase (decrease) in net assets resulting from unit transactions (44,710,859) (4,720,181) (8,085,930) --------------- -------------- -------------- Net increase (decrease) in net assets (116,100,822) (13,185,404) (20,727,562) NET ASSETS: Beginning of year 187,128,380 21,885,662 37,458,116 --------------- -------------- -------------- End of year $71,027,558 $8,700,258 $16,730,554 =============== ============== ==============
SA-21 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2008 -------------------------------------------------------------------------------
PUTNAM VT PUTNAM VT SMALL CAP THE GEORGE PUTNAM VALUE FUND OF BOSTON SUB-ACCOUNT SUB-ACCOUNT ----------------------------------------------------------------------------- OPERATIONS: Net investment income (loss) $322,769 $4,695,765 Net realized gain (loss) on security transactions 459,773 (6,746,514) Net realized gain on distribution 16,320,134 11,889,349 Net unrealized appreciation (depreciation) of investments during the year (45,937,795) (68,406,877) -------------- -------------- Net increase (decrease) in net assets resulting from operations (28,835,119) (58,568,277) -------------- -------------- UNIT TRANSACTIONS: Purchases 240,744 432,049 Net transfers (11,102,516) (10,145,043) Surrenders for benefit payments and fees (13,432,521) (28,819,143) Net annuity transactions (43,673) (36,535) -------------- -------------- Net increase (decrease) in net assets resulting from unit transactions (24,337,966) (38,568,672) -------------- -------------- Net increase (decrease) in net assets (53,173,085) (97,136,949) NET ASSETS: Beginning of year 90,178,275 170,629,630 -------------- -------------- End of year $37,005,190 $73,492,681 ============== ==============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. SA-22 -------------------------------------------------------------------------------
PUTNAM VT UTILITIES GROWTH PUTNAM VT PUTNAM VT AND INCOME VISTA VOYAGER SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------------------------------------------------------------------------------------- OPERATIONS: Net investment income (loss) $1,347,057 $(799,290) $(4,541,484) Net realized gain (loss) on security transactions 6,725,071 2,541,562 13,025,015 Net realized gain on distribution -- -- -- Net unrealized appreciation (depreciation) of investments during the year (51,552,952) (32,398,341) (191,023,480) -------------- -------------- --------------- Net increase (decrease) in net assets resulting from operations (43,480,824) (30,656,069) (182,539,949) -------------- -------------- --------------- UNIT TRANSACTIONS: Purchases 467,811 280,396 2,165,169 Net transfers (1,955,262) (4,685,614) (36,476,724) Surrenders for benefit payments and fees (22,675,473) (10,874,026) (72,132,397) Net annuity transactions (92,520) (23,661) (384,879) -------------- -------------- --------------- Net increase (decrease) in net assets resulting from unit transactions (24,255,444) (15,302,905) (106,828,831) -------------- -------------- --------------- Net increase (decrease) in net assets (67,736,268) (45,958,974) (289,368,780) NET ASSETS: Beginning of year 151,911,176 77,855,126 553,351,218 -------------- -------------- --------------- End of year $84,174,908 $31,896,152 $263,982,438 ============== ============== =============== PUTNAM VT PUTNAM VT DISCOVERY CAPITAL PUTNAM VT GROWTH OPPORTUNITIES EQUITY INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- ----------------------------------------------------------- OPERATIONS: Net investment income (loss) $(105,758) $(83,037) $686,595 Net realized gain (loss) on security transactions (165,463) (805,232) (1,706,838) Net realized gain on distribution 824,642 609,808 3,971,817 Net unrealized appreciation (depreciation) of investments during the year (4,168,255) (4,178,446) (33,941,077) ------------- ------------- -------------- Net increase (decrease) in net assets resulting from operations (3,614,834) (4,456,907) (30,989,503) ------------- ------------- -------------- UNIT TRANSACTIONS: Purchases 22,193 34,600 500,287 Net transfers (703,977) (1,405,064) 8,854,578 Surrenders for benefit payments and fees (1,054,511) (2,110,246) (18,884,965) Net annuity transactions (187) (596) (49,563) ------------- ------------- -------------- Net increase (decrease) in net assets resulting from unit transactions (1,736,482) (3,481,306) (9,579,663) ------------- ------------- -------------- Net increase (decrease) in net assets (5,351,316) (7,938,213) (40,569,166) NET ASSETS: Beginning of year 9,362,704 14,733,599 102,154,616 ------------- ------------- -------------- End of year $4,011,388 $6,795,386 $61,585,450 ============= ============= ==============
SA-23 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2007 -------------------------------------------------------------------------------
PUTNAM AMERICAN PUTNAM PUTNAM GOVERNMENT CAPITAL MID CAP VALUE INCOME APPRECIATION SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------------------------------------------------------------------------- OPERATIONS: Net investment income (loss) $99,385 $1,594,948 $(192,849) Net realized gain (loss) on security transactions 264,404 (26,656) 595,841 Net realized gain on distributions 3,645,303 -- 1,397,990 Net unrealized appreciation (depreciation) of investments during the year (3,562,522) 1,292,185 (3,061,484) ------------- ------------- ------------- Net increase (decrease) in net assets resulting from operations 446,570 2,860,477 (1,260,502) ------------- ------------- ------------- UNIT TRANSACTIONS: Purchases 319,347 146,342 239,289 Net transfers 814,225 3,514,681 (676,714) Surrenders for benefit payments and fees (8,059,259) (9,262,244) (3,681,335) Net annuity transactions (18,087) (54,114) (3,597) ------------- ------------- ------------- Net increase (decrease) in net assets resulting from unit transactions (6,943,774) (5,655,335) (4,122,357) ------------- ------------- ------------- Net increase (decrease) in net assets (6,497,204) (2,794,858) (5,382,859) NET ASSETS: Beginning of year 42,330,225 45,153,485 19,439,433 ------------- ------------- ------------- End of year $35,833,021 $42,358,627 $14,056,574 ============= ============= =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. SA-24 -------------------------------------------------------------------------------
PUTNAM PUTNAM PUTNAM PUTNAM DIVERSIFIED GLOBAL ASSET GLOBAL GROWTH AND INCOME ALLOCATION EQUITY INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------------------------------------------------------------------------------------------- OPERATIONS: Net investment income (loss) $5,476,370 $(1,074,903) $2,436,987 $3,212,935 Net realized gain (loss) on security transactions (3,175,940) 6,816,720 2,345,987 41,634,387 Net realized gain on distributions -- -- -- 236,047,809 Net unrealized appreciation (depreciation) of investments during the year 1,553,207 (2,585,187) 16,070,273 (369,294,226) -------------- -------------- -------------- ---------------- Net increase (decrease) in net assets resulting from operations 3,853,637 3,156,630 20,853,247 (88,399,095) -------------- -------------- -------------- ---------------- UNIT TRANSACTIONS: Purchases 766,456 1,285,567 1,078,634 7,036,112 Net transfers 7,021,688 3,036,548 (3,671,717) (62,496,189) Surrenders for benefit payments and fees (31,260,776) (32,637,849) (52,408,439) (327,169,375) Net annuity transactions (50,218) (48,199) (308,805) (1,502,704) -------------- -------------- -------------- ---------------- Net increase (decrease) in net assets resulting from unit transactions (23,522,850) (28,363,933) (55,310,327) (384,132,156) -------------- -------------- -------------- ---------------- Net increase (decrease) in net assets (19,669,213) (25,207,303) (34,457,080) (472,531,251) NET ASSETS: Beginning of year 155,390,466 165,266,437 271,378,767 1,688,519,672 -------------- -------------- -------------- ---------------- End of year $135,721,253 $140,059,134 $236,921,687 $1,215,988,421 ============== ============== ============== ================ PUTNAM PUTNAM GROWTH HEALTH PUTNAM OPPORTUNITIES SCIENCES HIGH YIELD SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- ------------------------------------------------------------ OPERATIONS: Net investment income (loss) $(169,286) $(150,564) $11,161,018 Net realized gain (loss) on security transactions (3,089,980) 6,617,859 (17,843,429) Net realized gain on distributions -- -- -- Net unrealized appreciation (depreciation) of investments during the year 3,841,686 (6,688,019) 10,245,661 ------------- -------------- -------------- Net increase (decrease) in net assets resulting from operations 582,420 (220,724) 3,563,250 ------------- -------------- -------------- UNIT TRANSACTIONS: Purchases 94,016 328,682 1,084,192 Net transfers (296,374) (5,736,561) (8,447,280) Surrenders for benefit payments and fees (3,059,816) (15,216,566) (36,409,661) Net annuity transactions (7,168) (7,870) 65,952 ------------- -------------- -------------- Net increase (decrease) in net assets resulting from unit transactions (3,269,342) (20,632,315) (43,706,797) ------------- -------------- -------------- Net increase (decrease) in net assets (2,686,922) (20,853,039) (40,143,547) NET ASSETS: Beginning of year 15,337,494 65,927,555 182,122,487 ------------- -------------- -------------- End of year $12,650,572 $45,074,516 $141,978,940 ============= ============== ==============
SA-25 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2007 -------------------------------------------------------------------------------
PUTNAM INTERNATIONAL PUTNAM PUTNAM GROWTH AND INTERNATIONAL INCOME INCOME EQUITY SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT --------------------------------------------------------------------------------------------- OPERATIONS: Net investment income (loss) $7,561,876 $1,014,730 $3,479,703 Net realized gain (loss) on security transactions (1,775,905) 4,667,144 5,477,473 Net realized gain on distributions -- 35,485,826 26,584,538 Net unrealized appreciation (depreciation) of investments during the year 1,283,863 (29,609,057) (20,226,862) -------------- -------------- -------------- Net increase (decrease) in net assets resulting from operations 7,069,834 11,558,643 15,314,852 -------------- -------------- -------------- UNIT TRANSACTIONS: Purchases 1,077,692 1,144,691 800,330 Net transfers 7,996,792 9,786,067 2,869,156 Surrenders for benefit payments and fees (42,556,105) (41,032,285) (42,569,724) Net annuity transactions (64,196) (65,275) (90,054) -------------- -------------- -------------- Net increase (decrease) in net assets resulting from unit transactions (33,545,817) (30,166,802) (38,990,292) -------------- -------------- -------------- Net increase (decrease) in net assets (26,475,983) (18,608,159) (23,675,440) NET ASSETS: Beginning of year 200,720,558 198,817,733 216,908,097 -------------- -------------- -------------- End of year $174,244,575 $180,209,574 $193,232,657 ============== ============== ==============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. SA-26 -------------------------------------------------------------------------------
PUTNAM INTERNATIONAL PUTNAM NEW PUTNAM PUTNAM NEW OPPORTUNITIES INVESTORS MONEY MARKET OPPORTUNITIES SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ------------------------------------------------------------------------------------------------------------------ OPERATIONS: Net investment income (loss) $(241,313) $(1,114,285) $3,766,357 $(4,011,985) Net realized gain (loss) on security transactions 4,153,293 6,187,520 -- 23,870,130 Net realized gain on distributions -- -- -- -- Net unrealized appreciation (depreciation) of investments during the year 3,240,198 (12,053,761) (1,312) (4,201,608) -------------- -------------- --------------- -------------- Net increase (decrease) in net assets resulting from operations 7,152,178 (6,980,526) 3,765,045 15,656,537 -------------- -------------- --------------- -------------- UNIT TRANSACTIONS: Purchases 546,822 589,308 1,355,434 1,338,665 Net transfers 5,455,832 (3,781,153) 115,361,978 (23,475,052) Surrenders for benefit payments and fees (13,518,514) (32,455,333) (109,775,813) (59,773,921) Net annuity transactions 34,452 (167,209) (76,083) (174,778) -------------- -------------- --------------- -------------- Net increase (decrease) in net assets resulting from unit transactions (7,481,408) (35,814,387) 6,865,516 (82,085,086) -------------- -------------- --------------- -------------- Net increase (decrease) in net assets (329,230) (42,794,913) 10,630,561 (66,428,549) NET ASSETS: Beginning of year 65,948,307 147,978,123 100,753,240 350,286,597 -------------- -------------- --------------- -------------- End of year $65,619,077 $105,183,210 $111,383,801 $283,858,048 ============== ============== =============== ============== PUTNAM PUTNAM OTC & EMERGING PUTNAM NEW VALUE GROWTH RESEARCH SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- ----------------------------------------------------------------- OPERATIONS: Net investment income (loss) $(122,525) $(317,514) $(358,301) Net realized gain (loss) on security transactions 11,592,514 (1,310,542) 1,208,777 Net realized gain on distributions 22,671,579 -- -- Net unrealized appreciation (depreciation) of investments during the year (45,173,323) 3,872,329 (596,487) -------------- ------------- -------------- Net increase (decrease) in net assets resulting from operations (11,031,755) 2,244,273 253,989 -------------- ------------- -------------- UNIT TRANSACTIONS: Purchases 1,485,453 317,833 256,596 Net transfers (8,636,641) 2,746,910 (2,790,469) Surrenders for benefit payments and fees (48,664,662) (4,304,769) (9,783,266) Net annuity transactions (117,692) (2,877) (20,064) -------------- ------------- -------------- Net increase (decrease) in net assets resulting from unit transactions (55,933,542) (1,242,903) (12,337,203) -------------- ------------- -------------- Net increase (decrease) in net assets (66,965,297) 1,001,370 (12,083,214) NET ASSETS: Beginning of year 254,093,677 20,884,292 49,541,330 -------------- ------------- -------------- End of year $187,128,380 $21,885,662 $37,458,116 ============== ============= ==============
SA-27 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2007 -------------------------------------------------------------------------------
PUTNAM PUTNAM SMALL CAP THE GEORGE PUTNAM VALUE FUND OF BOSTON SUB-ACCOUNT SUB-ACCOUNT ----------------------------------------------------------------------------- OPERATIONS: Net investment income (loss) $(786,251) $3,322,024 Net realized gain (loss) on security transactions 11,427,580 4,064,273 Net realized gain on distributions 15,427,502 19,704,219 Net unrealized appreciation (depreciation) of investments during the year (40,935,714) (26,602,730) -------------- -------------- Net increase (decrease) in net assets resulting from operations (14,866,883) 487,786 -------------- -------------- UNIT TRANSACTIONS: Purchases 719,918 790,864 Net transfers (15,310,506) (972,239) Surrenders for benefit payments and fees (28,857,786) (48,957,502) Net annuity transactions (53,789) (101,072) -------------- -------------- Net increase (decrease) in net assets resulting from unit transactions (43,502,163) (49,239,949) -------------- -------------- Net increase (decrease) in net assets (58,369,046) (48,752,163) NET ASSETS: Beginning of year 148,547,321 219,381,793 -------------- -------------- End of year $90,178,275 $170,629,630 ============== ==============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. SA-28 -------------------------------------------------------------------------------
PUTNAM UTILITIES GROWTH PUTNAM PUTNAM AND INCOME VISTA VOYAGER SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT -------------------------------------------------------------------------------------------------- OPERATIONS: Net investment income (loss) $866,906 $(1,317,543) $(8,730,206) Net realized gain (loss) on security transactions 10,146,872 6,941,505 27,980,656 Net realized gain on distributions -- -- -- Net unrealized appreciation (depreciation) of investments during the year 14,780,480 (2,522,076) 8,723,004 -------------- -------------- --------------- Net increase (decrease) in net assets resulting from operations 25,794,258 3,101,886 27,973,454 -------------- -------------- --------------- UNIT TRANSACTIONS: Purchases 1,166,287 439,773 2,806,760 Net transfers 6,116,535 (9,484,547) (61,176,703) Surrenders for benefit payments and fees (34,298,565) (19,379,706) (133,854,478) Net annuity transactions 24,853 (31,296) (806,899) -------------- -------------- --------------- Net increase (decrease) in net assets resulting from unit transactions (26,990,890) (28,455,776) (193,031,320) -------------- -------------- --------------- Net increase (decrease) in net assets (1,196,632) (25,353,890) (165,057,866) NET ASSETS: Beginning of year 153,107,808 103,209,016 718,409,084 -------------- -------------- --------------- End of year $151,911,176 $77,855,126 $553,351,218 ============== ============== =============== PUTNAM PUTNAM DISCOVERY CAPITAL PUTNAM GROWTH OPPORTUNITIES EQUITY INCOME SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT ----------------------------- ----------------------------------------------------------- OPERATIONS: Net investment income (loss) $(135,767) $(273,251) $79,266 Net realized gain (loss) on security transactions 189,489 (108,461) 652,817 Net realized gain on distributions 758,544 1,420,140 7,054,017 Net unrealized appreciation (depreciation) of investments during the year (111,551) (2,876,465) (5,633,474) ------------- ------------- -------------- Net increase (decrease) in net assets resulting from operations 700,715 (1,838,037) 2,152,626 ------------- ------------- -------------- UNIT TRANSACTIONS: Purchases 107,468 107,637 492,968 Net transfers 1,815,392 (662,610) 15,554,971 Surrenders for benefit payments and fees (1,627,257) (3,559,210) (19,312,157) Net annuity transactions (244) (216) 2,427 ------------- ------------- -------------- Net increase (decrease) in net assets resulting from unit transactions 295,359 (4,114,399) (3,261,791) ------------- ------------- -------------- Net increase (decrease) in net assets 996,074 (5,952,436) (1,109,165) NET ASSETS: Beginning of year 8,366,630 20,686,035 103,263,781 ------------- ------------- -------------- End of year $9,362,704 $14,733,599 $102,154,616 ============= ============= ==============
SA-29 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2008 ------------------------------------------------------------------------------- 1. ORGANIZATION: Separate Account Ten (the "Account") is a separate investment account within Hartford Life and Annuity Insurance Company (the "Company") and is registered with the Securities and Exchange Commission ("SEC") as a unit investment trust under the Investment Company Act of 1940, as amended. Both the Company and the Account are subject to supervision and regulation by the Department of Insurance of the State of Connecticut and the SEC. The Account invests deposits by variable annuity contract owners of the Company in the various mutual funds (the "Funds") as directed by the contract owners. The Account invests in the following sub-accounts (collectively, the "Sub-Accounts"): the Putnam VT Mid Cap Value, Putnam VT American Government Income, Putnam VT Capital Appreciation, Putnam VT Diversified Income, Putnam VT Global Asset Allocation, Putnam VT Global Equity, Putnam VT Growth and Income, Putnam VT Growth Opportunities, Putnam VT Health Sciences, Putnam VT High Yield, Putnam VT Income, Putnam VT International Growth and Income, Putnam VT International Equity, Putnam VT International New Opportunities, Putnam VT Investors, Putnam VT Money Market, Putnam VT New Opportunities, Putnam VT New Value, Putnam VT OTC & Emerging Growth, Putnam VT Research, Putnam VT Small Cap Value, Putnam VT The George Putnam Fund of Boston, Putnam VT Utilities Growth and Income, Putnam VT Vista, Putnam VT Voyager, Putnam VT Discovery Growth, Putnam VT Capital Opportunities, and Putnam VT Equity Income. 2. SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of significant accounting policies of the Account, which are in accordance with accounting principles generally accepted in the United States of America: a) SECURITY TRANSACTIONS -- Security transactions are recorded on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sales of securities are computed using the last in, first out method. Dividend and net realized gain on distributions income is accrued as of the ex-dividend date. Net realized gain on distributions income represents those dividends from the Funds, which are characterized as capital gains under tax regulations. b) SECURITY VALUATION -- The investments in shares of the Funds are valued at the closing net asset value per share as determined by the appropriate Fund as of December 31, 2008. c) UNIT TRANSACTIONS -- Unit transactions are executed based on the unit values calculated at the close of the business day. d) SECURITY CLASS -- The Account consists of a series of funds, each of which is represented by a separate series of class IA and class IB shares. e) Class IA shares are offered at net asset value and are not subject to a distribution fee. Forty percent of Class IA shares are for Company employees only. f) Class IB shares are offered at net asset value and pay an ongoing distribution fee. g) FEDERAL INCOME TAXES -- The operations of the Account form a part of, and are taxed with, the total operations of the Company, which is taxed as an insurance company under the Internal Revenue Code. Under current law, no federal income taxes are payable with respect to the operations of the Account. h) USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the period. Operating results in the future could vary from the amounts derived from management's estimates. i) MORTALITY RISK -- Net assets allocated to contracts in the annuity period are computed according to the 1983a Individual Annuitant Mortality Table and the Annuity 2000 Table. The Mortality Risk is fully borne by the Company and may result in additional amounts being transferred into the variable annuity account by the Company to cover greater longevity of contract owners than expected. Conversely, if amounts allocated exceed amounts required, transfers may be made to the Company. j) FAIR VALUE MEASUREMENTS -- On January 1, 2008, the Account adopted Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value Measurements" ("SFAS 157"). For financial statement elements currently required to be measured at fair value, SFAS 157 redefines fair value, establishes a framework for measuring fair value under U.S. GAAP, establishes a hierarchy based on the level of observable inputs used to measure SA-30 ------------------------------------------------------------------------------- fair value and enhances disclosures about fair value measurements. The new definition of fair value focuses on the price that would be received to sell the asset or paid to transfer the liability regardless of whether an observable liquid market price existed (an exit price). The following section applies the SFAS 157 fair value hierarchy and disclosure requirements to the Account's financial instruments that are carried at fair value. SFAS 157 establishes a fair value hierarchy that prioritizes the inputs in the valuation techniques used to measure fair value into three broad Levels (Level 1, 2, and 3). Level 1: Observable inputs that reflect quoted prices for identical assets or liabilities in active markets that the Account has the ability to access at the measurement date. Level 1 investments include highly liquid open ended management investment companies ("mutual funds"). Level 2: Observable inputs, other than quoted prices included in Level 1, for the asset or liability or prices for similar assets and liabilities. Most debt securities and some preferred stocks are model priced by vendors using observable inputs and are classified within Level 2. Also included in the Level 2 category are derivative instruments that are priced using models with observable market inputs, including interest rate, foreign currency and certain credit swap contracts. Level 3: Valuations that are derived from techniques in which one or more of the significant inputs are unobservable (including assumptions about risk). Level 3 securities include less liquid securities such as highly structured and/or lower quality asset-backed securities ("ABS") and commercial mortgage-backed securities ("CMBS"), including ABS backed by sub-prime loans, and private placement debt and equity securities. Embedded derivatives and complex derivatives securities, including equity derivatives, longer dated interest rate swaps and certain complex credit derivatives are also included in Level 3. Because Level 3 fair values, by their nature, contain unobservable market inputs as there is no observable market for these assets and liabilities, considerable judgment is used to determine the SFAS 157 Level 3 fair values. Level 3 fair values represent the best estimate of an amount that could be realized in a current market exchange absent actual market exchanges. The adoption of SFAS 157 did not have a material impact on the results of the Account. As of December 31, 2008, the Account invests in mutual funds which are carried at fair value and represent Level 1 investments under the SFAS 157 hierarchy levels. There were no Level 2 or Level 3 investments in the Account. k) ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES, AN INTERPRETATION OF FASB STATEMENT NO. 109 -- In July 2006, the FASB released "Accounting for Uncertainty in Income Taxes" ("FIN 48") to clarify accounting for income taxes recognized in the financial statements in accordance with FASB 109, "Accounting for Income Taxes." FIN 48 is effective for fiscal years beginning after December 15, 2006 and prescribes a comprehensive model for how an entity should recognize, measure, present and disclose in its financial statements uncertain tax positions that the entity has taken or expects to take on a tax return. Upon adoption, as of the first quarter of 2007, FIN 48 did not have an effect on the Account's financial condition. 3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES: Certain amounts are deducted from the contracts, as described below: a) MORTALITY AND EXPENSE RISK CHARGES -- The Company, as issuer of variable annuity contracts, provides the mortality and expense undertakings and, with respect to the Account, receives a maximum annual fee of 1.50% of the Account's average daily net assets. b) ANNUAL MAINTENANCE FEE -- An annual maintenance fee in the amount of $30 may be deducted from the contract's value each contract year. However, this fee is not applicable to contracts with values of $50,000 or more, as determined on the most recent contract anniversary. These charges are included in surrenders for benefit payments and fees in the accompanying statements of changes in net assets. c) TAX EXPENSE CHARGE -- If applicable, the Company will make deductions at a maximum annual rate of 3.5% of the contract's value to meet premium tax requirements. An additional tax charge based on a percentage of the contract's value may be assessed on partial withdrawals or surrenders. These charges are reflected in surrenders for benefit payments and fees on the accompanying statements of changes in net assets. d) ADMINISTRATIVE CHARGE -- The Company will make deductions to cover administrative expenses at a maximum annual rate of 0.20% of the contract's value. SA-31 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2008 ------------------------------------------------------------------------------- 4. PURCHASES AND SALES OF INVESTMENTS: The cost of purchases and proceeds from sales of investments for the year ended December 31, 2008 were as follows:
PURCHASES PROCEEDS SUB-ACCOUNT AT COST FROM SALES -------------------------------------------------------------------------------- Putnam VT Mid Cap Value $7,040,559 $11,320,083 Putnam VT American Government Income 28,386,699 14,545,009 Putnam VT Capital Appreciation 2,463,474 3,943,031 Putnam VT Diversified Income 10,444,316 33,613,403 Putnam VT Global Asset Allocation 8,459,481 27,690,653 Putnam VT Global Equity 5,553,037 43,235,619 Putnam VT Growth and Income 190,929,127 275,253,905 Putnam VT Growth Opportunities 2,423,969 4,301,548 Putnam VT Health Sciences 2,391,457 11,133,364 Putnam VT High Yield 23,515,597 44,954,505 Putnam VT Income 15,374,975 46,006,669 Putnam VT International Growth and Income 32,679,344 39,229,716 Putnam VT International Equity 29,296,592 41,522,809 Putnam VT International New Opportunities 2,787,154 17,872,214 Putnam VT Investors 1,809,616 26,638,146 Putnam VT Money Market 99,073,836 67,755,441 Putnam VT New Opportunities 1,520,208 53,112,392 Putnam VT New Value 34,175,616 48,162,875 Putnam VT OTC & Emerging Growth 1,259,739 6,197,594 Putnam VT Research 1,222,369 9,335,972 Putnam VT Small Cap Value 18,996,664 26,691,730 Putnam VT The George Putnam of Boston 21,596,565 43,580,122 Putnam VT Utilities Growth and Income 6,233,613 29,142,001 Putnam VT Vista 1,101,432 17,203,621 Putnam VT Voyager 2,951,129 114,321,453 Putnam VT Discovery Growth 1,608,208 2,625,806 Putnam VT Capital Opportunities 1,729,467 4,683,937 Putnam VT Equity Income 13,073,131 17,994,378 -------------- ---------------- $568,097,375 $1,082,067,997 ============== ================
5. CHANGES IN UNITS OUTSTANDING: The changes in units outstanding for the year ended December 31, 2008 were as follows:
UNITS UNITS NET INCREASE SUB-ACCOUNT ISSUED REDEEMED (DECREASE) -------------------------------------------------------------------------------- Putnam VT Mid Cap Value 101,532 705,293 (603,761) Putnam VT American Government Income 1,871,145 1,034,183 836,962 Putnam VT Capital Appreciation 165,329 491,901 (326,572) Putnam VT Diversified Income 219,478 1,990,035 (1,770,557) Putnam VT Global Asset Allocation 178,145 935,474 (757,329) Putnam VT Global Equity 84,337 1,828,467 (1,744,130) Putnam VT Growth and Income 168,477 6,332,927 (6,164,450) Putnam VT Growth Opportunities 555,844 1,007,843 (451,999) Putnam VT Health Sciences 179,983 951,539 (771,556) Putnam VT High Yield 544,737 1,577,887 (1,033,150) Putnam VT Income 223,748 1,952,230 (1,728,482)
SA-32 -------------------------------------------------------------------------------
UNITS UNITS NET INCREASE SUB-ACCOUNT ISSUED REDEEMED (DECREASE) -------------------------------------------------------------------------------- Putnam VT International Growth and Income 198,763 1,995,631 (1,796,868) Putnam VT International Equity 181,921 2,046,130 (1,864,209) Putnam VT International New Opportunities 132,572 1,152,860 (1,020,288) Putnam VT Investors 219,960 3,162,914 (2,942,954) Putnam VT Money Market 57,128,699 39,110,744 18,017,955 Putnam VT New Opportunities 108,754 2,666,868 (2,558,114) Putnam VT New Value 113,471 2,884,034 (2,770,563) Putnam VT OTC & Emerging Growth 269,765 1,072,967 (803,202) Putnam VT Research 92,291 830,241 (737,950) Putnam VT Small Cap Value 80,782 1,314,153 (1,233,371) Putnam VT The George Putnam of Boston 291,454 3,607,258 (3,315,804) Putnam VT Utilities Growth and Income 128,165 971,257 (843,092) Putnam VT Vista 129,174 1,343,206 (1,214,032) Putnam VT Voyager 138,632 2,836,562 (2,697,930) Putnam VT Discovery Growth 141,592 480,039 (338,447) Putnam VT Capital Opportunities 71,177 316,681 (245,504) Putnam VT Equity Income 516,103 1,212,615 (696,512)
The changes in units outstanding for the year ended December 31, 2007 were as follows:
UNITS UNITS NET INCREASE SUB-ACCOUNT ISSUED REDEEMED (DECREASE) -------------------------------------------------------------------------------- Putnam Mid Cap Value 311,906 673,071 (361,165) Putnam American Government Income 469,533 903,074 (433,541) Putnam Capital Appreciation 194,439 598,321 (403,882) Putnam Diversified Income 349,787 1,656,561 (1,306,774) Putnam Global Asset Allocation 154,751 901,214 (746,463) Putnam Global Equity 203,292 2,054,834 (1,851,542) Putnam Growth and Income 183,650 7,196,930 (7,013,280) Putnam Growth Opportunities 221,359 884,388 (663,029) Putnam Health Sciences 100,033 1,721,963 (1,621,930) Putnam High Yield 337,334 1,697,876 (1,360,542) Putnam Income 267,861 1,588,852 (1,320,991) Putnam International Growth and Income 274,103 1,482,663 (1,208,560) Putnam International Equity 461,296 2,015,453 (1,554,157) Putnam International New Opportunities 569,836 992,118 (422,282) Putnam Investors 379,599 3,696,676 (3,317,077) Putnam Money Market 52,019,118 48,245,309 3,773,809 Putnam New Opportunities 143,476 3,718,736 (3,575,260) Putnam New Value 173,491 2,685,498 (2,512,007) Putnam OTC & Emerging Growth 1,024,283 1,152,690 (128,407) Putnam Research 88,495 983,792 (895,297) Putnam Small Cap Value 90,764 1,728,347 (1,637,583) Putnam The George Putnam Fund of Boston 336,641 3,854,287 (3,517,646) Putnam Utilities Growth and Income 227,653 1,078,049 (850,396) Putnam Vista 130,281 1,962,687 (1,832,406) Putnam Voyager 139,460 4,139,764 (4,000,304) Putnam Discovery Growth 373,358 329,696 43,662 Putnam Capital Opportunities 155,940 380,751 (224,811) Putnam Equity Income 662,431 852,614 (190,183)
SA-33 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2008 ------------------------------------------------------------------------------- 6. FINANCIAL HIGHLIGHTS: The following is a summary of units, unit fair value, contract owners' equity, expense ratios, investment income ratios, and total return showing the minimum and maximum contract charges for each series in each Sub-Account that has outstanding units.
UNIT CONTRACT SUB-ACCOUNT UNITS FAIR VALUE # OWNERS' EQUITY ----------------------------------------------------------------------------------------- PUTNAM VT MID CAP VALUE 2008 Lowest contract charges 8,306 $10.622093 $88,229 Highest contract charges 2,253 9.759271 21,985 Remaining contract charges 1,322,682 -- 13,807,252 2007 Lowest contract charges 8,483 18.756747 159,109 Highest contract charges 207 17.494560 3,618 Remaining contract charges 1,928,312 -- 35,670,294 2006 Lowest contract charges 11,417 18.621027 212,594 Highest contract charges 181 17.630509 3,163 Remaining contract charges 2,286,569 -- 42,114,468 2005 Lowest contract charges 9,237 16.337546 150,916 Highest contract charges 179 15.702247 2,816 Remaining contract charges 2,373,738 -- 38,481,084 2004 Lowest contract charges 6,348 14.668596 93,112 Highest contract charges 147 14.311135 2,100 Remaining contract charges 1,561,425 -- 22,790,696 PUTNAM VT AMERICAN GOVERNMENT INCOME 2008 Lowest contract charges 5,565 14.440840 80,369 Highest contract charges 6,878 11.792509 81,111 Remaining contract charges 3,879,573 -- 53,364,595 2007 Lowest contract charges 5,352 14.500800 77,607 Highest contract charges 5,855 12.101172 70,850 Remaining contract charges 3,043,847 -- 42,210,170 2006 Lowest contract charges 4,363 13.475700 58,797 Highest contract charges 5,856 11.432670 66,937 Remaining contract charges 3,478,376 -- 45,027,751 2005 Lowest contract charges 6,754 13.143557 88,767 Highest contract charges 5,855 11.339415 66,390 Remaining contract charges 4,410,922 -- 56,043,514 2004 Lowest contract charges 9,419 13.053452 122,952 Highest contract charges 5,855 11.453959 67,061 Remaining contract charges 6,087,591 -- 77,281,447 INVESTMENT EXPENSE INCOME TOTAL SUB-ACCOUNT RATIO* RATIO** RETURN*** -------------------------------------- ------------------------------------------------------ PUTNAM VT MID CAP VALUE 2008 Lowest contract charges 0.95% 0.39% (43.37)% Highest contract charges 2.45% 0.14% (44.22)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 1.45% 0.73% Highest contract charges 2.44% 1.43% (0.77)% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 0.18% 13.98% Highest contract charges 2.45% 0.21% 12.28% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.94% 0.19% 11.38% Highest contract charges 2.44% 0.23% 9.72% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.94% 0.34% 14.35% Highest contract charges 2.41% 0.14% 12.65% Remaining contract charges -- -- -- PUTNAM VT AMERICAN GOVERNMENT INCOME 2008 Lowest contract charges 0.95% 4.06% (0.41)% Highest contract charges 2.41% -- (2.13)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 4.59% 7.61% Highest contract charges 2.34% 4.81% 5.85% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 5.07% 2.53% Highest contract charges 2.35% 4.10% 0.82% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 3.44% 0.69% Highest contract charges 2.34% 3.19% (1.00)% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 4.08% 1.88% Highest contract charges 2.35% 4.77% 0.28% Remaining contract charges -- -- --
SA-34 -------------------------------------------------------------------------------
UNIT CONTRACT SUB-ACCOUNT UNITS FAIR VALUE # OWNERS' EQUITY ----------------------------------------------------------------------------------------- PUTNAM VT CAPITAL APPRECIATION 2008 Lowest contract charges 10,512 $5.975688 $62,814 Highest contract charges 4,514 5.226586 23,591 Remaining contract charges 1,155,896 -- 6,593,922 2007 Lowest contract charges 13,441 9.775127 131,385 Highest contract charges 4,514 8.694537 39,244 Remaining contract charges 1,479,539 -- 13,885,945 2006 Lowest contract charges 13,904 10.581038 147,123 Highest contract charges 4,342 9.575555 41,590 Remaining contract charges 1,883,130 -- 19,250,720 2005 Lowest contract charges 20,197 9.485818 191,588 Highest contract charges 4,343 8.736567 37,946 Remaining contract charges 2,053,163 -- 18,910,320 2004 Lowest contract charges 19,400 8.851955 171,725 Highest contract charges 3,634 8.299424 30,158 Remaining contract charges 2,048,593 -- 17,709,183 PUTNAM VT DIVERSIFIED INCOME 2008 Lowest contract charges 17,135 12.855175 220,278 Highest contract charges 50,603 9.394683 475,404 Remaining contract charges 5,612,411 -- 69,644,294 2007 Lowest contract charges 16,670 18.758480 312,703 Highest contract charges 53,475 13.916279 744,178 Remaining contract charges 7,380,561 -- 134,664,372 2006 Lowest contract charges 21,891 18.186222 398,106 Highest contract charges 56,905 13.695602 779,317 Remaining contract charges 8,678,684 -- 154,213,043 2005 Lowest contract charges 23,781 17.272822 410,757 Highest contract charges 69,146 13.204279 913,027 Remaining contract charges 10,897,722 -- 184,139,478 2004 Lowest contract charges 21,407 16.921696 362,249 Highest contract charges 66,579 13.131361 874,276 Remaining contract charges 12,897,573 -- 214,325,442 PUTNAM VT GLOBAL ASSET ALLOCATION 2008 Lowest contract charges 3,927 25.264035 99,220 Highest contract charges 5,315 7.296212 38,777 Remaining contract charges 3,300,715 -- 74,609,628 2007 Lowest contract charges 4,768 38.251654 182,399 Highest contract charges 1,415 11.263005 15,942 Remaining contract charges 4,061,104 -- 139,860,793 2006 Lowest contract charges 5,875 37.514193 220,381 Highest contract charges 1,417 11.201591 15,856 Remaining contract charges 4,806,458 -- 165,030,200 2005 Lowest contract charges 5,141 33.557575 172,514 Highest contract charges 1,415 10.161396 14,383 Remaining contract charges 5,742,573 -- 177,633,299 2004 Lowest contract charges 2,726 31.669672 86,341 Highest contract charges 2,688 9.724887 26,138 Remaining contract charges 6,944,851 -- 205,561,827 INVESTMENT EXPENSE INCOME TOTAL SUB-ACCOUNT RATIO* RATIO** RETURN*** -------------------------------------- ------------------------------------------------------ PUTNAM VT CAPITAL APPRECIATION 2008 Lowest contract charges 0.95% 0.88% (38.87)% Highest contract charges 2.46% 0.42% (39.89)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 0.38% (7.62)% Highest contract charges 2.44% 0.14% (9.20)% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 0.37% 11.55% Highest contract charges 2.45% 0.10% 9.60% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 0.62% 7.16% Highest contract charges 2.44% 0.38% 5.27% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% -- 13.93% Highest contract charges 2.44% -- 11.93% Remaining contract charges -- -- -- PUTNAM VT DIVERSIFIED INCOME 2008 Lowest contract charges 0.95% 5.99% (31.47)% Highest contract charges 2.45% 6.03% (32.49)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 4.94% 3.15% Highest contract charges 2.44% 4.95% 1.61% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 5.70% 5.29% Highest contract charges 2.45% 5.98% 3.72% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 8.17% 2.08% Highest contract charges 2.44% 7.33% 0.56% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 7.34% 8.17% Highest contract charges 2.43% 4.85% 6.56% Remaining contract charges -- -- -- PUTNAM VT GLOBAL ASSET ALLOCATION 2008 Lowest contract charges 0.95% 3.99% (33.95)% Highest contract charges 2.44% -- (34.94)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 0.51% 1.97% Highest contract charges 2.34% 0.50% 0.55% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 2.47% 11.79% Highest contract charges 2.35% 2.67% 10.24% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.94% 1.01% 5.96% Highest contract charges 2.35% 1.76% 4.49% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 2.73% 8.08% Highest contract charges 2.35% 2.87% 6.58% Remaining contract charges -- -- --
SA-35 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2008 -------------------------------------------------------------------------------
UNIT CONTRACT SUB-ACCOUNT UNITS FAIR VALUE # OWNERS' EQUITY ----------------------------------------------------------------------------------------- PUTNAM VT GLOBAL EQUITY 2008 Lowest contract charges 22,909 $6.079462 $139,275 Highest contract charges 8,182 4.662990 38,154 Remaining contract charges 6,305,948 -- 100,262,057 2007 Lowest contract charges 36,864 11.208235 413,179 Highest contract charges 902 8.766103 7,910 Remaining contract charges 8,043,403 -- 236,500,598 2006 Lowest contract charges 49,655 10.346231 513,738 Highest contract charges 901 8.240043 7,435 Remaining contract charges 9,882,155 -- 270,857,594 2005 Lowest contract charges 56,350 8.457141 476,560 Highest contract charges 902 6.853303 6,184 Remaining contract charges 12,270,381 -- 276,749,211 2004 Lowest contract charges 74,822 7.826381 585,584 Highest contract charges 902 6.456263 5,826 Remaining contract charges 15,541,072 -- 325,979,806 PUTNAM VT GROWTH AND INCOME 2008 Lowest contract charges 25,066 33.626986 842,890 Highest contract charges 11,263 6.636242 74,742 Remaining contract charges 17,426,677 -- 542,279,811 2007 Lowest contract charges 35,418 55.377892 1,961,401 Highest contract charges 10,532 11.099975 116,905 Remaining contract charges 23,581,507 -- 1,213,910,115 2006 Lowest contract charges 41,918 59.499553 2,494,102 Highest contract charges 13,082 12.112525 158,477 Remaining contract charges 30,585,737 -- 1,685,867,093 2005 Lowest contract charges 47,311 51.822182 2,451,768 Highest contract charges 13,183 10.714366 141,244 Remaining contract charges 40,106,530 -- 1,915,859,171 2004 Lowest contract charges 45,476 49.717491 2,260,973 Highest contract charges 7,114 10.439750 74,265 Remaining contract charges 50,961,142 -- 2,352,963,112 PUTNAM VT GROWTH OPPORTUNITIES 2008 Lowest contract charges 15,507 3.251593 50,421 Highest contract charges 14,483 2.924694 42,357 Remaining contract charges 2,050,034 -- 6,298,346 2007 Lowest contract charges 11,504 5.263646 60,551 Highest contract charges 14,819 4.812229 71,313 Remaining contract charges 2,505,699 -- 12,518,708 2006 Lowest contract charges 16,721 5.021486 83,964 Highest contract charges 7,088 4.681085 33,175 Remaining contract charges 3,171,242 -- 15,220,355 2005 Lowest contract charges 22,076 4.661652 102,908 Highest contract charges 6,696 4.421402 29,608 Remaining contract charges 3,821,194 -- 17,135,225 2004 Lowest contract charges 30,119 4.510283 135,846 Highest contract charges 485 4.354501 2,112 Remaining contract charges 4,795,563 -- 20,960,235 INVESTMENT EXPENSE INCOME TOTAL SUB-ACCOUNT RATIO* RATIO** RETURN*** -------------------------------------- ------------------------------------------------------ PUTNAM VT GLOBAL EQUITY 2008 Lowest contract charges 0.96% 2.75% (45.76)% Highest contract charges 2.50% -- (46.70)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 2.29% 8.33% Highest contract charges 2.44% 2.01% 6.38% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 0.60% 22.34% Highest contract charges 2.45% 0.33% 20.24% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 1.08% 8.06% Highest contract charges 2.44% 0.78% 6.15% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 2.29% 12.86% Highest contract charges 2.42% -- 10.93% Remaining contract charges -- -- -- PUTNAM VT GROWTH AND INCOME 2008 Lowest contract charges 0.95% 2.18% (39.28)% Highest contract charges 2.51% 1.63% (40.21)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 1.32% (6.93)% Highest contract charges 2.50% 1.28% (8.36)% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 1.54% 14.82% Highest contract charges 2.50% 1.50% 13.05% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 1.53% 4.23% Highest contract charges 2.49% 1.56% 2.63% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 1.40% 10.06% Highest contract charges 2.45% -- 8.37% Remaining contract charges -- -- -- PUTNAM VT GROWTH OPPORTUNITIES 2008 Lowest contract charges 0.95% -- (38.23)% Highest contract charges 2.51% -- (39.22)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 0.36% 4.82% Highest contract charges 2.46% -- 2.80% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 0.38% 7.72% Highest contract charges 2.50% 0.06% 5.87% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 0.91% 3.36% Highest contract charges 2.48% 0.63% 1.54% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 0.15% 1.11% Highest contract charges 2.24% -- (0.77)% Remaining contract charges -- -- --
SA-36 -------------------------------------------------------------------------------
UNIT CONTRACT SUB-ACCOUNT UNITS FAIR VALUE # OWNERS' EQUITY ----------------------------------------------------------------------------------------- PUTNAM VT HEALTH SCIENCES 2008 Lowest contract charges 15,407 $10.960856 $168,873 Highest contract charges 12,444 6.595651 82,074 Remaining contract charges 2,943,488 -- 29,061,104 2007 Lowest contract charges 24,651 13.315442 328,239 Highest contract charges 16,881 8.155167 137,667 Remaining contract charges 3,701,364 -- 44,608,610 2006 Lowest contract charges 36,070 13.491720 486,640 Highest contract charges 1,738 8.452880 14,671 Remaining contract charges 5,327,018 -- 65,426,244 2005 Lowest contract charges 49,740 13.215507 657,342 Highest contract charges 1,725 8.418814 14,522 Remaining contract charges 7,390,171 -- 89,466,645 2004 Lowest contract charges 62,752 11.755249 737,668 Highest contract charges 1,734 7.614125 13,199 Remaining contract charges 9,042,774 -- 97,939,502 PUTNAM VT HIGH YIELD 2008 Lowest contract charges 12,681 11.072220 140,402 Highest contract charges 2,040 9.820305 20,036 Remaining contract charges 3,321,957 -- 79,272,903 2007 Lowest contract charges 30,827 15.107260 465,713 Highest contract charges 2,270 13.612628 30,902 Remaining contract charges 4,336,732 -- 141,482,325 2006 Lowest contract charges 36,427 14.763103 537,783 Highest contract charges 2,342 13.571050 31,786 Remaining contract charges 5,691,602 -- 181,552,918 2005 Lowest contract charges 45,167 13.475624 608,658 Highest contract charges 2,449 12.583377 30,817 Remaining contract charges 7,836,783 -- 220,869,826 2004 Lowest contract charges 64,196 13.148482 844,077 Highest contract charges 1,526 12.508249 19,089 Remaining contract charges 10,432,670 -- 291,283,313 PUTNAM VT INCOME 2008 Lowest contract charges 11,339 10.996463 124,686 Highest contract charges 350 9.156511 3,201 Remaining contract charges 5,147,799 -- 98,899,999 2007 Lowest contract charges 20,697 14.565708 301,460 Highest contract charges 10,434 12.341235 128,764 Remaining contract charges 6,856,840 -- 173,814,351 2006 Lowest contract charges 21,600 13.945055 301,208 Highest contract charges 13,375 12.025393 160,764 Remaining contract charges 8,173,987 -- 200,258,586 2005 Lowest contract charges 30,710 13.430082 412,439 Highest contract charges 13,097 11.796535 154,499 Remaining contract charges 10,121,427 -- 242,353,819 2004 Lowest contract charges 41,233 13.214950 544,886 Highest contract charges 4,519 11.816311 53,398 Remaining contract charges 12,272,564 -- 295,744,699 INVESTMENT EXPENSE INCOME TOTAL SUB-ACCOUNT RATIO* RATIO** RETURN*** -------------------------------------- ------------------------------------------------------ PUTNAM VT HEALTH SCIENCES 2008 Lowest contract charges 0.95% -- (17.68)% Highest contract charges 2.51% -- (19.12)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 1.10% (1.31)% Highest contract charges 2.46% -- (3.05)% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 0.58% 2.09% Highest contract charges 2.35% 0.30% 0.41% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 0.31% 12.42% Highest contract charges 2.34% 0.06% 10.57% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 0.41% 6.29% Highest contract charges 2.35% 0.19% 4.64% Remaining contract charges -- -- -- PUTNAM VT HIGH YIELD 2008 Lowest contract charges 0.96% 12.95% (26.71)% Highest contract charges 2.45% 9.60% (27.86)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 7.99% 2.33% Highest contract charges 2.44% 7.69% 0.31% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 7.81% 9.55% Highest contract charges 2.45% 7.64% 7.85% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 8.77% 2.49% Highest contract charges 2.44% 8.17% 0.60% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 8.43% 9.94% Highest contract charges 2.43% -- 7.87% Remaining contract charges -- -- -- PUTNAM VT INCOME 2008 Lowest contract charges 0.95% 7.73% (24.50)% Highest contract charges 2.52% 11.41% (25.81)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 4.99% 4.45% Highest contract charges 2.49% 4.58% 2.63% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 4.49% 3.83% Highest contract charges 2.50% 4.19% 1.94% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 3.52% 1.63% Highest contract charges 2.50% 3.39% (0.17)% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 4.50% 3.73% Highest contract charges 2.49% -- 1.86% Remaining contract charges -- -- --
SA-37 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2008 -------------------------------------------------------------------------------
UNIT CONTRACT SUB-ACCOUNT UNITS FAIR VALUE # OWNERS' EQUITY ----------------------------------------------------------------------------------------- PUTNAM VT INTERNATIONAL GROWTH AND INCOME 2008 Lowest contract charges 8,403 $13.887358 $116,694 Highest contract charges 520 8.538764 4,437 Remaining contract charges 5,421,609 -- 72,118,864 2007 Lowest contract charges 16,938 25.973269 439,924 Highest contract charges 7,957 16.220138 129,068 Remaining contract charges 7,202,506 -- 179,640,582 2006 Lowest contract charges 18,201 24.504130 445,991 Highest contract charges 10,809 15.541727 168,022 Remaining contract charges 8,406,951 -- 198,203,720 2005 Lowest contract charges 18,819 19.444326 365,927 Highest contract charges 12,202 12.525106 152,830 Remaining contract charges 9,026,480 -- 169,445,465 2004 Lowest contract charges 11,465 17.204076 197,249 Highest contract charges 4,462 11.255104 50,217 Remaining contract charges 9,934,902 -- 166,390,217 PUTNAM VT INTERNATIONAL EQUITY 2008 Lowest contract charges 38,961 9.504233 370,291 Highest contract charges 388 7.234579 2,804 Remaining contract charges 6,027,483 -- 80,928,621 2007 Lowest contract charges 57,686 17.085639 985,604 Highest contract charges 7,925 13.235183 104,883 Remaining contract charges 7,865,431 -- 192,142,170 2006 Lowest contract charges 68,850 15.881238 1,093,423 Highest contract charges 7,502 12.522501 93,939 Remaining contract charges 9,408,847 -- 215,720,735 2005 Lowest contract charges 74,974 12.521365 938,777 Highest contract charges 8,248 10.052848 82,920 Remaining contract charges 11,051,486 -- 200,843,907 2004 Lowest contract charges 75,980 11.240876 854,082 Highest contract charges 2,545 9.186741 23,384 Remaining contract charges 13,121,786 -- 216,880,500 PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES 2008 Lowest contract charges 2,225 11.268124 25,071 Highest contract charges 3,265 6.663483 21,753 Remaining contract charges 2,458,850 -- 26,382,496 2007 Lowest contract charges 1,443 19.777158 28,532 Highest contract charges 2,876 11.878566 34,160 Remaining contract charges 3,480,309 -- 65,556,385 2006 Lowest contract charges 813 17.635844 14,340 Highest contract charges 2,067 10.774040 22,286 Remaining contract charges 3,904,030 -- 65,911,681 2005 Lowest contract charges 1,697 14.115601 23,950 Highest contract charges 2,069 8.753731 18,109 Remaining contract charges 4,159,585 -- 56,099,694 2004 Lowest contract charges 814 12.039492 9,795 Highest contract charges 1,335 7.579025 10,117 Remaining contract charges 4,302,943 -- 50,451,958 INVESTMENT EXPENSE INCOME TOTAL SUB-ACCOUNT RATIO* RATIO** RETURN*** -------------------------------------- ------------------------------------------------------ PUTNAM VT INTERNATIONAL GROWTH AND INCOME 2008 Lowest contract charges 0.95% 2.04% (46.53)% Highest contract charges 2.55% 1.71% (47.36)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 1.65% 6.00% Highest contract charges 2.50% 1.69% 4.37% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 1.16% 26.02% Highest contract charges 2.50% 1.21% 24.09% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.94% 0.70% 13.02% Highest contract charges 2.49% 0.88% 11.28% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 1.02% 19.84% Highest contract charges 2.48% -- 18.00% Remaining contract charges -- -- -- PUTNAM VT INTERNATIONAL EQUITY 2008 Lowest contract charges 0.95% 2.66% (44.37)% Highest contract charges 2.60% 1.38% (45.34)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 3.14% 7.58% Highest contract charges 2.49% 2.73% 5.69% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 0.79% 26.83% Highest contract charges 2.50% 0.63% 24.57% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 1.75% 11.39% Highest contract charges 2.50% 1.45% 9.43% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 1.67% 15.39% Highest contract charges 2.48% -- 13.33% Remaining contract charges -- -- -- PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES 2008 Lowest contract charges 0.95% 1.61% (43.03)% Highest contract charges 2.50% 1.55% (43.90)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.94% 0.58% 12.14% Highest contract charges 2.47% -- 10.42% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 1.40% 24.94% Highest contract charges 2.45% 1.29% 23.08% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 0.71% 17.24% Highest contract charges 2.45% 0.47% 15.50% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.94% 0.96% 12.28% Highest contract charges 2.43% -- 10.61% Remaining contract charges -- -- --
SA-38 -------------------------------------------------------------------------------
UNIT CONTRACT SUB-ACCOUNT UNITS FAIR VALUE # OWNERS' EQUITY ----------------------------------------------------------------------------------------- PUTNAM VT INVESTORS 2008 Lowest contract charges 62,016 $5.520707 $342,370 Highest contract charges 19,347 4.289235 82,983 Remaining contract charges 7,462,574 -- 44,603,232 2007 Lowest contract charges 100,421 9.203441 924,220 Highest contract charges 19,454 7.275264 141,532 Remaining contract charges 10,367,016 -- 104,117,458 2006 Lowest contract charges 132,193 9.770554 1,291,601 Highest contract charges 8,838 7.865861 69,510 Remaining contract charges 13,662,937 -- 146,617,012 2005 Lowest contract charges 152,157 8.634611 1,313,815 Highest contract charges 8,933 7.078697 63,231 Remaining contract charges 16,915,271 -- 161,939,289 2004 Lowest contract charges 198,354 7.995115 1,585,860 Highest contract charges 3,211 6.670482 21,418 Remaining contract charges 20,266,265 -- 181,301,336 PUTNAM VT MONEY MARKET 2008 Lowest contract charges 190,916 1.224789 233,832 Highest contract charges 28,893 1.018279 29,421 Remaining contract charges 80,433,393 -- 142,439,589 2007 Lowest contract charges 92,965 1.202504 111,791 Highest contract charges 22,567 1.019909 23,016 Remaining contract charges 62,519,715 -- 111,248,994 2006 Lowest contract charges 183,649 1.155355 212,179 Highest contract charges 21,488 0.997267 21,426 Remaining contract charges 58,656,301 -- 100,519,635 2005 Lowest contract charges 118,736 1.114757 132,361 Highest contract charges 21,234 0.979257 20,794 Remaining contract charges 60,254,395 -- 100,027,027 2004 Lowest contract charges 115,183 1.094889 126,113 Highest contract charges 217,584 0.979258 213,071 Remaining contract charges 80,051,671 -- 130,723,903 PUTNAM VT NEW OPPORTUNITIES 2008 Lowest contract charges 7,949 15.167592 120,560 Highest contract charges 23,925 3.518082 84,171 Remaining contract charges 9,888,877 -- 135,792,853 2007 Lowest contract charges 10,438 24.998246 260,930 Highest contract charges 24,265 5.889089 142,898 Remaining contract charges 12,444,162 -- 283,454,220 2006 Lowest contract charges 15,801 23.867242 377,124 Highest contract charges 3,546 5.710479 20,244 Remaining contract charges 16,034,778 -- 349,889,229 2005 Lowest contract charges 16,386 22.195385 363,701 Highest contract charges 3,500 5.393438 18,878 Remaining contract charges 20,795,671 -- 424,903,056 2004 Lowest contract charges 16,517 20.369744 336,437 Highest contract charges 2,328 5.027090 11,701 Remaining contract charges 27,381,950 -- 519,927,050 INVESTMENT EXPENSE INCOME TOTAL SUB-ACCOUNT RATIO* RATIO** RETURN*** -------------------------------------- ------------------------------------------------------ PUTNAM VT INVESTORS 2008 Lowest contract charges 0.95% 0.58% (40.02)% Highest contract charges 2.51% 0.25% (41.04)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 0.60% (5.80)% Highest contract charges 2.45% -- (7.51)% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 0.69% 13.16% Highest contract charges 2.50% 0.40% 11.12% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 1.31% 8.00% Highest contract charges 2.50% 0.98% 6.12% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 0.73% 12.00% Highest contract charges 2.48% -- 9.86% Remaining contract charges -- -- -- PUTNAM VT MONEY MARKET 2008 Lowest contract charges 0.95% 2.67% 1.85% Highest contract charges 2.47% 2.39% 0.04% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 4.94% 4.08% Highest contract charges 2.44% 4.67% 2.27% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 4.66% 3.64% Highest contract charges 2.45% 4.27% 1.84% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 2.75% 1.82% Highest contract charges 2.44% 2.60% 0.05% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 0.89% (0.05)% Highest contract charges 2.40% 0.65% (1.73)% Remaining contract charges -- -- -- PUTNAM VT NEW OPPORTUNITIES 2008 Lowest contract charges 0.95% -- (39.33)% Highest contract charges 2.51% -- (40.26)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% -- 4.74% Highest contract charges 2.46% -- 3.13% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% -- 7.53% Highest contract charges 2.50% -- 5.88% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 0.10% 8.96% Highest contract charges 2.50% 0.11% 7.29% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% -- 9.27% Highest contract charges 2.48% -- 7.59% Remaining contract charges -- -- --
SA-39 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2008 -------------------------------------------------------------------------------
UNIT CONTRACT SUB-ACCOUNT UNITS FAIR VALUE # OWNERS' EQUITY ----------------------------------------------------------------------------------------- PUTNAM VT NEW VALUE 2008 Lowest contract charges 33,723 $10.253831 $345,789 Highest contract charges 10,238 7.932938 81,219 Remaining contract charges 6,276,791 -- 70,600,550 2007 Lowest contract charges 45,806 18.684705 855,879 Highest contract charges 14,855 14.724732 218,739 Remaining contract charges 9,030,654 -- 186,053,762 2006 Lowest contract charges 62,465 19.776242 1,235,327 Highest contract charges 18,892 15.873638 299,870 Remaining contract charges 11,521,965 -- 252,558,480 2005 Lowest contract charges 74,938 17.168823 1,286,594 Highest contract charges 19,062 14.028905 267,424 Remaining contract charges 14,379,270 -- 274,998,034 2004 Lowest contract charges 69,107 16.330760 1,128,575 Highest contract charges 14,281 13.583544 193,982 Remaining contract charges 15,487,854 -- 283,703,717 PUTNAM VT OTC & EMERGING GROWTH 2008 Lowest contract charges 1,485 3.973049 5,899 Highest contract charges 8,881 2.308377 20,501 Remaining contract charges 2,513,277 -- 8,673,858 2007 Lowest contract charges 25,023 5.589179 139,855 Highest contract charges 8,232 4.355489 35,854 Remaining contract charges 3,293,589 -- 21,709,953 2006 Lowest contract charges 9,755 6.612150 64,501 Highest contract charges 18,968 3.968801 75,280 Remaining contract charges 3,426,528 -- 20,744,511 2005 Lowest contract charges 9,527 5.938693 56,577 Highest contract charges 23,502 3.618459 85,040 Remaining contract charges 4,506,371 -- 24,659,570 2004 Lowest contract charges 9,527 5.558477 52,954 Highest contract charges 24,062 3.437947 82,726 Remaining contract charges 5,957,816 -- 30,937,937 PUTNAM VT RESEARCH 2008 Lowest contract charges 11,235 6.688187 75,139 Highest contract charges 292 5.068638 1,482 Remaining contract charges 2,119,418 -- 16,653,933 2007 Lowest contract charges 17,207 10.965040 188,680 Highest contract charges 6,082 8.457006 51,436 Remaining contract charges 2,845,606 -- 37,218,000 2006 Lowest contract charges 31,409 10.978838 344,839 Highest contract charges 8,544 8.622908 73,655 Remaining contract charges 3,724,239 -- 49,122,836 2005 Lowest contract charges 45,115 9.929116 447,950 Highest contract charges 8,462 7.942712 67,210 Remaining contract charges 4,803,268 -- 58,213,340 2004 Lowest contract charges 64,497 9.523152 614,213 Highest contract charges 2,743 7.755126 21,272 Remaining contract charges 6,245,589 -- 74,061,896 INVESTMENT EXPENSE INCOME TOTAL SUB-ACCOUNT RATIO* RATIO** RETURN*** -------------------------------------- ------------------------------------------------------ PUTNAM VT NEW VALUE 2008 Lowest contract charges 0.95% 2.38% (45.12)% Highest contract charges 2.51% 1.88% (46.13)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 1.39% (5.52)% Highest contract charges 2.50% 1.09% (7.24)% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 1.31% 15.19% Highest contract charges 2.50% 1.05% 13.15% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 1.04% 5.13% Highest contract charges 2.50% 0.94% 3.28% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 1.03% 14.68% Highest contract charges 2.45% -- 12.58% Remaining contract charges -- -- -- PUTNAM VT OTC & EMERGING GROWTH 2008 Lowest contract charges 0.95% -- (46.17)% Highest contract charges 2.51% -- (47.00)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% -- 11.81% Highest contract charges 2.46% -- 9.91% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% -- 11.34% Highest contract charges 2.45% -- 9.68% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% -- 6.84% Highest contract charges 2.45% -- 5.25% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% -- 7.50% Highest contract charges 2.44% -- 5.90% Remaining contract charges -- -- -- PUTNAM VT RESEARCH 2008 Lowest contract charges 0.95% 1.52% (39.00)% Highest contract charges 2.52% 2.00% (40.07)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 0.68% (0.13)% Highest contract charges 2.50% 0.39% (1.92)% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 0.81% 10.57% Highest contract charges 2.50% 0.53% 8.56% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 1.18% 4.26% Highest contract charges 2.48% 0.85% 2.42% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 0.17% 6.77% Highest contract charges 2.48% -- 4.91% Remaining contract charges -- -- --
SA-40 -------------------------------------------------------------------------------
UNIT CONTRACT SUB-ACCOUNT UNITS FAIR VALUE # OWNERS' EQUITY --------------------------------------------------------------------------------- PUTNAM VT SMALL CAP VALUE 2008 Lowest contract charges 7,861 $15.357260 $120,722 Highest contract charges 6,244 11.356564 70,905 Remaining contract charges 2,672,145 -- 36,813,563 2007 Lowest contract charges 9,961 25.512681 254,132 Highest contract charges 5,746 19.203583 110,349 Remaining contract charges 3,903,914 -- 89,813,794 2006 Lowest contract charges 15,159 29.429504 446,133 Highest contract charges 6,405 22.559466 144,414 Remaining contract charges 5,535,640 -- 147,956,774 2005 Lowest contract charges 16,017 25.269218 404,738 Highest contract charges 6,372 19.720038 125,649 Remaining contract charges 7,274,598 -- 167,868,081 2004 Lowest contract charges 19,217 23.775278 456,880 Highest contract charges 702 18.890720 13,255 Remaining contract charges 9,061,220 -- 197,902,148 PUTNAM VT THE GEORGE PUTNAM FUND OF BOSTON 2008 Lowest contract charges 52,633 8.479938 446,324 Highest contract charges 115 7.086744 817 Remaining contract charges 9,111,265 -- 73,045,540 2007 Lowest contract charges 77,717 14.380828 1,117,633 Highest contract charges 1,497 12.258317 18,355 Remaining contract charges 12,400,603 -- 169,493,642 2006 Lowest contract charges 105,944 14.354043 1,520,724 Highest contract charges 2,223 12.449916 27,663 Remaining contract charges 15,889,296 -- 217,833,406 2005 Lowest contract charges 166,252 12.912191 2,146,680 Highest contract charges 2,248 11.405387 25,638 Remaining contract charges 21,119,080 -- 261,797,440 2004 Lowest contract charges 201,298 12.508005 2,517,836 Highest contract charges 909 11.244390 10,226 Remaining contract charges 24,971,780 -- 301,414,460 PUTNAM VT UTILITIES GROWTH AND INCOME 2008 Lowest contract charges 6,714 11.158441 74,921 Highest contract charges 214 8.866021 1,901 Remaining contract charges 3,535,264 -- 84,098,086 2007 Lowest contract charges 28 35.536815 1,011 Highest contract charges 215 13.071945 2,806 Remaining contract charges 4,385,041 -- 151,907,359 2006 Lowest contract charges 204 29.910518 6,107 Highest contract charges 522 11.205826 5,832 Remaining contract charges 5,234,954 -- 153,095,869 2005 Lowest contract charges 204 23.770353 4,853 Highest contract charges 521 9.030912 4,701 Remaining contract charges 6,662,422 -- 154,940,003 2004 Lowest contract charges 11,739 9.975180 117,102 Highest contract charges 2,987 8.515380 25,432 Remaining contract charges 8,019,643 -- 173,756,591 INVESTMENT EXPENSE INCOME TOTAL SUB-ACCOUNT RATIO* RATIO** RETURN*** ----------------------------------- ---------------------------------------------- PUTNAM VT SMALL CAP VALUE 2008 Lowest contract charges 0.95% 1.97% (39.81)% Highest contract charges 2.51% 1.06% (40.86)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 0.81% (13.31)% Highest contract charges 2.50% 0.55% (14.88)% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 0.55% 16.46% Highest contract charges 2.50% 0.32% 14.40% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 0.40% 6.28% Highest contract charges 2.50% 0.13% 4.39% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 0.51% 25.35% Highest contract charges 2.48% -- 23.10% Remaining contract charges -- -- -- PUTNAM VT THE GEORGE PUTNAM FUND OF BOSTON 2008 Lowest contract charges 0.95% 5.23% (41.03)% Highest contract charges 2.51% 10.86% (42.19)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 3.11% 0.19% Highest contract charges 2.50% 2.51% (1.54)% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 2.93% 11.17% Highest contract charges 2.50% 2.38% 9.16% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 2.31% 3.23% Highest contract charges 2.50% 2.10% 1.43% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 2.11% 7.45% Highest contract charges 2.49% -- 5.54% Remaining contract charges -- -- -- PUTNAM VT UTILITIES GROWTH AND INCOME 2008 Lowest contract charges 0.95% 2.43% (30.99)% Highest contract charges 2.45% 2.15% (32.18)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 2.60% 18.81% Highest contract charges 2.41% -- 17.04% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 2.82% 25.83% Highest contract charges 2.36% 2.84% 24.08% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.94% -- 7.55% Highest contract charges 2.37% 1.82% 6.05% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 3.30% 20.72% Highest contract charges 2.34% 0.39% 18.78% Remaining contract charges -- -- --
SA-41 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2008 -------------------------------------------------------------------------------
UNIT CONTRACT SUB-ACCOUNT UNITS FAIR VALUE # OWNERS' EQUITY --------------------------------------------------------------------------------- PUTNAM VT VISTA 2008 Lowest contract charges 10,215 $9.121416 $93,175 Highest contract charges 339 3.451830 1,170 Remaining contract charges 3,989,159 -- 31,801,807 2007 Lowest contract charges 11,412 16.910462 192,986 Highest contract charges 8,319 6.499758 54,069 Remaining contract charges 5,194,015 -- 77,608,071 2006 Lowest contract charges 17,638 16.445388 290,063 Highest contract charges 8,814 6.419752 56,589 Remaining contract charges 7,019,700 -- 102,862,364 2005 Lowest contract charges 18,468 15.744049 290,761 Highest contract charges 8,339 6.242010 52,050 Remaining contract charges 9,101,130 -- 130,591,263 2004 Lowest contract charges 17,453 14.172543 247,355 Highest contract charges 2,266 5.706667 12,934 Remaining contract charges 11,009,184 -- 145,858,860 PUTNAM VT VOYAGER 2008 Lowest contract charges 72,049 6.033232 434,690 Highest contract charges 20,603 4.155468 85,615 Remaining contract charges 9,066,875 -- 263,462,133 2007 Lowest contract charges 111,439 9.648494 1,075,217 Highest contract charges 21,136 6.766742 143,023 Remaining contract charges 11,724,882 -- 552,132,978 2006 Lowest contract charges 144,478 9.207722 1,330,309 Highest contract charges 19,318 6.575081 127,011 Remaining contract charges 15,693,965 -- 716,951,764 2005 Lowest contract charges 192,743 8.794007 1,694,980 Highest contract charges 18,092 6.394015 115,683 Remaining contract charges 20,965,312 -- 927,301,057 2004 Lowest contract charges 285,714 8.380373 2,394,387 Highest contract charges 6,196 6.202743 38,435 Remaining contract charges 27,659,782 -- 1,201,374,747 PUTNAM VT DISCOVERY GROWTH 2008 Lowest contract charges 1,216 3.845590 4,677 Highest contract charges 11,799 3.354831 39,583 Remaining contract charges 1,090,096 -- 3,967,128 2007 Lowest contract charges 1,264 6.809903 8,606 Highest contract charges 11,997 6.063425 72,742 Remaining contract charges 1,428,297 -- 9,281,356 2006 Lowest contract charges 1,308 6.221582 8,139 Highest contract charges 12,687 5.632658 71,454 Remaining contract charges 1,383,901 -- 8,287,037 2005 Lowest contract charges 2,504 5.643475 14,129 Highest contract charges 15,616 5.197097 81,159 Remaining contract charges 1,830,420 -- 10,007,704 2004 Lowest contract charges 5,529 5.296388 29,285 Highest contract charges 16,913 4.966202 83,992 Remaining contract charges 2,449,919 -- 12,657,598 INVESTMENT EXPENSE INCOME TOTAL SUB-ACCOUNT RATIO* RATIO** RETURN*** ----------------------------------- ---------------------------------------------- PUTNAM VT VISTA 2008 Lowest contract charges 0.95% -- (46.06)% Highest contract charges 2.59% -- (46.89)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% -- 2.83% Highest contract charges 2.49% -- 1.25% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% -- 4.46% Highest contract charges 2.50% -- 2.85% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% -- 11.09% Highest contract charges 2.48% -- 9.38% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% -- 17.49% Highest contract charges 2.48% -- 15.68% Remaining contract charges -- -- -- PUTNAM VT VOYAGER 2008 Lowest contract charges 0.95% 0.32% (37.47)% Highest contract charges 2.51% -- (38.59)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 0.03% 4.79% Highest contract charges 2.46% -- 2.92% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 0.39% 4.71% Highest contract charges 2.50% 0.11% 2.83% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 1.02% 4.94% Highest contract charges 2.48% 0.67% 3.08% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 0.47% 4.34% Highest contract charges 2.48% -- 2.44% Remaining contract charges -- -- -- PUTNAM VT DISCOVERY GROWTH 2008 Lowest contract charges 0.95% -- (43.53)% Highest contract charges 2.46% -- (44.67)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% -- 9.46% Highest contract charges 2.44% -- 7.65% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% -- 10.24% Highest contract charges 2.45% -- 8.38% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% -- 6.55% Highest contract charges 2.44% -- 4.65% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% -- 6.71% Highest contract charges 2.44% -- 4.97% Remaining contract charges -- -- --
SA-42 -------------------------------------------------------------------------------
UNIT CONTRACT SUB-ACCOUNT UNITS FAIR VALUE # OWNERS' EQUITY --------------------------------------------------------------------------------- PUTNAM VT CAPITAL OPPORTUNITIES 2008 Lowest contract charges 4,176 $10.850239 $45,314 Highest contract charges 4,416 9.944019 43,908 Remaining contract charges 631,696 -- 6,706,164 2007 Lowest contract charges 5,783 16.900331 97,734 Highest contract charges 2,755 15.762954 43,419 Remaining contract charges 877,254 -- 14,592,446 2006 Lowest contract charges 5,977 18.863017 112,747 Highest contract charges 2,663 17.859648 47,585 Remaining contract charges 1,101,963 -- 20,525,703 2005 Lowest contract charges 6,642 16.528392 109,783 Highest contract charges 2,253 15.885699 35,793 Remaining contract charges 920,678 -- 15,084,582 2004 Lowest contract charges 8,960 15.147571 135,724 Highest contract charges 1,854 14.778449 27,394 Remaining contract charges 719,220 -- 10,837,675 PUTNAM VT EQUITY INCOME 2008 Lowest contract charges 57,732 11.470023 662,188 Highest contract charges 2,870 10.538465 30,242 Remaining contract charges 5,388,307 -- 60,893,020 2007 Lowest contract charges 68,785 16.816424 1,156,721 Highest contract charges 1,835 15.752872 28,905 Remaining contract charges 6,074,801 -- 100,968,990 2006 Lowest contract charges 82,911 16.452427 1,364,089 Highest contract charges 901 15.629199 14,112 Remaining contract charges 6,251,792 -- 101,885,580 2005 Lowest contract charges 96,822 13.975903 1,353,177 Highest contract charges 903 13.463703 12,155 Remaining contract charges 6,203,961 -- 86,106,652 2004 Lowest contract charges 93,623 13.373021 1,252,023 Highest contract charges 903 13.064493 11,795 Remaining contract charges 4,842,122 -- 64,504,197 INVESTMENT EXPENSE INCOME TOTAL SUB-ACCOUNT RATIO* RATIO** RETURN*** ----------------------------------- ---------------------------------------------- PUTNAM VT CAPITAL OPPORTUNITIES 2008 Lowest contract charges 0.95% 0.52% (35.80)% Highest contract charges 2.50% -- (36.79)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% -- (10.41)% Highest contract charges 2.44% -- (11.74)% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 0.09% 14.13% Highest contract charges 2.45% 0.08% 12.43% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% -- 9.12% Highest contract charges 2.44% -- 7.49% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 1.29% 17.01% Highest contract charges 2.44% 1.53% 15.26% Remaining contract charges -- -- -- PUTNAM VT EQUITY INCOME 2008 Lowest contract charges 0.95% 2.02% (31.79)% Highest contract charges 2.43% -- (32.81)% Remaining contract charges -- -- -- 2007 Lowest contract charges 0.95% 1.35% 2.21% Highest contract charges 2.34% 1.25% 0.79% Remaining contract charges -- -- -- 2006 Lowest contract charges 0.95% 1.29% 17.72% Highest contract charges 2.35% 1.17% 16.08% Remaining contract charges -- -- -- 2005 Lowest contract charges 0.95% 0.98% 4.51% Highest contract charges 2.34% 0.97% 3.06% Remaining contract charges -- -- -- 2004 Lowest contract charges 0.95% 0.10% 10.76% Highest contract charges 2.35% 0.13% 9.22% Remaining contract charges -- -- --
* This represents the annualized contract expenses of the Sub-Account for the year indicated and includes only those expenses that are charged through a reduction in the unit values. Excluded are expenses of the Funds and charges made directly to contract owner accounts through the redemption of units. ** These amounts represent the dividends, excluding distributions of capital gains, received by the Sub-Account from the Fund, net of management fees assessed by the Fund's Manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense risk charges, that result in direct reductions in the unit values. The recognition of investment income by the Sub- Account is affected by the timing of the declaration of dividends by the Fund in which the Sub-Accounts invest. *** This represents the total return for the year indicated and reflects a deduction only for expenses assessed through the daily unit value calculation. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation indicate the effective date of that investment option in the Account. The total return is calculated for the year indicated or from the effective date through the end of the reporting period. # Rounded unit values SA-43 SEPARATE ACCOUNT TEN HARTFORD LIFE AND ANNUITY INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2008 ------------------------------------------------------------------------------- Summary of the Account's expense charges, including Mortality and Expense Risk Charges, Administrative Charges, Riders (if applicable) and Annual Maintenance Fees assessed. These fees are either assessed as a direct reduction in unit values or through a redemption of units for all contracts contained within the Account. MORTALITY AND EXPENSE RISK CHARGES: The Company will charge an expense ranging from 0.80% to 1.50% of the contract's value for mortality and expense risks undertaken by the Company. These charges are a reduction in unit values. ADMINISTRATIVE CHARGES: The Company will charge an expense ranging from 0.15% to 0.20% of the contract's value for administrative services provided by the Company. These charges are a reduction in unit values. RIDERS: The Company will charge an expense for various Rider charges, such as Principal First Charge, Principal First Preferred Charge, MAV/EPB Death Benefit Charge, Optional Death Benefit Charge and Earnings Protection Benefit Charge. These deductions range from 0.15% to 0.75% These charges are a reduction in unit values. ANNUAL MAINTENANCE FEE: An annual maintenance fee, ranging from $25 to $30, may be deducted from the contract's value each contract year. However, this fee is not applicable to contracts with values of $50,000 or more, as determined on the most recent contract anniversary. These expenses are included in surrenders for benefit payments and fees in the accompanying statements of changes in net assets. These charges are a redemption of units. SA-44 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY INDEPENDENT AUDITORS' REPORT FINANCIAL STATEMENTS -- STATUTORY BASIS As of December 31, 2008 and 2007 and for the Years Ended December 31, 2008, 2007 and 2006 SUPPLEMENTAL SCHEDULES Year Ended December 31, 2008 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY CONTENTS
PAGE: -------------------------------------------------------------------------------- Independent Auditors' Report F-2 Financial Statements Statutory Basis: Admitted Assets, Liabilities and Surplus F-3 Statements of Operations F-4 Statements of Changes in Capital and Surplus F-5 Statements of Cash Flows F-6 Notes to Financial Statements F-7-F-31 Supplementary Information Schedule I -- Selected Financial Data F-32-F-34 Schedule II -- Summary Investment Schedule F-35 Schedule III -- Investment Risks Interrogatories
F-1 [DELOITTE LOGO] DELOITTE & TOUCHE LLP City Place, 32nd Floor 185 Asylum Street Hartford, CT 06103-3402 USA Tel: +1 860 725 3000 Fax: +1 860 725 3500 www.deloitte.com INDEPENDENT AUDITORS' REPORT To the Board of Directors of Hartford Life and Annuity Insurance Company Hartford, Connecticut We have audited the accompanying statutory-basis statements of admitted assets, liabilities, and surplus of Hartford Life and Annuity Insurance Company (the "Company") as of December 31, 2008 and 2007, and the related statutory-basis statements of operations, changes in capital and surplus, and cash flow for each of the three years in the period ended December 31, 2008. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards as established by the Auditing Standards Board (United States) and in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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. As described more fully in Note 2 to the financial statements, the Company prepared these financial statements using accounting practices prescribed or permitted by the Insurance Department of the State of Connecticut, and such practices differ from accounting principles generally accepted in the United States of America. The effects on such financial statements of the differences between the statutory basis of accounting and accounting principles generally accepted in the United States of America are also described in Note 2. In our opinion, because of the effects of the matter discussed in the preceding paragraph, the financial statements referred to above do not present fairly, in conformity with accounting principles generally accepted in the United States of America, the financial position of the Company as of December 31, 2008 or 2007, or the results of its operations or its cash flows for each of the three years in the period ended December 31, 2008. However, in our opinion, the statutory-basis financial statements referred to above present fairly, in all material respects, the admitted assets, liabilities, and surplus of the Company as of December 31, 2008 and 2007, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2008, on the basis of accounting described in Note 2. Our 2008 audit was conducted for the purpose of forming an opinion on the basic 2008 statutory-basis financial statements taken as a whole. The supplemental schedule of investment risk interrogatories, the supplemental summary investment schedule, and the supplemental schedule of selected financial data as of and for the year ended December 31, 2008 are presented for purposes of additional analysis and are not a required part of the basic 2008 statutory-basis financial statements. These schedules are the responsibility of the Company's management. Such schedules have been subjected to the auditing procedures applied in our audit of the basic 2008 statutory-basis financial statements. The effects on these schedules of the differences between the statutory basis of accounting and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material. Accordingly, in our opinion, such schedules do not present fairly, in conformity with accounting principles generally accepted in the United States of America, the information shown therein. However, in our opinion, such schedules are fairly stated in all material respects when considered in relation to the basic 2008 statutory-basis financial statements taken as a whole. As discussed in Note 2 to the financial statements, the Company received approval from the State of Connecticut Insurance Department for the use of a permitted practice related to the accounting for deferred income taxes. The change resulted in an increase in the deferred tax asset and an increase in surplus of $300 million. April 27, 2009 Member of DELOITTE TOUCHE TOHMATSU F-2 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ADMITTED ASSETS, LIABILITIES AND SURPLUS (STATUTORY BASIS) (AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)
AS OF DECEMBER 31, 2008 2007 -------------------------------------------------------------------------------- ADMITTED ASSETS Bonds $8,371,683 $5,605,630 Common and Preferred Stocks 266,882 316,558 Mortgage Loans 611,372 350,528 Real Estate 27,285 27,569 Policy Loans 354,920 343,773 Cash and Short-Term Investments 2,326,153 565,283 Other Invested Assets 2,028,888 629,835 -------------- -------------- TOTAL CASH AND INVESTED ASSETS 13,987,183 7,839,176 -------------- -------------- Investment Income Due and Accrued 85,917 77,351 Federal Income Taxes Recoverable 174,110 24,162 Deferred Tax Asset 368,287 145,516 Receivables from parent, subsidiaries and affiliates 10,223 32,272 Other Assets 283,676 156,908 Separate Account Assets 50,551,150 81,072,392 -------------- -------------- TOTAL ADMITTED ASSETS $65,460,546 $89,347,777 -------------- -------------- LIABILITIES Aggregate Reserves for Life and Accident and Health Policies $10,797,749 $5,976,074 Liability for Deposit Type Contracts 70,266 73,736 Policy and Contract Claim Liabilities 33,836 31,281 Asset Valuation Reserve 6,004 46,855 Payable to Parent, Subsidiaries or Affiliates 39,493 41,011 Accrued Expense Allowances and Other Amounts Due From Separate Accounts (1,642,086) (2,471,367) Other Liabilities 3,426,276 2,021,207 Separate Account Liabilities 50,551,150 81,072,392 -------------- -------------- TOTAL LIABILITIES 63,282,688 86,791,189 -------------- -------------- CAPITAL AND SURPLUS Common Stock -- 3,000 Shares Authorized, 2,000 Shares Issued and Outstanding 2,500 2,500 Gross Paid-In and Contributed Surplus 1,692,530 1,483,869 Aggregate Write-Ins for Other Than Special Surplus Funds 497,354 194,430 Unassigned Funds (14,526) 875,789 -------------- -------------- TOTAL CAPITAL AND SURPLUS 2,177,858 2,556,588 -------------- -------------- TOTAL LIABILITIES, CAPITAL AND SURPLUS $65,460,546 $89,347,777 -------------- --------------
SEE NOTES TO FINANCIAL STATEMENTS. F-3 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF OPERATIONS (STATUTORY BASIS) (AMOUNTS IN THOUSANDS UNLESS OTHERWISE STATED)
FOR THE YEARS ENDED DECEMBER 31, 2008 2007 2006 --------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums and Annuity Considerations $9,352,507 $10,313,501 $9,842,305 Net Investment Income 376,034 348,437 339,347 Commissions and Expense Allowances on Reinsurance Ceded 229,723 333,674 94,873 Reserve Adjustment on Reinsurance Ceded (18,161) (1,710,405) (1,659,418) Fee Income 1,602,040 1,786,396 1,650,017 Other Revenues 71,925 83,752 15,635 --------------- --------------- --------------- TOTAL REVENUES 11,614,068 11,155,355 10,282,759 --------------- --------------- --------------- BENEFITS AND EXPENSES Death and Annuity Benefits 648,881 341,654 280,782 Disability and Other Benefits 9,181 7,588 18,311 Surrenders and Other Fund Withdrawals 9,965,053 9,528,808 9,054,230 Commissions 834,850 962,917 864,564 Increase (Decrease) in Aggregate Reserves for Life and Accident and Health Policies 4,809,456 (70,821) 274,407 General Insurance Expenses 448,657 532,485 528,545 Net Transfers from Separate Accounts (1,671,681) (237,153) (675,124) Modified Coinsurance Adjustment on Reinsurance Assumed (339,634) (509,774) (530,122) Other Expenses 99,317 144,927 55,838 --------------- --------------- --------------- TOTAL BENEFITS AND EXPENSES 14,804,080 10,700,631 9,871,431 --------------- --------------- --------------- Net (loss) gain from operations before federal income tax expense (3,190,012) 454,724 411,328 Federal income tax (benefit) expense (245,745) 88,449 31,961 --------------- --------------- --------------- NET (LOSS) GAIN FROM OPERATIONS (2,944,267) 366,275 379,367 --------------- --------------- --------------- Net realized capital gains (losses), after tax 961,162 (81,759) (40,656) --------------- --------------- --------------- NET (LOSS) INCOME $(1,983,105) $284,516 $338,711 --------------- --------------- ---------------
SEE NOTES TO FINANCIAL STATEMENTS. F-4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS (STATUTORY BASIS) (AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)
FOR THE YEARS ENDED DECEMBER 31, 2008 2007 2006 --------------------------------------------------------------------------------------------------------------------------------- COMMON STOCK -- 3,000 SHARES AUTHORIZED, 2,000 SHARES ISSUED AND OUTSTANDING ------------- ------------- ------------- Balance, Beginning and End of Year $2,500 $2,500 $2,500 ------------- ------------- ------------- GROSS PAID-IN AND CONTRIBUTED SURPLUS, Beginning of Year 1,483,869 1,376,953 1,371,883 Capital Contribution 208,661 106,916 5,070 ------------- ------------- ------------- BALANCE, END OF YEAR 1,692,530 1,483,869 1,376,953 ------------- ------------- ------------- AGGREGATE WRITE-INS FOR OTHER THAN SPECIAL SURPLUS FUNDS Beginning of Year 194,430 -- -- Gain on Inforce Reinsurance 3,310 194,430 -- Permitted Practice DTA 299,614 -- ------------- ------------- ------------- BALANCE, END OF YEAR 497,354 194,430 -- ------------- ------------- ------------- UNASSIGNED FUNDS Balance, Beginning of Year 875,789 288,226 115,883 Net (loss) Income (1,983,105) 284,516 338,711 Change in Net Unrealized Capital Losses on Common Stocks and Other Invested Assets 731,679 262,434 (35,674) Change in Net Unrealized Foreign Exchange Capital Losses (34,794) (5,386) 2,957 Change in Net Deferred Income Tax 669,251 (82,891) 30,476 Change in Asset Valuation Reserve 40,851 (5,311) (6,795) Change in Non-Admitted Assets (182,691) 100,351 (42,153) Change in Reserve on Account of Change in Valuation Basis 23,935 236,861 -- Change in Liability for Reinsurance in Unauthorized Companies 559 (198) (179) Correction of Reserves and Tax Liabilities -- 4,187 -- Dividends to Stockholder (156,000) (207,000) (115,000) ------------- ------------- ------------- BALANCE, END OF YEAR (14,526) 875,789 288,226 ------------- ------------- ------------- CAPITAL AND SURPLUS, ------------- ------------- ------------- End of year $2,177,858 $2,556,588 $1,667,679 ------------- ------------- -------------
SEE NOTES TO FINANCIAL STATEMENTS. F-5 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY STATEMENTS OF CASH FLOWS (STATUTORY BASIS) (AMOUNTS IN THOUSANDS UNLESS OTHERWISE STATED)
FOR THE YEARS ENDED DECEMBER 31, 2008 2007 2006 --------------------------------------------------------------------------------------------------------------------------------- OPERATING ACTIVITIES Premiums and Annuity Considerations $9,351,978 $10,306,169 $9,836,688 Net Investment Income 408,199 378,000 383,972 Miscellaneous Income 1,885,933 493,502 98,373 --------------- --------------- --------------- Total Income 11,646,110 11,177,671 10,319,033 --------------- --------------- --------------- Benefits Paid 10,733,727 10,132,212 9,346,769 Federal Income Tax Payments (Recoveries) (96,263) 71,171 (103,806) Net Transfers from Separate Accounts (1,671,681) (204,517) (188,413) Other Expenses (2,295,760) 332,141 1,011,284 --------------- --------------- --------------- Total Benefits and Expenses 6,670,023 10,331,007 10,065,834 --------------- --------------- --------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 4,976,087 846,664 253,199 --------------- --------------- --------------- INVESTING ACTIVITIES PROCEEDS FROM INVESTMENTS SOLD AND MATURED Bonds 779,818 1,526,875 1,959,478 Common and Preferred Stocks 38,676 149,356 24,070 Mortgage Loans 17,014 63,357 8,746 Derivatives and Other 878,786 (32,175) (16,109) --------------- --------------- --------------- Total Investment Proceeds 1,714,294 1,707,413 1,976,185 --------------- --------------- --------------- COST OF INVESTMENTS ACQUIRED Bonds 3,706,708 2,269,295 1,682,961 Common and Preferred Stocks 19,943 214,967 140,727 Mortgage Loans 278,706 253,365 70,991 Real Estate -- 2,781 1,125 Derivatives and Other 1,529,747 384,420 109,533 --------------- --------------- --------------- Total Investments Acquired 5,535,104 3,124,828 2,005,337 --------------- --------------- --------------- Net Increase in Policy Loans 11,147 19,142 720 --------------- --------------- --------------- NET CASH USED FOR INVESTING ACTIVITIES (3,831,957) (1,436,557) (29,872) --------------- --------------- --------------- FINANCING AND MISCELLANEOUS ACTIVITIES Capital Contribution 208,661 100,000 -- Dividends to Stockholder (156,000) (57,726) (115,000) Funds Held Under Reinsurance Treaties with Unauthorized Reinsurers 1,013,639 646,001 -- Net Other Cash (Used) Provided (449,560) (747) 13,463 --------------- --------------- --------------- NET CASH PROVIDED BY (USED FOR) FINANCING AND MISCELLANEOUS ACTIVITIES 616,740 687,528 (101,537) --------------- --------------- --------------- Net Increase in Cash and Short-Term Investments 1,760,870 97,635 121,790 Cash and Short-Term Investments, Beginning of Year 565,283 467,648 345,858 --------------- --------------- --------------- CASH AND SHORT-TERM INVESTMENTS, END OF YEAR $2,326,153 $565,283 $467,648 --------------- --------------- --------------- Note: Supplemental disclosures of cash flow information for non-cash transactions: Capital contribution from parent to settle intercompany balances related to stock compensation 3,815 6,916 5,070 Dividend of Assets to Affiliate Champlain Life Reinsurance Company -- 149,274 --
SEE NOTES TO FINANCIAL STATEMENTS. F-6 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS (STATUTORY BASIS) (IN THOUSANDS) -------------------------------------------------------------------------------- 1. ORGANIZATION AND DESCRIPTION OF BUSINESS: Hartford Life and Annuity Insurance Company (the "Company") is a wholly-owned subsidiary of Hartford Life Insurance Company ("HLIC"), which is an indirect subsidiary of Hartford Life, Inc. ("HLI"). HLI is indirectly owned by The Hartford Financial Services Group, Inc. ("The Hartford"). The Company offers a complete line of fixed and variable annuities, universal and traditional individual life insurance and benefit products such as disability insurance. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: BASIS OF PRESENTATION The accompanying statutory basis financial statements have been prepared in conformity with statutory accounting practices prescribed or permitted by the State of Connecticut Department of Insurance ("the Department"). The Department recognizes only statutory accounting practices prescribed or permitted by Connecticut for determining and reporting the financial condition and results of operations of an insurance company and for determining solvency under State of Connecticut Insurance Law. The National Association of Insurance Commissioners' Accounting Practices and Procedures Manual ("NAIC SAP") has been adopted as a component of prescribed practices by Connecticut. A difference prescribed by Connecticut state law, allows the Company to obtain a reinsurance reserve credit for a reinsurance treaty which provides for a limited right of unilateral cancellation by the reinsurer. Even if the Company did not obtain reinsurance reserve credit for this reinsurance treaty, the Company's risk-based capital would not have triggered a regulatory event. The Company has received approval from the Connecticut Insurance Department regarding the use of a permitted practice related to the statutory accounting for deferred income taxes as of December 31, 2008. This permitted practice modifies the accounting for deferred income taxes prescribed by NAIC SAP by increasing the realization period for deferred tax assets from one year to three years and increasing the asset recognition limit from 10% to 15% of adjusted statutory capital and surplus. The benefits of this permitted practice may not be considered by the Company when determining surplus available for dividends and the Company must maintain it's Risk Based Capital Ratio at or above 250%. The Company is also required to submit a quarterly certification of the Company's deferred tax asset calculation to the Connecticut Department of Insurance. If the Company had not used this permitted practice, the Company's risk-based capital would not have triggered a regulatory event. The effect of the use of the above described practices prescribed and permitted by the Connecticut Insurance Department is shown in the reconciliation of the Company's net income and capital and surplus to NAIC SAP below:
2008 2007 2006 --------------------------------------------------------------------------------------------------------------------------------- NET (LOSS) INCOME, STATE OF CONNECTICUT BASIS $ (1,983,105) $ 284,516 $ 338,711 State prescribed practice: Reinsurance reserve credit (142,389) (7,492) (3,876) -------------- ------------- ------------- Net (loss) income, NAIC SAP: $(2,125,494) $277,024 $334,835 -------------- ------------- ------------- Statutory surplus, State of Connecticut basis $2,177,858 $2,556,588 $1,667,679 State permitted and prescribed practice Reinsurance reserve credit -- prescribed practice (390,571) (248,182) (240,690) Deferred income taxes -- permitted practice (299,614) -- -- -------------- ------------- ------------- Statutory surplus, NAIC SAP: $1,487,673 $2,308,406 $1,426,989 -------------- ------------- -------------
The preparation of financial statements in conformity with statutory accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimates. The most significant estimates include those used in determining the liability for aggregate reserves for life and accident and health policies, evaluation of other-than-temporary impairments and valuation of derivatives. Certain of these estimates are particularly sensitive to market conditions, and deterioration and/or volatility in the worldwide debt or equity markets could have a material impact on the financial statements. Although some variability is inherent in these estimates, management believes the amounts provided are adequate. Certain reclassifications have been made to prior year financial information to conform to current year presentation. F-7 STATUTORY ACCOUNTING VERSUS ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES ("GAAP") Statutory accounting principles and GAAP differ in certain significant respects. These differences principally involve: (1) treatment of policy acquisition costs (commissions, underwriting and selling expenses, etc.) and sales inducements which are charged to expense when incurred for statutory purposes rather than capitalized and amortized on a pro-rata basis over the expected life and gross profit stream of the policies for GAAP purposes; (2) recognition of premium revenues, which for statutory purposes are generally recorded as collected or when due during the premium paying period of the contract and which for GAAP purposes, for universal life policies and investment products, generally only consist of charges assessed to policy account balances for cost of insurance, policy administration and surrenders. For GAAP, when policy charges received relate to coverage or services to be provided in the future, the charges are recognized as revenue on a pro-rata basis over the expected life and gross profit stream of the policy. Also, for GAAP purposes, premiums for traditional life insurance policies are recognized as revenues when they are due from policyholders; (3) development of liabilities for future policy benefits, which for statutory purposes predominantly use interest rate and mortality assumptions prescribed by the NAIC, which may vary considerably from interest and mortality assumptions used under GAAP. Additionally for GAAP, reserves for guaranteed minimum death benefits are based on models that involve a range of scenarios and assumptions, including those regarding expected market rates of return and volatility, contract surrender rates and mortality experience, and, reserves for guaranteed withdrawal benefits are considered embedded derivatives and reported at fair value; (4) excluding certain assets designated as non-admitted assets (e.g., negative Interest Maintenance Reserve, and past due agents' balances) from the admitted assets, liabilities and surplus statement for statutory purposes by directly charging surplus; (5) the calculation of post-retirement benefits obligation which, for statutory accounting, excludes non-vested employees whereas GAAP liabilities include a provision for such employees; statutory and GAAP accounting permit either immediate recognition of the liability or straight-line amortization of the liability over a period not to exceed 20 years. For GAAP, The Hartford's obligation was immediately recognized, whereas, for statutory accounting, the obligation is being recognized ratably over a 20 year period; (6) establishing a formula reserve for realized and unrealized losses due to default and equity risk associated with certain invested assets (Asset Valuation Reserve) for statutory purposes; as well as the deferral and amortization of realized gains and losses, caused by changes in interest rates during the period the asset is held, into income over the original life to maturity of the asset sold (Interest Maintenance Reserve) for statutory purposes; whereas on a GAAP basis, no such formula reserve is required and realized gains and losses are recognized in the period the asset is sold; (7) the reporting of reserves and benefits, net of reinsurance ceded for statutory purposes; whereas on a GAAP basis, reserves are reported gross of reinsurance with reserve credits presented as recoverable assets; (8) the reporting of fixed maturities at amortized cost for NAIC classes 1-5 and the lower of amortized cost or fair value for NAIC class 6 for statutory purposes, whereas GAAP requires that fixed maturities be classified as "held-to-maturity", "available-for-sale" or "trading", based on the Company's intentions with respect to the ultimate disposition of the security and its ability to affect those intentions. The Company's bonds were classified on a GAAP basis as "available-for-sale" and accordingly, those investments and common stocks were reflected at fair value with the corresponding impact included as a separate component of Stockholder's Equity, (9) for statutory purposes separate account liabilities are calculated using prescribed actuarial methodologies, which approximate the market value of separate account assets, less applicable surrender charges. The separate account surplus generated by these reserving methods is recorded as an amount due to or from the separate account on the statutory basis admitted assets, liabilities and surplus statement, with changes reflected in the statutory basis results of operations. On a GAAP basis, separate account assets and liabilities must meet specific conditions to qualify as a separate account asset or liability. Amounts reported for separate accounts assets and liabilities are based upon the fair value of the underlying assets; (10) the consolidation of financial statements for GAAP reporting, whereas statutory accounting requires standalone financial statements with earnings of subsidiaries reflected as changes in unrealized gains or losses in surplus; (11) deferred income taxes, which provide for statutory/tax temporary differences, are subject to limitation and are charged directly to surplus, whereas, GAAP would include GAAP/tax temporary differences and are charged as a component of net income; (12) comprehensive income and its components are not presented in statutory financial statements; F-8 (13) for statutory purposes derivative instruments that qualify for hedging, replication, or income generation are accounted for in a manner consistent with the hedged item, cash instrument and covered asset, respectively, typically amortized cost. Derivative instruments held for other investment and risk management activities, which do not receive hedge accounting treatment, receive fair value accounting for statutory purposes and are recorded at fair value with corresponding changes in value reported in unrealized gains and losses within surplus. For GAAP accounting derivative instruments are recorded at fair value with changes in value reported in earnings, with the exception of cash flow hedges and net investment hedges of a foreign operation, which are carried at fair value with changes in value reported as a separate component of Stockholder's Equity. In addition, statutory accounting does not record the hedge ineffectiveness on qualified hedge positions, whereas, GAAP records the hedge ineffectiveness in earnings; and (14) embedded derivatives for statutory accounting are not bifurcated from the host contract, whereas, GAAP accounting requires the embedded derivative to be bifurcated from the host instrument, accounted and reported separately. As of and for the years ended December 31, the significant differences between Statutory and GAAP basis net (loss) income and capital and surplus for the Company are as follows:
2008 2007 2006 --------------------------------------------------------------------------------------------------------------------------------- GAAP Net (loss) Income $(2,431,996) $348,883 $312,900 Deferral and amortization of policy acquisition costs, net 56,711 (583,420) (69,341) Change in unearned revenue reserve 221,472 205,884 120,820 Deferred taxes (1,254,566) 76,671 (57,573) Separate account expense allowance (922,220) 382,281 143,649 Benefit reserve adjustment 359,517 (328,431) (91,421) Prepaid reinsurance adjustment (967) 3,703 615 Sales inducements (56,624) (30,167) (21,576) Derivatives 1,870,871 263,627 60,110 Realized capital gains (losses) 441,220 (114,173) (46,589) Goodwill impairment 76,895 -- -- Other, net (343,419) 59,658 (12,883) -------------- ------------- ------------- STATUTORY NET (LOSS) INCOME $(1,983,106) $284,516 $338,711 -------------- ------------- -------------
2008 2007 2006 --------------------------------------------------------------------------------------------------------------------------------- GAAP Stockholder's Equity $1,543,717 $4,153,194 $3,916,947 Deferred policy acquisition costs (5,679,729) (5,187,834) (4,583,199) Unearned revenue reserve 1,191,670 861,421 648,448 Deferred taxes (645,626) 475,659 383,837 Separate account expense allowance 1,561,059 2,473,554 2,089,536 Unrealized gains on investments 806,123 56,340 (117,113) Benefit reserve adjustment 3,327,187 (44,469) (274,921) Asset valuation reserve (6,004) (46,855) (41,544) Prepaid reinsurance premium (49,200) (40,877) (33,931) Goodwill (93,206) (170,100) (170,100) Reinsurance ceded 111,406 (569) (200,371) Other, net 110,461 27,124 50,090 -------------- ------------- ------------- STATUTORY CAPITAL AND SURPLUS $2,177,858 $2,556,588 $1,667,679 -------------- ------------- -------------
AGGREGATE RESERVES FOR LIFE AND ACCIDENT AND HEALTH POLICIES AND CONTRACTS AND LIABILITY FOR DEPOSIT TYPE CONTRACTS Aggregate reserves for payment of future life, health and annuity benefits are computed in accordance with applicable actuarial standards. Reserves for life insurance policies are generally based on the 1958, 1980 and 2001 Commissioner's Standard Ordinary Mortality Tables and various valuation rates ranging from 2.25% to 6%. Accumulation and on-benefit annuity reserves are based principally on individual and group annuity tables at various rates ranging from 2.50% to 9.50% and using the Commissioner's Annuity Reserve Valuation Method ("CARVM"). For non-interest sensitive ordinary life plans, the Company waives deduction of deferred fractional premiums upon death of insured. Return of the unearned portion of the final premium is governed by the terms of the contract. The Company does not have any forms for which the cash values are in excess of the legally computed reserve. Extra premiums are charged for substandard lives, in addition to the regular gross premiums for the true age. Mean reserves for traditional insurance products are determined by computing the regular mean reserve for the plan at the true age, and adding one-half (1/2) of the extra premium charge for the year. For plans with explicit mortality charges, mean reserves are based on appropriate multiples of standard rates of mortality. F-9 During 2008, the Company changed it's reserving methodologies relating to CARVM calculations for two blocks of Fortis Adaptable life policies. The change resulted in a basis change which lowered reserves by $23,935 and was reported as a direct increase to surplus. During 2007, the State of Connecticut Insurance Department approved changes to certain reserving methodologies. The reserve valuation basis for variable annuities was changed from "continuous" CARVM to "curtate" CARVM. The change resulted in a basis change which lowered reserves by $236,861 and was reported as a direct increase to surplus. As of December 31, 2008 and 2007, the Company had $14,464,897 and $10,136,370, respectively, of insurance in force for which the gross premiums are less than the net premiums according to the standard valuation set by the State of Connecticut. Reserves to cover the above insurance at December 31, 2008 and 2007 totaled $60,552 and $31,284, respectively. The Company has established separate accounts to segregate the assets and liabilities of certain life insurance, pension and annuity contracts that must be segregated from the Company's general account assets under the terms of its contracts. The assets consist primarily of marketable securities and are reported at fair value. Premiums, benefits and expenses relating to these contracts are reported in the statutory basis statements of operations. An analysis of Annuity Actuarial Reserves and Deposit Liabilities by Withdrawal Characteristics as of December 31, 2008 (including general and separate account liabilities) are as follows
% OF SUBJECT TO DISCRETIONARY WITHDRAWAL: AMOUNT TOTAL -------------------------------------------------------------------------------- With market value adjustment: In a lump sum reflecting changes in interest rates or asset values $2,464,756 4.73% In installments over 5 years or more, with or w/o reduction in interest rates -- 0.00% At book value, less current surrender charge of 5% or more 869,809 1.67% At market value 46,229,124 88.64% -------------- -------- TOTAL WITH ADJUSTMENT OR AT MARKET VALUE 49,563,689 95.03% -------------- -------- At book value without adjustment (minimal or no charge or adjustment): In a lump sum without adjustment 296,080 0.57% Installments over less than 5 years -- 0.00% In a lump sum subject to a fixed surrender charge of less than 5% 1,957,509 3.75% In a lump sum subject to a surrender charge -- 0.00% All others -- 0.00% Not subject to discretionary withdrawal 337,683 0.65% -------------- -------- TOTAL, GROSS 52,154,961 100.00% Reinsurance ceded -- 0.00% -------------- -------- TOTAL, NET $52,154,961 100.00% -------------- -------- Reconciliation of total annuity actuarial reserves and deposit fund liabilities: Life and Accident & Health Annual Statement: Exhibit 5, Annuities Section, Total (net) $5,777,961 Exhibit 5, Supplementary Contract Section, Total (net) 4,540 Exhibit 7, Deposit-Type Contracts Section, Column 1, Line 14 70,266 -------------- SUBTOTAL 5,852,767 Separate Account Annual Statement Exhibit 3, Column 2, Line 0299999 46,302,194 Exhibit 3, Column 2, Line 0399999 -- Policyholder dividend and coupon accumulations -- Policyholder premiums -- Guaranteed interest contracts -- Other contract deposit funds -- -------------- SUBTOTAL 46,302,194 -------------- COMBINED TOTAL $52,154,961 --------------
F-10 INVESTMENTS Investments in bonds are carried at amortized cost except for those securities that are deemed ineligible to be held at amortized cost by the NAIC Securities Valuation Office ("SVO"), which are carried at the lower of amortized cost or fair value. Short-term investments include all investments whose maturities, at the time of acquisition, are one year or less and are stated at amortized cost. Unaffiliated common stocks are carried at fair value with the change in the difference from cost recorded as a change in net unrealized capital gains (losses), a component of unassigned surplus. Unaffiliated preferred stocks are carried at cost, lower of cost or amortized cost, or fair values depending on the assigned credit rating and whether the preferred stock is redeemable or non-redeemable. Investments in common and preferred stocks of subsidiaries and affiliates of the Company are carried in accordance with Statement of Statutory Accounting Principles ("SSAP") No. 97 (Investment in Subsidiary, Controlled, and Affiliated Entities, a replacement of SSAP No. 88) based on their underlying equity generally adjusted to a statutory basis. Mortgage loans on real estate are stated at the outstanding principal balance. Policy loans are carried at outstanding balance, which approximates fair value. Interest income on bonds and mortgage loans is recognized when earned on the constant effective yield method based on estimated principal repayments, if applicable. For bonds subject to prepayment risk, yields are recalculated and adjusted periodically to reflect historical and/or estimated future principal repayments. The new effective yields used for fixed rate and variable rate loan-backed securities are recalculated on a retrospective and prospective basis, respectively. The Company has not elected to use the book value as of January 1, 1994 as the cost for applying the retrospective adjustment method to securities purchased prior to that date. Investment income on interest only securities is determined using the prospective method. Prepayment fees on bonds and mortgage loans are recorded in net investment income when earned. Dividends are recorded as earned on the ex-dividend date. For bond investments, other than loan-backed securities, that have had an other-than-temporary impairment loss, income is earned on the effective yield method based upon the new cost basis and the amount and timing of future estimated cash flows. Due and accrued investment income amounts over 90 days past due are non-admitted. There was no investment income due and accrued excluded from surplus at December 31, 2008 and 2007. Net realized gains and losses from investment sales are determined on a specific identification basis. Net realized capital gains and losses also result from termination or settlement of derivative contracts that do not qualify, or are not designated, as a hedge for accounting purposes. Impairments are recognized within net realized capital losses when investment losses in value are deemed other-than-temporary. Foreign currency transaction gains and losses are also recognized within net realized capital gains and losses. The Asset Valuation Reserve ("AVR") is designed to provide a standardized reserving process for realized and unrealized losses due to default and equity risks associated with invested assets. The AVR balances were $6,004 and $46,855 as of December 31, 2008, 2007 respectively. Additionally, the Interest Maintenance Reserve ("IMR") captures net realized capital gains and losses, net of applicable income taxes, resulting from changes in interest rates and amortizes these gains or losses into income over the life of the bond, preferred stock or mortgage loan sold. The IMR balances as of December 31, 2008 and 2007 were $(7,165), and $(10,988) respectively. The 2008 and 2007 IMR balances were asset balances and were reflected as a component of non-admitted assets in Unassigned Funds in accordance with statutory accounting practices. The net capital gains (losses) captured in the IMR, net of taxes, in 2008, 2007, and 2006 were $3,339, $(10,549) and $(15,707), respectively. The amount of (expense) or income amortized from the IMR net of taxes in 2008, 2007 and 2006 included in the Company's Statements of Operations, was $(484), $(86) and $2,664, respectively. Realized capital gains and losses, net of taxes, not included in the IMR are reported in the Statement of Operations. The Company's accounting policy requires that a decline in the value of a bond or equity security, that is not subject to SSAP No. 43 (Loan-backed and Structured Securities), below its cost or amortized cost basis be assessed to determine if the decline is other-than-temporary. If the decline in value of a bond or equity security is other-than-temporary, a charge is recorded in net realized capital losses equal to the difference between the fair value and cost or amortized cost basis of the security. In addition, for securities expected to be sold, an other-than-temporary impairment charge is recognized if the Company does not expect the fair value of a security to recover to its cost or amortized cost basis prior to the expected date of sale. The fair value of the other-than-temporarily impaired investment becomes its new cost basis. The Company has a security monitoring process overseen by a committee of investment and accounting professionals that identifies securities that, due to certain characteristics, as described below, are subjected to an enhanced analysis on a quarterly basis. Securities that are in an unrealized loss position are reviewed at least quarterly to determine if an other-than-temporary impairment is present based on certain quantitative and qualitative factors. The primary factors considered in evaluating whether a decline in value for securities not subject to SSAP No. 43 is other-than-temporary include: (a) the length of time and the extent to which the fair value has been less than cost or amortized cost, (b) the financial condition, credit rating and near-term prospects of the issuer, (c) whether the debtor is current on contractually obligated interest and principal payments, and (d) the intent and ability of the Company to retain the investment for a period of time sufficient to allow for F-11 recovery. Once an impairment charge has been recorded, the Company continues to review the other-than-temporarily impaired securities for further other-than- temporary impairments on an ongoing basis. Additionally, for certain securitized financial assets with contractual cash flows (including asset-backed securities), SSAP No. 43 requires the Company to periodically update their best estimate of cash flows over the life of the security. If management determines that the estimated undiscounted cash flows of a security are less than its amortized cost, then an other-than-temporary impairment charge is recognized equal to the difference between the amortized cost and undiscounted estimated cash flows of the security. The undiscounted estimated cash flows of the impaired investment become its new cost basis. Estimating future cash flows is a quantitative and qualitative process that incorporates information received from third party sources along with certain internal assumptions and judgments regarding the future performance of the underlying collateral. As a result, actual results may differ from estimates. In addition, projections of expected future cash flows may change based upon new information regarding the performance of the underlying collateral. Net realized capital losses resulting from write-downs for other-than-temporary impairments on corporate and asset-backed fixed maturities was $92,544, $560 and $0 for the years ended December 31, 2008, 2007 and 2006. Net realized capital losses resulting from write-downs for other-than-temporary impairments on equities was $20,786, $1,664 and $0 for the years ended December 31, 2008, 2007 and 2006, respectively. Mortgage loans on real estate are considered to be impaired when management estimates that, based upon current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. For mortgage loans that are determined to be impaired, a valuation allowance is established for the difference between the carrying amount and the Company's share of the fair value of the collateral. Changes in valuation allowances are recorded in net realized capital gains and losses. The Company does not have a valuation reserve as of December 31, 2008, 2007 and 2006, respectively. ADOPTION OF ACCOUNTING STANDARDS SSAP No. 98 -- Treatment of Cashflows When Quantifying Changes in Valuation and Impairments, An Amendment to SSAP 43 -- Loan Backed and Structured Securities (SSAP No. 98), was issued by the Statutory Accounting Issues Working Group of the NAIC's Accounting Practice and Procedures Task force during 2008. SSAP No. 98 more closely aligns the statutory accounting impairment rules with the more conservative U.S. GAAP accounting principles. SSAP 98 is effective on September 30, 2009 with early adoption permitted. The Company does not expect the implementation of SSAP 98 to have a material impact on the Company's financial statements. SSAP No. 97 -- Investments in Subsidiary, Controlled and Affiliated Entities (SSAP No. 97), was issued by the Statutory Accounting Issues Working Group of the NAIC's Accounting Practice and Procedures Task force during 2007. SSAP No. 97 defines the appropriate valuation for subsidiaries and affiliates of insurance companies. It was effective on January 1, 2008, and did not have a material impact on the Company's financial statements. SSAP No. 96 -- Settlement Requirements for Intercompany Transactions (SSAP No. 96), was issued by the Statutory Accounting Issues Working Group of the NAIC's Accounting Practice and Procedures Task Force December 11, 2006. SSAP No. 96 establishes a statutory aging threshold for admission of loans and advances to related parties outstanding as of the reporting date. In addition, this statement establishes an aging threshold for admission of receivables associated with transactions for services provided to related parties outstanding as of the reporting date. It was effective December 31, 2007, and did not have a material impact on the Company's financial statements. 3. INVESTMENTS: For the years ended December 31, (A) COMPONENTS OF NET INVESTMENT INCOME
2008 2007 2006 -------------------------------------------------------------------------------- Interest income from bonds and short-term investments $343,501 $335,302 $306,123 Interest income from policy loans 22,535 21,532 21,199 Interest income from mortgage loans 26,596 17,414 9,591 Interest and dividends from other investments (9,818) 9,101 9,577 ---------- ---------- ---------- Gross investment income 382,814 383,349 346,490 Less: investment expenses 6,780 34,912 7,143 ---------- ---------- ---------- NET INVESTMENT INCOME $376,034 $348,437 $339,347 ---------- ---------- ----------
F-12 (B) COMPONENTS OF NET UNREALIZED CAPITAL LOSSES ON BONDS AND SHORT TERM INVESTMENTS
2008 2007 2006 -------------------------------------------------------------------------------- Gross unrealized capital gains $89,940 $86,420 $95,839 Gross unrealized capital losses (981,592) (152,307) (62,923) Net unrealized capital (losses) gains (891,652) (65,887) 32,916 Balance, beginning of year (65,887) 32,916 41,257 ----------- ---------- ---------- CHANGE IN NET UNREALIZED CAPITAL LOSSES ON BONDS AND SHORT-TERM INVESTMENTS $(825,765) $(98,803) $(8,341) ----------- ---------- ----------
(C) COMPONENTS OF NET UNREALIZED CAPITAL (LOSSES) GAINS ON COMMON STOCKS AND PREFERRED STOCKS
2008 2007 2006 -------------------------------------------------------------------------------- Gross unrealized capital gains $245 $1,751 $3,778 Gross unrealized capital losses (157,708) (56,041) (36,376) ----------- --------- --------- Net unrealized capital losses (157,463) (54,290) (32,598) Balance, beginning of year (54,290) (32,598) (30,969) ----------- --------- --------- CHANGE IN NET UNREALIZED CAPITAL (LOSSES) GAINS ON COMMON STOCKS AND PREFERRED STOCKS $(103,173) $(21,692) $(1,629) ----------- --------- ---------
(D) COMPONENTS OF NET REALIZED CAPITAL GAINS (LOSSES)
2008 2007 2006 --------------------------------------------------------------------------------------------------------------------- Bonds and short-term investments $(103,639) $(13,496) $(19,176) Common stocks (784) (11) 43 Preferred stocks (27,428) (2,546) (502) Other invested assets 1,095,885 (72,007) (40,976) ------------ ------------ ------------ Realized capital gains (losses) 964,034 (88,060) (60,611) Capital gains tax benefit (467) 4,248 (4,248) ------------ ------------ ------------ Net realized capital losses, after tax 964,501 (92,308) (56,363) Less: amounts transferred to IMR 3,339 (10,549) (15,707) ------------ ------------ ------------ NET REALIZED CAPITAL (LOSSES) GAINS, AFTER TAX $961,162 $(81,759) $(40,656) ------------ ------------ ------------
For the years ended December 31, 2008, 2007 and 2006, sales of unaffiliated bonds and short-term investments resulted in proceeds of $1,083,622, $1,478,584 and $1,771,232, gross realized capital gains of $13,331, $13,287 and $9,836, and gross realized capital losses of $29,008, $26,224 and $29,012 respectively, before transfers to the IMR. For the years ended December 31, 2008, 2007 and 2006, sales of common and preferred stocks resulted in proceeds of $18,884, $149,356 and $24,070, gross realized capital gains of $11, $62 and $43, and gross realized capital losses of $7,437, $955 and $502, respectively. (E) INVESTMENTS -- DERIVATIVE INSTRUMENTS OVERVIEW The Company utilizes a variety of derivative instruments, including swaps, caps, floors, forwards, futures and options through one of four Company approved objectives: to hedge risk arising from interest rate, equity market, credit spread including issuer defaults, price or foreign currency exchange rate risk or volatility; to manage liquidity; to control transaction costs; or to enter into income generation or replication transactions. On the date the derivative contract is entered into, the Company designates the derivative as hedging (fair value, cash flow, or net investment in a foreign operation), income generation, replication, or held for other investment and/or risk management activities, which primarily involve managing asset or liability related risks which do not qualify for hedge accounting under SSAP No. 86. The Company's derivative transactions are used in strategies permitted under the derivative use plans required by the State of Connecticut, State of Illinois, and State of New York insurance departments. Interest rate swaps and index swaps involve the periodic exchange of payments with other parties, at specified intervals, calculated using the agreed upon rates or indices and notional principal amounts. Generally, no cash or principal payments are exchanged at the inception of the contract. Typically, at the time a swap is entered into, the cash flow streams exchanged by the counterparties are equal in value. Credit default swaps entitle one party to receive a periodic fee in exchange for an obligation to compensate the other party should a credit event occur on the part of the issuer. Interest rate cap and floor contracts entitle the purchaser to receive from the issuer at specified dates, the amount, if any, by which a specified market rate exceeds the cap strike interest rate or falls below the floor strike interest rate, applied to a notional principal amount. A premium payment is made by the purchaser of the contract at its inception, and no principal payments are exchanged. F-13 Forward contracts are customized commitments to either purchase or sell designated financial instruments, at a future date, for a specified price and may be settled in cash or through delivery of the underlying instrument. Financial futures are standardized commitments to either purchase or sell designated financial instruments at a future date, for a specified price and may be settled in cash or through delivery of the underlying instrument. Futures contracts trade on organized exchanges. Margin requirements for futures are met by pledging securities or cash, and changes in the futures' contract values are settled daily in cash. Option contracts grant the purchaser, for a premium payment, the right to either purchase from or sell to the issuer a financial instrument at a specified price, within a specified period or on a stated date. Foreign currency swaps exchange an initial principal amount in two currencies, agreeing to re-exchange the currencies at a future date, at an agreed upon exchange rate. There may also be a periodic exchange of payments at specified intervals calculated using the agreed upon rates and exchanged principal amounts. STRATEGIES The notional value, fair value, and carrying value of derivative instruments used during the year are disclosed in the strategy discussions below. During the year 2008 and 2007, the Company did not transact in or hold any positions related to net investment hedges in a foreign operation, fair value hedges, or income generation transactions. The notional amounts of derivative contracts represent the basis upon which pay or receive amounts are calculated and are not reflective of credit risk. Notional amounts pertaining to derivative instruments at December 31, 2008 and 2007, were $13,610,197 and $17,006,125, respectively. The fair value of derivative instruments are based upon widely accepted pricing valuation models which utilize independent third party data as inputs or independent broker quotations. The Company did not have any material unrealized gains or losses during the reporting period representing the component of the derivative instruments gain or loss from derivatives that no longer qualify for hedge accounting. The fair value of derivative instruments at December 31, 2008 and 2007, were $1,859,441 and $472,283, respectively. As of December 31, 2008 and 2007, the average fair value for derivatives held for other investment and/or risk management activities was $963,117 and $314,434, respectively. The carrying value of derivative instruments at December 31, 2008 and 2007, were $1,764,939 and $466,251, respectively. CASH-FLOW HEDGES INTEREST RATE SWAPS: Interest rate swaps are primarily used to convert interest receipts on floating-rate fixed maturity investments to fixed rates. Forward starting swap agreements are used to hedge the interest rate exposure of anticipated future purchases of fixed rate securities. The maximum length of time over which the Company is hedging exposure to the variability of future cash flows for forecasted transactions, excluding those forecasted transactions related to the payment of variable interest on existing financial instruments, is five years. There were no gains and losses classified in unrealized gains and losses related to cash flow hedges that have been discontinued because it was no longer probable that the original forecasted transactions would occur by the end of the originally specified time period. As of December 31, 2008 and 2007, interest rate swaps used in cash flow hedge relationships had a notional value of $235,000 and $150,000, respectively, a fair value of $72,937 and $(341), respectively, and a carrying value of $0. FOREIGN CURRENCY SWAPS: Foreign currency swaps are used to convert foreign denominated cash flows associated with certain foreign denominated fixed maturity investments to U.S. dollars. The foreign fixed maturities are primarily denominated in euros and are hedged to minimize cash flow fluctuations due to changes in currency rates. As of December 31, 2008 and 2007, foreign currency swaps used in cash flow hedge relationships had a notional value of $176,393 and $192,393, respectively, a fair value of $19,874 and $(23,535), respectively, and a carrying value of $(1,691) and $(29,875), respectively. REPLICATION TRANSACTIONS CREDIT DEFAULT SWAPS: The Company periodically enters into credit default swaps as part of replication transactions. Credit default swaps used in replication transactions had a notional value at December 31, 2008 and 2007, of $0, and $7,500, respectively, a fair value of $0 and $33, respectively, and a carrying value of $0. OTHER INVESTMENT AND RISK MANAGEMENT ACTIVITIES INTEREST RATE CAPS: The Company is exposed to policyholder surrenders during a rising interest rate environment. Interest rate cap contracts are used to mitigate the Company's loss in a rising interest rate environment. The increase in yield from the cap contracts in a rising interest rate environment may be used to raise credited rates, thereby increasing the Company's competitiveness and reducing the policyholder's incentive to surrender. As of December 31, 2008 and 2007, interest rate caps used to mitigate risk in a rising interest rate environment had a notional value of $80,767 and $580,767, respectively, a fair value of $655 and $2,435, respectively, and a carrying value of $655 and $2,435, respectively. For the years ended December 31, 2008, 2007 and 2006, derivative contracts in this strategy reported a loss of $(5,450), $(6,239) and $(235), respectively, in realized capital gains and losses. CREDIT DEFAULT SWAPS: The Company enters into swap agreements in which the Company reduces or assumes credit exposure from an individual entity. As of December 31, 2008 and 2007, credit default swaps had a notional value of $355,316 and F-14 $447,700, respectively, a fair value of $37,463 and $3,597, respectively, and a carrying value of $37,463 and $3,597 respectively. For the years ended December 31, 2008, 2007 and 2006, credit default swaps reported a gain of $20,185, a gain of $1,453 and a loss of $(19), respectively, in realized capital gains and losses. In addition, the Company may enter into credit default swaps to terminate existing swaps in hedging relationships, thereby offsetting the changes in value of the original swap. As of December 31, 2008 and 2007, credit default swaps in offsetting relationships had a notional value of $140,000 and $0, respectively, a fair value of $0, and a carrying value of $0. For the years ended 2008, 2007 and 2006, there were no realized gains and losses on credit default swaps in offsetting relationships. FUTURES CONTRACTS, EQUITY INDEX OPTIONS, TOTAL RETURN INDEX, AND INTEREST RATE SWAP CONTRACTS: The Company enters into interest rate futures, S&P 500 and NASDAQ index futures contracts and put and call options, as well as interest rate, total return Europe, Australasia, and Far East ("EAFE") and equity volatility and dividend swap contracts to hedge exposure to the volatility associated with the portion of the guaranteed minimum withdrawal benefit ("GMWB") liabilities which are not reinsured and to periodically hedge anticipated GMWB new business. In 2007, the Company entered into a customized swap contract to hedge certain risk components for the remaining term of certain blocks of non-reinsured GMWB riders. As of December 31, 2008 and 2007, derivative contracts in this strategy had a notional value of $10,136,044 and $14,946,569, respectively, a fair value of $1,565,020 and $495,575, respectively, and a carrying value of $1,565,020 and $495,575, respectively. For the years ended December 31, 2008, 2007 and 2006, derivative contracts in this strategy reported a gain of $1,006,992, a loss of $(48,528) and $(25,898), respectively, in realized capital gains and losses. INTEREST RATE SWAPS: The Company enters into interest rate swaps to manage duration risk between assets and liabilities. As of December 31, 2008 and 2007, interest rate swaps had a notional value of $75,000 and $636,500, respectively, a fair value of $319 and $(1,777), respectively, and a carrying value of $319 and $(1,777), respectively. For the years ended December 31, 2008, 2007 and 2006, interest rate swaps reported a gain of $6,056, $447 and $772, respectively, in realized capital gains and losses. In addition, the Company may enter into interest rates swaps to terminate existing swaps in hedging relationships, and thereby offsetting the changes in value in the original swap. As of December 31, 2008 and 2007, interest rate swaps in offsetting relationships had a notional value of $225,000 and $20,000, respectively, a fair value of $(13,301) and $297, respectively, and a carrying value of $(13,301) and $297, respectively. For the year ended December 31, 2008, interest rate swaps in offsetting relationships reported a gain of $2,316. For the years ended 2007 and 2006, there were no realized gains and losses on interest rate swaps in offsetting relationships. EQUITY INDEX OPTIONS AND FUTURES: The Company purchases S&P 500 options contracts as well as futures to economically hedge the statutory reserve impact of equity volatility arising primarily from guaranteed minimum death benefits ("GMDB") and guaranteed minimum withdrawal benefits ("GMWB") obligations against a decline in the equity markets. As of December 31, 2008 and 2007, derivative contracts in this strategy had a notional value $1,870,478 and $0, respectively, a fair value of $134,852 and $0, respectively, and a carrying value of $134,852 and $0, respectively. For the years ended December 31, 2008, 2007 and 2006, derivative contracts in this strategy reported a loss of $(13,503), $(16,876) and $(6,573), respectively, in realized capital gains and losses. FOREIGN CURRENCY SWAPS AND FORWARDS: The Company enters into foreign currency swaps to hedge the foreign currency exposures in certain of its foreign fixed maturity investments. In addition, foreign currency and forward contracts convert euros to yen in order to economically hedge the foreign currency risk associated with certain Japanese variable annuity products that are assumed by Hartford Life and Annuity Insurance Company. As of December 31, 2008 and 2007, foreign currency swaps and forwards had a notional value of $315,699 and $44,196, respectively, a fair value of $41,393 and $(3,756), respectively, and a carrying value of $41,393 and $(3,756), respectively. For the years ended December 31, 2008, 2007 and 2006, derivative contracts in this strategy reported a loss of $(773), a gain of $599 and a loss of $(805), respectively, in realized capital gains and losses. WARRANTS: During 2003, the Company received warrant contracts as part of a reinsurance treaty settlement. As of December 31, 2008 and 2007, the warrants had a notional value of $500, a fair value of $229 and $52, respectively, and a carrying value of $229 and $52, respectively. There were no realized gains and losses during the years 2008, 2007 and 2006. CREDIT RISK ASSUMED THROUGH CREDIT DERIVATIVES The Company enters into credit default swaps that assume credit risk from a referenced index or asset pool in order to synthetically replicate investment transactions. In addition, the Company may enter into credit default swaps that assume credit risk to terminate existing credit default swaps that reduce credit risk, thereby offsetting the changes in value of the original swap." The Company will receive periodic payments based on an agreed upon rate and notional amount and will only make a payment if there is a credit event. A credit event payment will typically be equal to the notional value of the swap contract less the value of the referenced security issuer's debt obligation. A credit event is generally defined as default on contractually obligated interest or principal payments or bankruptcy of the referenced entity. The credit default swaps in which the Company assumes credit risk primarily reference investment grade baskets of up to five corporate issuers and diversified F-15 portfolios of corporate issuers. The diversified portfolios of corporate issuers are established within sector concentration limits and are typically divided into tranches that possess different credit ratings. The following table presents the notional amount, fair value, carrying value, weighted average years to maturity, underlying referenced credit obligation type and average credit ratings, and offsetting notional amount, fair value and carrying value for credit derivatives in which the Company is assuming credit risk as of December 31, 2008.
AVERAGE AS OF DECEM CREDIT DERIVATIVE TYPE BY NOTIONAL CARRYING DERIVATIVE RISK EXPOSURE AMOUNT (2) FAIR VALUE VALUE --------------------------------------------------------------------------------------------- Basket credit default swaps (4) Investment grade risk exposure $70,000 $(21,514) $(21,514) --------- --------- --------- TOTAL $ 70,000 $ (21,514) $ (21,514) WEIGHTED UNDERLYING AVERAGE AS OF DECEM CREDIT DERIVATIVE TYPE BY YEARS TO OBLIGATION(S) (1)EDIT DERIVATIVE RISK EXPOSURE MATURITY TYPE RATING ------------------------- ------------------------------------------------------------------ Basket credit default swaps (4) Investment grade risk exposure 42 years CMBS Credit AAA --------- ------------ ------ TOTAL OFFSETTING AVERAGE AS OF DECEM CREDIT DERIVATIVE TYPE BY AMOUNT FAIR CARRYING DERIVATIVE RISK EXPOSURE (3) VALUE (3) VALUE ------------------------- ------------------------------------------------------------- Basket credit default swaps (4) Investment grade risk exposure $70,000 $21,514 $21,514 --------- --------- --------- TOTAL $ 70,000 $ 21,514 $ 21,514
(1) The average credit ratings are based on availability and the midpoint of the applicable ratings among Moody's, S&P, and Fitch. If no rating is available from a rating agency, then an internally developed rating is used. (2) Notional amount is equal to the maximum potential future loss amount. There is no specific collateral related to these contracts or recourse provisions included in the contracts to offset losses. (3) The Company has entered into offsetting credit default swaps to terminate certain existing credit default swaps, thereby offsetting, the future changes in value of or losses paid related to the original swap. (4) Includes $70,000 of standard market indices of diversified portfolios of corporate issuers referenced through credit default swaps. These swaps are subsequently valued based upon the observable standard market index. CREDIT RISK The Company's derivative counterparty exposure policy establishes market-based credit limits, favors long-term financial stability and creditworthiness and typically requires credit enhancement/credit risk reducing agreements. Credit risk is measured as the amount owed to the Company based on current market conditions and potential payment obligations between the Company and its counterparties. For each legal entity, the Company's credit exposures are generally quantified daily, netted by counterparty, and collateral is pledged to and held by, or behalf of, the Company to the extent the current value of derivatives exceeds the contractual thresholds which do not exceed $10,000. The Company also minimizes the credit risk in derivative instruments by entering into transactions with high quality counterparties rated A2/A or better, which are monitored and evaluated by the Company's risk management team and reviewed by senior management. In addition, the compliance unit monitors counterparty credit exposure on a monthly basis to ensure compliance with the Company policies and statutory limitations. The Company also maintains a policy of requiring that derivative contracts, other than exchange traded contracts and certain currency forward contracts, be governed by an International Swaps and Derivatives Association Master Agreement which is structured by legal entity and by counterparty and permits right of offset. As of December 31, 2008, the Company has incurred losses of $(13,838) on derivative instruments due to counterparty default related to the bankruptcy of Lehman Brothers Holdings, Inc. These losses were a result of the contractual collateral threshold amounts and open collateral calls in excess of such amounts immediately prior to the bankruptcy filing, as well as interest rate and credit spread movements from the date of the last collateral call to the date of the bankruptcy filing. (F) CONCENTRATION OF CREDIT RISK The Company aims to maintain a diversified investment portfolio including issuer, sector and geographic stratification, where applicable, and has established certain exposure limits, diversification standards and review procedures to mitigate credit risk. As of December 31, 2008, the Company had one significant concentration of credit risk, Government of Japan, that exceeded 10% of capital and surplus in bonds of single issuers that was not U.S. government, certain U.S. government agencies and short term investment pool. These bonds were all designated NAIC investment grade. The Company monitors closely these concentrations and the potential impact of capital and surplus should the issuer fail to perform according to the contractual terms of the investment. As of December 31, 2008, the carrying value, gross unrealized gain, gross unrealized loss and estimated fair value of these bonds were $1,848,824, $20,292, $0 and $1,869,116 F-16 (G) BONDS, SHORT-TERM INVESTMENTS, COMMON STOCKS AND PREFERRED STOCKS
DECEMBER 31, 2008 GROSS GROSS ESTIMATED STATEMENT UNREALIZED UNREALIZED FAIR VALUE GAINS LOSSES VALUE --------------------------------------------------------------------------------------------------------------------------------- BONDS AND SHORT-TERM INVESTMENTS U.S. government and government agencies and authorities: -- Guaranteed and sponsored $767,433 $8,278 $(3,717) $771,994 -- Guaranteed and sponsored -- asset-backed 612,681 14,147 (1,672) 625,156 States, municipalities and political subdivisions 56,540 258 (9,859) 46,939 International governments 1,784,069 21,070 (496) 1,804,643 Public utilities 552,314 5,224 (52,867) 504,671 All other corporate -- excluding asset-backed 2,543,103 34,761 (271,737) 2,306,127 All other corporate -- asset-backed 2,055,543 6,202 (641,244) 1,420,501 Short-term investments 2,166,710 -- -- 2,166,710 --------------- ---------- ------------- -------------- TOTAL BONDS AND SHORT-TERM INVESTMENTS $10,538,393 $89,940 $(981,592) $9,646,741 --------------- ---------- ------------- --------------
GROSDECEMBER 31, 2008 GROSS ESTIMATED UNREALIZED UNREALIZED FAIR COST GAINS LOSSES VALUE --------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS Common stock -- unaffiliated $5,987 $18 $(974) $5,031 Common stock -- affiliated 36,884 -- (30,395) 6,489 --------------- ---------- ------------- -------------- TOTAL COMMON STOCKS $42,871 $18 $(31,369) $11,520 --------------- ---------- ------------- --------------
DECEMBER 31, 2008 GROSS GROSS ESTIMATED STATEMENT UNREALIZED UNREALIZED FAIR VALUE GAINS LOSSES VALUE --------------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS Preferred stock -- unaffiliated $255,362 $227 $(126,339) $129,250 --------------- ---------- ------------- -------------- TOTAL PREFERRED STOCKS $255,362 $227 $(126,339) $129,250 --------------- ---------- ------------- --------------
DECEMBER 31, 2007 GROSS GROSS ESTIMATED STATEMENT UNREALIZED UNREALIZED FAIR VALUE GAINS LOSSES VALUE --------------------------------------------------------------------------------------------------------------------------------- BONDS AND SHORT-TERM INVESTMENTS U.S. government and government agencies and authorities: -- Guaranteed and sponsored $21,766 $489 $ -- $22,255 -- Guaranteed and sponsored -- asset-backed 610,221 8,476 (3,611) 615,086 States, municipalities and political subdivisions 36,155 -- (1,693) 34,462 International governments 16,739 439 (102) 17,076 Public utilities 467,158 3,364 (11,666) 458,856 All other corporate -- excluding asset-backed 2,156,711 47,235 (40,854) 2,163,092 All other corporate -- asset-backed 2,296,880 26,417 (94,381) 2,228,916 Short-term investments 476,505 -- -- 476,505 --------------- ---------- ------------- -------------- TOTAL BONDS AND SHORT-TERM INVESTMENTS $6,082,135 $86,420 $(152,307) $6,016,248 --------------- ---------- ------------- --------------
GROSS GROSS ESTIMATED UNREALDECEMBER 31, 2007UNREALIZED FAIR COST GAINS LOSSES VALUE --------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS Common stock -- unaffiliated $6,662 $1,425 $(3) $8,084 Common stock -- affiliated 36,884 -- (30,221) 6,663 --------------- ---------- ------------- -------------- TOTAL COMMON STOCKS $43,546 $1,425 $(30,224) $14,747 --------------- ---------- ------------- --------------
F-17
GROSS DECEMBER 31, 2007 GROSS ESTIMATED STATEMENT UNREALIZED UNREALIZED FAIR VALUE GAINS LOSSES VALUE --------------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS Preferred stock -- unaffiliated $301,811 $236 $(25,817) $276,230 ------------- --------- ------------ ------------- TOTAL PREFERRED STOCKS $301,811 $236 $(25,817) $276,230 ------------- --------- ------------ -------------
The statement value and estimated fair value of bonds and short-term investments at December 31, 2008 by expected maturity year are shown below. Expected maturities may differ from contractual maturities due to call or prepayment provisions. Asset-backed securities, including mortgage-backed securities and collateralized mortgage obligations, are distributed to maturity year based on the Company's estimate of the rate of future prepayments of principal over the remaining lives of the securities. These estimates are developed using prepayment speeds provided in broker consensus data. Such estimates are derived from prepayment speeds experienced at the interest rate levels projected for the applicable underlying collateral. Actual prepayment experience may vary from these estimates.
STATEMENT ESTIMATED VALUE FAIR VALUE -------------------------------------------------------------------------------- MATURITY Due in one year or less $2,534,297 $2,495,083 Due after one year through five years 2,637,862 2,356,958 Due after five years through ten years 3,812,781 3,406,406 Due after ten years 1,553,453 1,388,294 --------------- -------------- TOTAL $10,538,393 $9,646,741 --------------- --------------
At December 31, 2008 and 2007, securities with a statement value of $3,809 and $3,805, respectively, were on deposit with government agencies as required by law in various jurisdictions in which the Company conducts business. (H) MORTGAGE LOANS The maximum and minimum lending rates for the Company's mortgage loans outstanding were 6.99% and 4.02% and 9.38% and 5.26% during 2008 and 2007, respectively. During 2008 and 2007, the Company did not reduce interest rates on any outstanding mortgage loans. For loans held at December 31, 2008 and 2007, the highest loan to value percentage of any one loan at the time of loan origination, exclusive of insured, guaranteed, purchase money mortgages or construction loans was 79.23%. There were no taxes, assessments or amounts advanced and not included in the mortgage loan total. As of December 31, 2008 and 2007, the Company did not hold mortgages with interest more than 180 days past due. There were no impaired mortgage loans as of December 31, 2008 and 2007. (I) RESTRUCTURED DEBT IN WHICH THE COMPANY IS A CREDITOR The Company did not have investments in restructured loans as of December 31, 2008, 2007 and 2006. (J) FAIR VALUE OF FINANCIAL INSTRUMENTS
2008 ESTIMATED 2007 ESTIMATED STATEMENT FAIR STATEMENT FAIR VALUE VALUE VALUE VALUE ----------------------------------------------------------------------------------------------------------- ADMITTED ASSETS Bonds and short-term investments $10,538,393 9,646,741 $6,082,135 6,016,248 Preferred stocks 255,362 129,250 301,811 276,320 Common stocks 11,520 11,520 14,747 14,747 Mortgage loans 611,372 569,461 350,528 351,604 Derivative related assets (1) 1,791,997 1,813,561 473,685 479,381 Policy loans 354,920 354,920 343,773 343,773 Other invested assets 264,280 264,280 183,719 183,719 LIABILITIES Liability for deposit type contracts $70,266 $70,266 $73,736 $73,736 Derivative related liabilities (1) 27,058 27,058 7,434 6,790 ------------- ------------ ------------ ------------
(1) Includes derivatives held for other investment and risk management activities as of December 31, 2008 and 2007, with a fair value asset position of $1,793,687 and $490,565, respectively, and a liability position of $27,058 and $5,561, respectively. Excludes derivative contracts that receive hedge accounting and have a zero statement value at December 31, 2008 and 2007. These derivatives are not reported on the Statement of Admitted Assets, Liabilities and Surplus and have a fair value as of December 31, 2008 and 2007, of $72,938 and ($308), respectively. F-18 Included in various investment related line items in the financial statements are certain financial instruments carried at fair value. Other financial instruments are periodically measured at fair value, such as when impaired, or, for certain bonds and preferred stock when carried at the lower of cost or market. The fair value of an asset is the amount at which that asset could be bought or sold in a current transaction between willing parties, that is, other than in a forced or liquidation sale. The fair value of a liability is the amount at which that liability could be incurred or settled in a current transaction between willing parties, that is, other than in a forced or liquidation sale. The valuation methodologies used to determine the fair values of assets and liabilities under the "exit price" notion of SFAS 157 "Fair Value Measurements" reflect market-participant objectives and are based on the application of the fair value hierarchy that prioritizes observable market inputs over unobservable inputs. Security pricing is applied using a "waterfall" approach whereby publicly available prices are first sought from third party pricing services, the remaining unpriced securities are submitted to independent brokers for prices, or lastly, securities are priced using a pricing matrix. Derivative instruments are fair valued using pricing valuation models, which utilize market data inputs or independent broker quotations. The Company performs a monthly analysis on the prices received from third parties and derivative valuation which includes both quantitative and qualitative analysis. The Company's financial assets and liabilities carried at fair value have been classified, for disclosure purposes, based on a hierarchy defined by SFAS No. 157, FAIR VALUE MEASUREMENTS. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). In many situations, inputs used to measure the fair value of an asset or liability position may fall into different levels of the fair value hierarchy. In these situations, the Company will determine the level in which the fair value falls based upon the lowest level input that is significant to the determination of the fair value. In most cases, both observable (e.g., changes in interest rates) and unobservable (e.g., changes in risk assumptions) inputs are used in the determination of fair values that the Company has classified within Level 3. Consequently, these values and the related gains and losses are based upon both observable and unobservable inputs. The levels of the fair value hierarchy are as follows: LEVEL 1 -- Observable inputs that reflect quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date. LEVEL 2 -- Observable inputs, other than quoted prices included in Level 1, for the asset or liability or prices for similar assets and liabilities. LEVEL 3 -- Valuations that are derived from techniques in which one or more of the significant inputs are unobservable (including assumptions about risk). Level 3 securities include less liquid securities such as private placement debt and equity securities. Because Level 3 fair values, by their nature, contain unobservable market inputs as there is no observable market for these assets and liabilities, considerable judgment is used to determine the SFAS 157 Level 3 fair values. Level 3 fair values represent the Company's best estimate of an amount that could be realized in a current market exchange absent actual market exchanges. F-19 FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS The following table provides information as of December 31, 2008 about the Company's financial assets and liabilities measured at fair value on a recurring basis.
QUOTED PRICES IN ACTIVE SIGNIFICANT SIGNIFICANT MARKETS FOR OBSERVABLE UNOBSERVABLE IDENTICAL ASSETS INPUTS INPUTS (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL --------------------------------------------------------------------------------------------------------------------------------- ASSETS AT FAIR VALUE: Common Stock $5,028 -- $4 $5,032 Derivative related assets Customized derivatives used to hedge US GMWB -- -- 490,215 490,215 Other derivatives used to hedge US GMWB -- (12,918) 1,101,792 1,088,874 Macro hedge program -- 34,614 134,852 169,466 Other derivative assets -- 44,477 655 45,132 Total derivative related assets -- 66,173 1,727,514 1,793,687 Separate account assets 50,551 -- -- 50,551 --------- ----------- ------------- ------------- TOTAL ASSETS AT FAIR VALUE: $55,579 $132,346 $3,455,032 $3,642,957 --------- ----------- ------------- ------------- LIABILITIES AT FAIR VALUE: Derivative related liabilities Other derivatives used to hedge US GMWB -- -- 14,070 14,070 Other derivative liabilities -- 12,988 -- 12,988 Total derivative related liabilities -- 12,988 14,070 27,058 Separate account liabilities 50,551 -- -- 50,551 --------- ----------- ------------- ------------- TOTAL LIABILITIES AT FAIR VALUE: $50,551 $12,988 $14,070 $77,609 --------- ----------- ------------- -------------
Fair values and changes in the fair values of separate account assets generally accrue directly to the policyholders and are not included in the Company's revenues and expenses or surplus. Level 1 financial assets and liabilities Common Stock classified in Level 1 includes actively-traded exchange-listed equity securities and mutual funds. Separate account assets in Level 1 primarily include actively-traded institutional and retail mutual fund investments valued by the respective mutual fund companies. Level 2 financial assets and liabilities DERIVATIVE: Amounts classified in Level 2 represent over-the-counter instruments, such as forwards, interest rate swaps, currency swaps, and certain credit default swaps that do not qualify for hedge accounting. The derivative valuations are determined using pricing models with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Level 3 financial assets and liabilities The Company classifies certain privately placed, complex or illiquid securities in Level 3. COMMON STOCK: Securities classified in Level 3 represent private placement equity securities. Fair values for these securities are derived principally using unobservable inputs as there is little, if any, relevant market data. DERIVATIVES: Amounts classified in Level 3 represent complex derivatives, such as interest rate swaps, equity options and swaps, and certain credit default swaps that do not qualify for hedge accounting. Also included in Level 3 classification for derivatives are customized equity swaps that partially hedge the Company's U.S. GMWB liabilities. These derivative instruments are valued using pricing models which utilize both observable and unobservable inputs and, to a lesser extent, broker quotations. A derivative instrument containing Level 1 or Level 2 inputs will be classified as a Level 3 financial instrument in its entirety if it has at least one significant Level 3 input. F-20 Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis The table below provides a fair value rollforward for the year ending December 31, 2008 for the financial instruments for which significant unobservable inputs (Level 3) are used in the fair value measurement on a recurring basis. The Company classifies the fair values of financial instruments within Level 3 if there are no observable markets for the instruments or, in the absence of active markets, the majority of the inputs used to determine fair value are based on the Company's own assumptions about market participant assumptions. The gains and losses in the table below include changes in fair value due partly to observable and unobservable factors.
CUSTOMIZED OTHER DERIVATIVES USED DERIVATIVES USED COMMON TO HEDGE US TO HEDGE US (IN MILLIONS) STOCK GMWB GMWB ---------------------------------------------------------------------------------------------- Fair value at 1/1/08 $4 $36,281 $430,264 Realized/unrealized gains (losses) included in: Net income -- -- -- Unrealized gains and losses -- 453,934 836,724 Purchases, issuances, and settlements -- -- (179,266) Transfers in (out) of Level 3 -- -- -- --- -------- --------- Fair value at 12/31/08 4 490,215 1,087,722 --- -------- --------- Total gains and (losses) included in income attributable to instruments held at the reporting date -- 453,934 729,955 --- -------- --------- MACRO HEDGE OTHER (IN MILLIONS) PROGRAM DERIVATIVES TOTAL -------------------------------------- ------------------------------------------------------ Fair value at 1/1/08 -- $(515) $466,034 Realized/unrealized gains (losses) included in: Net income -- -- -- Unrealized gains and losses 101,264 (1,394) 1,390,528 Purchases, issuances, and settlements 33,588 (1,192) (146,870) Transfers in (out) of Level 3 -- 3,756 3,756 ------- ------- ----------- Fair value at 12/31/08 134,852 655 $1,713,448 ------- ------- ----------- Total gains and (losses) included in income attributable to instruments held at the reporting date 101,264 (4,167) $1,280,986 ------- ------- -----------
Changes in the value of common stock for realized gains/losses are included in net income, and changes in unrealized gains/losses have been included in surplus. Changes in the value of separate account assets for realized and unrealized gains/losses accrue directly to the policyholders and are not included in net income. Transfers in and/or (out) of Level 3 during the twelve months ended December 31, 2008 are attributable to a change in the availability of market observable information for individual securities within respective categories ASSETS MEASURED AT FAIR VALUE ON A NON-RECURRING BASIS Certain financial assets are measured at fair value on a non-recurring basis, such as certain bonds and preferred stock valued at the lower of amortized cost or fair value, or investments that are impaired during the reporting period and recorded at fair value on the balance sheet at December 31, 2008. The following table summarizes the assets measured at fair value on a non-recurring basis as of 12/31/08:
QUOTED PRICES IN SIGNIFICANT SIGNIFICANT ACTIVE MARKETS FOR OBSERVABLE UNOBSERVABLE IDENTICAL ASSETS INPUTS INPUTS TOTAL GAINS TOTAL (LEVEL 1) (LEVEL 2) (LEVEL 3) AND (LOSSES) ------------------------------------------------------------------------------------------------------------------------ Bonds 6,173 -- 4,775 1,398 (7,128)
Bonds include those securities that are ineligible to be carried at amortized cost by the SVO and have a fair value that is less than amortized cost as of December 31, 2008. Also included in bonds are those securities that are eligible to be carried at amortized cost, but have been permanently impaired as of December 31, 2008 due to an other-than-temporary loss in value and as a result are written down to fair value at that time. Level 3 Bonds include primarily sub-prime and Alt-A securities that are priced by third party pricing services or brokers and are classified as level 3 due to the lack of liquidity in the market. (K) SECURITIES LENDING AND COLLATERAL ARRANGEMENTS The Company participates in a securities lending program to generate additional income, whereby certain domestic fixed income securities are loaned from the Company's investment portfolio to qualifying third parties. Borrowers of these securities provide collateral of 102% of the market value of the loaned securities. Acceptable collateral may be in the form of cash or U.S. Government securities. The market value of the loaned securities is monitored and additional collateral is obtained if the market value of the collateral falls below 100% of the market value of the loaned securities. Under the terms of the securities lending program, the lending agent indemnifies the Company against borrower defaults. As of December 31, 2008 and 2007, the statement value of the loaned securities was approximately $274,377 and $388,666, respectively, and was included in bonds in the Statements of Admitted Assets, Liabilities and Surplus. The Company earns income from the cash collateral or receives a fee from the borrower. The Company recorded before-tax income from securities lending transactions, net of lending fees, of $135, $489 and $192 for the years ended December 31, 2008, 2007 and 2006, respectively, which was included in net investment income. The Company also enters into various collateral arrangements in connection with its derivative instruments, which require both the pledging and accepting of collateral. As of December 31, 2008 and 2007, collateral pledged of $478,048 and $10,939, respectively, was included in bonds, on the Statements of Admitted Assets, Liabilities and Surplus. F-21 As of December 31, 2008 and 2007, the Company had accepted collateral relating to the securities lending program and derivative instruments consisting of cash, U.S. Government and U.S. Government agency securities with a statement value of $2,080,162 and $799,664, respectively. At December 31, 2008 and 2007, cash collateral of $1,924,101 and $667,016 respectively, was invested and recorded in the Statements of Admitted Assets, Liabilities and Surplus in bonds and cash and short-term investments with a corresponding amount recorded in other liabilities. The fair value of the cash collateral invested in bonds and cash and short-term investments was $1,829,907 as of December 31, 2008. The Company is only permitted by contract to sell or repledge the noncash collateral in the event of a default by the counterparty and none of the collateral has been sold or repledged at December 31, 2008 and 2007. As of December 31, 2008 and 2007, all collateral accepted was held in separate custodial accounts. The statement value of the cash and securities collateral received by contractually obligated terms are shown below.
CASH AND SECURITIES COLLATERAL DECEMBER 31, 2008 ---------------------------------------------------------------------------- Thirty days or less $1,949,162 Thirty one to 60 days 59,000 Sixty one to 90 days -- ------------ Over 90 days 72,000 ------------ TOTAL $2,080,162 ------------
(L) SECURITY UNREALIZED LOSS AGING The Company has a security monitoring process overseen by a committee of investment and accounting professionals that, on a quarterly basis, identifies securities in an unrealized loss position that could potentially be other-than-temporarily impaired. For further discussion regarding the Company's other-than-temporary impairment policy, see Note No. 2, Summary of Significant Accounting Policies. Due to the issuers' continued satisfaction of the securities' obligations in accordance with their contractual terms and the expectation that they will continue to do so, as well as the evaluation of the fundamentals of the issuers' financial condition and other objective evidence, the Company believes that the prices of the securities in the sectors identified in the tables below were temporarily depressed as of December 31, 2008 and 2007. The following table presents cost or statement value, fair value, and unrealized losses for the Company's bonds and equity securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2008.
LESS THAN 12 MONTHS 12 MONTHS OR MORE AMORTIZED FAIR UNREALIZED AMORTIZED FAIR UNREALIZED COST VALUE LOSSES COST VALUE LOSSES ---------------------------------------------------------------------------------------------------------------------------------- U.S. Gov't and Gov't agencies & authorities -- guaranteed & sponsored $684,248 $680,531 $(3,717) $ -- $ -- $ -- -- guaranteed & sponsored -- asset backed 37,768 37,523 (245) 79,200 77,773 (1,427) States, municipalities & political subdivisions 10,395 9,721 (674) 36,145 26,960 (9,185) International Governments 4,983 4,487 (496) -- -- -- Public utilities 223,457 206,514 (16,943) 198,757 162,833 (35,924) All other corporate including international 1,311,543 1,212,800 (98,743) 721,634 548,640 (172,994) All other corporate-asset backed 557,904 455,963 (101,941) 1,441,860 902,557 (539,303) ----------- ----------- ----------- ----------- ----------- ---------- TOTAL FIXED MATURITIES 2,830,298 2,607,539 (222,759) 2,477,596 1,718,763 (758,833) Common stock -- unaffiliated 4,258 3,286 (972) 2 -- (2) Common stock -- affiliated -- -- -- 36,884 6,489 (30,395) Preferred stock -- unaffiliated 20,127 11,958 (8,169) 232,547 114,377 (118,170) ----------- ----------- ----------- ----------- ----------- ---------- TOTAL EQUITY 24,385 15,244 (9,141) 269,433 120,866 (148,567) ----------- ----------- ----------- ----------- ----------- ---------- TOTAL SECURITIES $2,854,683 $2,622,783 $(231,900) $2,747,029 $1,839,629 $(907,400) ----------- ----------- ----------- ----------- ----------- ---------- TOTAL AMORTIZED FAIR UNREALIZED COST VALUE LOSSES ----------------------------- ------------------------------------------------------ U.S. Gov't and Gov't agencies & authorities -- guaranteed & sponsored $684,248 $680,531 $(3,717) -- guaranteed & sponsored -- asset backed 116,968 115,296 (1,672) States, municipalities & political subdivisions 46,540 36,681 (9,859) International Governments 4,983 4,487 (496) Public utilities 422,214 369,347 (52,867) All other corporate including international 2,033,177 1,761,440 (271,737) All other corporate-asset backed 1,999,764 1,358,520 (641,244) ----------- ----------- ------------ TOTAL FIXED MATURITIES 5,307,894 4,326,302 (981,592) Common stock -- unaffiliated 4,260 3,286 (974) Common stock -- affiliated 36,884 6,489 (30,395) Preferred stock -- unaffiliated 252,674 126,335 (126,339) ----------- ----------- ------------ TOTAL EQUITY 293,818 136,110 (157,708) ----------- ----------- ------------ TOTAL SECURITIES $5,601,712 $4,462,412 $(1,139,300) ----------- ----------- ------------
The following discussion refers to the data presented in the table above, excluding affiliated common stock. The Company holds 100% of the common stock of a foreign insurance subsidiary which is stated at GAAP carrying value adjusted for certain items non-admitted for U.S. Statutory rules if applicable. The Company does not have any current plans to dispose of this investment. As of December 31, 2008, fixed maturities, comprised of approximately 760 securities, accounted for approximately 86% of the Company's total unrealized loss amount. The securities were primarily concentrated in securitized assets, specifically CMBS and financial services sector securities. The remaining 14%, comprised of approximately 25 securities, primarily consisted of non-redeemable preferred stock in the financial services sector. The unrealized losses were largely the result of credit spread widening primarily due to continued deterioration in the U.S. housing market, tightened lending conditions and the market's flight to quality securities, as well as, a U.S. recession and a declining global economy. F-22 As of December 31, 2008, 66% of securities in an unrealized loss position were depressed less than 20% of amortized cost. Based upon the Company's current evaluation of these securities in accordance with its impairment policy, the Company has determined that these securities are temporarily impaired. Securities in an unrealized loss position for less than twelve months were comprised of approximately 340 securities. The majority of these securities are investment grade fixed maturities depressed due to changes in credit spreads from the date of purchase. As of December 31, 2008, 80% were securities priced at or greater than 85% of amortized cost. The remaining securities were primarily composed of CMBS, ABS, and other corporate securities in the financial services sector, of which 90% had a credit rating of BBB or above as of December 31, 2008. The severity of the depression resulted from credit spread widening due to tightened lending conditions and the market's flight to quality securities. Securities depressed for twelve months or more as of December 31, 2008 were comprised of approximately 445 securities with the majority of the unrealized loss amount relating to securitized assets and financial services sector securities. The majority of the securitized assets depressed for twelve months or more primarily relate to CMBS and sub-prime RMBS. Based upon the Company's cash flow modeling in a severe negative economic outlook, which shows no loss of principal and interest, it has been determined that these securities are temporarily impaired as of December 31, 2008. The majority of the other securities depressed for twelve months or more primarily relate to financial services sector securities that include corporate bonds, as well as, preferred equity issued by large high quality financial institutions that are lower in the capital structure and, as a result, have incurred greater price depressions. Based upon the Company's analysis of these securities and current macroeconomic conditions, the Company expects to see price recovery on these securities. The following table presents amortized cost, fair value, and unrealized losses for the Company's bond and equity securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2007.
LESS THAN 12 MONTHS 12 MONTHS OR MORE AMORTIZED FAIR UNREALIZED AMORTIZED FAIR COST VALUE LOSSES COST VALUE --------------------------------------------------------------------------------------------------------------- U.S. Gov't and Gov't agencies & authorities -- guaranteed & sponsored $ -- $ -- $ -- $110 $110 -- guaranteed & sponsored --asset backed 44,618 44,107 (511) 190,627 187,527 States, municipalities & political subdivisions 35,000 33,354 (1,646) 1,155 1,108 International Governments -- -- -- 14,074 13,972 Public utilities 172,959 166,639 (6,320) 111,623 106,277 All other corporate including international 627,727 609,966 (17,761) 477,236 454,143 All other corporate -- asset backed 1,053,508 974,477 (79,031) 475,498 460,148 ---------- ---------- --------- ---------- ---------- TOTAL FIXED MATURITIES 1,933,812 1,828,543 (105,269) 1,270,323 1,223,285 Common stock -- unaffiliated -- -- -- 3 -- Common stock -- affiliated -- -- -- 36,884 6,663 Preferred stock -- unaffiliated 207,806 188,684 (19,122) 69,480 62,785 ---------- ---------- --------- ---------- ---------- TOTAL EQUITY 207,806 188,684 (19,122) 106,367 69,448 ---------- ---------- --------- ---------- ---------- TOTAL SECURITIES $2,141,618 $2,017,227 $(124,391) $1,376,690 $1,292,733 ---------- ---------- --------- ---------- ---------- 12 MONTHS OR MORE TOTAL UNREALIZED AMORTIZED FAIR UNREALIZED LOSSES COST VALUE LOSSES -------------------------- ------------------------------------------------------------------------------- U.S. Gov't and Gov't agencies & authorities -- guaranteed & sponsored $ -- $110 $110 $ -- -- guaranteed & sponsored --asset backed (3,100) 235,245 231,634 (3,611) States, municipalities & political subdivisions (47) 36,155 34,462 (1,693) International Governments (102) 14,074 13,972 (102) Public utilities (5,346) 284,582 272,916 (11,666) All other corporate including international (23,093) 1,104,963 1,064,109 (40,854) All other corporate -- asset backed (15,350) 1,529,006 1,434,625 (94,381) -------- ---------- ---------- --------- TOTAL FIXED MATURITIES (47,038) 3,204,135 3,051,828 (152,307) Common stock -- unaffiliated (3) 3 -- (3) Common stock -- affiliated (30,221) 36,884 6,663 (30,221) Preferred stock -- unaffiliated (6,695) 277,286 251,469 (25,817) -------- ---------- ---------- --------- TOTAL EQUITY (36,919) 314,173 258,132 (56,041) -------- ---------- ---------- --------- TOTAL SECURITIES $(83,957) $3,518,308 $3,309,960 $(208,348) -------- ---------- ---------- ---------
The following discussion refers to the data presented in the table above, excluding affiliated common stock. The Company holds 100% of the common stock of a foreign insurance subsidiary which is stated at GAAP carrying value adjusted for certain items non-admitted for U.S. Statutory rules if applicable. The Company does not have any current plans to dispose of this investment. As of December 31, 2007, fixed maturities, comprised of approximately 590 securities, accounted for approximately 86% of the Company's total unrealized loss amount. The remaining 14% primarily consisted of non-redeemable preferred stock in the financial services sector, the majority of which were in an unrealized loss position for less than twelve months. There were no fixed maturities or equity securities as of December 31, 2007, with a fair value less than 80% of the security's amortized cost for more than six continuous months other than certain asset backed securities ("ABS") and collateralized mortgage backed securities ("CMBS") accounted for under SSAP No. 43. Based on management's best estimate of future cash flows, there were no such ABS and CMBS in an unrealized loss position as of December 31, 2007 that were deemed to be other-than- temporarily impaired. Fixed maturity securities in an unrealized loss position for less than twelve months were comprised of approximately 245 securities. The majority of these securities are investment grade fixed maturities depressed due to changes in credit spreads from the date of purchase. As of December 31, 2007, 85% were securities priced at or greater than 85% of amortized cost. The remaining securities were primarily composed of CMBS, ABS, and other corporate securities in the financial services sector, of which 75% had a credit rating of BBB or above as of December 31, 2007. The severity of the depression resulted from credit spread widening due to tightened lending conditions and the market's flight to quality securities. F-23 Fixed maturity securities depressed for twelve months or more as of December 31, 2007 were comprised of approximately 350 securities, with the majority of the unrealized loss amount relating to CMBS, corporate fixed maturities within the industrial and financial services sector and ABS. The CMBS in an unrealized loss position for twelve months or more as of December 31, 2007 were primarily the results of credit spreads widening from the security purchase date. The recent price depression resulted from widening credit spreads primarily due to tightened lending conditions and the market's flight to quality securities. Future changes in fair value of these securities are primarily dependent on sector fundamentals, credit spread movements and changes in interest rates. Corporate securities in an unrealized loss position for twelve months or more as of December 31, 2007 were primarily the result of credit spreads widening from the security purchase date primarily due to tightened lending conditions and the market's flight to quality securities. Substantially all of these securities are investment grade with an average price of 95% of amortized cost. Future changes in fair value of these securities are primarily dependent on the extent of future issuer credit losses, return of liquidity, and changes in general market conditions, including interest rates and credit spread movements. 4. INCOME TAXES: (a) The components of the net deferred tax asset/(liability) as of December 31, are as follows:
2008 2007 ----------------------------------------------------------------------------- Total of all deferred tax assets (admitted and non-admitted) $1,492,810 $610,815 Total of all deferred tax liabilities (891,412) (116,655) ------------ ----------- Net deferred asset/(liability) 601,398 494,160 Total deferred tax assets non-admitted 233,111 348,644 Net admitted deferred tax asset $368,287 $145,516 ------------ ----------- Decrease in deferred taxes non-admitted $(115,533) $(113,281) ------------ -----------
(b) There were no unrecognized deferred tax liabilities. (c) The components of incurred income tax expense/(benefit) as of December 31, are as follows:
2008 2007 2006 -------------------------------------------------------------------------------- Federal taxes before capital gains, NOL, and AMT $(479,071) $128,160 $66,084 Foreign taxes -- (13,802) (29,123) NOL limitation/(utilization) 230,834 -- (7,166) Alternative minimum tax (6,233) (32,097) 35,010 Prior period adjustments and other 8,725 6,187 (32,844) ------------ ------------ ------------ FEDERAL AND FOREIGN INCOME TAX INCURRED $(245,745) $88,448 $31,961 ------------ ------------ ------------
The changes in the main components of deferred tax assets and deferred tax liabilities are as follows:
DEFERRED TAX ASSETS 2008 2007 Change --------------------------------------------------------------------------------------- Reserves $751,417 $25,989 $725,428 Tax DAC 302,889 283,943 18,946 Unrealized Losses -- 54,684 (54,684) Bonds and Other Investments -- 53,588 (53,588) NOL/Minimum Tax Credit/Foreign Tax Credits 404,134 164,056 240,078 Other 34,370 28,555 5,815 ------------- ----------- ------------ TOTAL DEFERRED TAX ASSETS $1,492,810 $610,815 $881,995 ------------- ----------- ------------ DEFERRED TAX ASSETS NON-ADMITTED $233,111 $348,644 $(115,533) ------------- ----------- ------------
DEFERRED TAX LIABILITIES 2008 2007 Change ------------------------------------------------------------------------------------------------- Bonds and Other Investments $(275,019) $ -- $(275,019) Accrued Deferred Compensation (5,073) (2,153) (2,920) Reserves (76,704) (87,097) 10,393 Deferred and Uncollected (21,848) (19,853) (1,995) Unrealized Gains/(Losses) (505,949) -- (505,949) Other (6,819) (7,552) 733 ------------ ------------ ------------ TOTAL DEFERRED TAX LIABILITIES $(891,412) $(116,655) $(774,757) ------------ ------------ ------------ TOTAL ADMITTED DEFERRED TAX ASSETS $368,287 $145,516 $222,771 ------------ ------------ ------------
F-24
2008 2007 CHANGE ----------------------------------------------------------------------------------------------- Total deferred tax assets $1,492,810 $610,815 $881,995 Total deferred tax liabilities (891,412) (116,655) (774,757) Net deferred tax asset (liability) $601,398 $494,160 $107,238 Adjust for stock compensation transfer 1,380 Adjust for change in deferred tax on unrealized gains (losses) 560,633 ----------- ADJUSTED CHANGE IN NET DEFERRED INCOME TAX $669,251 -----------
(d) The Company's income tax expense and change in deferred tax assets and deferred tax liabilities as of December 31, differs from the amount obtained by applying the Federal statutory rate of 35% to the Net Gain from Operations After Dividends to Policyholders for the following reasons:
EFFECTIVE EFFECTIVE EFFECTIVE 2008 TAX RATE 2007 TAX RATE 2006 TAX RATE ------------------------------------------------------------------------------------------------------------------------------- Tax provision at statutory rate $(780,261) 35.0% $132,025 35.0% $128,249 35.0% DRD (105,214) 4.7% (100,000) (26.5)% (107,070) (29.2)% IMR adjustment 1,338 (0.1)% (3,662) (1.0)% (6,430) (1.8)% Gain on reinsurance booked to surplus 2,846 (0.1)% 68,051 18.0% -- -- Correction of deferred balances -- -- 8,698 2.3% -- -- 2005 Tax Return true-up adjustment -- -- -- -- (3,636) (1.0)% Foreign tax credits (12,910) 0.6% (12,692) (3.3)% (11,157) (3.0)% Change in basis of reserves booked to surplus (8,377) 0.4% 82,901 22.0% -- -- Other (12,885) 0.6% 267 0.1% (2,719) (0.7)% ---------- ----- ---------- ------ ---------- ------ TOTAL $(915,463) 41.3% $175,588 46.6% $(2,763) (0.8)% ---------- ----- ---------- ------ ---------- ------
EFFECTIVE EFFECTIVE EFFECTIVE 2008 TAX RATE 2007 TAX RATE 2006 TAX RATE --------------------------------------------------------------------------------------------------------------------------- Federal and foreign income tax incurred $(245,745) 11.0% $88,448 23.5% $31,961 8.7% Federal income taxes on net capital gains (467) 0.0% 4,248 1.1% (4,248) (1.2)% Adjusted change in net deferred income taxes (669,251) 30.1% 82,891 22.0% (30,476) (8.3)% ---------- ----- ---------- ------ ---------- ------ TOTAL STATUTORY INCOME TAXES $(915,463) 41.1% $175,587 46.6% $(2,763) (0.8)% ---------- ----- ---------- ------ ---------- ------
(e) As of December 31, 2008, the Company had a net operating loss carry forward of $659,526 originating in 2008 which will expire, if unused, in 2023. As of December 31, 2008, the Company had a foreign tax credit carry forward of $12,910 originating in 2008 which will expire, if unused, in 2018. There were no income taxes incurred in the current and prior years that will be available for recoupment. As of December 31, 2008, the aggregate amount of deposits reported as admitted assets under section 6603 of the Internal Revenue Code was $0. (f) The Company is included in the Hartford's consolidated Federal income tax return. The Company and The Hartford have entered into a tax sharing agreement under which each member in the consolidated U.S. Federal income tax return will make payments between them such that, with respect to any period, the amount of taxes to be paid by the Company, subject to certain tax adjustments, is consistent with the "parent down" approach. Under this approach, the Company's deferred tax assets and tax attributes are considered realized by it so long as the group is able to recognize (or currently use) the related deferred tax asset or attribute. The Company's federal income tax return is consolidated with the following entities: The Hartford Financial Services Group, Inc. (Parent) Hartford Holdings, Inc. Hartford Integrated Technologies, Inc. Nutmeg Insurance Company Business Management Group, Inc. Heritage Holdings, Inc. Personal Lines Insurance Center, Inc. Hartford Fire Insurance Nutmeg Insurance Agency, Inc. Company Hartford Accident and Hartford Lloyds Corporation Indemnity Company Hartford Casualty Insurance 1st AgChoice, Inc. Company Hartford Underwriters First State Management Group, Insurance Company Inc. Twin City Fire Insurance ClaimPlace, Inc. Company Pacific Insurance Company, Access CoverageCorp, Inc. Ltd. F-25 Trumbull Insurance Company Access CoverageCorp Technologies, Inc. Hartford Insurance Company of Hartford Casualty General Illinois Agency, Inc. Hartford Insurance Company of Hartford Fire General Agency, the Midwest Inc. Hartford Insurance Company of Hartford Strategic Investments the Southeast LLC Hartford Lloyds Insurance Hartford Life, Inc. Company Property & Casualty Insurance Hartford Life and Accident Co. of Hartford Insurance Company Sentinel Insurance Company, Hartford Life International Ltd. Ltd. First State Insurance Company Hartford Equity Sales Company, Inc. New England Insurance Company Hartford-Comprehensive Employee Benefit Service Co. New England Reinsurance Hartford Securities Corporation Distribution Company, Inc. Fencourt Reinsurance Company, The Evergreen Group, Ltd. Incorporated Heritage Reinsurance Co., Ltd. Hartford Administrative Services Company New Ocean Insurance Co., Ltd. Woodbury Financial Services, Inc. Hartford Investment Management Hartford Life, Ltd. Co. HARCO Property Services, Inc. Hartford Life Alliance, LLC Four Thirty Seven Land Hartford Life Insurance Company, Inc. Company HRA, Inc. Hartford Life and Annuity Insurance Company HRA Brokerage Services. Inc. Hartford International Life Reassurance Corp. Hartford Technology Services Hartford Hedge Fund Company, Company LLC Ersatz Corporation American Maturity Life Insurance Company Hartford Specialty Company Champlain Life Reinsurance Company 5. REINSURANCE: The Company has a reinsurance agreement under which the reinsurer has a limited right to unilaterally cancel any reinsurance for reasons other than for nonpayment of premium or other similar credits. The estimated amount of aggregate reduction in surplus of this limited right to unilaterally cancel this reinsurance agreement by the reinsurer for which cancellation results in a net obligation of the Company to the reinsurer, and for which such obligation is not presently accrued is $390,571 in 2008, an increase of $142,389 from the 2007 balance of $248,182. The total amount of reinsurance credits taken for this agreement is $600,878 in 2008, an increase of $219,059 from the 2007 balance of $381,819. The Company had no reinsurance-related concentrations of credit risk greater than 10% of the Company's capital and surplus Effective August 31, 2005, the Company entered into a reinsurance agreement with Hartford Life Insurance K.K. ("HLIKK") (the "Reinsurance Agreement"). Through the Reinsurance Agreement, HLIKK agreed to cede and the Company agreed to reinsure 100% of the risks associated with the in-force and prospective guaranteed minimum income benefits ("GMIB") riders issued by HLIKK on its variable annuity business. In connection with accepting the GMIB risk for the in-force riders, on the effective date the Company received premiums collected since inception by HLIKK related to the in-force riders of $25,466. Effective July 31, 2006, the Reinsurance Agreement was modified to include the guaranteed minimum death benefits ("GMDB") on covered contracts that have an associated GMIB rider. The modified reinsurance agreement applies to all contracts, GMIB riders and GMDB riders in-force and issued as of July 31, 2006 and prospectively, except for policies and GMIB riders issued prior to April 1, 2005, which were recaptured. Additionally, a tiered premium structure was implemented. On the date of the recapture, the Company forgave the reinsurance premiums collected since inception on all GMIB riders issued prior to April 1, 2005 and paid HLIKK $38,354. GMIB riders issued by HLIKK subsequent to April 1, 2005 continue to be reinsured by the Company. In connection with this Reinsurance Agreement, the Company collected premiums of $110,364, $47,999 and $5,313 for the year ended December 31, 2008, 2007 and 2006, respectively and holds reserves of $813,275 and $66,677 at December 31, 2008 and 2007, respectively. Effective September 30, 2007, the Company entered into a reinsurance agreement where HLIKK agreed to cede and the Company agreed to reinsure 100% of the risks associated with the in-force and prospective guaranteed minimum accumulation benefits ("GMAB"), GMIB and GMDB riders issued by HLIKK on certain of its variable annuity business. In connection with this agreement, the Company collected premiums of $2,040,623 and $8,416 as of December 31, 2008 and 2007, respectively, and holds reserves of $1,960,923 and $8,429 as of December 31, 2008 and 2007, respectively. This treaty covered HLIKK's "3 Win" annuity. This product contains a GMIB feature that triggers at a float value of 80% of original premium and gives the policyholder an option to receive either an immediate withdrawal of account value without surrender charges or a payout annuity of the original premium over time. As a result of capital markets underperformance, 97% of contracts, a total of $3.1 billion triggered during the fourth quarter of 2008, and of this amount $2.0 billion have elected the payout annuity. The Company received the proceeds of this triggering impact, net of the first annuity payout, through a reinsurance agreement with HLIKK and will pay the associated benefits to HLIKK over a 12-year payout. See note 13 for additional information. F-26 Effective February 29, 2008, the Company entered into a reinsurance agreement where HLIKK agree to cede and the Company agreed to reinsure 100% of the risks associated with the in-force and prospective GMWB and GMDB riders issued by HLIKK on certain variable annuity business. In connection with this agreement, the Company collected premiums of $1,203 and holds reserves of $3,927 as of December 31, 2008. Effective October 1, 2008, the Company entered into a reinsurance agreement where HLIKK agree to cede and the Company agreed to reinsure 100% of the risks associated with the in-force and prospective GMDB riders issued by HLIKK on certain variable annuity business. In connection with this agreement, the Company collected premiums of $696 and holds reserves of $38 as of December 31, 2008. Effective November 1, 2007, the Company has entered into a coinsurance with funds withheld and a modified coinsurance reinsurance agreement with Champlain Life Reinsurance Company, an affiliated reinsurance company domiciled in Vermont. The reinsurer is unauthorized in the State of Connecticut. This Agreement takes into account State of Vermont prescribed practice that allows a letter of credit to back a certain portion of statutory reserves and a prescribed practice for the reinsurer to recognize a net liability for inuring YRT reinsurance contracted by the ceding company. The letter of credit held by the affiliated reinsurer has been assigned to the Company and as such also provides collateral for the unauthorized reinsurance. The increase in surplus, net of federal income tax, resulting from the reinsurance agreement is $194,430 and is identified separately on the Admitted Assets, Liabilities and Surplus statement. This surplus benefit will be amortized into income on a net of tax basis as earnings emerge from the business reinsured, resulting in a net zero impact to surplus. The amount of reinsurance recoverables from and payables to reinsurers were $24,748 and $15,998 and $27,577 and $12,397 at December 31, 2008 and 2007, respectively. The effect of reinsurance as of and for the years ended December 31, is summarized as follows:
DIRECT ASSUMED CEDED NET --------------------------------------------------------------------------------------------------------------------------------- 2008 Aggregate Reserves for Life and Accident and Health $10,813,526 $3,206,736 $(3,222,513) $10,797,749 Policies Policy and Contract Claim Liabilities $55,343 $11,186 $(32,693) $33,836 Premium and Annuity Considerations $7,861,654 $2,322,174 $(831,321) $9,352,507 Death, Annuity, Disability and Other Benefits $515,171 $343,069 $(200,178) $658,062 Surrenders and Other Fund Withdrawals $9,660,930 $429,781 $(125,658) $9,965,053
DIRECT ASSUMED CEDED NET --------------------------------------------------------------------------------------------------------------------------------- 2007 Aggregate Reserves for Life and Accident and Health $6,974,834 $1,050,543 $(2,049,303) $5,976,074 Policies Policy and Contract Claim Liabilities $47,256 $14,423 $(30,399) $31,281 Premium and Annuity Considerations $11,045,000 $241,808 $(973,307) $10,313,501 Death, Annuity, Disability and Other Benefits $334,482 $115,945 $(101,185) $349,242 Surrenders and Other Fund Withdrawals $10,633,115 $624,725 $(1,729,032) $9,528,808
DIRECT ASSUMED CEDED NET --------------------------------------------------------------------------------------------------------------------------------- 2006 Aggregate Reserves for Life and Accident and Health $6,189,958 $1,385,824 $(1,152,935) $6,422,847 Policies Policy and Contract Claim Liabilities $51,900 $13,508 $(32,773) $32,635 Premium and Annuity Considerations $9,936,139 $210,011 $(303,845) $9,842,305 Death, Annuity, Disability and Other Benefits $275,788 $106,626 $(83,321) $299,093 Surrenders and Other Fund Withdrawals $10,086,669 $673,938 $(1,706,377) $9,054,230
6. PREMIUM AND ANNUITY CONSIDERATIONS (DEFERRED AND UNCOLLECTED) The following presents premium and annuity considerations (deferred and uncollected) as of December 31,
2008 GROSS NET OF LOADING -------------------------------------------------------------------------------- TYPE Ordinary New Business $4,569 5,546 Ordinary Renewal 44,318 56,825 Group Life 27 50 -------- -------- TOTAL $48,914 $62,421 -------- --------
F-27
2007 GROSS NET OF LOADING -------------------------------------------------------------------------------- TYPE Ordinary New Business $3,418 $3,775 Ordinary Renewal 45,181 52,893 Group Life 30 56 -------- -------- TOTAL $48,629 $56,724 -------- --------
7. RELATED PARTY TRANSACTIONS: Transactions between the Company and its affiliates, relate principally to tax settlements, reinsurance, insurance coverages, rental and service fees, capital contributions and payments of dividends. Investment management fees were allocated by Hartford Investment Management Company and are a component of net investment income. Substantially all general insurance expenses related to the Company, including rent and benefit plan expenses, are initially paid by The Hartford. Direct expenses are allocated using specific identification and indirect expenses are allocated using other applicable methods. Indirect expenses include those for corporate areas which, depending on type, are allocated based on either a percentage of direct expenses or on utilization. During 2006 the Company revised its method of allocating certain indirect expenses. The Company has also invested in bonds of its indirect affiliate, HL Investment Advisors, Inc., and common stock of its subsidiary, Hartford Life, Ltd. The HL Investment Advisors, Inc. bond was sold in December 2007. At December 31, 2008 and 2007, the Company reported $10,223 and $32,272, respectively, as a receivable from and $39,493 and $41,011, respectively, as a payable to it's parent, and subsidiary. The terms of the written settlement agreement require that these amounts be settled generally within 30 days. Related party transactions may not be indicative of the costs that would have been incurred on a stand alone basis. For additional information, see Notes 4, 5, 8 and 11. 8. PENSION, RETIREMENT, AND OTHER POST-RETIREMENT AND POST-EMPLOYMENT BENEFITS: All employees hired by The Hartford's life insurance companies are included in The Hartford's non-contributory defined benefit pension plans. These plans provide pension benefits that are based on years of service and the employee's compensation during the last ten years of employment. The Hartford's funding policy is to contribute annually an amount between the minimum funding requirements set forth in the Employee Retirement Income Security Act of 1974, as amended, and the maximum amount that can be deducted for U.S. Federal income tax purposes. Generally, pension costs are funded through the purchase of group pension contracts sold by affiliates. The costs that were allocated to the Company for pension related expenses were $10,523, $12,807 and $10,717 for 2008, 2007 and 2006, respectively. Employees of The Hartford's life insurance companies are also provided, through The Hartford, certain health care and life insurance benefits for eligible retired employees. The contribution for health care benefits depends on the retiree's date of retirement and years of service. In addition, this benefit plan has a defined dollar cap, which limits average company contributions. The Hartford has prefunded a portion of the health care and life insurance obligations through trust funds where such prefunding can be accomplished on a tax effective basis. Postretirement health care and life insurance benefits expense allocated to the Company was not material to the results of operations for 2008, 2007 or 2006. Substantially all employees of the Company are eligible to participate in the Hartford's Investment and Savings Plan under which designated contributions may be invested in common stock of The Hartford or certain other investments. These contributions are matched, up to 3% of compensation, by the Company. In addition, the Company allocates 1.5% of base salary to the plan for each eligible employee earning less than $100,000 and 0.5% of base salary for all other eligible employees. The cost allocated to the Company for the years ended December 31, 2008 and 2007 and 2006 was $4,825 and $5,528 and $4,113, respectively. 9. CAPITAL AND SURPLUS AND SHAREHOLDER DIVIDEND RESTRICTIONS: The maximum amount of dividends which can be paid to shareholders by Connecticut domiciled insurance companies, without prior approval, is generally restricted to the greater of 10% of surplus as of the preceding December 31st or the net gain from operations after dividends to policyholders, federal income taxes and before realized capital gains or (losses) for the previous year. In addition, if any dividend exceeds the insurer's earned surplus, it requires the prior approval of the Connecticut Insurance Commissioner. Dividends are paid as determined by the Board of Directors and are not cumulative. In 2008 and 2007 and 2006, dividends of $156,000 and $207,000 and $115,000, respectively, were paid. The amount available for dividends in 2009 is $0. The portion of unassigned funds (surplus) represented or reduced by cumulative unrealized gains and losses is $711,751. F-28 10. SEPARATE ACCOUNTS: The Company maintained separate account assets totaling $50,551,150 and $81,072,392 as of December 31, 2008 and 2007, respectively. Separate account assets are segregated from other investments and reported at fair value. Separate account liabilities are determined in accordance with prescribed actuarial methodologies, which approximate the market value less applicable surrender charges. The resulting surplus is recorded in the general account Statements of Operations as a component of Net Transfers to Separate Accounts. The Company's separate accounts are non-guaranteed, wherein the policyholder assumes substantially all the investment risks and rewards. Investment income (including investment gains and losses) and interest credited to policyholders on separate account assets are not separately reflected in the statutory statements of operations. Separate account fees, net of minimum guarantees, were $1,363,868, $1,542,870 and $1,378,577 for the years ended December 31, 2008, 2007 and 2006, respectively, and are recorded as a component of fee income on the Company's statutory basis Statements of Operations. An analysis of the Separate Accounts as of December 31, 2008 is as follows:
NONINDEXED GUARANTEED NON- LESS THAN NONINDEXED GUARANTEED OR EQUAL GUARANTEED SEPARATE TO 4% MORE THAN 4% ACCOUNTS TOTAL ---------------------------------------------------------------------------------------------------------------- 1. Premiums considerations or deposits for the year ended 2008 $ -- $ -- $3,572,439 $3,572,439 2. Reserves @ year end -- -- -- -- I. For accounts with assets at: -- -- -- -- a. Market value -- -- 49,015,961 49,015,961 b. Amortized cost -- -- -- -- ---- ---- ------------- ------------- c. Total reserves $ -- $ -- $49,015,961 $49,015,961 ---- ---- ------------- ------------- II. By withdrawal characteristics: a. Subject to discretionary withdrawal $ -- $ -- $ -- $ -- b. With MVA adjustment -- -- -- -- c. @ BV without MV adjustment and with surrender charge of 5% or more -- -- -- -- d. @ Market value -- -- 48,942,891 48,942,891 e. @ BV without MV adjustment and with surrender charge less than 5% -- -- -- -- ---- ---- ------------- ------------- f. Subtotal $ -- $ -- $48,942,891 $48,942,891 g. Not subject to discretionary withdrawal -- -- 73,070 73,070 ---- ---- ------------- ------------- h. Total $ -- $ -- $49,015,961 $49,015,961 ---- ---- ------------- -------------
Below is the reconciliation of Net Transfers (from) to Separate Accounts as of December 31,
2008 2007 2006 ---------------------------------------------------------------------------------------------------- Transfer to Separate Accounts $3,572,439 $7,121,542 $6,907,635 Transfer from Separate Accounts (5,260,541) (7,340,251) (7,637,822) ------------- ------------- ------------- Net Transfer (from) to Separate Accounts (1,688,102) (218,708) (730,187) Internal Exchanges & Other Separate Account Activity 16,421 (18,445) 55,063 ------------- ------------- ------------- Transfer (from) to Separate Accounts on the Statement of Operations $(1,671,681) $(237,153) $(675,124) ------------- ------------- -------------
11. CORRECTION OF ERRORS: During an analysis of reserving systems in 2007, the Company discovered an error in the reserves for certain individual annuity products. These annuity products have a 4 year surrender charge, however, they were coded in the reserving system with a 7 year surrender charge. As a result reported 2007 reserves were understated and surplus was overstated. The correction related to prior years was recorded directly to reserves and surplus in the amount of $32,469. During an analysis of federal income taxes in 2007, the Company discovered an error in the liability relating to prior years. A portion of total taxes has been inadvertently misclassified between current and deferred taxes, and inadvertently misallocated among certain affiliates. As a result, the reported current federal income tax recoverable and surplus were understated. The correction was booked directly to federal income tax recoverable and surplus in the amount of $36,656. F-29 The net admitted deferred tax asset is unaffected, as the adjustment to the total deferred tax asset is offset by a change in the nonadmitted portion. 12. COMMITMENTS AND CONTINGENT LIABILITIES: (A) LITIGATION The Company is or may become involved in various legal actions, some of which assert claims for substantial amounts. Management expects that the ultimate liability, if any, with respect to such lawsuits, after consideration of provisions made for estimated losses and costs of defense, will not be material to the consolidated financial condition of the Company. On July 23, 2007, The Hartford entered into an agreement (the "Agreement") with the New York Attorney General's Office, the Connecticut Attorney General's Office, and the Illinois Attorney General's Office to resolve (i) the previously disclosed investigations by these Attorneys General regarding, among other things, The Hartford's compensation agreements with brokers, alleged participation in arrangements to submit inflated bids, sale of fixed and individual annuities used to fund structured settlements, and marketing and sale of individual and group variable annuity products and (ii) the previously disclosed investigation by the New York Attorney General's Office of aspects of The Hartford's variable annuity and mutual fund operations related to market timing. In light of the Agreement, the Staff of the Securities and Exchange Commission has informed The Hartford that it has determined to conclude its previously disclosed investigation into market timing without taking any action. Under the terms of the Agreement, The Hartford paid $115 million, of which $84 million represents restitution for market timing, $5 million represents restitution for issues relating to the compensation of brokers, and $26 million is a civil penalty. Hartford Life & Annuity recorded charges of $50 million, after-tax, in the aggregate through 2007 to establish a reserve for the market timing matters. (B) GUARANTY FUNDS Under insurance guaranty fund laws in each state, the District of Columbia and Puerto Rico, insurers licensed to do business can be assessed by state insurance guaranty association for certain obligations of insolvent insurance companies to policyholders and claimants. Part of the assessments paid by the Company pursuant to these laws may be used as credits for a portion of the associated premium taxes. The Company paid guaranty fund assessments of approximately $202, $519 and $308 in 2008, 2007 and 2006, respectively, of which $108, $480 and $279 in 2008, 2007 and 2006, respectively, increased the creditable amount against premium taxes. The Company has a guaranty fund receivable of $3,493 and $3,881 as of December 31, 2008 and 2007, respectively. (C) LEASES As discussed in Note 7, transactions with The Hartford include rental of facilities and equipment. The rent paid by the Company to Hartford Fire for space occupied was $6,142, $12,104 and $15,719 in 2008, 2007 and 2006, respectively. Future minimum rental commitments are as follows: 2009 4,464 2010 3,283 2011 2,442 Thereafter 3,125 --------- Total $13,314 ---------
The principal executive office of the Company, together with its parent and other life insurance affiliates, is located in Simsbury, Connecticut. The Company's allocated rental expense is recognized over the term of the primary sublease for the facility located in Simsbury, Connecticut, which expires on December 31, 2010, and amounted to $2,714, $4,953 and $4,891 in 2008, 2007 and 2006, respectively. (D) TAX MATTERS The Company's federal income tax returns are routinely audited by the Internal Revenue Service ("IRS") as part of the Hartford consolidated return. During 2008, the IRS completed its examination of the consolidated group's U.S. income tax returns for 2002 through 2003. The Company received notification of the approval by the Joint Committee on Taxation of the results of the examination subsequent to December 31, 2008. The examination will not have a material effect on the Company's net income or financial position. The 2004 through 2006 examination began during 2008, and is expected to close by the end of 2010. The separate account dividends-received deduction ("DRD") is estimated for the current year using information from the prior year-end, adjusted for current year equity market performance and other appropriate factors, including estimated levels of corporate dividend payments. The estimated DRD was updated in the third quarter for the provision-to-filed-return adjustments, and in the fourth quarter based on current year ultimate mutual fund distributions and fee income from the Company's variable insurance products. The actual current year DRD varied from earlier estimates based on, but not limited to, changes in eligible dividends received by the mutual funds, amounts of distributions from these mutual funds, amounts of F-30 short-term capital gains and asset values at the mutual fund level and the Company's taxable income before the DRD. Given recent financial markets' volatility, the Company intends to review its DRD computations on a quarterly basis, beginning in 2009. The Company recorded benefits of $112, $99 and $110 related to the separate account DRD in the years ended December 31, 2008, December 31, 2007 and December 31, 2006, respectively. The 2008 benefit included a benefit of $7 related to a true-up of the prior year tax return, the 2007 benefit included a charge of $1 related to a true-up of the prior year tax return, and the 2006 benefit included a benefit of $3 related to true-ups of prior years' tax returns. In Revenue Ruling 2007-61, issued on September 25, 2007, the IRS announced its intention to issue regulations with respect to certain computational aspects of the DRD on separate account assets held in connection with variable annuity contracts. Revenue Ruling 2007-61 suspended Revenue Ruling 2007-54, issued in August 2007 that purported to change accepted industry and IRS interpretations of the statutes governing these computational questions. Any regulations that the IRS may ultimately propose for issuance in this area will be subject to public notice and comment, at which time insurance companies and other members of the public will have the opportunity to raise legal and practical questions about the content, scope and application of such regulations. As a result, the ultimate timing and substance of any such regulations are unknown, but they could result in the elimination of some or all of the separate account DRD tax benefit that the Company receives. Management believes that it is highly likely that any such regulations would apply prospectively only. The Company receives a foreign tax credit ("FTC") against its U.S. tax liability for foreign taxes paid by the Company including payments from its separate account assets. The separate account FTC is estimated for the current year using information from the most recent filed return, adjusted for the change in the allocation of separate account investments to the international equity markets during the current year. The actual current year FTC can vary from the estimates due to actual FTCs passed through by the mutual funds. The Company recorded benefits of $11, $8 and $11 related to separate account FTC in the years ended December 31, 2008, December 31, 2007 and December 31, 2006, respectively. These amounts included benefits related to true-ups of prior years' tax returns of $3, $0 and $4 in 2008, 2007 and 2006 respectively. (E) FUNDING OBLIGATION The Company had outstanding commitments totaling $12,002 and $16,373 as of December 31, 2008 and 2007, respectively, of which $10,750 and $10,532, related to funding limited partnership investments and $1,251 and $5,841 related to a mortgage loan funding, respectively. 13. SUBSEQUENT EVENT: As a result of unfavorable market performance in 2008, the 3WIN product reached a triggering event in which contract holders have made elections to either (a) receive 80% of their original variable annuity deposit in a lump sum or (b) receive 100% of their original variable annuity deposit as an annuity certain paid in level installments. As a result, on February 5, 2009,the Company's parent (HLIC) issued a funding agreement to the Company in the amount of $1,468,810 for the purpose of funding these annuity certain payments under the Company's reinsurance agreement with Hartford Life Insurance Company, KK (see note 5). The contract calls for October 31 scheduled annual payouts with interest at 5.16% through 2019. ***** F-31 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY SCHEDULE I -- SELECTED FINANCIAL DATA DECEMBER 31, 2008 (AMOUNTS IN THOUSANDS UNLESS OTHERWISE STATED) INVESTMENT INCOME EARNED: U.S. Government Bonds $2,642 Bonds Exempt from U.S. Tax 45 Other Bonds (unaffiliated) 313,664 Bonds of Affiliates -- Preferred Stocks (unaffiliated) 17,566 Preferred Stocks of affiliates Common Stocks (unaffiliated) 108 Common Stocks of affiliates -- Mortgage Loans 26,596 Real Estate 1,409 Contract loans 22,535 Cash/short-term Investments 27,150 Derivative Instruments (19,377) Other Invested Assets 17 Aggregate Write-ins for Investment Income (9,541) -------------- GROSS INVESTMENT INCOME 382,814 Less: Investment Expenses 6,780 -------------- NET INVESTMENT INCOME $376,034 -------------- REAL ESTATE OWNED -- BOOK VALUE LESS ENCUMBRANCES: $27,285 -------------- MORTGAGE LOANS -- BOOK VALUE: Farm Mortgages $68,410 Residential Mortgages -- Commercial Mortgages 542,962 -------------- TOTAL MORTGAGE LOANS $611,372 -------------- MORTGAGE LOANS BY STANDING -- BOOK VALUE: Good Standing $611,372 Good Standing with Restructured Terms Interest Overdue More Than 90 Days Not In Foreclosure Foreclosure In Process OTHER LONG TERM ASSETS -- STATEMENT VALUE: $10,489 -------------- COLLATERAL LOANS $ -- -------------- BONDS AND STOCKS OF PARENTS, SUBSIDIARIES AND AFFILIATES -- BOOK VALUE: Bonds $ -- Preferred Stocks -- Common Stocks 6,489 BONDS AND SHORT-TERM INVESTMENTS BY MATURITY AND CLASS: By Maturity -- Statement Value Due within one year or less $2,534,297 Over 1 year through 5 years 2,637,862 Over 5 years through 10 years 3,812,781 Over 10 years through 20 years 692,677 Over 20 years 860,776 -------------- TOTAL BY MATURITY $10,538,393 -------------- By Class -- Statement Value Class 1 $8,749,832 Class 2 1,625,331 Class 3 134,682 Class 4 63 Class 5 27,027 Class 6 1,458 -------------- TOTAL BY CLASS $10,538,393 -------------- Total Publicly Traded $8,651,218 Total Privately Placed 1,887,175 -------------- TOTAL BY MAJOR TYPE $10,538,393 --------------
F-32 INVESTMENT BALANCES: Preferred Stocks -- Statement Value $255,362 Common Stocks -- Market Value 11,520 Short-Term Investments -- Book Value 2,166,710 Options, Caps, and Floors Owned -- Statement Value 1,202,744 Options, Caps, and Floors Written and Inforce -- Statement -- Value Collar, Swap, and Forward Agreements Open -- Statement Value 562,195 Financial Futures Contracts Open -- Current Value 3,634,952 Cash on Deposit 147,770 Cash Equivalents 11,673 LIFE INSURANCE IN FORCE: Industrial $ -- Ordinary 79,650,740 Credit Life -- Group Life 166,760 AMOUNT OF ACCIDENTAL DEATH INSURANCE IN FORCE UNDER: Ordinary Policies $41,194 POLICIES WITH DISABILITY PROVISIONS IN FORCE: Industrial $ -- Ordinary 5,045,312 Credit Life -- Group Life 5,010 SUPPLEMENTARY CONTRACTS IN FORCE: Ordinary -- Not Involving Life Contingencies Amount on Deposit $ -- Income Payable -- Ordinary -- Involving Life Contingencies Amount on Deposit $ -- Income Payable 3,206,234 Group -- Not Involving Life Contingencies Amount on Deposit Income Payable -- Group -- Involving Life Contingencies Amount on Deposit $ -- Income Payable -- ANNUITIES: Ordinary: Immediate -- Amount of Income Payable $53,752 Deferred -- Fully Paid Account Balance 51,101,938 Deferred -- Not Fully Paid -- Account Balance 100,215 Group: Amount of Income Payable $75 Fully Paid Account Balance 199,452 Not Fully Paid -- Account Balance -- ACCIDENT AND HEALTH INSURANCE -- PREMIUMS IN FORCE: Group $ -- Credit -- Ordinary 1,025 DEPOSIT FUNDS AND DIVIDEND ACCUMULATIONS: Deposit Funds -- Account Balance $37,740 Dividend Accumulations -- Account Balance 127
F-33 CLAIM PAYMENTS: Group Accident & Health 2008 $ -- 2007 -- 2006 -- 2005 -- 2004 -- Prior -- Other Accident & Health 2008 $267 2007 264 2006 72 2005 55 2004 30 Prior 747 Other Coverages that use Development Methods to Calculate Claim Reserves 2008 $ -- 2007 -- 2006 -- 2005 -- 2004 -- Prior --
F-34 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY SCHEDULE II -- SUMMARY INVESTMENT SCHEDULE DECEMBER 31, 2008 (AMOUNTS IN THOUSANDS UNLESS OTHERWISE STATED)
HOLDINGS ANNUAL STATEMENT AMOUNT PERCENTAGE AMOUNT PERCENTAGE --------------------------------------------------------------------------------------------------------------------------------- INVESTMENT CATEGORIES 1. Bonds: 1.1 U.S. treasury securities $767,433 5.5 $767,433 5.5 1.2 U.S. government agency obligations (excluding mortgage-backed securities): 1.21 issued by U.S. government agencies -- -- -- -- 1.22 issued by U.S. government sponsored agencies -- -- -- -- 1.3 Foreign government (including Canada, excluding mortgage-backed securities) 1,776,427 12.7 1,776,427 12.7 1.4 Securities issued by states, territories and possessions and political subdivisions in the U.S: 1.41 State, territories, and possessions general obligations 11,540 0.1 11,540 0.1 1.42 Political subdivisions of states, territories & possessions & political subdivisions general obligations -- -- -- -- 1.43 Revenue and assessment obligations 45,000 0.3 45,000 0.3 1.41 Industrial development and similar obligations -- -- -- -- 1.5 Mortgage-backed securities (includes residential and commercial MBS): 1.51 Pass-through securities: 1.511 Issued or guaranteed by GNMA 15,664 0.1 15,664 0.1 1.512 Issued or guaranteed bly FNMA and FHLMC 424,767 3.0 424,767 3.0 1.513 All other -- -- -- -- 1.52 CMOs and REMICs: 1.521 Issued or guaranteed by GNMA, FNMA, and FHLMC or VA 113,002 0.8 113,002 0.8 1.522 Issued by non-U.S. Government issuers and collateralized by MBS issued or guaranteed by GNMA, FNMA, FHLMC or VA -- -- -- -- 1.523 All other 1,281,606 9.2 1,281,606 9.2 2. Other debt and other fixed income securities (excluding short-term): 2.1 Unaffiliated domestic securities (includes credit tenant loans rated by the SVO) 2,666,182 19.1 2,666,182 19.1 2.2 Unaffiliated foreign securities 1,270,062 9.2 1,270,062 9.2 2.3 Affiliated securities -- -- -- -- 3. Equity Interests: 3.1 Investment in mutual funds 5,031 -- 5,031 -- 3.2 Preferred stocks: 3.21 Affiliated -- -- -- -- 3.22 Unaffiliated 255,362 1.8 255,362 1.8 3.3 Publicly traded securities (excluding preferred stocks): 3.31 Affiliated -- -- -- -- 3.32 Unaffiliated -- -- -- -- 3.4 Other equity securities: 3.41 Affiliated 6,489 -- 6,489 -- 3.42 Unaffiliated -- -- -- -- 3.5 Other equity securities including tangible personal property under lease: 3.51 Affiliated -- -- -- -- 3.52 Unaffiliated -- -- -- -- 4. Mortgage loans: 4.1 Construction and land development -- -- -- -- 4.2 Agricultural -- -- -- -- 4.3 Single family residential properties -- -- -- -- 4.4 Multifamily residential properties -- -- -- -- 4.5 Commercial loans 611,371 4.4 611,371 4.4 4.6 Mezzanine real estate loans -- -- -- -- 5. Real estate investments 5.1 Property occupied by company 27,285 0.2 27,285 0.2 5.2 Property held for production of income -- -- -- -- 5.3 Property held for sale -- -- -- -- 6. Policy Loans 354,920 2.5 354,920 2.5 7. Receivables for securities 226,507 1.6 226,507 1.6 8. Cash and short-term investments 2,326,153 16.6 2,326,153 16.6 9. Other invested assets 1,802,382 12.9 1,802,382 12.9 ----------- ----- ----------- ----- 10. TOTAL INVESTED ASSETS $13,987,183 100.0 $13,987,183 100.0 ----------- ----- ----------- -----
F-35 Supplement for the year 2008 of the HARTFORD LIFE AND ANNUITY INSURANCE COMPANY *71153200828500100* SUPPLEMENTAL INVESTMENT RISKS INTERROGATORIES For the year ended December 31, 2008 (To be filed by April 1) Of HARTFORD LIFE AND ANNUITY INSURANCE COMPANY Address (City, State, Zip Code): SIMSBURY CT 06089 NAIC Group Code 0091 NAIC Company Code 71153 Employer's ID Number 39-1052598 The Investment Risks Interrogatories are to be filed by April 1. They are also to be included with the Audited Statutory Financial Statements. Answer the following interrogatories by reporting the applicable U.S. dollar amounts and percentages of the reporting entity's total admitted assets held in that category of investments.
1. Reporting entity's total admitted assets as reported on Page 2 of this $14,909,3966,259 annual statement. 2. Ten largest exposures to a single issuer/borrower/investment. 1 2 3 4 PERCENTAGE OF TOTAL ISSUER DESCRIPTION OF EXPOSURE AMOUNT ADMITTED ASSETS ------ ----------------------- ------ --------------- 2.01 JAPAN (GOVERNMENT OF) BOND $1,848,824,521 12.400% 2.02 SHORT TERM INVESTMENT POOL (STIP) BOND $1,436,865,978 9.637% 2.03 BANK OF NEW YORK CASH RESERVE FUND BOND $ 143,730,709 0.964% 2.04 GOLDENTREE LOAN OPPORTUNITIES BOND $ 125,000,000 0.838% 2.05 NORTHWOODS CAPITAL LTD WOODS_07-8A BOND $ 75,000,000 0.503% 2.06 HTFD REGENCY CENTERS FIXED LIFE MORTGAGE LOAN $ 60,000,000 0.402% 2.07 PACIFIC RAILROAD CO 2007-3 PASS THROUGH BOND $ 59,499,714 0.399% 2.08 CBS CORP BOND $ 54,578,283 0.366% 2.09 HUTCHISON WHAMPOA LIMITED BOND $ 53,995,506 0.362% 2.10 PARCS LTD BOND $ 49,841,994 0.334% 3. Amounts and percentages of the reporting entity's total admitted assets held in bonds and preferred stocks by NAIC rating. BONDS 1 2 -------- 3.01 NAIC-1 $8,749,832,390 58.687% 3.02 NAIC-2 $1,625,330,953 10.901% 3.03 NAIC-3 $ 134,681,924 0.903% 3.04 NAIC-4 $ 63,173 0.000% 3.05 NAIC-5 $ 27,026,883 0.181% 3.06 NAIC-6 $ 1,457,742 0.010% PREFERRED STOCKS 3 4 ---------------- 3.07 P/RP-1 $ 149,493,232 1.003% 3.08 P/RP-2 $ 82,334,324 0.552% 3.09 P/RP-3 $ 23,181,698 0.155% 3.10 P/RP-4 $ 0.000% 3.11 P/RP-5 $ 352,714 0.002% 3.12 P/RP-6 $ 0.000% 4. Assets held in foreign investments: 4.01 Are assets held in foreign investments less than 2.5% of the reporting entity's total admitted assets? Yes [ ] No [X] If response to 4.01 above is yes, responses are not required for interrogatories 5-10. 4.02 Total admitted assets held in foreign investments $3,050,726,782 20.462% 4.03 Foreign-currency-denominated investments $2,073,125,690 13.905% 4.04 Insurance liabilities denominated in that same foreign currency $ 0.000% 5. Aggregate foreign investment exposure categorized by NAIC sovereign rating: 1 2 5.01 Countries rated NAIC-1 $3,050,726,782 20.462% 5.02 Countries rated NAIC-2 $ 0.000% 5.03 Countries rated NAIC-3 or below $ 0.000% 6. Largest foreign investment exposures by country, categorized by the country's NAIC sovereign rating: 1 2 Countries rated NAIC-1: 6.01 Country 1: JAPAN $1,867,871,759 12.528% 6.02 Country 2: CAYMAN ISLANDS $ 301,689,713 2.023% Countries rated NAIC-2: 6.03 Country 1: $ 0.000% 6.04 Country 2: $ 0.000% Countries rated NAIC-3 or below: 6.05 Country 1: $ 0.000% 6.06 Country 2: $ 0.000%
F-36 Supplement for the year 2008 of the HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
1 2 7. Aggregate unhedged foreign currency exposure: $1,848,824,521 12.400% 8. Aggregate unhedged foreign currency exposure categorized by NAIC sovereign rating: 1 2 8.01 Countries rated NAIC-1 $1,848,824,521 12.400% 8.02 Countries rated NAIC-2 $ 0.000% 8.03 Countries rated NAIC-3 or below $ 0.000% 9. Largest unhedged foreign currency exposures by country, categorized by the country's NAIC sovereign rating: 1 2 Countries rated NAIC-1: 9.01 Country 1: JAPAN $1,848,824,521 12.400% 9.02 Country 2: $ 0.000 Countries rated NAIC-2: 9.03 Country 1: $ 0.000% 9.04 Country 2: $ 0.000% Countries rated NAIC-3 or below: 9.05 Country 1: $ 0.000% 9.06 Country 2: $ 0.000% 10. Ten largest non-sovereign (i.e. non-governmental) foreign issues: 1 2 3 4 ISSUER NAIC RATING ------ ----------- 10.01 GOLDENTREE LOAN OPPORTUNITIES 1FE $ 125,000,000 0.838% 10.02 NORTHWOODS CAPITAL LTD WOODS_07-8A 1FE $ 75,000,000 0.503% 10.03 HUTCHISON WHAMPOA LIMITED 1FE $ 53,995,506 0.362% 10.04 KONINKLIJKE PHILIPS ELECTRONICS NV 1FE $ 35,195,042 0.236% 10.05 STATOILHYDRO ASA 1FE $ 30,747,570 0.206% 10.06 GLAXOSMITHKLINE PLC 1FE $ 28,546,244 0.191% 10.07 RAGIONE SAPA DI GILBERTO BENETTON E C 1FE $ 27,801,000 0.186% 10.08 COCA-COLA AMATIL LIMITED 1 $ 27,499,343 0.184% 10.09 TELECOM ITALIA SPA 2FE $ 26,135,495 0.175% 10.10 CENT CDO 14 LTD 1FE $ 25,200,000 0.169% 11. Amounts and percentages of the reporting entity's total admitted assets held in Canadian investments and unhedged Canadian currency exposure: 11.01 Are assets held in Canadian investments less than 2.5% of the reporting entity's total admitted assets? Yes [X] No [ ] If response to 11.01 is yes, detail is not required for the remainder of Interrogatory 11. 11.02 Total admitted assets held in Canadian Investments $ 0.000% 11.03 Canadian currency-denominated investments $ 0.000% 11.04 Canadian-denominated insurance liabilities $ 0.000% 11.05 Unhedged Canadian currency exposure $ 0.000% 12. Report aggregate amounts and percentages of the reporting entity's total admitted assets held in investments with contractual sales restrictions. 12.01 Are assets held in investments with contractual sales restrictions less than 2.5% of the reporting entity's total admitted assets? Yes [X] No [ ] If response to 12.01 is yes, responses are not required for the remainder of Interrogatory 12. 1 2 3 12.02 Aggregate statement value of investments with contractual sales restrictions: $ 0.000% Largest three investments with contractual sales restrictions: 12.03 $ 0.000% 12.04 $ 0.000% 12.05 $ 0.000% 13. Amounts and percentages of admitted assets held in the ten largest equity interests: 13.01 Are assets held in equity interest less than 2.5% of the reporting entity's total admitted assets? Yes [X] No [ ] If response to 13.01 above is yes, responses are not required for the remainder of Interrogatory 13. 1 2 3 NAME OF ISSUER -------------- 13.02 $ 0.000% 13.03 $ 0.000% 13.04 $ 0.000% 13.05 $ 0.000% 13.06 $ 0.000% 13.07 $ 0.000% 13.08 $ 0.000% 13.09 $ 0.000% 13.10 $ 0.000% 13.11 $ 0.000%
F-37 Supplement for the year 2008 of the HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
14. Amounts and percentages of the reporting entity's total admitted assets held in nonaffiliated, privately placed equities: 14.01 Are assets held in nonaffiliated, privately placed equities less than 2.5% of the reporting entity's total admitted assets? Yes [X] No [ ] If response to 14.01 above is yes, responses are not required for the remainder of Interrogatory 14. 1 2 3 14.02 Aggregate statement value of investments held in nonaffiliated, privately placed equities: $ 0.000% Largest three investments held in nonaffiliated, privately placed equities: 14.03 $ 0.000% 14.04 $ 0.000% 14.05 $ 0.000% 15. Amounts and percentages of the reporting entity's total admitted assets held in general partnership interests: 15.01 Are assets held in general partnership interests less than 2.5% of the reporting entity's total admitted assets? Yes [X] No [ ] If response to 15.01 above is yes, responses are not required for the remainder of Interrogatory 15. 1 2 3 15.02 Aggregate statement value of investments held in general partnership interests: $ 0.000% Largest three investments in general partnership interests: 15.03 $ 0.000% 15.04 $ 0.000% 15.05 $ 0.000% 16. Amounts and percentages of the reporting entity's total admitted assets held in mortgage loans: 16.01 Are mortgage loans reported in Schedule B less than 2.5% of the reporting entity's total admitted assets? Yes [ ] No [X] If response to 16.01 above is yes, responses are not required for the remainder of Interrogatory 16 and Interrogatory 17. 1 2 3 TYPE (RESIDENTIAL, COMMERCIAL, AGRICULTURAL) --------------------------------------------- 16.02 HTFD REGENCY CENTERS FIXED LIFE $ 60,000,000 0.402% 16.03 HTFD AMB PORTFOLIO WHLN 2008 $ 49,767,544 0.334% 16.04 WACHOVIA MONTCLAIR PLAZA PN 2006 $ 49,715,670 0.333% 16.05 HTFD LIT IX PORTFOLIO WHLN 2008 $ 40,000,000 0.268% 16.06 HTFD_1880 CENTURY PARK EAST WHLN 06 $ 35,000,000 0.235% 16.07 JPMC DRA PORTFOLIO PN05 $ 35,000,000 0.235% 16.08 HTFD LIT VIII PORTFOLIO WHLN 2008 $ 30,500,000 0.205% 16.09 FORTIS $ 25,928,800 0.174% 16.10 CAG CIMARRON ENTITIES $ 25,626,268 0.172% 16.11 HTFD ESTATE ON QUARRY LAKES WHLN 2007 $ 25,500,000 0.171% Amount and percentage of the reporting entity's total admitted assets held in the following categories of mortgage loans: LOANS $ 0.000% 16.12 Construction loans $ 0.000% 16.13 Mortgage loans over 90 days past due $ 0.000% 16.14 Mortgage loans in the process of foreclosure $ 0.000% 16.15 Mortgage loans foreclosed $ 0.000% 16.16 Restructured mortgage loans $ 0.000% 17. Aggregate mortgage loans having the following loan-to-value ratios as determined from the most current appraisal as of the annual statement date: LOAN-TO-VALUE RESIDENTIAL COMMERCIAL AGRICULTURAL ------------- ----------- ---------- ------------ 1 2 3 4 5 6 17.01 above 95% $ 0.000% $ 0.000% $ 0.000% 17.02 91% to 95% $ 0.000% $ 0.000% $ 0.000% 17.03 81% to 90 $ 0.000% $ 0.000% $ 0.000% 17.04 71% to 80 $ 0.000% $ 152,379,515 1.022% $ 2,519,665 0.017% 17.05 below 70% $ 0.000% $ 357,763,953 2.400% $65,889,716 0.442% 18. Amounts and percentages of the reporting entity's total admitted assets held in each of the five largest investments in real estate: 18.01 Are assets held in real estate reported less than 2.5% of the reporting entity's total admitted assets? Yes [X] No [ ] If response to 18.01 above is yes, responses are not required for the remainder of Interrogatory 18. Largest five investments in any one parcel or group of contiguous parcels of real estate. Description 2 3 18.02 $ 0.000% 18.03 $ 0.000% 18.04 $ 0.000% 18.05 $ 0.000% 18.06 $ 0.000% 19. Report aggregate amounts and percentages of the reporting entity's total admitted assets held in investments held in mezzanine real estate loans. 19.01 Are assets held in investments held in mezzanine real estate loans less than 2.5% of the reporting entity's admitted assets? Yes [X] No [ ] If response to 19.01 is yes, responses are not required for the remainder of Interrogatory 19. 1 2 3 19.02 Aggregate statement value of investments held in mezzanine real estate loans: $ 0.000% Largest three investments held in mezzanine real estate loans. 19.03 $ 0.000% 19.04 $ 0.000% 19.05 $ 0.000%
F-38 Supplement for the year 2008 of the HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
20. Amounts and percentages of the reporting entity's total admitted assets subject to the following types of agreements: AT YEAR-END AT END OF EACH QUARTER ----------- ---------------------- 1ST QTR 2ND QTR 3RD QTR 1 2 3 4 5 20.01 Securities lending agreements (do not include assets held as collateral for such transactions) $274,376,770 1.840% $391,620,719 $341,456,394 $401,557,930 20.02 Repurchase agreements $ 0.000% $ $ $ 20.03 Reverse repurchase agreements $ 0.000% $ $ $ 20.04 Dollar repurchase agreements $ 0.000% $ $ $ 20.05 Dollar reverse repurchase agreements 21. Amounts and percentages of the reporting entity's total admitted assets for warrants not attached to other financial instruments, options, caps and floors: OWNED WRITTEN ----- ------- 1 2 3 4 21.01 Hedging $ 0.000% $ 0.000% 21.02 Income generation $ 0.000% $ 0.000% 21.03 Other $ 1,202,743,835 8.067% $ 0.000% 22. Amounts and percentages of the reporting entity's total admitted assets of potential exposure for collars, swaps, and forwards: AT YEAR-END AT END OF EACH QUARTER ----------- ---------------------- 1ST QTR 2ND QTR 3RD QTR 1 2 3 4 5 22.01 Hedging $ 8,906,517 0.060% $ 10,690,416 $ 9,848,902 $ 9,306,111 22.02 Income generation $ 0.000% $ $ $ 22.03 Replications $ 0.000% $ $ $ 22.04 Other $202,840,401 1.360% $330,170,714 $323,544,067 $272,702,107 23. Amounts and percentages of the reporting entity's total admitted assets of potential exposure for futures contracts: AT YEAR-END AT END OF EACH QUARTER ----------- ---------------------- 1ST QTR 2ND QTR 3RD QTR 1 2 3 4 5 23.01 Hedging $ 0.000% $ $ $ 23.02 Income generation $ 0.000% $ $ $ 23.03 Replications $ 0.000% $ $ $ 23.04 Other $389,562,500 2.613% $ 31,809,000 $ 28,997,200 $114,397,500
F-39 LIFE AND ACCIDENT AND HEALTH COMPANIES - ASSOCIATION EDITION [BAR CODE] *71153200920100101* QUARTERLY STATEMENT AS OF MARCH 31, 2009 of the Condition and Affairs of the HARTFORD LIFE AND ANNUITY INSURANCE COMPANY NAIC Group Code 0091, 0091 NAIC Company Code 71153 Employer's ID Number 39-1052598 (Current Period) (Prior Period) Organized under the Laws of CONNECTICUT State of Domicile or Port of Entry CONNECTICUT Country of Domicile US Incorporated/Organized January 9, 1956 Commenced Business July 1, 1965 Statutory Home Office 200 HOPMEADOW STREET SIMSBURY CT 06089 (STREET AND NUMBER) (CITY OR TOWN, STATE AND ZIP CODE) Main Administrative Office 200 HOPMEADOW STREET SIMSBURY CT 06089 860-547-5000 (STREET AND NUMBER) (CITY OR TOWN, STATE AND ZIP CODE) (AREA CODE) (TELEPHONE NUMBER) Mail Address ONE HARTFORD PLAZA HARTFORD CT 06155 (STREET AND NUMBER OR P.O. BOX) (CITY OR TOWN, STATE AND ZIP CODE) Primary Location of Books and Records 200 HOPMEADOW STREET SIMSBURY CT 06089 860-547-5000 (STREET AND NUMBER) (CITY OR TOWN, STATE AND ZIP CODE) (AREA CODE) (TELEPHONE NUMBER) Internet Web Site Address WWW.THEHARTFORD.COM Statutory Statement Contact MICHAEL W SALWEN 860-843-7739 (NAME) (AREA CODE) (TELEPHONE NUMBER) (EXTENSION) Michael.Salwen@hartfordlife.com 860-843-3884 (E-MAIL ADDRESS) (FAX NUMBER) OFFICERS NAME TITLE NAME TITLE 1. JOHN CLINTON WALTERS President, CEO & COB 2. DONALD CHRISTIAN HUNT Secretary 3. ERNEST MALCOLM MCNEILL, JR. SVP & Chief Accounting Officer 4. CRAIG DOUGLAS MORROW AVP & Appointed Actuary OTHER RICARDO ARTURO ANZALDUA SVP & Assistant Secretary DAVID ALAN CARLSON SVP & Director of Taxes JENNIFER JILL GEISLER Senior Vice President JOHN NICHOLAS GIAMALIS SVP & Treasurer CHRISTOPHER JAMES HANLON Senior Vice President STEPHEN THOMAS JOYCE Executive Vice President ALAN JAMES KRECZKO EVP & General Counsel GLENN DAVID LAMMEY CFO & Executive Vice President GREGORY MCGREEVEY EVP & Chief Investment Officer WILLIAM PATRICK MEANEY Senior Vice President BRIAN DENNIS MURPHY Executive Vice President CRAIG RODOLPH RAYMOND Senior Vice President JAMES EVERETT TRIMBLE SVP & Chief Actuary DIRECTORS OR TRUSTEES GLENN DAVID LAMMEY GREGORY MCGREEVEY JOHN CLINTON WALTERS State of CONNECTICUT County of HARTFORD ss The officers of this reporting entity being duly sworn, each depose and say that they are the described officers of said reporting entity, and that on the reporting period stated above, all of the herein described assets were the absolute property of the said reporting entity, free and clear from any liens or claims thereon, except as herein stated, and that this statement, together with related exhibits, schedules and explanations therein contained, annexed or referred to, is a full and true statement of all the assets and liabilities and of the condition and affairs of the said reporting entity as of the reporting period stated above, and of its income and deductions there from for the period ended, and have been completed in accordance with the NAIC ANNUAL STATEMENT INSTRUCTIONS and ACCOUNTING PRACTICES AND PROCEDURES manual except to the extent that: (1) state law may differ: or, (2) that state rules or regulations require differences in reporting not related to accounting practices and procedures, according to the best of their information, knowledge and belief, respectively. Furthermore, the scope of this attestation by the described officers also includes the related corresponding electronic filing with the NAIC, when required, that is an exact copy (except for formatting differences due to electronic filing) of the enclosed statement. The electronic filing may be requested by various regulators in lieu of or in addition to the enclosed statement. /s/ John Clinton Walters /s/ Donald Christian Hunt /s/ Ernest Malcolm McNeill, Jr. ------------------------------------------ ------------------------------------------ ------------------------------------------ (Signature) (Signature) (Signature) JOHN CLINTON WALTERS DONALD CHRISTIAN HUNT ERNEST MALCOLM MCNEILL, JR. 1. (Printed Name) 2. (Printed Name) 3. (Printed Name) President, CEO & COB Secretary SVP & Chief Accounting Officer (Title) (Title) (Title) Subscribed and sworn to before me a. Is this an original filing? Yes |X| No |_| This 28th day of April 2009 b. If no: 1. State the amendment number _______________________________ [Illegible] 2. Date filed _______________________________ ----------------------------------- 3. Number of pages attached _______________________________ My Commission Expires 2/28/2012
ASSETS
CURRENT STATEMENT DATE ------------------------------------------------------------ 1 2 3 4 NET ADMITTED DECEMBER 31 NONADMITTED ASSETS PRIOR YEAR NET ASSETS ASSETS (COLS. 1 - 2) ADMITTED ASSETS -------------- ----------- -------------- --------------- 1. Bonds 8,700,622,271 8,700,622,271 8,371,683,455 2. Stocks: 2.1 Preferred stocks 73,528,956 73,528,956 255,361,968 2.2 Common stocks 11,360,725 11,360,725 11,520,161 3. Mortgage loans on real estate: 3.1 First liens 575,364,439 575,364,439 578,552,850 3.2 Other than first liens 32,669,672 32,669,672 32,818,581 4. Real estate: 4.1 Properties occupied by the company (less $ 0 encumbrances) 28,239,879 28,239,879 27,284,717 4.2 Properties held for the production of income (less $0 encumbrances) 0 4.3 Properties held for sale (less $ 0 encumbrances) 0 5. Cash ($69,151,190), cash equivalents ($1,775,000) and short-term investments ($ 2,787,210,524) 2,858,136,714 2,858,136,714 2,326,153,004 6. Contract loans (including $ 0 premium notes) 348,303,434 348,303,434 354,919,732 7. Other invested assets 10,550,032 10,550,032 10,488,653 8. Receivables for securities 389,203,725 389,203,725 226,506,600 9. Aggregate write-ins for invested assets 1,556,431,264 0 1,556,431,264 1,791,892,868 ------------------------------------------------------------ 10. Subtotals, cash and invested assets (Lines 1 to 9) 14,584,411,111 0 14,584,411,111 13,987,182,589 11. Title plants less $ 0 charged off (for Title insurers only) 0 12. Investment income due and accrued 105,375,365 105,375,365 85,916,570 13. Premiums and considerations: 13.1 Uncollected premiums and agents' balances in the course of collection 17,243,853 17,243,853 19,384,051 13.2 Deferred premiums, agents' balances and installments booked but deferred and not yet due (including $0 earned but unbilled premiums) 44,974,307 15,905,747 29,068,560 29,547,113 13.3 Accrued retrospective premiums 0 14. Reinsurance: 14.1 Amounts recoverable from reinsurers 47,585,690 47,585,690 69,081,834 14.2 Funds held by or deposited with reinsured companies 0 14.3 Other amounts receivable under reinsurance contracts 72,265,407 72,265,407 91,846,715 15. Amounts receivable relating to uninsured plans 0 16.1 Current federal and foreign income tax recoverable and interest thereon 28,853,873 28,853,873 174,110,370 16.2 Net deferred tax asset 703,901,036 522,943,887 180,957,149 68,672,999 17. Guaranty funds receivable or on deposit 3,519,088 3,519,088 3,493,310 18. Electronic data processing equipment and software 0 19. Furniture and equipment, including health care delivery assets ($0) 0 20. Net adjustment in assets and liabilities due to foreign exchange rates 0 21. Receivables from parent, subsidiaries and affiliates 8,725,785 8,725,785 10,222,853 22. Health care ($0) and other amounts receivable 6,190,469 6,190,469 0 23. Aggregate write-ins for other than invested assets 170,079,668 (65,561,472) 235,641,140 369,937,855 ------------------------------------------------------------ 24. Total assets excluding Separate Accounts, Segregated Accounts and Protected Cell Accounts (Lines 10 through 23) 15,793,125,652 479,478,631 15,313,647,021 14,909,396,259 25. From Separate Accounts, Segregated Accounts and Protected Cell Accounts 46,238,347,853 46,238,347,853 50,551,150,119 26. Total (Lines 24 and 25) 62,031,473,505 479,478,631 61,551,994,874 65,460,546,378 DETAILS OF WRITE-INS 0901. Derivative Instruments 1,556,431,264 1,556,431,264 1,791,892,868 0902. 0 0903. 0 0998. Summary of remaining write-ins for Line 9 from overflow page 0 0 0 0 0999. Totals (Lines 0901 thru 0903 plus 0998) (Line 9 above) 1,556,431,264 0 1,556,431,264 1,791,892,868 ------------------------------------------------------------ 2301. Disbursements And Items Not Allocated 145,162,566 145,162,566 70,323,930 2302. Permitted Practice - DTA (90,478,574) 90,478,574 299,613,925 2303. Other Assets Non-admitted 54,393 54,393 0 2398. Summary of remaining write-ins for Line 23 from overflow page 24,862,709 24,862,709 0 0 2399. Totals (Lines 2301 thru 2303 plus 2398) (Line 23 above) 170,079,668 (65,561,472) 235,641,140 369,937,855
Q02 LIABILITIES, SURPLUS AND OTHER FUNDS
1 2 CURRENT DECEMBER 31 STATEMENT DATE PRIOR YEAR -------------- -------------- 1. Aggregate reserve for life contracts $11,244,884,283 less $0 included in Line 6.3 (including $0 Modco Reserve) 11,244,884,283 10,792,355,216 2. Aggregate reserve for accident and health contracts (including $0 Modco Reserve) 5,397,792 5,394,388 3. Liability for deposit-type contracts (including $0 Modco Reserve) 70,751,473 70,265,707 4. Contract claims: 4.1 Life 41,072,850 33,700,451 4.2 Accident and health 165,215 136,012 5. Policyholders' dividends $0 and coupons $0 due and unpaid 6. Provision for policyholders' dividends and coupons payable in following calendar year - estimated amounts: 6.1 Dividends apportioned for payment (including $0 Modco) 1,347,531 1,406,729 6.2 Dividends not yet apportioned (including $0 Modco) 814 855 6.3 Coupons and similar benefits (including $0 Modco) 7. Amount provisionally held for deferred dividend policies not included in Line 6 8. Premiums and annuity considerations for life and accident and health contracts received in advance less $0 discount; including $0 accident and health premiums 862,886 1,016,529 9. Contract liabilities not included elsewhere: 9.1 Surrender values on canceled contracts 9.2 Provision for experience rating refunds, including $0 accident and health experience rating refunds 4,464,417 4,977,920 9.3 Other amounts payable on reinsurance, including $0 assumed and $15,583,749 ceded 15,583,749 15,998,017 9.4 Interest Maintenance Reserve 10. Commissions to agents due or accrued - life and annuity contracts $43,576,558, accident and health $0 and deposit-type contract funds $8,429,361 52,005,919 56,208,822 11. Commissions and expense allowances payable on reinsurance assumed 12. General expenses due or accrued 32,659,244 47,722,869 13. Transfers to Separate Accounts due or accrued (net) (including $(1,347,663,890) accrued for expense allowances recognized in reserves, net of reinsured allowances) (1,476,731,471) (1,642,086,342) 14. Taxes, licenses and fees due or accrued, excluding federal income taxes 7,960,580 9,647,525 15.1 Current federal and foreign income taxes, including $0 on realized capital gains (losses) 15.2 Net deferred tax liability 16. Unearned investment income 3,188,394 3,304,252 17. Amounts withheld or retained by company as agent or trustee 1,643,087 1,866,332 18. Amounts held for agents' account, including $858,653 agents' credit balances 858,653 1,327,925 19. Remittances and items not allocated 94,969,988 145,871,785 20. Net adjustment in assets and liabilities due to foreign exchange rates 21. Liability for benefits for employees and agents if not included above 22. Borrowed money $0 and interest thereon $0 23. Dividends to stockholders declared and unpaid 24. Miscellaneous liabilities: 24.1 Asset valuation reserve 6,596,740 6,003,772 24.2 Reinsurance in unauthorized companies 10,330 10,330 24.3 Funds held under reinsurance treaties with unauthorized reinsurers 1,091,338,424 1,013,638,930 24.4 Payable to parent, subsidiaries and affiliates 49,515,455 39,493,081 24.5 Drafts outstanding 137,674,429 135,928,955 24.6 Liability for amounts held under uninsured plans 24.7 Funds held under coinsurance 24.8 Payable for securities 355,160,966 27,723,614 24.9 Capital notes $0 and interest thereon $0 25. Aggregate write-ins for liabilities 1,272,876,946 1,959,624,176 -------------- -------------- 26. Total liabilities excluding Separate Accounts business (Lines 1 to 25) 13,014,258,694 12,731,537,849 -------------- -------------- 27. From Separate Accounts statement 46,238,347,853 50,551,150,119 -------------- -------------- 28. Total liabilities (Lines 26 and 27) 59,252,606,547 63,282,687,968 -------------- -------------- 29. Common capital stock 2,500,000 2,500,000 30. Preferred capital stock 31. Aggregate write-ins for other than special surplus funds 286,562,553 497,354,084 32. Surplus notes 33. Gross paid in and contributed surplus 2,179,883,491 1,692,530,362 34. Aggregate write-ins for special surplus funds 0 0 35. Unassigned funds (surplus) (169,557,718) (14,526,035) 36. Less treasury stock, at cost: 36.1 0.000 shares common (value included in Line 29 $0) 36.2 0.000 shares preferred (value included in Line 30 $0) 37. Surplus (Total Lines 31 + 32 + 33 + 34 + 35 - 36) (including $0 in Separate Accounts Statement) 2,296,888,326 2,175,358,411 -------------- -------------- 38. Totals of Lines 29, 30 and 37 2,299,388,327 2,177,858,411 -------------- -------------- 39. Totals of Lines 28 and 38 61,551,994,874 65,460,546,378 ============== ============== DETAILS OF WRITE-INS 2501. Collateral on Derivatives 1,156,137,929 1,682,427,970 2502. Securities Lending Collateral 73,823,548 215,494,633 2503. Derivative Investments 927,870 27,057,908 2598. Summary of remaining write-ins for Line 25 from overflow page 41,987,599 34,643,665 2599. Totals (Lines 2501 thru 2503 plus 2598) (Line 25 above) 1,272,876,946 1,959,624,176 3101. Gain on Inforce Reinsurance 196,083,979 197,740,159 3102. Permitted practice DTA 90,478,574 299,613,925 3103. 3198. Summary of remaining write-ins for Line 31 from overflow page 0 0 3199. Totals (Lines 3101 thru 3103 plus 3198) (Line 31 above) 286,562,553 497,354,084 3401. 3402. 3403. 3498. Summary of remaining write-ins for Line 34 from overflow page 0 0 3499. Totals (Lines 3401 thru 3403 plus 3498) (Line 34 above) 0 0
Q03 SUMMARY OF OPERATIONS (EXCLUDING UNREALIZED CAPITAL GAINS AND LOSSES)
1 2 3 CURRENT PRIOR PRIOR YEAR ENDED YEAR TO DATE YEAR TO DATE DECEMBER 31 ------------- ------------- ---------------- 1. Premiums and annuity considerations for life and accident and health contracts 848,026,936 2,156,944,221 9,352,507,146 2. Considerations for supplementary contracts with life contingencies 65,216 8 78,236 3. Net investment income 115,478,145 89,334,697 376,034,010 4. Amortization of Interest Maintenance Reserve (IMR) 487,365 (142,303) (484,358) 5. Separate Accounts net gain from operations excluding unrealized gains or losses 6. Commissions and expense allowances on reinsurance ceded 45,889,753 49,426,364 229,723,440 7. Reserve adjustments on reinsurance ceded (3,167,746) (5,410,969) (18,160,804) 8. Miscellaneous Income: 8.1 Income from fees associated with investment management, administration and contract guarantees from Separate Accounts 259,201,295 370,225,378 1,363,867,995 8.2 Charges and fees for deposit-type contracts 8.3 Aggregate write-ins for miscellaneous income 47,426,022 104,228,745 310,502,821 ------------- ------------- -------------- 9. Totals (Lines 1 to 8.3) 1,313,406,986 2,764,606,141 11,614,068,486 ------------- ------------- -------------- 10. Death benefits 90,926,425 79,917,338 332,285,784 11. Matured endowments (excluding guaranteed annual pure endowments) 47,751 98,442 488,258 12. Annuity benefits 19,122,096 21,349,267 316,594,968 13. Disability benefits and benefits under accident and health contracts 1,360,766 1,425,099 5,429,577 14. Coupons, guaranteed annual pure endowments and similar benefits 72 72 112 15. Surrender benefits and withdrawals for life contracts 1,907,409,861 2,668,966,836 9,965,052,593 16. Group conversions 17. Interest and adjustments on contract or deposit-type contract funds 1,563,581 2,787,846 15,797,103 18. Payments on supplementary contracts with life contingencies 841,936 796,876 3,262,919 19. Increase in aggregate reserves for life and accident and health contracts 482,074,887 251,073,982 4,809,455,973 ------------- ------------- -------------- 20. Totals (Lines 10 to 19) 2,503,347,375 3,026,415,758 15,448,367,287 21. Commissions on premiums, annuity considerations and deposit-type contract funds (direct business only) 126,128,887 223,530,550 821,540,041 22. Commissions and expense allowances on reinsurance assumed 2,143,239 3,792,212 13,310,322 23. General insurance expenses 95,352,480 111,939,104 448,657,076 24. Insurance taxes, licenses and fees, excluding federal income taxes 9,582,431 11,330,546 43,032,521 25. Increase in loading on deferred and uncollected premiums (2,398,414) 353,644 (5,412,378) 26. Net transfers to or (from) Separate Accounts net of reinsurance (813,515,467) (450,080,961) (1,671,680,758) 27. Aggregate write-ins for deductions (46,142,044) (80,795,306) (295,289,105) ------------- ------------- -------------- 28. Totals (Lines 20 to 27) 1,874,498,487 2,846,485,547 14,802,525,006 ------------- ------------- -------------- 29. Net gain from operations before dividends to policyholders and federal income taxes (Line 9 minus Line 28) (561,091,501) (81,879,406) (3,188,456,520) 30. Dividends to policyholders 288,149 544,413 1,555,063 ------------- ------------- -------------- 31. Net gain from operations after dividends to policyholders and before federal income taxes (Line 29 minus Line 30) (561,379,649) (82,423,819) (3,190,011,583) 32. Federal and foreign income taxes incurred (excluding tax on capital gains) (11,298,089) (35,309,241) (245,744,939) ------------- ------------- -------------- 33. Net gain from operations after dividends to policyholders and federal income taxes and before realized capital gains or (losses) (Line 31 minus Line 32) (550,081,560) (47,114,578) (2,944,266,644) 34. Net realized capital gains (losses) (excluding gains (losses) transferred to the IMR) less capital gains tax of $(1,007,713) (excluding taxes of $4,940,832 transferred to the IMR) 495,627,693 27,812,661 961,161,644 ------------- ------------- -------------- 35. Net income (Line 33 plus Line 34) (54,453,867) (19,301,917) (1,983,105,000) ------------- ------------- -------------- CAPITAL AND SURPLUS ACCOUNT 36. Capital and surplus, December 31, prior year 2,177,858,411 2,556,587,807 2,556,587,807 37. Net income (Line 35) (54,453,867) (19,301,917) (1,983,105,000) 38. Change in net unrealized capital gains (losses) less capital gains tax of $76,894,207 (152,185,578) 83,740,418 731,680,206 39. Change in net unrealized foreign exchange capital gain (loss) 31,094,350 (6,512,995) (34,794,203) 40. Change in net deferred income tax 21,152,432 5,012,719 669,251,250 41. Change in nonadmitted assets (46,051) 223,706,346 (182,691,362) 42. Change in liability for reinsurance in unauthorized companies 558,760 43. Change in reserve on account of change in valuation basis, (increase) or decrease 23,935,154 44. Change in asset valuation reserve (592,968) (1,655,248) 40,850,768 45. Change in treasury stock 46. Surplus (contributed to) withdrawn from Separate Accounts during period 47. Other changes in surplus in Separate Accounts Statement 48. Change in surplus notes 49. Cumulative effect of changes in accounting principles 50. Capital changes: 50.1 Paid in 50.2 Transferred from surplus (Stock Dividend) 50.3 Transferred to surplus 51. Surplus adjustment: 51.1 Paid in 487,353,129 1,361,339 208,661,159 51.2 Transferred to capital (Stock Dividend) 51.3 Transferred from capital 51.4 Change in surplus as a result of reinsurance 52. Dividends to stockholders (66,000,000) (156,000,000) 53. Aggregate write-ins for gains and losses in surplus (210,791,531) 0 302,923,872 ------------- ------------- -------------- 54. Net change in capital and surplus (Lines 37 through 53) 121,529,916 220,350,662 (378,729,396) ------------- ------------- -------------- 55. Capital and surplus as of statement date (Lines 36 + 54) 2,299,388,327 2,776,938,469 2,177,858,411 ============= ============= ============== DETAILS OF WRITE-INS 08.301. Other Investment Management Fees 21,732,019 42,730,325 130,208,911 08.302. Separate Account Loads 21,894,770 35,993,646 107,963,200 08.303. Miscellaneous Income 3,799,233 25,504,774 72,330,710 08.398. Summary of remaining write-ins for Line 8.3 from overflow page 0 0 0 08.399. Totals (Lines 08.301 thru 08.303 plus 08.398) (Line 8.3 above) 47,426,022 104,228,745 310,502,821 ------------- ------------- -------------- 2701. MODCO Reserve Adjustment on Reinsurance Assumed (60,572,680) 16,458,750 (339,633,625) 2702. Miscellaneous Deductions 14,944,139 87,126 43,926,598 2703. Change in Provision for Experience-Rated Refunds (513,503) (97,341,182) 417,922 2798. Summary of remaining write-ins for Line 27 from overflow page 0 0 0 2799. Totals (Lines 2701 thru 2703 plus 2798) (Line 27 above) (46,142,044) (80,795,306) (295,289,105) ------------- ------------- -------------- 5301. Permitted practice DTA (209,135,351) 299,613,925 5302. Gain on Inforce Reinsurance (1,656,180) 3,309,947 5303. 5398. Summary of remaining write-ins for Line 53 from overflow page 0 0 0 5399. Totals (Lines 5301 thru 5303 plus 5398) (Line 53 above) (210,791,531) 0 302,923,872
Q04 CASH FLOW
1 2 CURRENT YEAR PRIOR YEAR ENDED TO DATE DECEMBER 31 ------------- ---------------- CASH FROM OPERATIONS 1. Premiums collected net of reinsurance 850,043,757 9,351,978,269 2. Net investment income 109,077,766 408,198,730 3. Miscellaneous income 349,349,324 1,885,933,452 ------------- -------------- 4. Total (Lines 1 through 3) 1,308,470,847 11,646,110,451 5. Benefit and loss related payments 1,973,207,702 10,733,727,427 6. Net transfers to Separate Accounts, Segregated Accounts and Protected Cell Accounts (978,870,338) (2,500,961,899) 7. Commissions, expenses paid and aggregate write-ins for deductions 1,108,978,975 (1,468,784,326) 8. Dividends paid to policyholders 347,388 2,304,771 9. Federal and foreign income taxes paid (recovered) net of $0 tax on capital gains (losses) (152,621,467) (96,262,978) ------------- -------------- 10. Total (Lines 5 through 9) 1,951,042,260 6,670,022,995 11. Net cash from operations (Line 4 minus Line 10) (642,571,413) 4,976,087,456 CASH FROM INVESTMENTS 12. Proceeds from investments sold, matured or repaid: 12.1 Bonds 5,321,093,242 779,817,535 12.2 Stocks 38,675,892 12.3 Mortgage loans 3,423,779 17,014,335 12.4 Real estate 12.5 Other invested assets 116,431 12.6 Net gains or (losses) on cash, cash equivalents and short-term investments 12.7 Miscellaneous proceeds 1,078,960,146 987,246,991 ------------- -------------- 12.8 Total investment proceeds (Lines 12.1 to 12.7) 6,403,477,167 1,822,871,183 13. Cost of investments acquired (long-term only): 13.1 Bonds 5,541,827,616 3,706,707,675 13.2 Stocks 29,767 19,943,302 13.3 Mortgage loans 69,905 278,706,286 13.4 Real estate 13.5 Other invested assets 438,130 2,096,528 13.6 Miscellaneous applications 162,697,125 1,527,650,914 ------------- -------------- 13.7 Total investments acquired (Lines 13.1 to 13.6) 5,705,062,543 5,535,104,704 ------------- -------------- 14. Net increase (decrease) in contract loans and premium notes (6,616,298) 11,146,529 15. Net cash from investments (Line 12.8 minus Line 13.7 and Line 14) 705,030,922 (3,723,380,050) CASH FROM FINANCING AND MISCELLANEOUS SOURCES 16. Cash provided (applied): 16.1 Surplus notes, capital notes 16.2 Capital and paid in surplus, less treasury stock 487,353,129 204,846,049 16.3 Borrowed funds 16.4 Net deposits on deposit-type contracts and other insurance liabilities (3,470,587) 16.5 Dividends to stockholders 156,000,000 16.6 Other cash provided (applied) (17,828,929) 462,787,191 ------------- -------------- 17. Net cash from financing and miscellaneous sources (Lines 16.1 through 16.4 minus Line 16.5 plus Line 16.6) 469,524,200 508,162,653 ------------- -------------- RECONCILIATION OF CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS 18. Net change in cash, cash equivalents and short-term investments (Line 11 plus Line 15 plus Line 17) 531,983,710 1,760,870,059 19. Cash, cash equivalents and short-term investments: 19.1 Beginning of year 2,326,153,004 565,282,946 19.2 End of period (Line 18 plus Line 19.1) 2,858,136,714 2,326,153,004 Note: Supplemental disclosures of cash flow information for non-cash transactions: 20.0001
Q05 EXHIBIT 1 DIRECT PREMIUMS AND DEPOSIT-TYPE CONTRACTS
1 2 3 CURRENT YEAR PRIOR YEAR PRIOR YEAR TO DATE TO DATE ENDED DECEMBER 31 ------------ ------------- ----------------- 1. Industrial life 2. Ordinary life insurance 320,377,734 377,511,122 1,546,934,521 3. Ordinary individual annuities 631,350,915 1,910,529,270 6,312,931,770 4. Credit life (group and individual) 5. Group life insurance 190,070 205,347 726,004 6. Group annuities 11,300 7. A&H - group 8. A&H - credit (group and individual) 9. A&H - other 251,858 278,044 1,050,535 10. Aggregate of all other lines of business 0 0 0 ----------- ------------- ------------- 11. Subtotal 952,170,577 2,288,523,783 7,861,654,130 12. Deposit-type contracts ----------- ------------- ------------- 13. Total 952,170,577 2,288,523,783 7,861,654,130 =========== ============= ============= DETAILS OF WRITE-INS 1001. 1002. 1003. 1098. Summary of remaining write-ins for Line 10 from overflow page 0 0 0 1099. Total (Lines 1001 thru 1003 plus 1098) (Line 10 above) 0 0 0
Q06 Statement as of March 31, 2009 of the HARTFORD LIFE AND ANNUITY INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying statutory basis financial statements have been prepared in conformity with statutory accounting practices prescribed or permitted by the State of Connecticut Department of Insurance ("the Department"). The Department recognizes only statutory accounting practices prescribed or permitted by Connecticut for determining and reporting the financial condition and results of operations of an insurance company and for determining solvency under the state of Connecticut Insurance Law. The National Association of Insurance Commissioners' Accounting Practices and Procedures Manual ("NAIC SAP") has been adopted as a component of prescribed practices by Connecticut. A difference prescribed by Connecticut state law allows the Company to obtain a reinsurance reserve credit for a reinsurance treaty which provides for a limited right of unilateral cancellation by the reinsurer. Even if the Company did not obtain reinsurance reserve credit for this reinsurance treaty, the Company's risk-based capital would not have triggered a regulatory event. The Company has also received approval from the Connecticut Insurance Department regarding the use of a permitted practice related to the statutory accounting for deferred income taxes for the year ended December 31, 2008 through September 30, 2009. This permitted practice modifies the accounting for deferred income taxes prescribed by NAIC SAP by increasing the realization period for deferred tax assets from one year to three years and increasing the asset recognition limit from 10% to 15% of adjusted statutory capital and surplus. The benefits of this permitted practice may not be considered by the Company when determining surplus have triggered a regulatory event. The effect of the use of the above described practices prescribed and permitted by the Connecticut Insurance Department is shown in the reconciliation of the Company's net income and capital and surplus to NAIC SAP below:
MARCH 31, DECEMBER 31, 2009 2008 -------------- --------------- Net Loss, State of Connecticut basis $ (54,453,867) $(1,983,105,000 State permitted practice: Reserve Credit $ (51,482,863) $ (142,388,066) -------------- --------------- Net income, NAIC SAP: $ (105,936,730) $(2,125,493,066) ============== =============== Statutory surplus, State of Connecticut basis $2,299,388,327 $ 2,177,858,411) State permitted practice: Reserve Credit $ (442,053,401) $ (390,570,538) Deferred income taxes (as described above) $ (90,478,574) $ (299,613,925) -------------- --------------- Statutory surplus, NAIC SAP: $1,766,856,352 $ 1,487,673,948 ============== ===============
NOTE 2 - ACCOUNTING CHANGES AND CORRECTIONS OF ERRORS No significant change. NOTE 3 - BUSINESS COMBINATIONS AND GOODWILL No significant change. NOTE 4 - DISCONTINUED OPERATIONS No significant change. NOTE 5 - INVESTMENTS No significant change. NOTE 6 - JOINT VENTURES, PARTNERSHIPS AND LIMITED LIABILITY COMPANIES No significant change. NOTE 7 - INVESTMENT INCOME No significant change. Q07 NOTE 8 - DERIVATIVE INSTRUMENTS No significant change. NOTE 9 - INCOME TAXES No significant change. NOTE 10 - INFORMATION CONCERNING PARENT, SUBSIDIARIES, AFFILIATES AND OTHER RELATED PARTIES No significant change. NOTE 11 - DEBT No significant change. NOTE 12 - RETIREMENT PLANS, DEFERRED COMPENSATION, POSTEMPLOYMENT BENEFITS AND COMPENSATED ABSENCES AND OTHER POSTRETIREMENT BENEFIT PLANS No significant change. NOTE 13 - CAPITAL AND SURPLUS, SHAREHOLDERS' DIVIDEND RESTRICTIONS AND QUASI-REORGANIZATIONS No significant change. NOTE 14 - CONTINGENCIES No significant change. NOTE 15 - LEASES No significant change. NOTE 16 - INFORMATION ABOUT FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND FINANCIAL INSTRUMENTS WITH CONCENTRATIONS OF CREDIT RISK No significant change. NOTE 17 - SALE, TRANSFER AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENTS OF LIABILITIES C. The Company had no wash sales. NOTE 18 - GAIN OR LOSS TO THE REPORTING ENTITY FROM UNINSURED PLANS AND THE UNINSURED PORTION OF PARTIALLY INSURED PLANS No significant change. NOTE 19 - DIRECT PREMIUM WRITTEN/PRODUCED BY MANAGING GENERAL AGENTS/THIRD PARTY ADMINISTRATORS No significant change. NOTE 20 - OTHER ITEMS No significant change. NOTE 21 - EVENTS SUBSEQUENT No significant change. NOTE 22 - REINSURANCE No significant change. Q07.1 NOTE 23 - RETROSPECTIVELY RATED CONTRACTS & CONTRACTS SUBJECT TO REDETERMINATION No significant change. NOTE 24 - CHANGE IN INCURRED LOSSES AND LOSS ADJUSTMENT EXPENSES The Company has no change to incurred losses or loss adjustment expenses. NOTE 25 - INTERCOMPANY POOLING ARRANGEMENTS No significant change. NOTE 26 - STRUCTURED SETTLEMENTS No significant change. NOTE 27 - HEALTH CARE RECEIVABLES No significant change. NOTE 28 - PARTICIPATING POLICIES No significant change. NOTE 29 - PREMIUM DEFICIENCY RESERVES No significant change. NOTE 30 - RESERVES FOR LIFE CONTRACTS AND ANNUITY CONTRACTS No significant change. NOTE 31 - ANALYSIS OF ANNUITY ACTUARIAL RESERVES AND DEPOSIT LIABILITIES BY WITHDRAWAL CHARACTERISTICS No significant change. NOTE 32 - PREMIUMS AND ANNUITY CONSIDERATIONS DEFERRED AND UNCOLLECTED No significant change. NOTE 33 - SEPARATE ACCOUNTS No significant change. NOTE 34 - LOSS/CLAIM ADJUSTMENT EXPENSES No significant change. Q07.2 GENERAL INTERROGATORIES (Responses to these interrogatories should be based on changes that have occurred since prior year end unless otherwise noted) PART 1 - COMMON INTERROGATORIES GENERAL 1.1 Did the reporting entity experience any material transactions requiring the filing of Disclosure of Material Transactions with the State of Domicile, as required by the Model Act? Yes |_| No |X| 1.2 If yes, has the report been filed with the domiciliary state? Yes |_| No |_| 2.1 Has any change been made during the year of this statement in the charter, by-laws, articles of incorporation, or deed of settlement of the reporting entity? Yes |_| No |X| 2.2 If yes, date of change: ______________________ 3. Have there been any substantial changes in the organizational chart since the prior quarter end? Yes |_| No |X| If yes, complete the Schedule Y-Part 1 - Organizational chart. 4.1 Has the reporting entity been a party to a merger or consolidation during the period covered by this statement? Yes |_| No |X| 4.2 If yes, provide name of entity, NAIC Company Code, and state of domicile (use two letter state abbreviation) for any entity that has ceased to exist as a result of the merger or consolidation. 1 2 3 NAIC STATE OF NAME OF ENTITY COMPANY CODE DOMICILE -------------- ------------ -------- 5. If the reporting entity is subject to a management agreement, including third-party administrator(s), managing general agent(s), attorney-in-fact, or similar agreement, have there been any significant changes regarding the terms of the agreement or principals involved? Yes |_| No |X| N/A |_| If yes, attach an explanation. ____________________________________________________________________ ____________________________________________________________________ 6.1 State as of what date the latest financial examination of the reporting entity was made or is being made. 12/31/2007 6.2 State the as of date that the latest financial examination report became available from either the state of domicile or the reporting entity. This date should be the date of the examined balance sheet and not the date the report was completed or released. 12/31/2002 6.3 State as of what date the latest financial examination report became available to other states or the public from either the state of domicile or the reporting entity. This is the release date or completion date of the examination report and not the date of the examination (balance 1/16/2004 sheet date). 6.4 By what department or departments? Connecticut State Insurance Department ____________________________________________________________________ 6.5 Have all financial statement adjustments within the latest financial examination report been accounted for in a subsequent financial statement filed with Departments? Yes |_| No |_| N/A |X| 6.6 Have all of the recommendations within the latest financial examination report been complied with? Yes |X| No |_| N/A |_| 7.1 Has this reporting entity had any Certificates of Authority, licenses or registrations (including corporate registration, if applicable) suspended or revoked by any governmental entity during the reporting period? Yes |_| No |X| 7.2 If yes, give full information: ____________________________________________________________________ ____________________________________________________________________ 8.1 Is the company a subsidiary of a bank holding company regulated by the Federal Reserve Board? Yes |_| No |X| 8.2 If response to 8.1 is yes, please identify the name of the bank holding company. ____________________________________________________________________ ____________________________________________________________________ 8.3 Is the company affiliated with one or more banks, thrifts or securities firms? Yes |X| No |_| 8.4 If the response to 8.3 is yes, please provide below the names and location (city and state of the main office) of any affiliates regulated by a federal regulatory services agency [i.e. the Federal Reserve Board (FRB), the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTS), the Federal Deposit Insurance Corporation (FDIC) and the Securities Exchange Commission (SEC)] and identify the affiliate's primary federal regulator]. 1 2 3 4 5 6 7 AFFILIATE NAME LOCATION (CITY, STATE) FRB OCC OTS FDIC SEC --------------------------------------- ---------------------- --- --- --- ---- --- Hartford Equity Sales Company, Inc. Simsbury, CT YES Hartford Securities Distribution Simsbury, CT YES Hartford Investment Financial Services, Simsbury, CT YES Planco Financial Services, Inc. Wayne, PA YES Woodbury Financial Services, Inc. Woodbury, MN YES 9.1 Are the senior officers (principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions) of the reporting entity subject to a code of ethics, which includes the following standards? Yes |X| No |_| (a) Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (b) Full, fair, accurate, timely and understandable disclosure in the periodic reports required to be filed by the reporting entity; (c) Compliance with applicable governmental laws, rules and regulations; (d) The prompt internal reporting of violations to an appropriate person or persons identified in the code; and (e) Accountability for adherence to the code. 9.11 If the response to 9.1 is No, please explain: ____________________________________________________________________ ____________________________________________________________________ 9.2 Has the code of ethics for senior managers been amended? Yes |_| No |X|
Q08 GENERAL INTERROGATORIES (Responses to these interrogatories should be based on changes that have occurred since prior year end unless otherwise noted) PART 1 - COMMON INTERROGATORIES 9.21 If the response to 9.2 is Yes, provide information related to amendment(s). ____________________________________________________________________ ____________________________________________________________________ 9.3 Have any provisions of the code of ethics been waived for any of the specified officers? Yes |_| No |X| 9.31 If the response to 9.3 is Yes, provide the nature of any waiver(s). ____________________________________________________________________ ____________________________________________________________________ FINANCIAL 10.1 Does the reporting entity report any amounts due from parent, subsidiaries or affiliates on Page 2 of this statement? Yes |X| No |_| 10.2 If yes, indicate any amounts receivable from parent included in the Page 2 amount: $8,653,480 INVESTMENT 11.1 Were any of the stocks, bonds, or other assets of the reporting entity loaned, placed under option agreement, or otherwise made available for use by another person? (Exclude securities under securities lending agreements.) Yes |X| No |_| 11.2 If yes, give full and complete information relating thereto: $432,260,361 representing ninehighly rated bonds pledged as collateral for derivative activities. ____________________________________________________________________ 12. Amount of real estate and mortgages held in other invested assets in Schedule BA: $0 13. Amount of real estate and mortgages held in short-term investments: $0 14.1 Does the reporting entity have any investments in parent, subsidiaries and affiliates? Yes |X| No |_| 14.2 If yes, please complete the following: 1 2 PRIOR YEAR-END CURRENT QUARTER BOOK/ADJUSTED BOOK/ADJUSTED CARRYING VALUE CARRYING VALUE -------------- --------------- 14.21 Bonds $ 0 $_________ 14.22 Preferred Stock $ 0 $_________ 14.23 Common Stock $6,488,643 $6,617,565 14.24 Short-Term Investments $ 0 $_________ 14.25 Mortgage Loans on Real Estate $ 0 $_________ 14.26 All Other $ 0 $_________ 14.27 Total Investment in Parent, Subsidiaries and Affiliates $6,488,643 $6,617,565 (Subtotal Lines 14.21 to 14.26) 14.28 Total Investment in Parent included in Lines 14.21 to 14.26 above $_________ $_________ 15.1 Has the reporting entity entered into any hedging transactions reported on Schedule DB? Yes |X| No |_| 15.2 If yes, has a comprehensive description of the hedging program been made available to the domiciliary state? Yes |X| No |_| If no, attach a description with this statement. 16. Excluding items in Schedule E-Part 3-Special Deposits, real estate, mortgage loans and investments held physically in the reporting entity's offices, vaults or safety deposit boxes, were all stocks, bonds and other securities, owned throughout the current year held pursuant to a custodial agreement with a qualified bank or trust company in accordance with Section 3, III. Conducting Examinations, F-Custodial or Safekeeping Agreements of the NAIC Financial Condition Examiners Handbook? Yes |X| No |_| 16.1 For all agreements that comply with the requirements of the NAIC Financial Condition Examiners Handbook, complete the following: 1 2 NAME OF CUSTODIAN(S) CUSTODIAN ADDRESS -------------------------- ------------------------------------------------ JP Morgan Chase Bank, N.A. 4 New York Plaza, 15th Floor, New York, NY 10004 The Bank of New York 101 Barclay St., 8 West, New York, NY 10286 The Bank of New York 32 Old Slip, 15th Floor, New York, NY 10286 16.2 For all agreements that do not comply with the requirements of the NAIC Financial Condition Examiners Handbook, provide the name, location and a complete explanation. 1 2 3 NAME(S) LOCATION(S) COMPLETE EXPLANATION(S) ------- ----------- ----------------------- 16.3 Have there been any changes, including name changes, in the custodian(s) identified in 16.1 during the current quarter? Yes |_| No |X| 16.4 If yes, give full and complete information relating thereto: 1 2 3 4 OLD CUSTODIAN NEW CUSTODIAN DATE OF CHANGE REASON ------------- ------------- -------------- ------ 16.5 Identify all investment advisors, broker/dealers or individuals acting on behalf of broker/dealers that have access to the investment accounts, handle securities and have authority to make investments on behalf of the reporting entity: 1 2 3 CENTRAL REGISTRATION DEPOSITORY NAME(S) ADDRESS ------------------------------- ------- -------
Q08.1 GENERAL INTERROGATORIES (Responses to these interrogatories should be based on changes that have occurred since prior year end unless otherwise noted) PART 1 - COMMON INTERROGATORIES 17.1 Have all the filing requirements of the Purposes and Procedures Manual of the NAIC Securities Valuation Office been followed? Yes |_| No |X| 17.2 If no, list exceptions: 124900C@8 CCL INDUSTRIES INC. Q08.2 PART 2 - LIFE & HEALTH 1. Report the statement value of mortgage loans at the end of this reporting period for the following categories:
1 AMOUNT 1.1 Long-term mortgages in good standing 1.11 Farm mortgages $ 66,590,809 1.12 Residential mortgages $ 1.13 Commercial mortgages $541,443,301 ------------ 1.14 Total mortgages in good standing $608,034,110 1.2 Long-term mortgages in good standing with restructured terms 1.21 Total mortgages in good standing with restructured terms $ 1.3 Long-term mortgage loans upon which interest is overdue more than three months 1.31 Farm mortgages $ 1.32 Residential mortgages $ 1.33 Commercial mortgages $ ------------ 1.34 Total mortgages with interest overdue more than three months $ 0 1.4 Long-term mortgage loans in process of foreclosure 1.41 Farm mortgages $ 1.42 Residential mortgages $ 1.43 Commercial mortgages $ ------------ 1.44 Total mortgages in process of foreclosure $ 0 1.5 Total mortgage loans (Lines 1.14 + 1.21 + 1.34 + 1.44) (Page 2, Column 3, Lines 3.1 + 3.2) $608,034,110 1.6 Long-term mortgages foreclosed, properties transferred to real estate in current quarter 1.61 Farm mortgages $ 1.62 Residential mortgages $ 1.63 Commercial mortgages $ ------------ 1.64 Total mortgages foreclosed and transferred to real estate $ 0
Q09 SCHEDULE S - CEDED REINSURANCE Showing All New Reinsurance Treaties - Current Year to Date
1 2 6 7 NAIC FEDERAL 3 TYPE OF IS INSURER COMPANY ID EFFECTIVE 4 5 REINSURANCE AUTHORIZED? CODE NUMBER DATE NAME OF REINSURER LOCATION CEDED (YES OR NO) ----------------------------------------------------------------------------------------
NONE Q10 Statement as of March 31, 2009 of the HARTFORD LIFE AND ANNUITY INSURANCE COMPANY SCHEDULE T - PREMIUMS AND ANNUITY CONSIDERATIONS Current Year to Date - Allocated by States and Territories
DIRECT BUSINESS ONLY --------------------------------------------------------------------------------- 4 ACCIDENT AND HEALTH LIFE CONTRACTS INSURANCE -------------------------- PREMIUMS, 2 INCLUDING 6 7 1 LIFE 3 POLICY, 5 TOTAL DEPOSIT- ACTIVE INSURANCE ANNUITY MEMBERSHIP AND OTHER COLUMNS TYPE STATES, ETC. STATUS PREMIUMS CONSIDERATIONS OTHER FEES CONSIDERATIONS 2 THROUGH 5 CONTRACTS ----------------------------------------------------------------------------------------------------------------------------------- 1. Alabama AL L 1,720,675 51,063 836 5,845,877 7,618,451 2. Alaska AK L 433,746 139 734,142 1,168,026 3. Arizona AZ L 6,849,281 90,925 5,426 11,329,695 18,275,326 4. Arkansas AR L 2,135,879 124,922 590 9,322,057 11,583,448 5. California CA L 36,224,301 1,444,689 29,093 78,972,217 116,670,300 6. Colorado CO L 7,540,512 20,359 1,480 6,661,528 14,223,879 7. Connecticut CT L 6,430,266 156,895 89 8,547,319 15,134,570 8. Delaware DE L 3,212,582 52,781 1,207,212 4,472,574 9. District of Columbia DC L 909,152 2,889,661 3,798,812 10. Florida FL L 21,146,584 1,353,560 11,369 44,003,789 66,515,303 11. Georgia GA L 9,381,193 155,243 3,035 13,438,841 22,978,312 12. Hawaii HI L 1,455,152 503 4,538,096 5,993,751 13. Idaho ID L 927,653 610 4,167,798 5,096,060 14. Illinois IL L 16,138,784 187,428 12,545 28,325,041 44,663,798 15. Indiana IN L 5,077,308 97,569 5,421 8,754,838 13,935,136 16. Iowa IA L 3,108,257 144,326 13,252 8,368,559 11,634,394 17. Kansas KS L 3,944,942 118,766 842 6,563,733 10,628,283 18. Kentucky KY L 3,017,222 68,964 4,039 5,464,873 8,555,098 19. Louisiana LA L 9,414,922 88,314 3,447 11,989,538 21,496,221 20. Maine ME L 499,508 118,485 349 3,423,553 4,041,895 21. Maryland MD L 7,017,457 22,473 265 21,453,104 28,493,299 22. Massachusetts MA L 6,947,524 444,978 230 13,012,659 20,405,390 23. Michigan MI L 8,206,227 464,468 9,529 15,727,635 24,407,859 24. Minnesota MN L 11,292,760 310,525 20,993 14,071,613 25,695,891 25. Mississippi MS L 2,447,780 114,993 1,331 3,185,706 5,749,810 26. Missouri MO L 10,204,482 186,907 4,061 18,856,049 29,251,498 27. Montana MT L 426,796 76,446 972 1,266,665 1,770,878 28. Nebraska NE L 2,270,810 20,406 3,328 5,876,068 8,170,612 29. Nevada NV L 2,890,983 2,310 5,716,106 8,609,398 30. New Hampshire NH L 1,166,858 43,360 2,443,246 3,653,465 31. New Jersey NJ L 7,528,457 120,485 77 14,892,029 22,541,049 32. New Mexico NM L 1,906,183 981 6,662,560 8,569,723 33. New York NY N 2,523,359 179 289,675 2,813,213 34. North Carolina NC L 17,601,188 1,436,587 13,031 15,507,146 34,557,952 35. North Dakota ND L 1,360,475 1,474 682,871 2,044,821 36. Ohio OH L 10,667,907 438,436 5,155 18,888,399 29,999,897 37. Oklahoma OK L 4,608,904 227,533 2,820 6,313,422 11,152,678 38. Oregon OR L 2,867,077 161,298 1,814 9,958,411 12,988,600 39. Pennsylvania PA L 13,658,495 704,604 553 23,847,698 38,211,350 40. Rhode Island RI L 2,739,573 887 1,229,954 3,970,414 41. South Carolina SC L 3,533,701 26,871 782 9,648,746 13,210,100 42. South Dakota SD L 3,113,514 30,689 2,011 791,265 3,937,479 43. Tennessee TN L 4,984,461 575,539 3,422 14,010,739 19,574,161 44. Texas TX L 25,787,079 1,650,879 4,695 42,023,185 69,465,838 45. Utah UT L 1,141,487 6,738 691 3,447,189 4,596,104 46. Vermont VT L 1,152,544 2,099,090 3,251,635 47. Virginia VA L 6,943,419 572,828 1,527 20,764,899 28,282,674 48. Washington WA L 6,811,329 937,281 2,916 19,716,640 27,468,167 49. West Virginia WV L 2,024,820 31,773 1,336 2,993,318 5,051,247 50. Wisconsin WI L 7,326,461 199,605 71,184 23,657,720 31,254,970 51. Wyoming WY L 928,505 407 921,101 1,850,013 52. American Samoa AS N 0 53. Guam GU N 2,642 2,642 54. Puerto Rico PR L 59,392 1,240 60,632 55. US Virgin Islands VI L 1,711 46,000 47,711 56. Northern Mariana Islands MP N 0 57. Canada CN N 1,734 1,734 58. Aggregate Other Alien OT XXX 1,066,525 0 155 14,100 1,080,779 0 ------ ----------- ---------- ------- ----------- ------------- --- 59. Subtotal (a)52 322,780,535 13,079,989 252,182 604,564,616 940,677,322 0 90. Reporting entity contributions for employee benefit plans XXX 0 91. Dividends or refunds applied to purchase paid-up additions and annuities XXX 717 341 1,058 92. Dividends or refunds applied to shorten endowment or premium paying period XXX 0 93. Premium or annuity considerations waived under disability or other contract provisions XXX 225,299 225,299 94. Aggregate other amounts not allocable by State XXX 0 0 0 0 0 0 ------ ----------- ---------- ------- ----------- ------------- --- 95. Totals (Direct Business) XXX 323,006,552 13,080,329 252,182 604,564,616 940,903,679 0 96. Plus Reinsurance Assumed XXX 33,689,439 17,255,478 38,281,138 89,226,055 ------ ----------- ---------- ------- ----------- ------------- --- 97. Totals (All Business) XXX 356,695,990 30,335,808 252,182 642,845,754 1,030,129,733 0 98. Less Reinsurance Ceded XXX 158,252,852 20,922,867 179,175,719 ------ ----------- ---------- ------- ----------- ------------- --- 99. Totals (All Business) less Reinsurance Ceded XXX 198,443,138 30,335,808 252,182 621,922,887 850,954,015 0 ====== =========== ========== ======= =========== ============= === DETAILS OF WRITE-INS 5801. Other Foreign XXX 1,066,525 155 14,100 1,080,779 5802. XXX 0 5803. XXX 0 5898. Summary of remaining write-ins for line 58 from overflow page XXX 0 0 0 0 0 0 5899. Total (Lines 5801 thru 5803 plus 5898) (Line 58 above) XXX 1,066,525 0 155 14,100 1,080,779 0 ------ ----------- ---------- ------- ----------- ------------- --- 9401. XXX 0 9402. XXX 0 9403. XXX 0 9498. Summary of remaining write-ins for line 94 from overflow page XXX 0 0 0 0 0 0 9499. Total (Lines 9401 thru 9403 plus 9498) (Line 94 above) XXX 0 0 0 0 0 0 ------ ----------- ---------- ------- ----------- ------------- ---
(a) Insert the number of L responses except for Canada and Other Alien. Q11 SCHEDULE Y - INFORMATION CONCERNING ACTIVITIES OF INSURER MEMBERS OF A HOLDING COMPANY GROUP PART 1 - ORGANIZATIONAL CHART NONE Q12 Statement as of March 31, 2009 of the HARTFORD LIFE AND ANNUITY INSURANCE COMPANY SUPPLEMENTAL EXHIBITS AND SCHEDULES INTERROGATORIES The following supplemental reports are required to be filed as part of your statement filing. However, in the event that your company does not transact the type of business for which the special report must be filed, your response of NO to the specific interrogatory will be accepted in lieu of filing a "NONE" report and a bar code will be printed below. If the supplement is required of your company but is not being filed for whatever reason, enter SEE EXPLANATION and provide an explanation following the interrogatory questions. RESPONSE 1. Will the Trusteed Surplus Statement be filed with the state of domicile and the NAIC with this statement? NO 2. Will the Medicare Part D Coverage Supplement be filed with the state of domicile and the NAIC with this statement? NO 3. Will the Reasonableness of Assumptions Certification required by Actuarial Guideline XXXV be filed with the state of domicile and electronically with the NAIC? NO 4. Will the Reasonableness and Consistency of Assumptions Certification required by Actuarial Guideline XXXV be filed with the state of domicile and electronically with the NAIC? NO 5. Will the Reasonableness of Assumptions Certification for Implied Guaranteed Rate Method required by Actuarial Guideline XXXVI be filed with the state of domicile and electronically with the NAIC? NO 6. Will the Reasonableness and Consistency of Assumptions Certification required by Actuarial Guideline XXXVI (Updated Average Market Value) be filed with the state of domicile and electronically with the NAIC? NO 7. Will the Reasonableness and Consistency of Assumptions Certification required by Actuarial Guideline XXXVI (Updated Market Value) be filed with the state of domicile and electronically with the NAIC? NO EXPLANATIONS: 1. 2. 3. 4. 5. 6. 7. BAR CODE: [BAR CODE] *71153200949000001* [BAR CODE] *71153200936500001* [BAR CODE] *71153200944500001* [BAR CODE] *71153200944600001* [BAR CODE] *71153200944700001* [BAR CODE] *71153200944800001* [BAR CODE] *71153200944900001* Q13 OVERFLOW PAGE FOR WRITE-INS ADDITIONAL WRITE-INS FOR ASSETS:
CURRENT STATEMENT DATE ---------------------------------------- 3 4 2 NET ADMITTED DECEMBER 31, 1 NONADMITTED ASSETS PRIOR YEAR NET ASSETS ASSETS (COLS. 1 - 2) ADMITTED ASSETS ---------------------------------------------------------- 2304. Interest Maintenance Reserve 24,862,709 24,862,709 0 2397. Summary of remaining write-ins for Line 23 24,862,709 24,862,709 0 0
ADDITIONAL WRITE-INS FOR LIABILITIES:
1 2 CURRENT DECEMBER 31 STATEMENT DATE PRIOR YEAR -------------- ----------- 2504. Interest On Policy Or Contract Funds Due Or Accrued 341,173 317,613 2505. Miscellaneous Liabilities 41,646,426 34,326,052 2597. Summary of remaining write-ins for Line 25 41,987,599 34,643,665
Q14 SCHEDULE A - VERIFICATION Real Estate
2 1 PRIOR YEAR ENDED YEAR TO DATE DECEMBER 31 ------------ ---------------- 1. Book/adjusted carrying value, December 31 of prior year 27,284,717 27,569,379 2. Cost of acquired: 2.1 Actual cost at time of acquisition 2.2 Additional investment made after acquisition 3. Current year change in encumbrances 1,242,375 675,624 4. Total gain (loss) on disposals 5. Deduct amounts received on disposals 6. Total foreign exchange change in book/adjusted carrying value 7. Deduct current year's other than temporary impairment recognized 8. Deduct current year's depreciation 287,213 960,286 ---------- ---------- 9. Book/adjusted carrying value at end of current period (Lines 1+2+3+4-5+6-7-8) 28,239,879 27,284,717 10. Deduct total nonadmitted amounts ---------- ---------- 11. Statement value at end of current period (Line 9 minus Line 10) 28,239,879 27,284,717
SCHEDULE B - VERIFICATION Mortgage Loans
2 1 PRIOR YEAR ENDED YEAR TO DATE DECEMBER 31 ------------ ---------------- 1. Book value/recorded investment excluding accrued interest, December 31 of prior year 611,371,431 350,528,540 2. Cost of acquired: 2.1 Actual cost at time of acquisition 274,862,000 2.2 Additional investment made after acquisition 69,905 3,844,286 3. Capitalized deferred interest and other 4. Accrual of discount 24,498 94,401 5. Unrealized valuation increase (decrease) 6. Total gain (loss) on disposals (732,521) 7. Deduct amounts received on disposals 3,423,779 17,014,335 8. Deduct amortization of premium and mortgage interest points and commitment fees 7,945 210,940 9. Total foreign exchange change in book value/recorded investment excluding accrued interest 10. Deduct current year's other than temporary impairment recognized ----------- ----------- 11. Book value/recorded investment excluding accrued interest at end of current period (Lines 1+2+3+4+5+6-7-8+9-10) 608,034,111 611,371,431 ----------- ----------- 12. Total valuation allowance ----------- ----------- 13. Subtotal (Line 11 plus Line 12) 608,034,111 611,371,431 ----------- ----------- 14. Deduct total nonadmitted amounts ----------- ----------- 15. Statement value at end of current period (Line 13 minus Line 14) 608,034,111 611,371,431
SCHEDULE BA - VERIFICATION Other Long-Term Invested Assets
2 1 PRIOR YEAR ENDED YEAR TO DATE DECEMBER 31 ------------ ---------------- 1. Book/adjusted carrying value, December 31 of prior year 10,488,653 9,672,081 2. Cost of acquired: 2.1 Actual cost at time of acquisition 331,740 2.2 Additional investment made after acquisition 438,130 1,764,788 3. Capitalized deferred interest and other 4. Accrual of discount 5. Unrealized valuation increase (decrease) (368,890) (1,159,686) 6. Total gain (loss) on disposals 7. Deduct amounts received on disposals 116,431 8. Deduct amortization of premium and depreciation 7,860 3,839 9. Total foreign exchange change in book/adjusted carrying value 10. Deduct current year's other than temporary impairment recognized ---------- ---------- 11. Book/adjusted carrying value at end of current period (Lines 1+2+3+4+5+6-7-8+9-10) 10,550,032 10,488,653 12. Deduct total nonadmitted amounts ---------- ---------- 13. Statement value at end of current period (Line 11 minus Line 12) 10,550,032 10,488,653
SCHEDULE D - VERIFICATION Bonds and Stocks
2 1 PRIOR YEAR ENDED YEAR TO DATE DECEMBER 31 ------------- ---------------- 1. Book/adjusted carrying value of bonds and stocks, December 31 of prior year 8,638,565,584 5,922,188,539 2. Cost of bonds and stocks acquired 5,541,857,383 3,726,650,976 3. Accrual of discount 1,563,195 6,643,753 4. Unrealized valuation increase (decrease) (21,408,866) (5,318,621) 5. Total gain (loss) on disposals 16,439,364 (22,480,831) 6. Deduct consideration for bonds and stocks disposed of 5,321,093,242 818,493,426 7. Deduct amortization of premium 14,754,022 53,000,251 8. Total foreign exchange change in book/adjusted carrying value (37,604,288) (4,294,729) 9. Deduct current year's other than temporary impairment recognized 18,053,155 113,329,825 ------------- ------------- 10. Book/adjusted carrying value at end of current period (Lines 1+2+3+4+5-6-7+8-9) 8,785,511,952 8,638,565,584 11. Deduct total nonadmitted amounts ------------- ------------- 12. Statement value at end of current period (Line 10 minus Line 11) 8,785,511,952 8,638,565,584
QSI01 SCHEDULE D - PART 1B Showing the Acquisitions, Dispositions and Non-Trading Activity During the Current Quarter for all Bonds and Preferred Stock by Rating Class
7 BOOK/ 4 5 6 ADJUSTED 8 1 2 3 NON-TRADING BOOK/ADJUSTED BOOK/ADJUSTED CARRYING BOOK/ADJUSTED BOOK/ADJUSTED ACQUISITIONS DISPOSITIONS ACTIVITY CARRYING CARRYING VALUE END CARRYING VALUE CARRYING VALUE DURING DURING DURING VALUE END VALUE END OF DECEMBER 31 BEGINNING OF CURRENT CURRENT CURRENT OF OF SECOND THIRD PRIOR CURRENT QUARTER QUARTER QUARTER QUARTER FIRST QUARTER QUARTER QUARTER YEAR --------------- -------------- -------------- ------------- -------------- ------------- --------- -------------- BONDS 1. Class 1 (a) 8,749,832,390 11,590,111,997 10,905,619,074 11,225,170 9,445,550,483 8,749,832,390 2. Class 2 (a) 1,625,330,953 227,494,396 11,406,412 (23,041,599) 1,818,377,338 1,625,330,953 3. Class 3 (a) 134,681,924 40,020,596 75,617,978 170,279,306 134,681,924 4. Class 4 (a) 63,173 408,775 33,670,487 33,324,885 63,173 5. Class 5 (a) 27,026,883 6,937 51,236 (8,448,765) 18,533,819 27,026,883 6. Class 6 (a) 1,457,742 309,222 1,766,964 1,457,742 -------------- -------------- -------------- ---------- -------------- --- --- -------------- 7. Total Bonds 10,538,393,066 11,817,613,330 10,957,506,093 89,332,493 11,487,832,795 0 0 10,538,393,066 ============== ============== ============== ========== ============== === === ============== PREFERRED STOCK 8. Class 1 149,493,229 (89,563,677) 59,929,552 149,493,229 9. Class 2 82,334,324 (73,753,218) 8,581,106 82,334,324 10. Class 3 23,181,702 (23,181,702) 23,181,702 11. Class 4 4,655,000 4,655,000 12. Class 5 352,714 10,584 363,298 352,714 13. Class 6 -------------- -------------- -------------- ---------- -------------- --- --- -------------- 14. Total Preferred Stock 255,361,969 10,584 0 (181,843,597) 73,528,956 0 0 255,361,969 -------------- -------------- -------------- ---------- -------------- --- --- -------------- 15. Total Bonds and Preferred Stock 10,793,755,035 11,817,623,914 10,957,506,093 (92,511,104)11,561,361,751 0 0 10,793,755,035 ============== ============== ============== ========== ============== === === ==============
(a) Book/Adjusted Carrying Value column for the end of the current reporting period includes the following amount of non-rated short-term and cash equivalent bonds by NAIC designation: NAIC 1 $10,718,546; NAIC 2 $0; NAIC 3 $0; NAIC 4 $0; NAIC 5 $0; NAIC 6 $0. QSI02 SCHEDULE DA - PART 1 Short-Term Investments
1 3 4 5 BOOK/ADJUSTED 2 ACTUAL INTEREST COLLECTED PAID FOR ACCRUED INTEREST CARRYING VALUE PAR VALUE COST YEAR TO DATE YEAR TO DATE -------------- --------- ------------- ------------------ ------------------------- 9199999. Totals 2,787,210,524 XXX 2,787,173,955 4,587,757
SCHEDULE DA - VERIFICATION Short-Term Investments
2 1 PRIOR YEAR ENDED YEAR TO DATE DECEMBER 31 ------------- ---------------- 1. Book/adjusted carrying value, December 31 of prior year 2,166,709,611 476,504,914 2. Cost of short-term investments acquired 6,275,785,714 9,367,885,094 3. Accrual of discount 239,159 1,335,722 4. Unrealized valuation increase (decrease) 5. Total gain (loss) on disposals 3,446,481 (0) 6. Deduct consideration received on disposals 5,656,300,695 7,681,603,848 7. Deduct amortization of premium 42,688 39,330 8. Total foreign exchange change in book/adjusted carrying value (2,627,059) 2,627,059 9. Deduct current year's other than temporary impairment recognized ------------- ------------- 10. Book/adjusted carrying value at end of current period (Lines 1+2+3+4+5-6-7+8-9) 2,787,210,524 2,166,709,611 11. Deduct total nonadmitted amounts ------------- ------------- 12. Statement value at end of current period (Line 10 minus Line 11) 2,787,210,524 2,166,709,611
QSI03 SCH. DB-PART F-SECTION 1 NONE SCH. DB-PART F-SECTION 2 NONE QSI04, QSI05 SCHEDULE E- VERIFICATION Cash Equivalents
2 1 PRIOR YEAR ENDED YEAR TO DATE DECEMBER 31 ------------ ---------------- 1. Book/adjusted carrying value, December 31 of prior year 11,673,000 17,419,000 2. Cost of cash equivalents acquired 3. Accrual of discount 4. Unrealized valuation increase (decrease) 5. Total gain (loss) on disposals 6. Deduct consideration received on disposals 9,898,000 5,746,000 7. Deduct amortization of premium 8. Total foreign exchange change in book/ adjusted carrying value 9. Deduct current year's other than temporary impairment recognized --------- ---------- 10. Book/adjusted carrying value at end of current period (Lines 1+2+3+4+5-6-7+8-9) 1,775,000 11,673,000 11. Deduct total nonadmitted amounts --------- ---------- 12. Statement value at end of current period (Line 10 minus Line 11) 1,775,000 11,673,000
QSI06 SCHEDULE A - PART 2 Showing All Real Estate ACQUIRED and Additions Made During the Current Quarter
LOCATION ----------- 9 6 8 ADDITIONAL 4 ACTUAL COST 7 BOOK/ADJUSTED CARRYING INVESTMENT 1 1 3 DATE 5 AT TIME OF AMOUNT OF VALUE LESS MADE AFTER DESCRIPTION OF PROPERTY CITY STATE ACQUIRED NAME OF VENDOR ACQUISITION ENCUMBRANCES ENCUMBRANCES ACQUISITION ------------------------------------------------------------------------------------------------------------------------------
NONE SCHEDULE A - PART 3 Showing All Real Estate Disposed During the Quarter, Including Payments During the Final Year On "Sales Under Contract"
7 EXPENDED FOR ADDITIONS, 8 PERMANENT BOOK/ADJUSTED LOCATION IMPROVEMENTS CARRYING VALUE ----------- 4 AND CHANGES LESS 1 2 3 DISPOSAL 5 6 IN ENCUMBRANCES DESCRIPTION OF PROPERTY CITY STATE DATE NAME OF PURCHASER ACTUAL COST ENCUMBRANCES PRIOR YEAR ------------------------------------------------------------------------------------------------------------ CHANGE IN BOOK/ADJUSTED CARRYING VALUE LESS ENCUMBRANCES ---------------------------------------------------------------- 10 CURRENT 13 14 YEAR'S 11 12 TOTAL BOOK/ADJUSTED 9 OTHER THAN CURRENT TOTAL FOREIGN CARRYING CURRENT TEMPORARY YEAR'S CHANGE IN EXCHANGE VALUE LESS 1 YEAR'S IMPAIRMENT CHANGE IN B./A.C.V. CHANGE IN ENCUMBRANCES DESCRIPTION OF PROPERTY DEPRECIATION RECOGNIZED ENCUMBRANCES (11 - 9 - 10) B./A.C.V. ON DISPOSAL -------------------------------------------------------------------------------------------------------- 19 20 16 GROSS INCOME TAXES, 15 FOREIGN 17 18 EARNED REPAIRS, AMOUNTS EXCHANGE REALIZED TOTAL LESS INTEREST AND 1 RECEIVED GAIN (LOSS) GAIN (LOSS) GAIN (LOSS) INCURRED ON EXPENSES DESCRIPTION OF PROPERTY DURING YEAR ON DISPOSAL ON DISPOSAL ON DISPOSAL ENCUMBRANCES INCURRED ----------------------------------------------------------------------------------------------------
NONE QE01 SCHEDULE B - PART 2 Showing all Mortgage Loans ACQUIRED During the Current Quarter
LOCATION ---------------------------------------- 7 8 ACTUAL ADDITIONAL 9 4 5 6 COST INVESTMENT VALUE OF 1 2 3 LOAN DATE RATE OF AT TIME OF MADE AFTER LAND AND LOAN NUMBER CITY STATE TYPE ACQUIRED INTEREST ACQUISITION ACQUISITION BUILDINGS --------------------------------------------------------------------------------------------------------------- MORTGAGES IN GOOD STANDING COMMERCIAL MORTGAGES - ALL OTHER BHM033XZ5 OXNARD CA 03/13/2009 5.890 69,904 104,857 0599999. Total - Mortgages in Good Standing - Commercial Mortgages - All Other XXX XXX 0 69,904 104,857 0899999. Total - Mortgages in Good Standing XXX XXX 0 69,904 104,857 3399999. Total Mortgages XXX XXX 0 69,904 104,857
SCHEDULE B - PART 3 Showing all Mortgage Loans DISPOSED, Transferred or Repaid During the Current Quarter
LOCATION ------------------ 7 BOOK VALUE/ RECORDED INVESTMENT EXCLUDING 4 5 6 ACCRUED 1 2 3 LOAN DATE DISPOSAL INTEREST LOAN NUMBER CITY STATE TYPE ACQUIRED DATE PRIOR YEAR -------------------------------------------------------------------- MORTGAGES CLOSED BY REPAYMENT BHM04X7M6 SILICON VALLEY CA 10/01/2008 01/01/2009 10,664 0199999. Total - Mortgages Closed by Repayment 10,664 MORTGAGES WITH PARTIAL REPAYMENTS B0A0AAVL4 VARIOUS US 04/01/2001 03/01/2009 1,020,585 BHM01G8F0 CARY NC 12/22/2005 03/01/2009 24,547 BHM01JS13 FRESNO CA 04/17/2006 01/01/2009 17,260 BHM01LDV8 BALTIMORE MD 04/28/2006 03/01/2009 78,155 BHM01WKR5 PITTSBURGH PA 09/22/2006 03/01/2009 37,727 BHM01Y6L0 CUMMING GA 10/05/2006 03/01/2009 10,584 BHM029188 SCOTTS BLUFF NE 03/02/2007 01/01/2009 8,499 BHM02RH99 TULARE CA 08/30/2007 03/01/2009 31,611 BHM02VHG4 HUMBOLDT IA 09/28/2007 01/01/2009 8,021 BHM02X6H0 WRIGHT IA 11/01/2007 01/01/2009 100,000 BHM031119 FRESNO CA 12/21/2007 01/01/2009 90,000 BHM032091 NEW YORK NY 01/30/2008 01/01/2009 17,338 BHM0320Y6 WEBSTER IA 01/15/2008 01/01/2009 26,000 BHM037E20 BUENA VISTA IA 02/29/2008 01/01/2009 53,000 BHM037E38 WRIGHT IA 02/20/2008 01/01/2009 28,250 BHM038DB9 VARIOUS IA 03/04/2008 01/01/2009 76,500 BHM038DD5 FAYETTE IA 03/28/2008 01/01/2009 81,000 BHM039NF7 GRAY KS 05/05/2008 03/01/2009 178,199 BHM03BMW6 TULARE CA 06/30/2008 01/01/2009 1,020,000 BHM03L0T5 STANISLAUS CA 07/25/2008 03/01/2009 32,282 BHM03S0C7 DALLAS TX 07/25/2008 03/01/2009 30,167 BHM03TLB4 VARIOUS MU 07/01/2008 03/01/2009 142,475 BHM03Z7Q3 ROCKVILLE MD 10/29/2008 03/01/2009 16,826 BHM04QLL7 CHAVES NM 10/17/2008 03/01/2009 50,616 BHM04X7M6 SILICON VALLEY CA 10/01/2008 03/01/2009 85,813 0299999. ---------- Total - Mortgages With Partial Repayments 3,265,4550 ---------- MORTGAGES DISPOSED BHM02CK31 VARIOUS US 04/03/2007 02/04/2009 50,924 BHM02CK49 VARIOUS US 04/03/2007 02/04/2009 73,907 CHANGE IN BOOK VALUE/RECORDED INVESTMENT ------------------------------------------------------------------------ 10 CURRENT 13 8 9 YEAR'S 11 12 TOTAL UNREALIZED CURRENT OTHER THAN CAPITALIZED TOTAL FOREIGN VALUATION YEAR'S TEMPORARY DEFERRED CHANGE IN EXCHANGE 1 INCREASE (AMORTIZATION)/ IMPAIRMENT INTEREST BOOK VALUE CHANGE IN LOAN NUMBER (DECREASE) ACCRETION RECOGNIZED AND OTHER (8+9-10+11) BOOK VALUE ------------------------------------------------------------------------------------ MORTGAGES CLOSED BY REPAYMENT BHM04X7M6 0 0199999. Total - Mortgages Closed by Repayment 0 0 0 0 0 0 MORTGAGES WITH PARTIAL REPAYMENTS B0A0AAVL4 (1,251) (1,251) BHM01G8F0 0 BHM01JS13 0 BHM01LDV8 0 BHM01WKR5 0 BHM01Y6L0 0 BHM029188 0 BHM02RH99 0 BHM02VHG4 0 BHM02X6H0 0 BHM031119 0 BHM032091 0 BHM0320Y6 0 BHM037E20 0 BHM037E38 0 BHM038DB9 0 BHM038DD5 0 BHM039NF7 0 BHM03BMW6 0 BHM03L0T5 0 BHM03S0C7 0 BHM03TLB4 0 BHM03Z7Q3 0 BHM04QLL7 0 BHM04X7M6 0 --- ------ --- --- ------ --- 0299999. Total - Mortgages With Partial Repayments 0 (1,251) 0 0 (1,251) 0 === ====== === === ====== === MORTGAGES DISPOSED BHM02CK31 0 BHM02CK49 0 14 BOOK VALUE/ RECORDED 16 INVESTMENT FOREIGN 17 18 EXCLUDING EXCHANGE REALIZED TOTAL 1 ACCRUED INTEREST 15 GAIN (LOSS) GAIN (LOSS) GAIN (LOSS) LOAN NUMBER ON DISPOSAL CONSIDERATION ON DISPOSAL ON DISPOSAL ON DISPOSAL ------------------------------------------------------------------------------ MORTGAGES CLOSED BY REPAYMENT BHM04X7M6 10,664 10,664 0 ------ ------ --- --- --- 0199999. Total - Mortgages Closed by Repayment 10,664 10,664 0 0 0 ====== ====== === === === MORTGAGES WITH PARTIAL REPAYMENTS B0A0AAVL4 1,019,334 1,019,334 0 BHM01G8F0 24,547 24,547 0 BHM01JS13 17,260 17,260 0 BHM01LDV8 78,155 78,155 0 BHM01WKR5 37,727 37,727 0 BHM01Y6L0 10,584 10,584 0 BHM029188 8,499 8,499 0 BHM02RH99 31,611 31,611 0 BHM02VHG4 8,021 8,021 0 BHM02X6H0 100,000 100,000 0 BHM031119 90,000 90,000 0 BHM032091 17,338 17,338 0 BHM0320Y6 26,000 26,000 0 BHM037E20 53,000 53,000 0 BHM037E38 28,250 28,250 0 BHM038DB9 76,500 76,500 0 BHM038DD5 81,000 81,000 0 BHM039NF7 178,199 178,199 0 BHM03BMW6 1,020,000 1,020,000 0 BHM03L0T5 32,282 32,282 0 BHM03S0C7 30,167 30,167 0 BHM03TLB4 142,475 142,475 0 BHM03Z7Q3 16,826 16,826 0 BHM04QLL7 50,616 50,616 0 BHM04X7M6 85,813 85,813 0 --------- --------- --- --- --- 0299999. Total - Mortgages With Partial Repayments 3,264,204 3,264,204 0 0 0 ========= ========= === === === MORTGAGES DISPOSED BHM02CK31 50,924 50,924 0 BHM02CK49 73,907 73,907 0
SCHEDULE B - PART 3 Showing all Mortgage Loans DISPOSED, Transferred or Repaid During the Current Quarter
LOCATION ------------------ 7 BOOK VALUE/ RECORDED INVESTMENT EXCLUDING 4 5 6 ACCRUED 1 2 3 LOAN DATE DISPOSAL INTEREST LOAN NUMBER CITY STATE TYPE ACQUIRED DATE PRIOR YEAR -------------------------------------------------------------------- BHM02CK56 VARIOUS US 04/03/2007 02/04/2009 24,079 0399999. Total - Mortgages Disposed 148,910 --------- 0599999. Total Mortgages 3,425,030 ========= CHANGE IN BOOK VALUE/RECORDED INVESTMENT ------------------------------------------------------------------------ 10 CURRENT 13 8 9 YEAR'S 11 12 TOTAL UNREALIZED CURRENT OTHER THAN CAPITALIZED TOTAL FOREIGN VALUATION YEAR'S TEMPORARY DEFERRED CHANGE IN EXCHANGE 1 INCREASE (AMORTIZATION)/ IMPAIRMENT INTEREST BOOK VALUE CHANGE IN LOAN NUMBER (DECREASE) ACCRETION RECOGNIZED AND OTHER (8+9-10+11) BOOK VALUE ------------------------------------------------------------------------------------ BHM02CK56 0 0399999. Total - Mortgages Disposed 0 0 0 0 0 0 --- ------ --- --- ------ --- 0599999. Total Mortgages 0 (1,251) 0 0 (1,251) 0 === ====== === === ====== === 14 BOOK VALUE/ RECORDED 16 INVESTMENT FOREIGN 17 18 EXCLUDING EXCHANGE REALIZED TOTAL 1 ACCRUED INTEREST 15 GAIN (LOSS) GAIN (LOSS) GAIN (LOSS) LOAN NUMBER ON DISPOSAL CONSIDERATION ON DISPOSAL ON DISPOSAL ON DISPOSAL ------------------------------------------------------------------------------ BHM02CK56 24,079 24,079 0 0399999. Total - Mortgages Disposed 148,910 148,910 0 0 0 --------- --------- --- --- --- 0599999. Total Mortgages 3,423,779 3,423,779 0 0 0 ========= ========= === === ===
QE02.1 SCHEDULE BA - PART 2 Showing Other Long-Term Invested Assets ACQUIRED During the Current Quarter
5 NAME OF LOCATION VENDOR 6 7 8 1 2 --------------- OR NAIC DATE TYPE CUSIP NAME OR 3 4 GENERAL DESIG- ORIGINALLY AND IDENTIFICATION DESCRIPTION CITY STATE PARTNER NATION ACQUIRED STRATEGY -------------- -------------- --------- ----- ------- ------ ---------- -------- JOINT VENTURE OR PARTNERSHIP INTERESTS THAT HAVE UNDERLYING CHARACTERISTICS OF COMMON STOCKS - UNAFFILIATED BHM033 G9 2 BABCOCK & SYDNEY US DIRECT BROWN WITH INFRASTRUCTURE ISSUER 01/06/2009 BHM03J 4Q 2 BROOKSIDE GREENWICH CT DIRECT MEZZANINE WITH FUND II ISSUER 03/20/2009 BHM03J 4H 2 BROOKSIDE GREENWICH CT DIRECT MEZZANINE WITH PARTNERS II ISSUER 03/20/2009 BHM035 DC 3 KRG CAPITAL DENVER CO DIRECT FUND IV LP WITH ISSUER 02/16/2009 1599999. Total - Joint Venture or Partnership Interests That Have Underlying Characteristics of Common Stocks - Unaffiliated 3999999. Subtotal - Unaffiliated 4199999. Totals 9 10 12 ACTUAL ADDITIONAL COMMITMENT 13 1 COST AT INVESTMENT 11 FOR PERCENTAGE CUSIP TIME OF MADE AFTER AMOUNT OF ADDITIONAL OF IDENTIFICATION ACQUISITION ACQUISITION ENCUMBRANCES INVESTMENT OWNERSHIP -------------- ----------- ----------- ------------ ---------- ---------- JOINT VENTURE OR PARTNERSHIP INTERESTS THAT HAVE UNDERLYING CHARACTERISTICS OF COMMON STOCKS - UNAFFILIATED BHM033 G9 2 35,269 850,711 BHM03J 4Q 2 169,472 1,542,152 BHM03J 4H 2 307 3,081 BHM035 DC 3 233,082 5,305,029 1599999. Total - Joint Venture or Partnership Interests That Have Underlying Characteristics of Common Stocks - Unaffiliated 0 438,130 0 7,700,974 XXX --- ------- --- --------- 3999999. Subtotal - Unaffiliated 0 438,130 0 7,700,974 XXX --- ------- --- --------- 4199999. Totals 0 438,130 0 7,700,974 XXX === ======= === =========
SCHEDULE BA - PART 3 Showing Other Long-Term Invested Assets DISPOSED, Transferred or Repaid During the Current Quarter
8 BOOK/ADJUSTED LOCATION 6 CARRYING VALUE 1 2 ---------- 5 DATE 7 LESS CUSIP NAME OR 3 4 NAME OF PURCHASER OR ORIGINALLY DISPOSAL ENCUMBRANCES, IDENTIFICATION DESCRIPTION CITY STATE NATURE OF DISPOSAL ACQUIRED DATE PRIOR YEAR -------------- ----------- ---- ----- -------------------- ---------- -------- -------------- CHANGES IN BOOK/ADJUSTED CARRYING VALUE ---------------------------------------------------------------------------- 10 11 14 9 CURRENT YEAR'S CURRENT YEAR'S 12 13 TOTAL UNREALIZED (DEPRECIATION) OTHER THAN CAPITALIZED TOTAL FOREIGN 1 VALUATION OR TEMPORARY DEFERRED CHANGE IN EXCHANGE CUSIP INCREASE (AMORTIZATION)/ IMPAIRMENT INTEREST B./A.C.V CHANGE IN IDENTIFICATION (DECREASE) ACCRETION RECOGNIZED AND OTHER (9+10-11+12) B./A.C.V. -------------- ---------- --------------- -------------- ----------- ------------ --------- 15 BOOK/ADJUSTED 17 CARRYING VALUE FOREIGN 18 19 20 1 LESS EXCHANGE REALIZED TOTAL CUSIP ENCUMBRANCES 16 GAIN (LOSS) GAIN (LOSS) GAIN (LOSS) INVESTMENT IDENTIFICATION ON DISPOSAL CONSIDERATION ON DISPOSAL ON DISPOSAL ON DISPOSAL INCOME -------------- -------------- ------------- ----------- ----------- ----------- ----------
NONE QE03 SCHEDULE D - PART 3 Show all Long-Term Bonds and Stock Acquired During the Current Quarter
10 9 NAIC PAID FOR DESIGNATION 5 6 ACCRUED OR 1 3 4 NUMBER OF 7 INTEREST MARKET CUSIP 2 DATE NAME OF SHARES OF ACTUAL 8 AND INDICATOR IDENTIFICATION DESCRIPTION FOREIGN ACQUIRED VENDOR STOCK COST PAR VALUE DIVIDENDS (A) --------------- ------------------ ------- ---------- ----------------- --------- ------------- ------------- ---------- ----------- BONDS - U.S. GOVERNMENT 36200W CB 5 GNMA 30YR 03/30/2009 HARTFORD LIFE 01/01/2032 INSURANCE COMPANY 368,213 333,972 1,749 1 36200X JF 7 GNMA 30YR 03/30/2009 HARTFORD LIFE 12/01/2031 INSURANCE COMPANY 334,820 298,812 1,565 1 36200X KN 8 GNMA 30YR 03/30/2009 HARTFORD LIFE 01/01/2032 INSURANCE COMPANY 277,872 266,436 1,395 1 36201C 6E 9 GNMA 30YR 03/30/2009 HARTFORD LIFE 03/01/2032 INSURANCE COMPANY 118,687 108,190 567 1 36201H WX 7 GNMA 30YR 03/30/2009 HARTFORD LIFE 06/01/2032 INSURANCE COMPANY 527,914 511,424 2,678 1 36201M LH 3 GNMA 30YR 03/30/2009 HARTFORD LIFE 08/01/2032 INSURANCE COMPANY 359,371 332,150 1,739 1 36213D 3C 0 GNMA 30YR 03/30/2009 HARTFORD LIFE 02/01/2032 INSURANCE COMPANY 177,462 171,496 898 1 36213E AB 2 GNMA 30YR 03/30/2009 HARTFORD LIFE 05/01/2032 INSURANCE COMPANY 168,826 158,522 830 1 36213E SK 3 GNMA 30YR 03/30/2009 HARTFORD LIFE 01/01/2032 INSURANCE COMPANY 355,050 341,878 1,790 1 36213E YS 9 GNMA 30YR 03/30/2009 HARTFORD LIFE 04/01/2032 INSURANCE COMPANY 309,291 283,425 1,484 1 36213J V2 8 GNMA 30YR 03/30/2009 HARTFORD LIFE 04/01/2032 INSURANCE COMPANY 488,024 458,492 2,401 1 36213X SB 1 GNMA 30YR 03/30/2009 HARTFORD LIFE 04/01/2032 INSURANCE COMPANY 280,562 262,121 1,373 1 36202E AL 3 GNMA2 30YR 03/30/2009 HIMCO 09/01/2034 OPERATIONAL TRANSACTION 1,211,893 1,213,104 5,863 1 912810 QA 9 TREASURY 03/31/2009 Various BOND 02/15/2039 155,231,202 156,085,000 196,949 1 912828 JR 2 TREASURY 02/11/2009 Various NOTE 11/15/2018 1,227,571,875 1,125,000,000 9,540,228 1 912828 JT 8 TREASURY 03/30/2009 HARTFORD LIFE NOTE INSURANCE 11/30/2013 COMPANY 3,482,207 3,500,000 23,077 1 912828 JW 1 TREASURY 01/30/2009 Various NOTE 12/31/2013 671,402,946 680,000,000 995,511 1 912828 JY 7 TREASURY 02/19/2009 Various NOTE 01/31/2011 281,432,935 281,633,000 34,787 1 912828 JZ 4 TREASURY 03/30/2009 Various NOTE 01/31/2014 87,617,612 88,103,000 175,414 1 912828 KC 3 TREASURY 03/04/2009 Various NOTE 02/15/2012 4,731,132 4,721,000 2,150 1 912828 KD 1 TREASURY 03/20/2009 RBS GREENWICH NOTE CAPITAL MARKETS 02/15/2019 100,921,875 100,000,000 273,481 1 912828 KF 6 TREASURY 03/17/2009 Various NOTE 02/28/2014 510,552,384 512,000,000 469,565 1 912828 KJ 8 TREASURY 03/26/2009 Various NOTE 03/31/2014 255,836,754 255,205,000 1 ------------- ------------- ---------- 0399999. Total - Bonds - U.S. Government 3,303,758,905 3,210,987,022 11,735,493 XXX ============= ============= ========== BONDS - U.S. SPECIAL REVENUE AND SPECIAL ASSESSMENT 312963 2E 0 FGOLD 03/30/2009 HARTFORD 15YR LIFE 01/01/2019 INSURANCE COMPANY 505,227 506,165 2,039 1 312964 LJ 6 FGOLD 03/30/2009 HARTFORD 15YR LIFE 02/01/2019 INSURANCE COMPANY 611,875 612,879 2,469 1 312964 P3 7 FGOLD 03/30/2009 HARTFORD 15YR LIFE 02/01/2019 INSURANCE COMPANY 642,691 643,787 2,593 1 312964 TZ 2 FGOLD 03/30/2009 HARTFORD 15YR LIFE 02/01/2019 INSURANCE COMPANY 425,758 426,488 1,718 1 312965 RD 0 FGOLD 03/30/2009 HARTFORD 15YR LIFE 04/01/2019 INSURANCE COMPANY 294,252 294,960 1,188 1 312966 GP 3 FGOLD 03/30/2009 HARTFORD 15YR LIFE 04/01/2019 INSURANCE COMPANY 571,003 572,005 2,304 1 312967 T2 8 FGOLD 03/30/2009 HARTFORD 15YR LIFE 06/01/2019 INSURANCE COMPANY 473,704 474,567 1,911 1 312967 TX 0 FGOLD 03/30/2009 HARTFORD 15YR LIFE 07/01/2019 INSURANCE COMPANY 277,224 277,714 1,119 1 312967 U4 2 FGOLD 03/30/2009 HARTFORD 15YR LIFE 06/01/2019 INSURANCE COMPANY 649,675 650,677 2,621 1 312967 WF 5 FGOLD 03/30/2009 HARTFORD 15YR LIFE 06/01/2019 INSURANCE COMPANY 572,299 573,308 2,309 1 312967 YK 2 FGOLD 03/30/2009 HARTFORD 15YR LIFE 06/01/2019 INSURANCE COMPANY 142,846 143,091 576 1 312968 A9 1 FGOLD 03/30/2009 HARTFORD 15YR LIFE 06/01/2019 INSURANCE COMPANY 188,352 188,616 760 1 312968 BA 7 FGOLD 03/30/2009 HARTFORD 15YR LIFE 06/01/2019 INSURANCE COMPANY 436,285 437,041 1,760 1 312968 KE 9 FGOLD 03/30/2009 HARTFORD 15YR LIFE 07/01/2019 INSURANCE COMPANY 569,386 570,370 2,297 1 312968 NT 3 FGOLD 03/30/2009 HARTFORD 15YR LIFE 07/01/2019 INSURANCE COMPANY 451,686 452,441 1,822 1 31296M 2N 8 FGOLD 03/30/2009 HARTFORD 30YR LIFE 09/01/2033 INSURANCE COMPANY 3,508,026 3,341,201 16,149 1 3128S4 BJ 5 FHLMC 12M 03/30/2009 HIMCO LIBOR ARM OPERATIONAL 03/01/2036 TRANSACTION 3,608,460 3,597,287 15,842 1 3133TH A5 6 FHLMC_2104 03/30/2009 HARTFORD 12/01/2028 LIFE INSURANCE COMPANY 17,314,258 16,955,337 81,951 1 31408X SR 2 FN 7|1 IY 03/30/2009 HTFD LIFE CMT ARM AND ACCIDENT 01/01/2036 INS CO 9,655,507 9,572,848 42,027 1 31406N JF 2 FN 7/1 1Y 03/30/2009 HARTFORD LIBOR ARM LIFE 04/01/2035 INSURANCE COMPANY 3,224,006 3,214,538 12,528 1 31402U TY 8 FNMA 15YR 03/30/2009 HARTFORD 09/01/2018 LIFE INSURANCE COMPANY 1,898,630 1,892,391 7,622 1 31403B 3Z 4 FNMA 15YR 03/30/2009 HARTFORD 09/01/2018 LIFE INSURANCE COMPANY 866,388 863,571 3,478 1 31408E G5 5 FNMA 30YR 03/30/2009 Various 01/01/2036 2,378,641 2,430,387 10,768 1 31414K 6T 2 FNMA 30YR 03/30/2009 HIMCO 01/01/2038 OPERATIONAL TRANSACTION 1,449,319 1,432,969 7,503 1 31414K KS 8 FNMA 30YR 03/30/2009 HIMCO 01/01/2038 OPERATIONAL TRANSACTION 1,456,488 1,439,723 7,539 1 31371N JC 0 FNMA 30YR 03/30/2009 HIMCO 10/20 INT OPERATIONAL FIRST TRANSACTION 08/01/2037 6,486,716 6,693,156 29,654 1 31412W H6 6 FNMA 30YR 03/30/2009 HIMCO 10/20 INT OPERATIONAL FIRST TRANSACTION 07/01/2037 1,550,755 1,600,779 7,092 1 83162C MA 8 SBAP_02-20B 03/30/2009 HARTFORD 02/01/2022 LIFE INSURANCE COMPANY 9,347,397 9,235,279 90,511 1FE
QE04 SCHEDULE D - PART 3 Show all Long-Term Bonds and Stock Acquired During the Current Quarter
10 9 NAIC PAID FOR DESIGNATION 5 6 ACCRUED OR 1 3 4 NUMBER OF 7 INTEREST MARKET CUSIP 2 DATE NAME OF SHARES OF ACTUAL 8 AND INDICATOR IDENTIFICATION DESCRIPTION FOREIGN ACQUIRED VENDOR STOCK COST PAR VALUE DIVIDENDS (A) --------------- ------------------ ------- ---------- ----------------- --------- ------------- ------------- ---------- ----------- 83162C SH 7 SBAP_09-20B 03/30/2009 HARTFORD LIFE 02/01/2029 INSURANCE COMPANY 3,798,986 3,750,000 24,296 1FE 3199999. Total - Bonds - U.S. Special Revenue & Special Assessments 73,355,839 72,843,575 384,447 XXX BONDS - INDUSTRIAL AND MISCELLANEOUS 002824 AU 4 ABBOTT 02/26/2009 JP MORGAN LABORATORIES SECURITIES INC 04/01/2019 19,557,946 19,643,000 1FE 002824 AV 2 ABBOTT 02/26/2009 BANC OF AMERICA LABORATORIES SECURITIES LLC 4,988,550 5,000,000 1FE 04/01/2039 010392 FB 9 ALABAMA POWER 02/26/2009 JP MORGAN COMPANY 03/01/2039 SECURITIES INC 4,990,400 5,000,000 1FE 03523T AC 2 ANHEUSER-BUSCH 01/07/2009 BARCLAYS CAPITAL INBEV WORLDWID INC 01/15/2039 6,648,935 6,666,000 2FE G0646# AB 5 ASSOCIATED BRITISH F 02/06/2009 BANC OF AMERICA FOODS PLC SECURITIES LLC 03/05/2014 5,000,000 5,000,000 1Z 05947U C8 9 BACM_05-1 02/01/2009 SCHEDULED 11/01/2042 ACQUISITION 0 0 1FE 87203R AA 0 BAE SYSTEMS ASSET F 03/15/2009 SCHEDULED TRUST 09/15/2013 ACQUISITION 0 0 2FE 055451 AH 1 BHP BILLITON R 03/18/2009 CITIGROUP FINANCE (USA) LT (Salomon/Smith 04/01/2019 Barney) 19,930,816 19,995,000 1FE 05577@ AG 5 BNSF RAILWAY CO 02/12/2009 JP MORGAN 2009-A 02/26/2021 SECURITIES INC 1,858,160 1,858,160 1FE 05577@ AH 3 BNSF RAILWAY CO 02/12/2009 JP MORGAN 2009-B 02/26/2021 SECURITIES INC 1,788,372 1,788,372 1FE 05577@ AJ 9 BNSF RAILWAY CO 02/12/2009 JP MORGAN 2009-C 02/26/2021 SECURITIES INC 557,723 557,723 1FE 05577@ AK 6 BNSF RAILWAY CO 02/12/2009 JP MORGAN 2009-D 02/26/2021 SECURITIES INC 562,351 562,351 1FE 05577@ AM 2 BNSF RAILWAY CO 02/12/2009 JP MORGAN 2009-E 02/26/2021 SECURITIES INC 233,395 233,395 1FE 05565Q BH 0 BP CAPITAL MARKETS F 03/30/2009 HARTFORD LIFE PLC 03/10/2015 INSURANCE COMPANY 14,983,488 15,000,000 32,292 1FE 05565Q BJ 6 BP CAPITAL MARKETS F 03/30/2009 Various PLC 03/10/2019 24,933,174 25,000,000 39,583 1FE BHM07S GD 4 BRAMBLES USA INC F 03/30/2009 ROYAL BANK OF 05/07/2016 SCOTLAND FINANCIAL MA 5,000,000 5,000,000 2Z 07383F WD 6 BSCMS_03-PWR2 03/30/2009 HIMCO OPERATIONAL 05/01/2039 TRANSACTION 2,339,496 2,443,128 8,624 1FE 07387B DY 6 BSCMS_05-PW10 03/30/2009 HIMCO OPERATIONAL 12/01/2040 TRANSACTION 1,680,933 1,770,000 7,514 1FE BHM07F J4 9 BUNZL FINANCE PLC 03/05/2009 BANC OF AMERICA GUARAN SEN SECURITIES LLC 04/02/2016 5,000,000 5,000,000 2Z 17305E DY 8 CCCIT_07-A8 03/30/2009 HARTFORD LIFE 09/20/2019 INSURANCE COMPANY 7,412,655 7,450,000 11,692 1FE 15131# AA 4 CENEX HARVEST 03/30/2009 HARTFORD LIFE STATES COOP SR INSURANCE COMPANY 06/19/2013 4,503,858 4,333,333 82,7922 166751 AH 0 CHEVRON CORP 02/26/2009 BARCLAYS CAPITAL 03/01/2014 INC 11,977,920 12,000,000 1FE 166751 AJ 6 CHEVRON CORP 02/26/2009 BARCLAYS CAPITAL 03/03/2019 INC 19,993,800 20,000,000 1FE 17275R AD 4 CISCO SYSTEMS INC. 02/10/2009 Various 02/15/2039 9,941,650 10,000,000 1FE 17275R AE 2 CISCO SYSTEMS INC. 03/30/2009 HARTFORD LIFE 02/15/2019 INSURANCE COMPANY 9,977,612 10,000,000 59,125 1FE 186108 BU 9 CLEVELAND ELECTRIC 03/30/2009 HTFD LIFE AND ILLUMINATI ACCIDENT INS CO 11/01/2017 5,516,759 5,000,000 163,072 2FE G1910# AE 6 COBHAM PLC SENIOR R 02/20/2009 BANC OF AMERICA NOTES SERIE SECURITIES LLC 03/17/2014 5,000,000 5,000,000 2Z G1910# AF 3 COBHAM PLC SENIOR R 03/30/2009 HARTFORD LIFE NOTES SERIE INSURANCE COMPANY 03/17/2016 5,000,000 5,000,000 11,935 2Z 191216 AM 2 COCA-COLA COMPANY 03/03/2009 BANC OF AMERICA (THE) 03/15/2019 SECURITIES LLC 14,861,550 15,000,000 1FE 20047B AB 4 COMM_04-LB2A IS 03/30/2009 TRANSFER OF 03/01/2039 SECURITY AT BOOK VALUE 1,484,872 72,276 1FE 202795 HN 3 COMMONWEALTH 03/30/2009 HARTFORD LIFE EDISON 08/15/2016 INSURANCE COMPANY 5,993,430 6,000,000 44,625 2FE 20825C AR 5 CONOCOPHILLIPS 01/29/2009 BANC OF AMERICA 02/01/2019 SECURITIES LLC 4,966,300 5,000,000 1FE 210518 CF 1 CONSUMERS ENERGY 03/30/2009 HTFD LIFE AND CO 03/15/2015 ACCIDENT INS CO 5,837,572 6,000,000 12,500 2FE 22541Q EP 3 CSFB_03-C3 IS 03/30/2009 TRANSFER OF 05/01/2038 SECURITY AT BOOK VALUE 2,306,049 25,282 1FE 22541N M6 3 CSFB_03-CPN1 IS 03/30/2009 TRANSFER OF 03/01/2035 SECURITY AT BOOK VALUE 1,507,192 122,891 1FE 25179M AH 6 DEVON ENERGY 03/30/2009 HARTFORD LIFE CORPORATION INSURANCE COMPANY 01/15/2019 4,985,148 5,000,000 70,875 2FE 25746U AJ 8 DOMINION RESOURCES 03/30/2009 HARTFORD LIFE INC 06/30/2012 INSURANCE COMPANY 10,125,342 10,000,000 156,250 2FE 233331 AE 7 DTE ENERGY CO 03/30/2009 HIMCO OPERATIONAL 06/01/2011 TRANSACTION 4,980,033 5,000,000 116,521 2FE 26442C AC 8 DUKE ENERGY 03/30/2009 HARTFORD LIFE CAROLINAS LLC INSURANCE COMPANY 01/15/2018 7,621,503 7,645,000 83,617 1FE 268789 AA 2 E.ON INTERNATIONAL F 03/30/2009 HARTFORD LIFE FINANCE B. INSURANCE COMPANY 04/30/2018 10,956,883 11,000,000 265,833 1FE 268317 AA 2 EDF 01/26/2014 F 01/21/2009 BANC OF AMERICA SECURITIES LLC 14,940,450 15,000,000 1FE 268317 AC 8 ELECTRICITE DE F 01/21/2009 BANC OF AMERICA FRANCE 01/26/2039 SECURITIES LLC 9,855,100 10,000,000 1FE G2978# AB 9 ELECTRICITY SUPPLY F 03/30/2009 HIMCO OPERATIONAL BOARD SERI TRANSACTION 12/15/2013 9,773,919 10,000,000 147,000 1 532457 BC 1 ELI LILLY AND 03/03/2009 CREDIT SUISSE COMPANY 11/15/2037 FIRST BOSTON 2,970,570 3,000,000 1FE 291011 AY 0 EMERSON ELECTRIC 01/15/2009 JP MORGAN CO 10/15/2019 SECURITIES INC 7,471,425 7,500,000 1FE 292562 A* 6 ENCORE WIRE LTD 03/30/2009 HARTFORD LIFE SRNT SER 2004 INSURANCE COMPANY 08/27/2011 15,000,000 15,000,000 72,463 2 35177P AK 3 FRANCE TELECOM F 03/30/2009 HIMCO OPERATIONAL 03/01/2011 TRANSACTION 2,427,795 2,500,000 15,608 1FE 36804P AG 1 GATX FINANCIAL 03/30/2009 HIMCO OPERATIONAL CORP 04/15/2010 TRANSACTION 3,814,762 4,000,000 93,958 2FE 373334 JN 2 GEORGIA POWER 02/04/2009 WACHOVIA COMPANY 02/01/2039 SECURITIES INC 4,981,400 5,000,000 1FE 36228C SG 9 GSMS_04-C1 03/30/2009 HIMCO OPERATIONAL 10/01/2028 TRANSACTION 2,102,338 2,213,734 7,702 1FE
QE04.1 SCHEDULE D - PART 3 Show all Long-Term Bonds and Stock Acquired During the Current Quarter
10 9 NAIC PAID FOR DESIGNATION 6 ACCRUED OR 1 4 5 NUMBER OF 7 INTEREST MARKET CUSIP 2 3 DATE NAME OF SHARES OF ACTUAL 8 AND INDICATOR IDENTIFICATION DESCRIPTION FOREIGN ACQUIRED VENDOR STOCK COST PAR VALUE DIVIDENDS (a) --------------- ------------------ ------- ---------- ----------------- --------- ------------- ------------- ---------- ----------- 452308 AG 4 ILLINOIS TOOL 03/23/2009 BANC OF AMERICA WORKS INC. SECURITIES LLC 04/01/2019 10,998,240 11,000,000 1FE 46051M AA 0 INTERNATIONAL 03/30/2009 HIMCO TRANSMISSION OPERATIONAL 07/15/2013 TRANSACTION 5,492,881 6,000,000 55,625 1FE 478115 AA 6 JOHNS HOPKINS 03/19/2009 JP MORGAN UNIVERSITY SECURITIES INC 07/01/2019 14,989,500 15,000,000 1FE 494550 AU 0 KINDER MORGAN 03/30/2009 HARTFORD LIFE ENERGY PARTNERS INSURANCE COMPANY 02/01/2017 10,490,233 10,500,000 103,250 2FE 57169* AJ 6 MARS INC 6.47% SR 03/30/2009 HARTFORD LIFE NTS DUE 201 INSURANCE COMPANY 10/06/2018 10,000,000 10,000,000 318,108 1 61746W HF 0 MSDWC_01-TOP3 03/30/2009 HARTFORD LIFE 07/01/2033 INSURANCE COMPANY 4,814,002 4,712,728 24,259 1FE 652478 BX 5 NEWS AMERICA 03/30/2009 HARTFORD LIFE HOLDINGS INSURANCE COMPANY 4,892,019 5,000,000 181,111 2FE 10/17/2016 66989H AA 6 NOVARTIS CAPITAL F 02/04/2009 CITIGROUP CORP 02/10/2014 (Salomon/Smith Barney) 19,979,400 20,000,000 1FE N6510* AE 5 NUTRECO HOLDING NV F 03/10/2009 ROYAL BANK OF 04/08/2016 SCOTLAND FINANCIAL MA 10,000,000 10,000,000 2Z N6510* AF 2 NUTRECO HOLDING NV F 03/10/2009 ROYAL BANK OF 04/08/2019 SCOTLAND FINANCIAL MA 10,000,000 10,000,000 2Z 677347 CD 6 OHIO EDISON 03/30/2009 HARTFORD LIFE COMPANY 07/15/2016 INSURANCE COMPANY 4,999,490 5,000,000 66,667 2FE 68233D AS 6 ONCOR ELECTRIC 03/30/2009 HARTFORD LIFE DELIVERY CO INSURANCE COMPANY 05/01/2012 5,087,896 5,000,000 131,927 2FE 68389X AC 9 ORACLE CORPORATION 03/30/2009 HARTFORD LIFE 04/15/2018 INSURANCE COMPANY 6,562,560 6,583,000 173,489 1FE 694308 GL 5 PACIFIC GAS AND 03/30/2009 HARTFORD LIFE ELECTRIC CO INSURANCE COMPANY 11/30/2017 10,236,790 9,978,000 187,088 1FE 717081 CY 7 PFIZER INC. 03/17/2009 BARCLAYS CAPITAL 03/15/2039 INC 9,994,200 10,000,000 1FE 717081 CZ 4 PFIZER INC. 03/30/2009 HARTFORD LIFE 03/15/2012 INSURANCE COMPANY 19,972,745 20,000,000 14,833 1FE 73755L AB 3 POTASH CORP A 03/30/2009 HARTFORD LIFE SASKATCHEWAN INSURANCE COMPANY 05/31/2011 2,694,953 2,700,000 69,750 2FE 742741 AA 9 PROCTER & GAMBLE - 03/30/2009 HARTFORD LIFE ESOP 01/01/2021 INSURANCE COMPANY 4,484,734 3,582,920 82,909 1FE 758202 AF 2 REED ELSEVIER 01/13/2009 BARCLAYS CAPITAL CAPITAL INC. INC 01/05/2014 12,966,720 13,000,000 2FE 771196 AQ 5 ROCHE HOLDINGS INC 02/18/2009 JP MORGAN 03/01/2014 SECURITIES INC 9,927,400 10,000,000 1FE 771196 AS 1 ROCHE HOLDINGS INC 02/18/2009 BANC OF AMERICA 03/01/2019 SECURITIES LLC 4,286,539 4,355,000 1FE 771196 AU 6 ROCHE HOLDINGS INC 02/18/2009 CITIGROUP 03/01/2039 (Salomon/Smith Barney) 9,727,800 10,000,000 1FE 77531Q AM 0 ROGERS WIRELESS A 03/30/2009 HARTFORD LIFE INC 03/15/2015 INSURANCE COMPANY 5,288,506 5,000,000 15,625 2FE 78632# AA 6 SADLERS BAR-B-QUE 01/23/2009 SCHEDULED SALES 10/23/2014 ACQUISITION 6,937 6,937 5 79603# AR 2 SAMSON INVESTMENT 02/27/2009 JP MORGAN CO 03/19/2014 SECURITIES INC 5,000,000 5,000,000 2Z 83162C NX 7 SBAP_04-20H 03/30/2009 HARTFORD LIFE 08/01/2024 INSURANCE COMPANY 3,249,034 3,244,721 27,493 1FE 83162C PV 9 SBAP_05-20J 03/30/2009 HARTFORD LIFE 10/01/2025 INSURANCE COMPANY 4,539,371 4,738,120 119,915 1FE 83162C SK 0 SBAP_09_20C 03/30/2009 Various 02/01/2029 5,667,000 5,667,000 11,458 1FE 822582 AD 4 SHELL F 02/09/2009 BARCLAYS CAPITAL INTERNATIONAL INC FINANCE B 12/15/2038 5,241,900 5,000,000 54,010 1FE 88031V AA 7 TENASKA GATEWAY 03/30/2009 HARTFORD LIFE PARTNERS LTD INSURANCE COMPANY 12/30/2023 3,995,542 4,705,684 2FE 881575 AA 2 TESCO PLC F 03/30/2009 HARTFORD LIFE 11/15/2017 INSURANCE COMPANY 9,962,488 10,000,000 206,250 1FE BHM07N J0 0 THE DEPOSITORY 03/20/2009 CAYLON TRUST COMPANY SECURITIES (USA) 04/15/2016 15,000,000 15,000,000 1Z 89566E A* 9 TRI-STATE GEN AND 03/20/2009 BANC OF AMERICA TRANS ASSOC SECURITIES LLC 04/08/2019 12,000,000 12,000,000 1Z 902118 BL 1 TYCO INTERNATIONAL R 03/30/2009 Various FINANCE SA 01/15/2019 29,999,108 30,000,000 344,250 2FE 907818 CR 7 UNION PACIFIC CORP 03/30/2009 HIMCO 06/01/2010 OPERATIONAL TRANSACTION 4,928,957 5,000,000 59,913 2FE 907818 DA 3 UNION PACIFIC 03/30/2009 HARTFORD LIFE CORPORATION INSURANCE COMPANY 08/15/2018 11,017,637 11,052,000 78,746 2FE 913017 BQ 1 UNITED 03/30/2009 HARTFORD LIFE TECHNOLOGIES INSURANCE COMPANY CORPORATI 02/01/2019 5,335,307 5,000,000 86,771 1FE 91913Y AP 5 VALERO ENERGY 03/12/2009 JP MORGAN CORPORATION SECURITIES INC 03/15/2039 4,987,400 5,000,000 2FE 92857W AK 6 VODAFONE GROUP F 03/30/2009 HARTFORD LIFE PUBLIC LIMITED INSURANCE COMPANY 03/15/2016 5,003,956 5,000,000 11,979 1FE 980745 A@ 2 WOODWARD GOVERNOR 03/30/2009 HIMCO COMPANY 10/01/2013 OPERATIONAL TRANSACTION 4,069,624 4,000,000 111,974 2 98385X AF 3 XTO ENERGY INC 03/30/2009 HARTFORD LIFE 01/31/2015 INSURANCE COMPANY 9,670,474 10,000,000 83,333 2FE 3899999. Total - Bonds - Industrial & Miscellaneous 695,902,967 691,985,306 4,344,765 XXX BONDS - PARENT, SUBSIDIARIES AND AFFILIATES 41660* AW 5 HARTFORD LIFE FA 02/05/2009 DIRECT WITH 91216A 10/31/2019 ISSUER 1,468,809,904 1,468,809,904 1 5599999. Total - Bonds - Parent, Subsidiaries and Affiliates 1,468,809,904 1,468,809,904 0 XXX 8399997. Total - Bonds - Part 3 5,541,827,616 5,444,625,806 16,464,705 XXX 8399999. Total - Bonds 5,541,827,616 5,444,625,806 16,464,705 XXX PREFERRED STOCKS - INDUSTRIAL AND MISCELLANEOUS 78632@ 12 6 SADLERS BAR-B-QUE 03/30/2009 Various 6,183.940 6,184 P5A 80909# 12 6 SCITOR HOLDINGS 01/02/2009 HIMCO INC JUNIOR OPERATIONAL TRANSACTION 2.200 2,200 P5A* 80909# 11 8 SCITOR HOLDINGS 01/02/2009 HIMCO INC SENIOR OPERATIONAL TRANSACTION 2.200 2,200 P5A* 8499999. Total - Preferred Stocks - Industrial & Miscellaneous 10,584 XXX 0 XXX 8999997. Total - Preferred Stocks - Part 3 10,584 XXX 0 XXX
QE04.2 SCHEDULE D - PART 3 Show all Long-Term Bonds and Stock Acquired During the Current Quarter
10 9 NAIC PAID FOR DESIGNATION 6 ACCRUED OR 1 4 5 NUMBER OF 7 INTEREST MARKET CUSIP 2 3 DATE NAME OF SHARES OF ACTUAL 8 AND INDICATOR IDENTIFICATION DESCRIPTION FOREIGN ACQUIRED VENDOR STOCK COST PAR VALUE DIVIDENDS (a) --------------- ------------------ ------- ---------- ----------------- --------- ------------- ------------- ---------- ----------- 8999999. Total - Preferred Stocks 10,584 XXX 0 XXX COMMON STOCKS- INDUSTRIAL AND MISCELLANEOUS 629377 50 8 NRG ENERGY INC 02/12/2009 HIMCO OPERATIONAL 468.000 XXX L TRANSACTION 9099999. Total - Common Stocks - Industrial & Miscellaneous 0 XXX 0 XXX COMMON STOCKS - MONEY MARKET MUTUAL FUNDS 416645 HARTFORD ADVISORS FUND-A 03/31/2009 DIVIDEND REINVESTMENT 920.657 9,446 XXX 416645 HARTFORD TOTAL RETURN BOND-A 03/04/2009 DIVIDEND REINVESTMENT 1,043.051 9,737 XXX 9399999. Total - Common Stocks - Money Market Mutual Funds 19,183 XXX 0 XXX 9799997. Total - Common Stocks - Part 3 19,183 XXX 0 XXX 9799999. Total - Common Stocks 19,183 XXX 0 XXX 9899999. Total - Preferred and Common Stocks 29,767 XXX 0 XXX 9999999. Total - Bonds, Preferred and Common Stocks 5,541,857,38 XXX 16,464,705 XXX
(a) For all common stock bearing the NAIC market indicator "U" provide: the number of such issues: 0. QE04.3 SCHEDULE D - PART 4 Show All Long-Term Bonds and Stock Sold, Redeemed or Otherwise Disposed of During the Current Quarter
6 1 4 NUMBER OF CUSIP 2 3 DISPOSAL 5 SHARES OF 7 8 IDENTIFICATION DESCRIPTION FOREIGN DATE NAME OF PURCHASER STOCK CONSIDERATION PAR VALUE ---------------------------------------------------------------------------------------------------- BONDS - U.S. GOVERNMENT 36200Q 3L 6 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 5,468 5,468 36200R YQ 9 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 4,870 4,870 36200U WJ 0 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 16 16 36200W Y9 6 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 41,435 41,435 36201A UL 0 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 618 618 36201C PY 4 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 314 314 36201F Q6 7 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 1,544 1,544 36201F UH 8 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 2,283 2,283 36201F UQ 8 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 1,473 1,473 36201F UR 6 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 1,020 1,020 36201F X6 9 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 20,877 20,877 36201H WX 7 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 1,912 1,912 36201J F6 1 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 4,493 4,493 36201J FD 6 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 6,995 6,995 36201K KP 0 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 33 33 36201L 6T 6 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 2,336 2,336 36201L 6V 1 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 693 693 36201L 7K 4 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 207 207 36201M G8 9 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 12,351 12,351 36201M JU 7 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 27,048 27,048 36201Q 2F 9 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 1,256 1,256 36201T AM 9 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 2,902 2,902 36203L CQ 3 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 1,645 1,645 362059 RM 1 GNMA 30YR 02/01/2009 SCHEDULED REDEMPTION 208 208 362060 SE 6 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 577 577 36208E BT 9 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 431 431 36209D R8 9 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 1,879 1,879 36209N 3L 4 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 79 79 36209R VG 5 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 64 64 36209Y X4 5 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 294 294 36211B T8 7 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 116 116 36211C 2S 0 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 389 389 36213D 3C 0 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 176 176 36213E AB 2 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 1,134 1,134 36213E SK 3 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 19,230 19,230 36213E YS 9 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 1,929 1,929 36213G AL 5 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 1,033 1,033 36213G TY 7 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 103 103 36213J LL 7 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 1,613 1,613 36213N LL 8 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 46,525 46,525 36213S KL 8 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 138 138 36213U C9 9 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 67 67 36213X T5 3 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 2,680 2,680 36213X T6 1 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 2,030 2,030 362158 DT 1 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 164 164 362161 6H 9 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 167 167 362162 G9 4 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 128 128 36217F 6S 3 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 961 961 36217V DA 9 GNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 141 141 CHANGE IN BOOK/ADJUSTED CARRYING VALUE ---------------------------------------------------------- 13 10 CURRENT 15 PRIOR YEAR 11 12 YEAR'S 14 TOTAL BOOK/ UNREALIZED CURRENT OTHER THAN TOTAL FOREIGN 1 ADJUSTED VALUATION YEAR'S TEMPORARY CHANGE IN EXCHANGE CUSIP 9 CARRYING INCREASE/ (AMORTIZATION)/ IMPAIRMENT B./A.C.V. CHANGE IN IDENTIFICATION ACTUAL COST VALUE (DECREASE) ACCRETION RECOGNIZED (11+12-13) B./A.C.V. ------------------------------------------------------------------------------------------------ BONDS - U.S. GOVERNMENT 36200Q 3L 6 5,624 5,966 (498) (498) 36200R YQ 9 5,008 5,343 (473) (473) 36200U WJ 0 16 17 (1) (1) 36200W Y9 6 42,613 44,132 (2,697) (2,697) 36201A UL 0 647 681 (63) (63) 36201C PY 4 319 324 (10) (10) 36201F Q6 7 1,587 1,653 (109) (109) 36201F UH 8 2,348 2,470 (186) (186) 36201F UQ 8 1,515 1,598 (124) (124) 36201F UR 6 1,049 1,114 (94) (94) 36201F X6 9 21,187 21,673 (796) (796) 36201H WX 7 1,939 1,974 (62) (62) 36201J F6 1 4,621 4,944 (450) (450) 36201J FD 6 7,302 7,315 (320) (320) 36201K KP 0 34 35 (2) (2) 36201L 6T 6 2,448 2,696 (360) (360) 36201L 6V 1 726 820 (127) (127) 36201L 7K 4 217 240 (33) (33) 36201M G8 9 12,685 13,475 (1,123) (1,123) 36201M JU 7 27,851 29,864 (2,816) (2,816) 36201Q 2F 9 1,292 1,331 (74) (74) 36201T AM 9 2,984 3,053 (151) (151) 36203L CQ 3 1,679 1,717 (72) (72) 362059 RM 1 207 208 0 0 362060 SE 6 626 579 (2) (2) 36208E BT 9 444 492 (61) (61) 36209D R8 9 1,915 2,017 (138) (138) 36209N 3L 4 81 83 (4) (4) 36209R VG 5 65 66 (2) (2) 36209Y X4 5 300 304 (10) (10) 36211B T8 7 118 118 (2) (2) 36211C 2S 0 396 406 (17) (17) 36213D 3C 0 179 182 (6) (6) 36213E AB 2 1,166 1,208 (74) (74) 36213E SK 3 19,515 19,973 (743) (743) 36213E YS 9 1,984 2,105 (177) (177) 36213G AL 5 1,053 1,090 (57) (57) 36213G TY 7 105 111 (8) (8) 36213J LL 7 1,658 1,790 (177) (177) 36213N LL 8 47,310 48,521 (1,996) (1,996) 36213S KL 8 141 147 (9) (9) 36213U C9 9 70 70 (3) (3) 36213X T5 3 2,754 2,879 (200) (200) 36213X T6 1 2,086 2,178 (148) (148) 362158 DT 1 182 181 (17) (17) 362161 6H 9 167 167 0 0 362162 G9 4 128 128 0 0 36217F 6S 3 961 961 1 1 36217V DA 9 141 141 0 0 22 17 20 NAIC 16 FOREIGN 18 19 BOND DESIG- BOOK/ EXCHANGE REALIZED TOTAL INTEREST/ NATION ADJUSTED GAIN GAIN GAIN STOCK OR 1 CARRYING (LOSS) (LOSS) (LOSS) DIVIDENDS 21 MARKET CUSIP VALUE AT ON ON ON RECEIVED MATURITY INDICATOR IDENTIFICATION DISPOSAL DATE DISPOSAL DISPOSAL DISPOSAL DURING YEAR DATE (A) ---------------------------------------------------------------------------------------- BONDS - U.S. GOVERNMENT 36200Q 3L 6 5,468 0 79 02/01/2032 1 36200R YQ 9 4,870 0 78 01/01/2032 1 36200U WJ 0 16 0 0 09/01/2031 1 36200W Y9 6 41,435 0 672 08/01/2032 1 36201A UL 0 618 0 10 07/01/2032 1 36201C PY 4 314 0 5 01/01/2032 1 36201F Q6 7 1,544 0 24 05/01/2032 1 36201F UH 8 2,283 0 33 04/01/2032 1 36201F UQ 8 1,473 0 21 04/01/2032 1 36201F UR 6 1,020 0 15 04/01/2032 1 36201F X6 9 20,877 0 230 02/01/2032 1 36201H WX 7 1,912 0 27 06/01/2032 1 36201J F6 1 4,493 0 73 05/01/2032 1 36201J FD 6 6,995 0 109 04/01/2032 1 36201K KP 0 33 0 0 04/01/2032 1 36201L 6T 6 2,336 0 36 07/01/2032 1 36201L 6V 1 693 0 11 07/01/2032 1 36201L 7K 4 207 0 3 08/01/2032 1 36201M G8 9 12,351 0 214 06/01/2032 1 36201M JU 7 27,048 0 433 07/01/2032 1 36201Q 2F 9 1,256 0 18 08/01/2032 1 36201T AM 9 2,902 0 42 08/01/2032 1 36203L CQ 3 1,645 0 28 09/01/2023 1 362059 RM 1 208 0 3 04/01/2009 1 362060 SE 6 577 0 10 04/01/2009 1 36208E BT 9 431 0 6 05/01/2031 1 36209D R8 9 1,879 0 22 09/01/2031 1 36209N 3L 4 79 0 1 07/01/2029 1 36209R VG 5 64 0 1 08/01/2030 1 36209Y X4 5 294 0 5 09/01/2031 1 36211B T8 7 116 0 2 06/01/2029 1 36211C 2S 0 389 0 6 07/01/2029 1 36213D 3C 0 176 0 3 02/01/2032 1 36213E AB 2 1,134 0 16 05/01/2032 1 36213E SK 3 19,230 0 271 01/01/2032 1 36213E YS 9 1,929 0 31 04/01/2032 1 36213G AL 5 1,033 0 16 02/01/2032 1 36213G TY 7 103 0 2 11/01/2031 1 36213J LL 7 1,613 0 27 05/01/2032 1 36213N LL 8 46,525 0 755 12/01/2031 1 36213S KL 8 138 0 2 08/01/2031 1 36213U C9 9 67 0 1 11/01/2031 1 36213X T5 3 2,680 0 32 05/01/2032 1 36213X T6 1 2,030 0 32 05/01/2032 1 362158 DT 1 164 0 4 05/01/2016 1 362161 6H 9 167 0 3 02/01/2017 1 362162 G9 4 128 0 2 01/01/2017 1 36217F 6S 3 961 0 18 02/01/2017 1 36217V DA 9 141 0 3 03/01/2017 1
QE05 SCHEDULE D - PART 4 Show All Long-Term Bonds and Stock Sold, Redeemed or Otherwise Disposed of During the Current Quarter
6 1 4 NUMBER OF CUSIP 2 3 DISPOSAL 5 SHARES OF 7 8 IDENTIFICATION DESCRIPTION FOREIGN DATE NAME OF PURCHASER STOCK CONSIDERATION PAR VALUE -------------------------------------------------------------------------------------------------------- 36218N NQ 0 GNMA 30YR 03/01/2009 SCHEDULED 398 398 REDEMPTION 36219L SM 7 GNMA 30YR 03/01/2009 SCHEDULED 337 337 REDEMPTION 362052 H4 7 GNMA 30YR 03/01/2009 SCHEDULED 438 438 1977-79 REDEMPTION 36219L AC 8 GNMA 30YR 03/01/2009 SCHEDULED 209 209 1980-86 REDEMPTION 36225B ND 6 GNMA 30YR 03/01/2009 SCHEDULED 28,111 28,111 PLATINUM REDEMPTION 36225B PM 4 GNMA 30YR 03/01/2009 SCHEDULED 96,573 96,573 PLATINUM REDEMPTION 36202E AL 3 GNMA2 30YR 03/01/2009 SCHEDULED 171,693 171,693 REDEMPTION 912810 QA 9 TREASURY 03/17/2009 Various 12,035,344 12,570,000 BOND 912828 BV 1 TREASURY 01/15/2009 MATURED 110,000 110,000 NOTE 912828 HA 1 TREASURY 03/03/2009 BANC OF 1,616,908 1,415,000 NOTE AMERICA SECURITIES LLC 912828 JH 4 TREASURY 03/03/2009 CITIGROUP 289,440 266,000 NOTE (Salomon/Smith Barney) 912828 JR 2 TREASURY 03/27/2009 Various 1,697,592,928 1,546,831,000 NOTE 912828 JW 1 TREASURY 03/20/2009 Various 623,567,895 634,525,000 NOTE 912828 JY 7 TREASURY 02/04/2009 CITIGROUP 269,493,750 270,000,000 NOTE (Salomon/Smith Barney) 912828 JZ 4 TREASURY 03/03/2009 CITIGROUP 2,892,144 2,908,000 NOTE (Salomon/Smith Barney) 912828 KF 6 TREASURY 03/18/2009 Various 503,575,464 500,000,000 NOTE 912828 KJ 8 TREASURY 03/31/2009 MIZUHO 250,703,125 250,000,000 NOTE SECURITIES USA INC 0399999. Total - 3,362,398,804 3,219,146,806 Bonds - US Government Bonds - All Other Government BRS7L0 SZ 4 JAPAN D 02/04/2009 MORGAN 382,784,413 379,782,184 (GOVERNMENT STANLEY OF) 10-YR # 297 BRS4T4 CC 3 JAPAN D 02/04/2009 MORGAN 174,347,976 159,855,065 (GOVT OF) STANLEY 10-YR # 288 J26160 SB 8 JAPAN D 02/04/2009 MORGAN 150,253,424 138,541,056 (GOVT OF) STANLEY 10-YR # 264 J26160 ZU 8 JAPAN D 02/04/2009 MORGAN 230,092,417 213,140,086 (GOVT OF) STANLEY 10-YR # 272 BRS2N6 FF 8 JAPAN D 02/04/2009 MORGAN 234,681,126 213,140,086 (GOVT OF) STANLEY 10-YR # 282 984998 SC 9 JAPAN D 02/03/2009 MORGAN 186,064,405 159,855,065 (GOVT OF) STANLEY 20-YR # 44 BRS7GH 7Y 9 JAPAN D 02/05/2009 MORGAN 55,841,959 53,285,022 (GOVT OF) STANLEY 2-YR # 274 BRS4W8 H9 2 JAPAN D 02/04/2009 MORGAN 56,690,503 53,285,022 (GOVT OF) STANLEY 5-YR # 66 BRS2PM FX 2 JAPAN D 02/04/2009 MORGAN 56,689,971 53,285,022 (GOVT OF) STANLEY 5-YR # 60 BHM06D M9 0 JAPAN D 02/04/2009 MORGAN 264,700,686 263,613,516 (GOVT OF) STANLEY 5-YR #78 1099999. Total - 1,792,146,882 1,687,782,122 Bonds - All Other Government BONDS - US SPECIAL REVENUE AND SPECIAL ASSESSMENT 31294K F3 4 FGOLD 15YR 03/01/2009 SCHEDULED 7,729 7,729 REDEMPTION 31288D 6V 6 FGOLD 30YR 03/01/2009 SCHEDULED 22,482 22,482 REDEMPTION 31288F 6X 7 FGOLD 30YR 03/01/2009 SCHEDULED 10,414 10,414 REDEMPTION 31292G Y5 9 FGOLD 30YR 03/01/2009 SCHEDULED 1,250 1,250 REDEMPTION 31292H 4H 4 FGOLD 30YR 03/01/2009 SCHEDULED 258,200 258,200 REDEMPTION 31292H SQ 8 FGOLD 30YR 03/01/2009 SCHEDULED 14,183 14,183 REDEMPTION 31296J TJ 5 FGOLD 30YR 03/01/2009 SCHEDULED 124,102 124,102 REDEMPTION 31296K X7 3 FGOLD 30YR 03/01/2009 SCHEDULED 287 287 REDEMPTION 31296N LJ 4 FGOLD 30YR 03/01/2009 SCHEDULED 600 600 REDEMPTION 31296P TL 6 FGOLD 30YR 03/01/2009 SCHEDULED 267,014 267,014 REDEMPTION 31296S AC 0 FGOLD 30YR 03/01/2009 SCHEDULED 8,273 8,273 REDEMPTION 31296U EU 1 FGOLD 30YR 03/01/2009 SCHEDULED 814 814 REDEMPTION 31296U H9 5 FGOLD 30YR 03/01/2009 SCHEDULED 425 425 REDEMPTION 31296X TY 1 FGOLD 30YR 03/01/2009 SCHEDULED 283 283 REDEMPTION 31297A 3S 1 FGOLD 30YR 03/01/2009 SCHEDULED 84,001 84,001 REDEMPTION 31297A 3T 9 FGOLD 30YR 03/01/2009 SCHEDULED 20,707 20,707 REDEMPTION 31297A 5J 9 FGOLD 30YR 03/01/2009 SCHEDULED 92,417 92,417 REDEMPTION 31297A 5K 6 FGOLD 30YR 03/01/2009 SCHEDULED 41,067 41,067 REDEMPTION CHANGE IN BOOK/ADJUSTED CARRYING VALUE ---------------------------------------------------------- 13 10 CURRENT 15 PRIOR YEAR 11 12 YEAR'S 14 TOTAL BOOK/ UNREALIZED CURRENT OTHER THAN TOTAL FOREIGN 1 ADJUSTED VALUATION YEAR'S TEMPORARY CHANGE IN EXCHANGE CUSIP 9 CARRYING INCREASE/ (AMORTIZATION)/ IMPAIRMENT B./A.C.V. CHANGE IN IDENTIFICATION ACTUAL COST VALUE (DECREASE) ACCRETION RECOGNIZED (11+12-13) B./A.C.V. ------------------------------------------------------------------------------------------------------- 36218N NQ 0 442 474 (76) (76) 36219L SM 7 374 386 (49) (49) 362052 H4 7 436 438 0 0 36219L AC 8 232 244 (36) (36) 36225B ND 6 28,946 30,826 (2,714) (2,714) 36225B PM 4 98,781 103,681 (7,108) (7,108) 36202E AL 3 178,292 179,452 (7,760) (7,760) 912810 QA 9 12,464,845 20 20 912828 BV 1 112,454 110,021 (21) (21) 912828 HA 1 1,584,137 1,582,444 (2,957) (2,957) 912828 JH 4 270,697 270,640 (70) (70) 912828 JR 2 1,719,230,995 684,248,161 (367,301) (367,301) 912828 JW 1 626,529,895 18,166 18,166 912828 JY 7 269,809,688 0 912828 JZ 4 2,870,741 60 60 912828 KF 6 498,554,688 488 488 912828 KJ 8 250,656,559 (347) (347) 0399999. 3,382,621,643 686,765,306 0 (384,197) 0 (384,197) 0 BONDS - ALL OTHER GOVERNMENT BRS7L0 SZ 4 386,398,436 381,592,911 (58,251) (58,251) 4,795,219 BRS4T4 CC 3 165,552,299 171,321,668 (57,583) (57,583) (5,815,096) J26160 SB 8 143,234,827 148,206,399 (74,211) (74,211) (5,030,504) J26160 ZU 8 219,890,233 227,541,684 (90,535) (90,535) (7,723,347) BRS2N6 FF 8 223,601,002 231,357,673 (121,141) (121,141) (7,852,871) 984998 SC 9 176,136,303 182,222,689 (120,656) (120,656) (6,185,104) BRS7GH 7Y 9 53,320,723 55,192,742 (1,767) (1,767) (1,873,383) BRS4W8 H9 2 53,922,843 55,804,622 (15,580) (15,580) (1,894,152) BRS2PM FX 2 54,036,340 55,914,316 (25,059) (25,059) (1,897,875) BHM06D M9 0 265,574,800 262,272,619 (36,144) (36,144) 3,295,802 1099999. 1,741,667,807 1,771,427,325 0 (600,927) 0 (600,927) 30,181,311 BONDS - US SPECIAL REVENUE AND SPECIAL ASSESSMENT 31294K F3 4 8,436 8,209 (480) (480) 31288D 6V 6 23,237 23,174 (692) (692) 31288F 6X 7 10,764 10,835 (421) (421) 31292G Y5 9 1,273 1,285 (35) (35) 31292H 4H 4 254,488 254,610 3,590 3,590 31292H SQ 8 14,659 14,768 (585) (585) 31296J TJ 5 125,033 125,118 (1,016) (1,016) 31296K X7 3 297 305 (18) (18) 31296N LJ 4 621 630 (29) (29) 31296P TL 6 268,891 268,990 (1,976) (1,976) 31296S AC 0 8,551 8,601 (327) (327) 31296U EU 1 842 858 (43) (43) 31296U H9 5 439 444 (20) (20) 31296X TY 1 293 306 (23) (23) 31297A 3S 1 80,392 80,639 3,363 3,363 31297A 3T 9 19,817 19,748 959 959 31297A 5J 9 88,446 88,470 3,947 3,947 31297A 5K 6 39,302 39,451 1,616 1,616 22 17 20 NAIC 16 FOREIGN 18 19 BOND DESIG- BOOK/ EXCHANGE REALIZED TOTAL INTEREST/ NATION ADJUSTED GAIN GAIN GAIN STOCK OR 1 CARRYING (LOSS) (LOSS) (LOSS) DIVIDENDS 21 MARKET CUSIP VALUE AT ON ON ON RECEIVED MATURITY INDICATOR IDENTIFICATION DISPOSAL DATE DISPOSAL DISPOSAL DISPOSAL DURING YEAR DATE (A) --------------------------------------------------------------------------------------------------- 36218N NQ 0 398 0 9 07/01/2019 1 36219L SM 7 337 0 8 09/01/2018 1 362052 H4 7 438 0 7 05/01/2009 1 36219L AC 8 209 0 5 09/01/2018 1 36225B ND 6 28,111 0 416 05/01/2031 1 36225B PM 4 96,573 0 1,504 09/01/2031 1 36202E AL 3 171,693 0 2,355 09/01/2034 1 912810 QA 9 12,464,865 (429,521) (429,521) 31,624 02/15/2039 1 912828 BV 1 110,000 0 1,788 01/15/2009 1 912828 HA 1 1,579,487 37,421 37,421 37,134 08/15/2017 1 912828 JH 4 270,570 18,870 18,870 5,878 08/15/2018 1 912828 JR 2 1,718,672,711 (21,079,783) (21,079,783) 12,064,385 11/15/2018 1 912828 JW 1 626,548,060 (2,980,165) (2,980,165) 1,031,190 12/31/2013 1 912828 JY 7 269,809,688 (315,938) (315,938) 32,631 01/31/2011 1 912828 JZ 4 2,870,801 21,343 21,343 4,780 01/31/2014 1 912828 KF 6 498,555,175 5,020,289 5,020,289 476,393 02/28/2014 1 912828 KJ 8 250,656,212 46,913 46,913 11,954 03/31/2014 1 0399999. 3,382,059,374 0 (19,660,570) (19,660,570) 13,705,492 XXX XXX BONDS - ALL OTHER GOVERNMENT BRS7L0 SZ 4 386,329,880 (1,227,511) (2,317,956) (3,545,467) 666,027 12/20/2018 1FE BRS4T4 CC 3 165,448,990 7,417,876 1,481,110 8,898,987 1,064,476 09/20/2017 1FE J26160 SB 8 143,101,684 6,413,365 738,376 7,151,740 814,962 09/20/2014 1FE J26160 ZU 8 219,727,802 9,847,505 517,110 10,364,615 1,170,202 09/20/2015 1FE BRS2N6 FF 8 223,383,660 10,013,147 1,284,319 11,297,466 1,420,047 09/20/2016 1FE 984998 SC 9 175,916,929 7,879,781 2,267,695 10,147,476 1,557,530 03/20/2020 1FE BRS7GH 7Y 9 53,317,592 2,364,726 159,641 2,524,367 75,011 11/15/2010 1FE BRS4W8 H9 2 53,894,891 2,416,111 379,502 2,795,613 229,593 09/20/2012 1FE BRS2PM FX 2 53,991,382 2,420,341 278,248 2,698,589 250,465 09/20/2011 1FE BHM06D M9 0 265,532,277 (842,518) 10,927 (831,591) 297,980 12/20/2013 1FE 1099999. 1,740,645,087 46,702,821 4,798,973 51,501,794 7,546,293 XXX XXX BONDS - US SPECIAL REVENUE AND SPECIAL ASSESSMENT 31294K F3 4 7,729 0 106 12/01/2016 1 31288D 6V 6 22,482 0 334 10/01/2032 1 31288F 6X 7 10,414 0 146 03/01/2033 1 31292G Y5 9 1,250 0 21 03/01/2029 1 31292H 4H 4 258,200 0 2,960 12/01/2033 1 31292H SQ 8 14,183 0 201 11/01/2032 1 31296J TJ 5 124,102 0 1,656 06/01/2033 1 31296K X7 3 287 0 4 07/01/2033 1 31296N LJ 4 600 0 8 10/01/2033 1 31296P TL 6 267,014 0 3,614 10/01/2033 1 31296S AC 0 8,273 0 111 01/01/2034 1 31296U EU 1 814 0 11 03/01/2034 1 31296U H9 5 425 0 6 08/01/2034 1 31296X TY 1 283 0 4 05/01/2034 1 31297A 3S 1 84,001 0 1,009 06/01/2034 1 31297A 3T 9 20,707 0 232 06/01/2034 1 31297A 5J 9 92,417 0 1,116 06/01/2034 1 31297A 5K 6 41,067 0 448 06/01/2034 1
QE05.1 SCHEDULE D - PART 4 Show All Long-Term Bonds and Stock Sold, Redeemed or Otherwise Disposed of During the Current Quarter
6 1 4 NUMBER OF CUSIP 2 3 DISPOSAL 5 SHARES OF 7 8 IDENTIFICATION DESCRIPTION FOREIGN DATE NAME OF PURCHASER STOCK CONSIDERATION PAR VALUE ---------------------------------------------------------------------------------------------------- 31297B AM 4 FGOLD 30YR 03/01/2009 SCHEDULED REDEMPTION 50,286 50,286 31297E J7 2 FGOLD 30YR 03/01/2009 SCHEDULED REDEMPTION 74,202 74,202 31297E L8 7 FGOLD 30YR 03/01/2009 SCHEDULED REDEMPTION 62,642 62,642 31298E P7 4 FGOLD 30YR 03/01/2009 SCHEDULED REDEMPTION 19 19 31298F JL 7 FGOLD 30YR 03/01/2009 SCHEDULED REDEMPTION 181 181 3128KW BV 4 FGOLD 30YR 03/01/2009 SCHEDULED REDEMPTION 1,015 1,015 ALT-A 3128L0 YL 0 FGOLD 30YR 03/01/2009 SCHEDULED REDEMPTION 7,515 7,515 ALT-A 3128L4 7D 0 FGOLD 30YR 03/01/2009 SCHEDULED REDEMPTION 46,844 46,844 ALT-A 3128L4 G6 5 FGOLD 30YR 03/01/2009 SCHEDULED REDEMPTION 1,042 1,042 ALT-A 31283H QX 6 FGOLD 30YR 03/01/2009 SCHEDULED REDEMPTION 10,321 10,321 GIANT 31283H UA 1 FGOLD 30YR 03/01/2009 SCHEDULED REDEMPTION 12,505 12,505 GIANT 31283H XH 3 FGOLD 30YR 03/01/2009 SCHEDULED REDEMPTION 5,856 5,856 GIANT 31283H Y5 8 FGOLD 30YR 03/01/2009 SCHEDULED REDEMPTION 60,118 60,118 GIANT 3128M6 ZY 7 FGOLD 30YR 03/01/2009 SCHEDULED REDEMPTION 1,010,215 1,010,215 GIANT 3128M6 JY 5 FGOLD 30YR 03/01/2009 SCHEDULED REDEMPTION 741,189 741,189 GIANT AGENCY ALT-A 313421 MH 9 FH 1/1 1Y 03/01/2009 SCHEDULED REDEMPTION 1,202 1,202 CMT ARM 3128Q2 CU 5 FH 7/1 1Y 03/01/2009 SCHEDULED REDEMPTION 1,149,281 1,149,281 CMT ARM 3128JM M8 7 FH 7/1 1Y 03/01/2009 SCHEDULED REDEMPTION 142,764 142,764 LIBOR ARM 3128S4 BJ 5 FHLMC 12M 03/01/2009 SCHEDULED REDEMPTION 395,192 395,192 LIBOR ARM 313401 GK 1 FHLMC 30YR 02/01/2009 SCHEDULED REDEMPTION 27 27 313401 GR 6 FHLMC 30YR 03/01/2009 SCHEDULED REDEMPTION 337 337 313401 GT 2 FHLMC 30YR 03/01/2009 SCHEDULED REDEMPTION 68 68 3128NH 2N 2 FHLMC 5/1 03/01/2009 SCHEDULED REDEMPTION 74,359 74,359 1YR LIBOR ARM 3133TP QW 2 FHLMC_2252 03/01/2009 SCHEDULED REDEMPTION 23,683 23,683 31339W A6 3 FHLMC_2426C 03/01/2009 SCHEDULED REDEMPTION 224,617 224,617 31339W NG 7 FHLMC_2439 03/01/2009 SCHEDULED REDEMPTION 279,625 279,625 31392R 4A 6 FHLMC_2471 03/01/2009 SCHEDULED REDEMPTION 236,559 236,559 31395T V3 5 FHLMC_2976 03/01/2009 SCHEDULED REDEMPTION 288,035 288,035 31407G CY 2 FN 5/1 1Y 03/01/2009 SCHEDULED REDEMPTION 378,134 378,134 CMT ARM 31362P VJ 7 FN 5/12 03/01/2009 SCHEDULED REDEMPTION 177 177 11TH COFI ARM 31362J UN 3 FN 6/12 03/01/2009 SCHEDULED REDEMPTION 2,977 2,977 11TH COFI ARM 31403C 7J 4 FN 7/1 1Y 03/01/2009 SCHEDULED REDEMPTION 135,591 135,591 CMT ARM 31406X XD 9 FN 7/1 1Y 03/01/2009 SCHEDULED REDEMPTION 928,550 928,550 CMT ARM 31407B YA 1 FN 7/1 1Y 03/01/2009 SCHEDULED REDEMPTION 362,690 362,690 CMT ARM 31405C NR 6 FN 7/1 1Y 03/01/2009 SCHEDULED REDEMPTION 349,685 349,685 LIBOR ARM 31406E QG 2 FN 7/1 1Y 03/01/2009 SCHEDULED REDEMPTION 836,904 836,904 LIBOR ARM 31406M 3F 1 FN 7/1 1Y 03/01/2009 SCHEDULED REDEMPTION 223,287 223,287 LIBOR ARM 31407B YC 7 FN 7/1 1Y 03/01/2009 SCHEDULED REDEMPTION 291,557 291,557 LIBOR ARM 31407E MH 3 FN 7/1 1Y 03/01/2009 SCHEDULED REDEMPTION 484,611 484,611 LIBOR ARM 31371K KS 9 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 4,986 4,986 31371K NG 2 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 1,540 1,540 31371K QE 4 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 11,361 11,361 31371K RD 5 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 1,607 1,607 31371K SB 8 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 3,138 3,138 31371K WE 7 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 94,443 94,443 31374T QF 9 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 2,815 2,815 31379J KH 8 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 9,666 9,666 31379T W2 6 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 4,652 4,652 31382H BS 3 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 14,610 14,610 CHANGE IN BOOK/ADJUSTED CARRYING VALUE ---------------------------------------------------------- 13 10 CURRENT 15 PRIOR YEAR 11 12 YEAR'S 14 TOTAL BOOK/ UNREALIZED CURRENT OTHER THAN TOTAL FOREIGN 1 ADJUSTED VALUATION YEAR'S TEMPORARY CHANGE IN EXCHANGE CUSIP 9 CARRYING INCREASE/ (AMORTIZATION)/ IMPAIRMENT B./A.C.V. CHANGE IN IDENTIFICATION ACTUAL COST VALUE (DECREASE) ACCRETION RECOGNIZED (11+12-13) B./A.C.V. ------------------------------------------------------------------------------------------------ 31297B AM 4 48,125 48,262 2,024 2,024 31297E J7 2 76,939 77,322 (3,120) (3,120) 31297E L8 7 64,952 65,379 (2,737) (2,737) 31298E P7 4 19 19 0 0 31298F JL 7 181 180 1 1 3128KW BV 4 1,054 1,050 (35) (35) 3128L0 YL 0 7,806 7,787 (272) (272) 3128L4 7D 0 48,660 48,447 (1,602) (1,602) 3128L4 G6 5 1,083 1,078 (36) (36) 31283H QX 6 10,667 10,771 (450) (450) 31283H UA 1 12,925 13,044 (539) (539) 31283H XH 3 6,053 6,116 (259) (259) 31283H Y5 8 63,311 63,723 (3,606) (3,606) 3128M6 ZY 7 1,037,995 1,037,499 (27,284) (27,284) 3128M6 JY 5 749,064 748,886 (7,697) (7,697) 313421 MH 9 1,200 1,202 0 3128Q2 CU 5 1,159,335 1,157,673 (8,392) (8,392) 3128JM M8 7 143,121 143,019 (256) (256) 3128S4 BJ 5 394,374 394,574 618 618 313401 GK 1 27 27 0 313401 GR 6 335 336 0 0 313401 GT 2 67 67 0 0 3128NH 2N 2 74,516 74,516 (157) (157) 3133TP QW 2 24,483 24,740 (1,056) (1,056) 31339W A6 3 230,341 230,336 (5,718) (5,718) 31339W NG 7 276,086 279,014 611 611 31392R 4A 6 244,100 238,827 (2,268) (2,268) 31395T V3 5 284,794 285,929 2,106 2,106 31407G CY 2 379,887 379,632 (1,499) (1,499) 31362P VJ 7 176 119 58 58 31362J UN 3 2,900 2,918 59 59 31403C 7J 4 133,806 134,240 1,351 1,351 31406X XD 9 934,681 934,676 (6,126) (6,126) 31407B YA 1 365,893 365,348 (2,658) (2,658) 31405C NR 6 351,466 351,361 (1,676) (1,676) 31406E QG 2 844,768 843,257 (6,353) (6,353) 31406M 3F 1 224,243 224,117 (830) (830) 31407B YC 7 293,915 293,143 (1,586) (1,586) 31407E MH 3 491,010 489,045 (4,433) (4,433) 31371K KS 9 5,181 5,245 (259) (259) 31371K NG 2 1,608 1,625 (85) (85) 31371K QE 4 11,865 11,960 (599) (599) 31371K RD 5 1,678 1,694 (87) (87) 31371K SB 8 3,278 3,308 (170) (170) 31371K WE 7 94,830 94,778 (334) (334) 31374T QF 9 2,850 2,835 (20) (20) 31379J KH 8 9,801 9,734 (67) (67) 31379T W2 6 4,654 4,654 (2) (2) 31382H BS 3 14,333 14,437 173 173 22 17 20 NAIC 16 FOREIGN 18 19 BOND DESIG- BOOK/ EXCHANGE REALIZED TOTAL INTEREST/ NATION ADJUSTED GAIN GAIN GAIN STOCK OR 1 CARRYING (LOSS) (LOSS) (LOSS) DIVIDENDS 21 MARKET CUSIP VALUE AT ON ON ON RECEIVED MATURITY INDICATOR IDENTIFICATION DISPOSAL DATE DISPOSAL DISPOSAL DISPOSAL DURING YEAR DATE (a) ---------------------------------------------------------------------------------------- 31297B AM 4 50,286 0 509 06/01/2034 1 31297E J7 2 74,202 0 1,082 09/01/2034 1 31297E L8 7 62,642 0 867 09/01/2034 1 31298E P7 4 19 0 0 12/01/2030 1 31298F JL 7 181 0 3 01/01/2031 1 3128KW BV 4 1,015 0 15 09/01/2037 1 3128L0 YL 0 7,515 0 121 11/01/2037 1 3128L4 7D 0 46,844 0 702 01/01/2038 1 3128L4 G6 5 1,042 0 15 01/01/2038 1 31283H QX 6 10,321 0 145 03/01/2032 1 31283H UA 1 12,505 0 177 12/01/2032 1 31283H XH 3 5,856 0 81 06/01/2033 1 31283H Y5 8 60,118 0 870 12/01/2033 1 3128M6 ZY 7 1,010,215 0 14,109 11/01/2038 1 3128M6 JY 5 741,189 0 10,249 01/01/2038 1 313421 MH 9 1,202 0 14 04/01/2017 1 3128Q2 CU 5 1,149,281 0 12,029 06/01/2035 1 3128JM M8 7 142,764 0 1,801 07/01/2035 1 3128S4 BJ 5 395,192 0 5,405 03/01/2036 1 313401 GK 1 27 0 1 06/01/2009 1 313401 GR 6 337 0 9 09/01/2009 1 313401 GT 2 68 0 2 09/01/2009 1 3128NH 2N 2 74,359 0 735 06/01/2037 1 3133TP QW 2 23,683 0 368 09/01/2030 1 31339W A6 3 224,617 0 3,070 03/01/2017 1 31339W NG 7 279,625 0 4,022 09/01/2030 1 31392R 4A 6 236,559 0 3,423 02/01/2031 1 31395T V3 5 288,035 0 2,894 01/01/2033 1 31407G CY 2 378,134 0 3,505 05/01/2035 1 31362P VJ 7 177 0 2 09/01/2018 1 31362J UN 3 2,977 0 29 06/01/2028 1 31403C 7J 4 135,591 0 1,515 12/01/2035 1 31406X XD 9 928,550 0 11,430 05/01/2035 1 31407B YA 1 362,690 0 3,815 07/01/2035 1 31405C NR 6 349,685 0 3,669 06/01/2034 1 31406E QG 2 836,904 0 9,044 07/01/2035 1 31406M 3F 1 223,287 0 2,573 03/01/2035 1 31407B YC 7 291,557 0 2,658 07/01/2035 1 31407E MH 3 484,611 0 5,590 06/01/2035 1 31371K KS 9 4,986 0 84 01/01/2017 1 31371K NG 2 1,540 0 25 04/01/2017 1 31371K QE 4 11,361 0 186 05/01/2017 1 31371K RD 5 1,607 0 26 06/01/2017 1 31371K SB 8 3,138 0 47 07/01/2017 1 31371K WE 7 94,443 0 1,063 12/01/2017 1 31374T QF 9 2,815 0 41 04/01/2014 1 31379J KH 8 9,666 0 137 05/01/2013 1 31379T W2 6 4,652 0 61 05/01/2013 1 31382H BS 3 14,610 0 186 04/01/2014 1
QE05.2 SCHEDULE D - PART 4 Show All Long-Term Bonds and Stock Sold, Redeemed or Otherwise Disposed of During the Current Quarter
6 1 4 NUMBER OF CUSIP 2 3 DISPOSAL 5 SHARES OF 7 8 IDENTIFICATION DESCRIPTION FOREIGN DATE NAME OF PURCHASER STOCK CONSIDERATION PAR VALUE ---------------------------------------------------------------------------------------------------- 31384V ZR 6 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 1,426 1,426 31384X 3K 2 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 15,210 15,210 31386D UB 4 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 360 360 31386F YK 5 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 1,267 1,267 31387F GV 0 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 6,433 6,433 31388C 3E 8 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 42,223 42,223 31388C 4X 5 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 5,097 5,097 31389G TU 4 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 1,169 1,169 31389L D8 9 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 4,267 4,267 31389N NB 7 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 2,199 2,199 31389V S5 7 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 4,669 4,669 31389V SY 4 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 1,230 1,230 31389X 6A 6 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 914 914 31390C AN 6 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 200 200 31390D HH 0 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 476 476 31390H CA 1 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 2,932 2,932 31390H CH 6 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 229 229 31390M HB 3 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 1,775 1,775 31400S Z9 3 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 137,210 137,210 31402U TY 8 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 55,605 55,605 31403B 3Y 7 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 201,355 201,355 31403B 3Z 4 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 52,471 52,471 313633 UK 3 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 97 97 31363C MM 8 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 12 12 31371J L4 4 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 150 150 31371J XA 7 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 2,447 2,447 31371K HY 0 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 10,801 10,801 31371K WJ 6 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 144,362 144,362 31371K XY 2 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 38,677 38,677 31371L DH 9 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 336,256 336,256 31382S GP 0 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 91,628 91,628 31383P 2X 3 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 254 254 31383R FV 9 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 4,043 4,043 31383W X7 1 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 141 141 31385H 5B 4 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 137,835 137,835 31385J GG 7 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 15,231 15,231 31385J P5 1 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 80,466 80,466 31385J RN 0 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 97,514 97,514 31386E C4 8 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 1,287 1,287 31386H CG 4 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 1,456 1,456 31386H MR 9 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 2,068 2,068 31386M ZB 9 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 2,805 2,805 31386P UJ 0 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 539 539 31386R KK 4 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 788 788 31387H V5 6 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 519 519 31387T X2 5 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 961 961 31387U V6 5 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 71,469 71,469 31388M NB 0 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 256 256 31388N Q6 6 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 14,453 14,453 CHANGE IN BOOK/ADJUSTED CARRYING VALUE ---------------------------------------------------------- 13 10 CURRENT 15 PRIOR YEAR 11 12 YEAR'S 14 TOTAL BOOK/ UNREALIZED CURRENT OTHER THAN TOTAL FOREIGN 1 ADJUSTED VALUATION YEAR'S TEMPORARY CHANGE IN EXCHANGE CUSIP 9 CARRYING INCREASE/ (AMORTIZATION)/ IMPAIRMENT B./A.C.V. CHANGE IN IDENTIFICATION ACTUAL COST VALUE (DECREASE) ACCRETION RECOGNIZED (11+12-13) B./A.C.V. ------------------------------------------------------------------------------------------------ 31384V ZR 6 1,470 1,499 (73) (73) 31384X 3K 2 15,676 16,000 (790) (790) 31386D UB 4 371 388 (27) (27) 31386F YK 5 1,293 1,319 (52) (52) 31387F GV 0 6,630 6,709 (276) (276) 31388C 3E 8 43,714 44,096 (1,873) (1,873) 31388C 4X 5 5,277 5,297 (200) (200) 31389G TU 4 1,220 1,232 (64) (64) 31389L D8 9 4,456 4,522 (255) (255) 31389N NB 7 2,296 2,320 (121) (121) 31389V S5 7 4,876 4,902 (234) (234) 31389V SY 4 1,284 1,287 (58) (58) 31389X 6A 6 955 963 (49) (49) 31390C AN 6 209 216 (16) (16) 31390D HH 0 497 503 (27) (27) 31390H CA 1 3,062 3,154 (222) (222) 31390H CH 6 240 246 (16) (16) 31390M HB 3 1,854 1,878 (102) (102) 31400S Z9 3 143,084 143,190 (5,980) (5,980) 31402U TY 8 55,833 55,791 (186) (186) 31403B 3Y 7 202,181 201,996 (641) (641) 31403B 3Z 4 52,686 52,645 (174) (174) 313633 UK 3 107 104 (7) (7) 31363C MM 8 13 14 (2) (2) 31371J L4 4 154 169 (20) (20) 31371J XA 7 2,500 2,621 (175) (175) 31371K HY 0 10,724 10,629 173 173 31371K WJ 6 147,565 151,355 (6,994) (6,994) 31371K XY 2 39,523 40,344 (1,668) (1,668) 31371L DH 9 338,515 339,032 (2,776) (2,776) 31382S GP 0 94,907 104,870 (13,242) (13,242) 31383P 2X 3 257 257 (4) (4) 31383R FV 9 3,958 3,880 163 163 31383W X7 1 138 134 7 7 31385H 5B 4 141,981 142,976 (5,141) (5,141) 31385J GG 7 15,769 17,007 (1,776) (1,776) 31385J P5 1 82,886 83,481 (3,016) (3,016) 31385J RN 0 100,448 101,242 (3,727) (3,727) 31386E C4 8 1,324 1,364 (77) (77) 31386H CG 4 1,481 1,539 (83) (83) 31386H MR 9 2,114 2,258 (189) (189) 31386M ZB 9 2,855 2,909 (104) (104) 31386P UJ 0 551 575 (36) (36) 31386R KK 4 805 843 (55) (55) 31387H V5 6 527 557 (38) (38) 31387T X2 5 969 986 (25) (25) 31387U V6 5 72,061 72,627 (1,158) (1,158) 31388M NB 0 260 271 (15) (15) 31388N Q6 6 14,888 14,896 (443) (443) 22 17 20 NAIC 16 FOREIGN 18 19 BOND DESIG- BOOK/ EXCHANGE REALIZED TOTAL INTEREST/ NATION ADJUSTED GAIN GAIN GAIN STOCK OR 1 CARRYING (LOSS) (LOSS) (LOSS) DIVIDENDS 21 MARKET CUSIP VALUE AT ON ON ON RECEIVED MATURITY INDICATOR IDENTIFICATION DISPOSAL DATE DISPOSAL DISPOSAL DISPOSAL DURING YEAR DATE (a) ---------------------------------------------------------------------------------------- 31384V ZR 6 1,426 0 23 08/01/2015 1 31384X 3K 2 15,210 0 224 06/01/2015 1 31386D UB 4 360 0 6 12/01/2015 1 31386F YK 5 1,267 0 20 01/01/2016 1 31387F GV 0 6,433 0 116 06/01/2016 1 31388C 3E 8 42,223 0 733 11/01/2016 1 31388C 4X 5 5,097 0 79 11/01/2016 1 31389G TU 4 1,169 0 18 02/01/2017 1 31389L D8 9 4,267 0 68 03/01/2017 1 31389N NB 7 2,199 0 34 04/01/2017 1 31389V S5 7 4,669 0 71 05/01/2017 1 31389V SY 4 1,230 0 19 05/01/2017 1 31389X 6A 6 914 0 14 05/01/2017 1 31390C AN 6 200 0 3 03/01/2017 1 31390D HH 0 476 0 7 04/01/2017 1 31390H CA 1 2,932 0 46 05/01/2017 1 31390H CH 6 229 0 4 05/01/2017 1 31390M HB 3 1,775 0 28 06/01/2017 1 31400S Z9 3 137,210 0 1,641 04/01/2018 1 31402U TY 8 55,605 0 631 09/01/2018 1 31403B 3Y 7 201,355 0 2,224 09/01/2018 1 31403B 3Z 4 52,471 0 572 09/01/2018 1 313633 UK 3 97 0 2 07/01/2019 1 31363C MM 8 12 0 0 11/01/2019 1 31371J L4 4 150 0 3 06/01/2030 1 31371J XA 7 2,447 0 45 03/01/2031 1 31371K HY 0 10,801 0 159 01/01/2032 1 31371K WJ 6 144,362 0 2,071 12/01/2032 1 31371K XY 2 38,677 0 543 01/01/2033 1 31371L DH 9 336,256 0 4,305 10/01/2033 1 31382S GP 0 91,628 0 1,474 04/01/2029 1 31383P 2X 3 254 0 4 09/01/2029 1 31383R FV 9 4,043 0 58 08/01/2029 1 31383W X7 1 141 0 2 11/01/2029 1 31385H 5B 4 137,835 0 1,912 02/01/2032 1 31385J GG 7 15,231 0 232 06/01/2032 1 31385J P5 1 80,466 0 1,129 10/01/2032 1 31385J RN 0 97,514 0 1,381 11/01/2032 1 31386E C4 8 1,287 0 19 04/01/2031 1 31386H CG 4 1,456 0 23 12/01/2030 1 31386H MR 9 2,068 0 39 01/01/2031 1 31386M ZB 9 2,805 0 39 10/01/2030 1 31386P UJ 0 539 0 9 01/01/2031 1 31386R KK 4 788 0 12 02/01/2031 1 31387H V5 6 519 0 8 05/01/2031 1 31387T X2 5 961 0 15 07/01/2031 1 31387U V6 5 71,469 0 1,244 07/01/2031 1 31388M NB 0 256 0 4 09/01/2031 1 31388N Q6 6 14,453 0 190 01/01/2032 1
QE05.3
6 1 4 NUMBER OF CUSIP 2 3 DISPOSAL 5 SHARES OF 7 8 IDENTIFICATION DESCRIPTION FOREIGN DATE NAME OF PURCHASER STOCK CONSIDERATION PAR VALUE ----------------------------------------------------------------------------------------------------- 31389C Q8 5 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 4,985 4,985 31389F J9 4 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 129,069 129,069 31389T VH 2 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 51,136 51,136 31390H ST 3 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 671 671 31390K CM 8 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 30,804 30,804 31390K WQ 7 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 2,497 2,497 31390P GK 7 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 40,295 40,295 31390Y PN 2 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 144,473 144,473 31391F TZ 1 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 377,452 377,452 31391U C5 2 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 1,686 1,686 31391U J2 2 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 1,940 1,940 31400C 6B 5 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 2,505 2,505 31400F C6 2 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 4,082 4,082 31400H YZ 0 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 16,303 16,303 31400J RY 7 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 171,702 171,702 31400K G3 4 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 34,797 34,797 31400K GZ 3 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 5,629 5,629 31400Q TN 3 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 25,336 25,336 31400R MA 6 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 2,781 2,781 31400R ML 2 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 16,698 16,698 31400R NT 4 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 609 609 31400T B2 2 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 6,303 6,303 31401A GE 1 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 12,463 12,463 31401B NS 0 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 63,889 63,889 31402Q LZ 2 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 60,835 60,835 31402Q TR 2 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 162,410 162,410 31402X EP 7 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 21,475 21,475 31402Y GF 5 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 75,013 75,013 31403B CG 6 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 11,433 11,433 31403F JF 2 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 11,401 11,401 31403F JW 5 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 12,612 12,612 31404M 6Q 6 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 14,297 14,297 31405A TY 9 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 18,925 18,925 31405A U9 2 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 157,623 157,623 31405D D4 6 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 20,698 20,698 31406A 6Y 3 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 295 295 31406D EL 6 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 106,007 106,007 31406D FK 7 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 163,585 163,585 31406M UD 6 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 226,696 226,696 31408E G5 5 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 266,278 266,278 31413Q R4 2 FNMA 30YR 01/01/2009 Various 0 0 31414A D5 8 FNMA 30YR 03/01/2009 SCHEDULED REDEMPTION 239,338 239,338 31414K 6R 6 FNMA 30YR ALT-A 03/01/2009 SCHEDULED REDEMPTION 1,353,975 1,353,975 31414K 6S 4 FNMA 30YR ALT-A 03/01/2009 SCHEDULED REDEMPTION 887,561 887,561 31377T VK 9 FNMA 30YR MULTI 03/01/2009 SCHEDULED REDEMPTION 7,591 7,591 31377T VL 7 FNMA 30YR MULTI 03/01/2009 SCHEDULED REDEMPTION 9,036 9,036 31377T WC 6 FNMA 30YR MULTI 03/01/2009 SCHEDULED REDEMPTION 6,792 6,792 31377T WK 8 FNMA 30YR MULTI 03/01/2009 SCHEDULED REDEMPTION 16,306 16,306 31410G NB 5 FNMA 30YR 10/20 INT 03/01/2009 SCHEDULED REDEMPTION 2,305,410 2,305,410 FIRST CHANGE IN BOOK/ADJUSTED CARRYING VALUE ---------------------------------------------------------- 13 10 CURRENT 15 PRIOR YEAR 11 12 YEAR'S 14 TOTAL BOOK/ UNREALIZED CURRENT OTHER THAN TOTAL FOREIGN 1 ADJUSTED VALUATION YEAR'S TEMPORARY CHANGE IN EXCHANGE CUSIP 9 CARRYING INCREASE/ (AMORTIZATION)/ IMPAIRMENT B./A.C.V. CHANGE IN IDENTIFICATION ACTUAL COST VALUE (DECREASE) ACCRETION RECOGNIZED (11+12-13) B./A.C.V. ------------------------------------------------------------------------------------------------- 31389C Q8 5 5,022 5,090 (105) (105) 31389F J9 4 132,951 133,648 (4,579) (4,579) 31389T VH 2 52,674 53,138 (2,002) (2,002) 31390H ST 3 679 687 (16) (16) 31390K CM 8 31,579 33,298 (2,493) (2,493) 31390K WQ 7 2,585 2,704 (207) (207) 31390P GK 7 42,134 45,301 (5,006) (5,006) 31390Y PN 2 148,819 149,885 (5,412) (5,412) 31391F TZ 1 390,545 390,504 (13,052) (13,052) 31391U C5 2 1,766 1,896 (210) (210) 31391U J2 2 2,032 2,151 (211) (211) 31400C 6B 5 2,522 2,523 (18) (18) 31400F C6 2 4,109 4,121 (40) (40) 31400H YZ 0 16,413 16,404 (100) (100) 31400J RY 7 175,377 175,511 (3,809) (3,809) 31400K G3 4 35,031 35,088 (291) (291) 31400K GZ 3 5,666 5,677 (49) (49) 31400Q TN 3 25,507 25,552 (216) (216) 31400R MA 6 2,800 2,801 (20) (20) 31400R ML 2 16,810 16,827 (128) (128) 31400R NT 4 647 645 (36) (36) 31400T B2 2 6,346 6,354 (51) (51) 31401A GE 1 12,546 12,557 (94) (94) 31401B NS 0 64,408 64,485 (596) (596) 31402Q LZ 2 61,244 61,290 (455) (455) 31402Q TR 2 168,043 169,783 (7,373) (7,373) 31402X EP 7 21,757 22,039 (564) (564) 31402Y GF 5 75,974 76,038 (1,025) (1,025) 31403B CG 6 11,744 12,086 (653) (653) 31403F JF 2 11,494 11,497 (95) (95) 31403F JW 5 12,714 12,710 (99) (99) 31404M 6Q 6 14,015 14,002 295 295 31405A TY 9 18,553 18,532 393 393 31405A U9 2 154,519 154,146 3,477 3,477 31405D D4 6 20,291 20,250 448 448 31406A 6Y 3 299 300 (5) (5) 31406D EL 6 107,365 107,428 (1,421) (1,421) 31406D FK 7 165,681 165,647 (2,061) (2,061) 31406M UD 6 234,560 235,832 (9,135) (9,135) 31408E G5 5 257,832 258,043 8,235 8,235 31413Q R4 2 0 0 0 31414A D5 8 251,155 251,053 (11,715) (11,715) 31414K 6R 6 1,405,595 1,399,858 (45,883) (45,883) 31414K 6S 4 921,399 919,205 (31,644) (31,644) 31377T VK 9 7,894 7,855 (264) (264) 31377T VL 7 9,365 9,322 (286) (286) 31377T WC 6 6,831 6,826 (34) (34) 31377T WK 8 16,749 16,690 (385) (385) 31410G NB 5 2,304,689 2,304,730 680 680 22 17 20 NAIC 16 FOREIGN 18 19 BOND DESIG- BOOK/ EXCHANGE REALIZED TOTAL INTEREST/ NATION ADJUSTED GAIN GAIN GAIN STOCK OR 1 CARRYING (LOSS) (LOSS) (LOSS) DIVIDENDS 21 MARKET CUSIP VALUE AT ON ON ON RECEIVED MATURITY INDICATOR IDENTIFICATION DISPOSAL DATE DISPOSAL DISPOSAL DISPOSAL DURING YEAR DATE (a) ---------------------------------------------------------------------------------------- 31389C Q8 5 4,985 0 59 12/01/2031 1 31389F J9 4 129,069 0 1,913 01/01/2032 1 31389T VH 2 51,136 0 760 10/01/2032 1 31390H ST 3 671 0 8 07/01/2033 1 31390K CM 8 30,804 0 467 06/01/2032 1 31390K WQ 7 2,497 0 36 08/01/2032 1 31390P GK 7 40,295 0 593 08/01/2032 1 31390Y PN 2 144,473 0 2,053 09/01/2032 1 31391F TZ 1 377,452 0 5,355 09/01/2032 1 31391U C5 2 1,686 0 24 01/01/2033 1 31391U J2 2 1,940 0 28 01/01/2033 1 31400C 6B 5 2,505 0 30 04/01/2033 1 31400F C6 2 4,082 0 53 03/01/2033 1 31400H YZ 0 16,303 0 219 03/01/2033 1 31400J RY 7 171,702 0 2,126 02/01/2033 1 31400K G3 4 34,797 0 409 03/01/2033 1 31400K GZ 3 5,629 0 53 03/01/2033 1 31400Q TN 3 25,336 0 330 04/01/2033 1 31400R MA 6 2,781 0 34 04/01/2033 1 31400R ML 2 16,698 0 227 03/01/2033 1 31400R NT 4 609 0 9 02/01/2033 1 31400T B2 2 6,303 0 86 05/01/2033 1 31401A GE 1 12,463 0 146 04/01/2033 1 31401B NS 0 63,889 0 829 04/01/2033 1 31402Q LZ 2 60,835 0 793 08/01/2033 1 31402Q TR 2 162,410 0 2,295 11/01/2034 1 31402X EP 7 21,475 0 305 07/01/2033 1 31402Y GF 5 75,013 0 1,008 10/01/2033 1 31403B CG 6 11,433 0 170 11/01/2033 1 31403F JF 2 11,401 0 138 10/01/2033 1 31403F JW 5 12,612 0 154 10/01/2033 1 31404M 6Q 6 14,297 0 190 06/01/2034 1 31405A TY 9 18,925 0 228 06/01/2034 1 31405A U9 2 157,623 0 2,017 06/01/2034 1 31405D D4 6 20,698 0 275 07/01/2034 1 31406A 6Y 3 295 0 4 12/01/2034 1 31406D EL 6 106,007 0 1,302 12/01/2034 1 31406D FK 7 163,585 0 2,041 12/01/2034 1 31406M UD 6 226,696 0 3,359 01/01/2035 1 31408E G5 5 266,278 0 3,475 01/01/2036 1 31413Q R4 2 0 0 09/01/2037 1 31414A D5 8 239,338 0 4,156 11/01/2037 1 31414K 6R 6 1,353,975 0 21,887 01/01/2038 1 31414K 6S 4 887,561 0 11,804 01/01/2038 1 31377T VK 9 7,591 0 97 04/01/2034 1 31377T VL 7 9,036 0 115 04/01/2034 1 31377T WC 6 6,792 0 81 03/01/2034 1 31377T WK 8 16,306 0 203 03/01/2034 1 31410G NB 5 2,305,410 0 32,790 10/01/2037 1
QE05.4 SCHEDULE D - PART 4 Show All Long-Term Bonds and Stock Sold, Redeemed or Otherwise Disposed of During the Current Quarter
6 1 4 NUMBER OF CUSIP 2 3 DISPOSAL 5 SHARES OF 7 8 IDENTIFICATION DESCRIPTION FOREIGN DATE NAME OF PURCHASER STOCK CONSIDERATION PAR VALUE ------------------------------------------------------------------------------------------------------ 31411V MZ 9 FNMA 30YR 03/01/2009 SCHEDULED 10/20 INT REDEMPTION FIRST 558,805 558,805 31411W NR 4 FNMA 30YR 03/01/2009 SCHEDULED 10/20 INT REDEMPTION FIRST 217,236 217,236 31412A D6 8 FNMA 30YR 03/01/2009 SCHEDULED 10/20 INT REDEMPTION FIRST 258,485 258,485 31359S J3 5 FNMA_01-19 03/01/2009 SCHEDULED REDEMPTION 65,120 65,120 31359S JT 8 FNMA_01-5 03/01/2009 SCHEDULED REDEMPTION 17,638 17,638 31392C KP 8 FNMA_02-15 03/25/2009 SCHEDULED REDEMPTION 139,538 139,538 31392F P9 2 FNMA_02-82 03/25/2009 SCHEDULED REDEMPTION 150,080 150,080 31394A E2 8 FNMA_04-69 03/01/2009 SCHEDULED REDEMPTION 173,434 173,434 31364H AJ 6 FNSTR_E 03/01/2009 SCHEDULED REDEMPTION 815 815 31364H AM 9 FNSTR_F 03/01/2009 SCHEDULED REDEMPTION 312 312 83162C QD 8 SBAP_06-20C 03/01/2009 SCHEDULED REDEMPTION 166,107 166,107 83162C QN 6 SBAP_06-20I 03/13/2009 Various 12,564,929 12,006,288 83162C QP 1 SBAP_06-20J 02/26/2009 BANC OF AMERICA SECURITIES LLC 6,525,940 6,258,018 795485 AA 9 SBM6_86-1 03/01/2009 SCHEDULED REDEMPTION 972 972 31374T C3 1 FNMA 15YR 03/01/2009 SCHEDULED REDEMPTION 18,940 18,940 3199999. Total - Bonds 39,754,202 38,927,640 - U.S. Special Revenue & Assessment BONDS - INDUSTRIAL AND MISCELLANEOUS 00432C AG 6 ACCSS_01 02/25/2009 SCHEDULED REDEMPTION 32,868 32,868 004406 AA 2 ACE_06-GP1 03/25/2009 SCHEDULED REDEMPTION 175,010 175,010 03062X AC 0 AMCAR_06-BG 03/06/2009 SCHEDULED REDEMPTION 586,642 586,642 024937 AA 2 AMERICAN 03/09/2009 IMPERIAL CAPITAL CAPITAL LLC STRATEGIES LTD. 8,883,280 25,000,000 001957 AV 1 AT&T CORP 03/15/2009 MATURED 450,000 450,000 05947U C8 9 BACM_05-1 03/01/2009 SCHEDULED REDEMPTION 0 0 05947U D2 1 BACM_05-1 03/01/2009 SCHEDULED REDEMPTION 156,108 156,108 87203R AA 0 BAE SYSTEMS F 03/15/2009 Various ASSET TRUST 56,839 56,839 084664 BD 2 BERKSHIRE 03/10/2009 BARCLAYS 987,206 HATHAWAY CAPITAL INC FINANCE CORP 985,000 084664 BG 5 BERKSHIRE 03/06/2009 BROADPOINT 751,508 HATHAWAY CAPITAL INC FINANCE CORP 735,000 111021 AD 3 BRITISH 2/19/2009 CREDIT SUISSE 3,783,914 TELECOMMUNICATIONS FIRST BOSTON PUBLIC F 3,620,000 07383F AQ 1 BSCMS_99-C1 03/01/2009 SCHEDULED REDEMPTION 670,010 670,010 12189P AJ 1 BURLINGTON 01/15/2009 SCHEDULED 142,469 NORTHERN AND REDEMPTION SANTE FE R 142,469 12189P AF 9 BURLINGTON 01/02/2009 SCHEDULED NORTHERN REDEMPTION SANTE FE R. 121,594 121,594 12322U AA 7 BUSHNELL LOAN 01/28/2009 SCHEDULED FUND II_08-1A REDEMPTION 1,033,021 1,033,021 144141 CK 2 CAROLINA 03/01/2009 MATURED POWER & LIGHT CO 3,000,000 3,000,000 14984W AA 8 CBAC_07-1A 03/01/2009 SCHEDULED REDEMPTION 238,805 238,805 172967 AX 9 CITIGROUP INC 03/15/2009 MATURED 5,000,000 5,000,000 161443 AH 9 CMAOT_05-B 02/15/2009 SCHEDULED REDEMPTION 215,082 215,082 14040K CH 9 COMT_02-1A 01/15/2009 SCHEDULED REDEMPTION 4,250,000 4,250,000 22541L AC 7 CREDIT SUISSE 02/24/2009 CREDIT SUISSE FIRST BOSTON FIRST BOSTON (USA) 5,104,200 5,000,000 12629R AA 4 CSAMF-4A 01/12/2009 SCHEDULED REDEMPTION 44,587 44,587 22540A 3E 6 CSFB_01-CK3 03/01/2009 SCHEDULED REDEMPTION 158,154 158,154 22540V N4 0 CSFB_02-HE11 03/25/2009 SCHEDULED REDEMPTION 36,800 36,800 22540A LK 2 CSFB_99-C1 03/11/2009 SCHEDULED REDEMPTION 507,982 507,982 12669F GX 5 CWHL_03-J13 02/04/2009 Various 1,608,534 1,668,737 23243N AF 5 CWL_06-S4 03/01/2009 SCHEDULED REDEMPTION 119,075 119,075 126683 AC 5 CWL_06-S5 03/01/2009 SCHEDULED REDEMPTION 51,236 51,236 12669R AB 3 CWL_07-S1 03/01/2009 SCHEDULED REDEMPTION 204,387 204,387 12669R AC 1 CWL_07-S1 03/01/2009 SCHEDULED REDEMPTION 204,387 204,387 23322B CM 8 DLJCM_98-CG1 03/01/2009 SCHEDULED REDEMPTION 439,789 439,789 264399 DL 7 DUKE ENERGY 01/01/2009 MATURED CAROLINAS LLC 1,250,000 1,250,000 CHANGE IN BOOK/ADJUSTED CARRYING VALUE ---------------------------------------------------------- 13 10 CURRENT 15 PRIOR YEAR 11 12 YEAR'S 14 TOTAL BOOK/ UNREALIZED CURRENT OTHER THAN TOTAL FOREIGN 1 ADJUSTED VALUATION YEAR'S TEMPORARY CHANGE IN EXCHANGE CUSIP 9 CARRYING INCREASE/ (AMORTIZATION)/ IMPAIRMENT B./A.C.V. CHANGE IN IDENTIFICATION ACTUAL COST VALUE (DECREASE) ACCRETION RECOGNIZED (11+12-13) B./A.C.V. ------------------------------------------------------------------------------------------------ 31411V MZ 9 544,617 546,521 12,284 12,284 31411W NR 4 211,686 212,360 4,875 4,875 31412A D6 8 251,963 252,759 5,726 5,726 31359S J3 5 68,325 68,251 (3,132) (3,132) 31359S JT 8 17,847 17,843 (205) (205) 31392C KP 8 140,639 139,538 0 31392F P9 2 150,127 150,080 0 31394A E2 8 180,968 183,397 (9,963) (9,963) 31364H AJ 6 742 803 12 12 31364H AM 9 325 312 0 83162C QD 8 164,290 164,411 1,696 1,696 83162C QN 6 12,006,288 12,006,288 0 83162C QP 1 6,258,018 6,258,018 0 795485 AA 9 956 972 0 31374T C3 1 18,952 18,950 (10) (10) 3199999. 39,161,131 39,183,990 0 (256,350) 0 (256,350) 0 BONDS - INDUSTRIAL AND MISCELLANEOUS 00432C AG 6 32,540 32,859 10 10 004406 AA 2 175,010 175,010 0 03062X AC 0 575,367 582,619 4,023 4,023 024937 AA 2 24,989,500 24,992,169 267 267 001957 AV 1 422,042 449,077 923 923 05947U C8 9 0 0 0 05947U D2 1 153,712 154,676 1,432 1,432 87203R AA 0 59,276 111,403 (3,211) (3,211) 084664 BD 2 983,900 983,918 45 45 084664 BG 5 732,948 732,980 76 76 111021 AD 3 3,915,593 3,704,503 (5,663) (5,663) 07383F AQ 1 690,424 670,335 (325) (325) 12189P AJ 1 142,469 142,469 0 12189P AF 9 143,386 136,230 (14,636) (14,636) 12322U AA 7 1,033,021 1,033,021 0 144141 CK 2 2,884,140 2,996,932 3,068 3,068 14984W AA 8 238,725 238,755 50 50 172967 AX 9 4,974,100 4,999,166 834 834 161443 AH 9 214,040 215,024 59 59 14040K CH 9 4,020,234 4,241,500 8,500 8,500 22541L AC 7 5,396,450 5,159,132 (7,577) (7,577) 12629R AA 4 44,729 44,633 (46) (46) 22540A 3E 6 172,771 161,773 (3,619) (3,619) 22540V N4 0 36,800 36,800 0 22540A LK 2 590,033 514,970 (6,987) (6,987) 12669F GX 5 1,653,093 1,655,272 171 171 23243N AF 5 119,073 119,074 1 1 126683 AC 5 51,235 51,235 1 1 12669R AB 3 204,385 204,386 1 1 12669R AC 1 204,377 204,381 6 6 23322B CM 8 488,956 441,480 (1,690) (1,690) 264399 DL 7 1,187,038 1,250,000 0 22 17 20 NAIC 16 FOREIGN 18 19 BOND DESIG- BOOK/ EXCHANGE REALIZED TOTAL INTEREST/ NATION ADJUSTED GAIN GAIN GAIN STOCK OR 1 CARRYING (LOSS) (LOSS) (LOSS) DIVIDENDS 21 MARKET CUSIP VALUE AT ON ON ON RECEIVED MATURITY INDICATOR IDENTIFICATION DISPOSAL DATE DISPOSAL DISPOSAL DISPOSAL DURING YEAR DATE (A) -------------------------------------- ---------------------- -------------------------------- 31411V MZ 9 558,805 0 7,678 05/01/2037 1 31411W NR 4 217,236 0 2,543 04/01/2037 1 31412A D6 8 258,485 0 3,348 05/01/2037 1 31359S J3 5 65,120 0 955 05/01/2031 1 31359S JT 8 17,638 0 275 03/01/2031 1 31392C KP 8 139,538 0 367 04/25/2032 1 31392F P9 2 150,080 0 334 12/25/2032 1 31394A E2 8 173,434 0 2,617 05/01/2033 1 31364H AJ 6 815 0 10 09/01/2010 1 31364H AM 9 312 0 5 05/01/2009 1 83162C QD 8 166,107 0 4,691 03/01/2026 1FE 83162C QN 6 12,006,288 558,641 558,641 365,404 09/01/2026 1FE 83162C QP 1 6,258,018 267,921 267,921 141,890 10/01/2026 1FE 795485 AA 9 972 0 13 12/01/2011 1FE 31374T C3 1 18,940 0 254 09/01/2013 1 3199999. 38,927,640 0 826,562 826,562 777,012 XXX XXX BONDS - INDUSTRIAL AND MISCELLANEOUS 00432C AG 6 32,868 0 253 05/25/2034 1FE 004406 AA 2 175,010 0 219 02/25/2031 1FE 03062X AC 0 586,642 0 6,842 10/06/2011 2FE 024937 AA 2 24,992,436 (16,109,156) (16,109,156) 955,723 08/01/2012 3FE 001957 AV 1 450,000 0 13,500 03/15/2009 1FE 05947U C8 9 0 0 11/01/2042 1FE 05947U D2 1 156,108 0 1,752 11/01/2042 1FE 87203R AA 0 56,839 0 1,892 09/15/2013 2FE 084664 BD 2 983,963 3,243 3,243 14,852 05/15/2013 1FE 084664 BG 5 733,055 18,453 18,453 21,948 08/15/2013 1FE 111021 AD 3 3,698,840 85,074 85,074 56,808 12/15/2010 2FE 07383F AQ 1 670,010 0 5,093 02/01/2031 1FE 12189P AJ 1 142,469 0 4,792 07/15/2022 1FE 12189P AF 9 121,594 0 4,602 01/02/2021 1FE 12322U AA 7 1,033,021 0 14,563 10/28/2015 1FE 144141 CK 2 3,000,000 0 89,250 03/01/2009 1FE 14984W AA 8 238,805 0 3,259 07/01/2039 1FE 172967 AX 9 5,000,000 0 155,000 03/15/2009 1FE 161443 AH 9 215,082 0 1,361 06/15/2012 1FE 14040K CH 9 4,250,000 0 6,569 11/15/2011 1FE 22541L AC 7 5,151,555 (47,355) (47,355) 200,417 01/15/2012 1FE 12629R AA 4 44,587 0 571 06/09/2016 1FE 22540A 3E 6 158,154 0 2,283 06/01/2034 1FE 22540V N4 0 36,800 0 147 10/25/2032 1FE 22540A LK 2 507,982 0 8,399 09/11/2041 1FE 12669F GX 5 1,655,442 (46,908) (46,908) 15,671 01/01/2019 1FE 23243N AF 5 119,075 0 1,560 07/01/2034 2FE 126683 AC 5 51,236 0 707 06/01/2035 5FE 12669R AB 3 204,387 0 2,618 11/01/2036 4FE 12669R AC 1 204,387 0 2,712 11/01/2036 4FE 23322B CM 8 439,789 0 5,647 06/01/2031 1FE 264399 DL 7 1,250,000 0 33,594 01/01/2009 1FE
QE05.5 SCHEDULE D - PART 4 Show All Long-Term Bonds and Stock Sold, Redeemed or Otherwise Disposed of During the Current Quarter
6 1 4 NUMBER OF CUSIP 2 3 DISPOSAL 5 SHARES OF 7 8 IDENTIFICATION DESCRIPTION FOREIGN DATE NAME OF PURCHASER STOCK CONSIDERATION PAR VALUE ----------------------------------------------------------------------------------------------------- 294751 BP 6 EQABS_02-5 03/01/2009 SCHEDULED REDEMPTION 132,933 132,933 31865Q AH 4 FARGT_03-2 03/15/2009 SCHEDULED REDEMPTION 115,869 115,869 31331F AU 5 FEDERAL EXPRESS CORP 1997 PASS THR 01/15/2009 SCHEDULED REDEMPTION 112,245 112,245 35729P AK 6 FHLT_02-2 03/25/2009 SCHEDULED REDEMPTION 565,719 565,719 35729P AT 7 FHLT_03-1 02/25/2009 SCHEDULED REDEMPTION 51,630 51,630 350259 AA 5 FOSTERS FINANCE CORPORATION F 03/13/2009 STIFEL, NICOLAUS & CO 5,549,610 5,500,000 337378 AB 9 FUNBC_99-C4 03/01/2009 SCHEDULED REDEMPTION 272,043 272,043 337366 AB 4 FUNCM_99-C2 01/01/2009 SCHEDULED REDEMPTION 323,584 323,584 337366 AE 8 FUNCM_99-C2 03/01/2009 SCHEDULED REDEMPTION 3,000,000 3,000,000 36158Y AB 5 GECMC_00-1 03/01/2009 SCHEDULED REDEMPTION 76,348 76,348 361849 QE 5 GMACC_01-C1 03/01/2009 SCHEDULED REDEMPTION 9,012 9,012 361849 CP 5 GMACC_97-C2 03/01/2009 SCHEDULED REDEMPTION 31,406 31,406 38141M MP 3 GOLDMAN SACHS GROUP INC. (THE) 02/25/2009 MATURED 3,000,000 3,000,000 393505 KD 3 GT_95-9 03/15/2009 SCHEDULED REDEMPTION 74,939 74,939 449182 BL 7 HART_05-A 03/15/2009 SCHEDULED REDEMPTION 130,797 130,797 449182 BN 3 HART_05-A 03/15/2009 SCHEDULED REDEMPTION 1,066,698 1,066,698 22541N HH 5 HEAT_02-3 03/25/2009 SCHEDULED REDEMPTION 252,603 252,603 441812 GE 8 HOUSEHOLD FINANCE CORPORATION 02/01/2009 MATURED 2,000,000 2,000,000 403914 AB 0 HSBC USA INC 03/01/2009 MATURED 300,000 300,000 449670 BB 3 IMCHE_96-2 03/01/2009 SCHEDULED REDEMPTION 14,757 14,757 464187 AF 0 IRWHE_02-A 03/01/2009 SCHEDULED REDEMPTION 104,556 104,556 244217 BG 9 JOHN DEERE CAPITAL CORP 03/04/2009 Various 161,101 150,000 24422E QQ 5 JOHN DEERE CAPITAL CORPORATION 02/09/2009 BARCLAYS CAPITAL INC 14,952,940 15,000,000 617059 EU 0 JPMC_98-C6 03/01/2009 SCHEDULED REDEMPTION 2,400,848 2,400,848 46625M 2L 2 JPMCC_04- CB8 03/01/2009 SCHEDULED REDEMPTION 27,059 27,059 46625Y TY 9 JPMCC_05- LDP4 03/01/2009 SCHEDULED REDEMPTION 65,329 65,329 49725V AA 0 KIOWA POWER PARTNERS LLC SER A 03/30/2009 SCHEDULED REDEMPTION 194,242 194,242 493268 BB 1 KSLT_01-A 03/27/2009 SCHEDULED REDEMPTION 73,236 73,236 493268 BG 0 KSLT_02-A 02/27/2009 SCHEDULED REDEMPTION 109,621 109,621 501773 CS 2 LBCMT_99-C1 03/01/2009 SCHEDULED REDEMPTION 2,862,645 2,862,645 86359D UE 5 LBSBC_05-2A 01/01/2009 SCHEDULED REDEMPTION 15,959 15,959 52520V AB 9 LBSBC_06-2A 03/01/2009 SCHEDULED REDEMPTION 927,303 927,303 52108H LG 7 LBUBS_02-C4 03/11/2009 SCHEDULED REDEMPTION 84,442 84,442 52521R CN 9 LMT_07-5 03/01/2009 SCHEDULED REDEMPTION 458,455 458,455 52524P AN 2 LXS_07-6 03/01/2009 SCHEDULED REDEMPTION 563,122 563,122 55262T EC 3 MBNAM_99-B 03/15/2009 SCHEDULED REDEMPTION 7,250,000 7,250,000 590188 JP 4 MERRILL LYNCH & CO. INC 02/17/2009 MATURED 3,000,000 3,000,000 57117P AH 7 MLR_06-1A 02/15/2009 SCHEDULED REDEMPTION 57,941 57,941 61746R AG 6 MSAC_02-NC6 03/25/2009 SCHEDULED REDEMPTION 383,439 383,439 617451 CM 9 MSC_06-T21 03/01/2009 SCHEDULED REDEMPTION 72,749 72,749 61745M NR 0 MSC_99-LIFE 03/01/2009 SCHEDULED REDEMPTION 1,274,506 1,274,506 61746W GB 0 MSDWC_01- TOP1 03/01/2009 SCHEDULED REDEMPTION 30,529 30,529 61746W HF 0 MSDWC_01- TOP3 03/01/2009 SCHEDULED REDEMPTION 34,464 34,464 61746W WT 3 MSDWC_02- IQ3 03/01/2009 Various 80,927 80,927 655042 AC 3 NOBLE DRILLING CORP 03/15/2009 MATURED 250,000 250,000 674135 DM 7 OAK_98-B 03/01/2009 SCHEDULED REDEMPTION 36,542 36,542 67773# AD 2 OHIO VALLEY ELECTRIC CORP 02/15/2009 SCHEDULED REDEMPTION 313,006 313,006 74438W AB 2 PMCF_01- ROCK 03/01/2009 SCHEDULED REDEMPTION 86,887 86,887 69348H BK 3 PNCMA_00-C1 03/01/2009 SCHEDULED REDEMPTION 467,909 467,909 CHANGE IN BOOK/ADJUSTED CARRYING VALUE ---------------------------------------------------------- 13 10 CURRENT 15 PRIOR YEAR 11 12 YEAR'S 14 TOTAL BOOK/ UNREALIZED CURRENT OTHER THAN TOTAL FOREIGN 1 ADJUSTED VALUATION YEAR'S TEMPORARY CHANGE IN EXCHANGE CUSIP 9 CARRYING INCREASE/ (AMORTIZATION)/ IMPAIRMENT B./A.C.V. CHANGE IN IDENTIFICATION ACTUAL COST VALUE (DECREASE) ACCRETION RECOGNIZED (11+12-13) B./A.C.V. ------------------------------------------------------------------------------------------------ 294751 BP 6 132,933 132,933 0 31865Q AH 4 115,869 115,869 0 31331F AU 5 119,594 116,411 (4,166) (4,166) 35729P AK 6 563,244 560,060 5,659 5,659 35729P AT 7 51,589 51,630 0 350259 AA 5 5,770,134 5,589,894 (7,400) (7,400) 337378 AB 9 305,846 275,730 (3,687) (3,687) 337366 AB 4 329,126 323,705 (122) (122) 337366 AE 8 3,044,994 3,002,538 (2,538) (2,538) 36158Y AB 5 78,629 76,889 (542) (542) 361849 QE 5 9,944 9,349 (337) (337) 361849 CP 5 32,024 31,406 0 38141M MP 3 2,951,160 2,998,827 1,173 1,173 393505 KD 3 77,398 75,054 (115) (115) 449182 BL 7 130,773 130,795 3 3 449182 BN 3 1,066,538 1,066,686 12 12 22541N HH 5 252,603 252,603 0 441812 GE 8 1,921,100 1,998,921 1,079 1,079 403914 AB 0 315,715 300,516 (516) (516) 449670 BB 3 15,308 15,089 (332) (332) 464187 AF 0 104,527 104,556 0 244217 BG 9 171,174 158,725 (397) (397) 24422E QQ 5 14,890,000 14,904,828 2,253 2,253 617059 EU 0 2,624,160 2,423,581 (22,733) (22,733) 46625M 2L 2 25,196 25,610 1,450 1,450 46625Y TY 9 65,654 65,433 (103) (103) 49725V AA 0 194,242 194,242 0 493268 BB 1 72,261 73,105 131 131 493268 BG 0 109,621 109,621 0 501773 CS 2 2,949,083 2,864,949 (2,304) (2,304) 86359D UE 5 15,957 15,957 2 2 52520V AB 9 927,259 927,264 39 39 52108H LG 7 84,862 84,568 (125) (125) 52521R CN 9 463,140 289,465 168,990 168,990 52524P AN 2 570,337 568,467 (5,345) (5,345) 55262T EC 3 6,788,379 7,223,381 26,619 26,619 590188 JP 4 2,951,700 2,999,018 982 982 57117P AH 7 57,938 57,939 1 1 61746R AG 6 378,627 382,550 889 889 617451 CM 9 72,928 72,815 (67) (67) 61745M NR 0 1,461,842 1,287,086 (12,580) (12,580) 61746W GB 0 30,927 30,927 (398) (398) 61746W HF 0 37,024 35,208 (745) (745) 61746W WT 3 81,356 107,601 (210) (210) 655042 AC 3 279,309 251,142 (1,142) (1,142) 674135 DM 7 36,526 36,542 0 67773# AD 2 313,006 313,006 0 74438W AB 2 88,666 87,490 (602) (602) 69348H BK 3 534,933 477,574 (9,665) (9,665) 22 17 20 NAIC 16 FOREIGN 18 19 BOND DESIG- BOOK/ EXCHANGE REALIZED TOTAL INTEREST/ NATION ADJUSTED GAIN GAIN GAIN STOCK OR 1 CARRYING (LOSS) (LOSS) (LOSS) DIVIDENDS 21 MARKET CUSIP VALUE AT ON ON ON RECEIVED MATURITY INDICATOR IDENTIFICATION DISPOSAL DATE DISPOSAL DISPOSAL DISPOSAL DURING YEAR DATE (A) ---------------------------------------------------------------------------------------- 294751 BP 6 132,933 0 1,736 11/01/2032 1FE 31865Q AH 4 115,869 0 845 09/15/2010 2FE 31331F AU 5 112,245 0 4,209 01/15/2018 1 35729P AK 6 565,719 0 2,626 10/25/2033 1FE 35729P AT 7 51,630 0 327 02/25/2033 2FE 350259 AA 5 5,582,494 (32,884) (32,884) 97,682 06/15/2011 2FE 337378 AB 9 272,043 0 4,974 12/01/2031 1FE 337366 AB 4 323,584 0 1,792 06/01/2031 1FE 337366 AE 8 3,000,000 0 39,162 06/01/2031 1FE 36158Y AB 5 76,348 0 954 01/01/2033 1FE 361849 QE 5 9,012 0 138 04/01/2034 1FE 361849 CP 5 31,406 0 533 04/01/2029 1FE 38141M MP 3 3,000,000 0 97,500 02/25/2009 1FE 393505 KD 3 74,939 0 1,197 01/15/2026 1FE 449182 BL 7 130,797 0 1,223 02/15/2012 1FE 449182 BN 3 1,066,698 0 10,566 02/15/2012 1FE 22541N HH 5 252,603 0 1,047 02/25/2033 3FE 441812 GE 8 2,000,000 0 58,750 02/01/2009 1FE 403914 AB 0 300,000 0 9,938 03/01/2009 1FE 449670 BB 3 14,757 0 260 07/01/2026 1FE 464187 AF 0 104,556 0 1,699 05/01/2032 1FE 244217 BG 9 158,328 2,772 2,772 4,753 03/15/2012 1FE 24422E QQ 5 14,907,081 45,859 45,859 240,171 04/03/2013 1FE 617059 EU 0 2,400,848 0 41,889 01/01/2030 1FE 46625M 2L 2 27,059 0 253 01/01/2039 1FE 46625Y TY 9 65,329 0 712 10/01/2042 1FE 49725V AA 0 194,242 0 2,336 12/30/2013 2FE 493268 BB 1 73,236 0 361 06/29/2037 1FE 493268 BG 0 109,621 0 803 11/30/2032 1FE 501773 CS 2 2,862,645 0 44,797 06/01/2031 1FE 86359D UE 5 15,959 0 147 09/01/2030 1FE 52520V AB 9 927,303 0 10,939 09/01/2036 1FE 52108H LG 7 84,442 0 775 09/11/2026 1FE 52521R CN 9 458,455 0 7,171 06/01/2037 2FE 52524P AN 2 563,122 0 8,307 05/01/2037 1FE 55262T EC 3 7,250,000 0 112,375 08/15/2011 1FE 590188 JP 4 3,000,000 0 90,000 02/17/2009 1FE 57117P AH 7 57,941 0 648 09/16/2013 1FE 61746R AG 6 383,439 0 1,582 11/25/2032 1FE 617451 CM 9 72,749 0 807 10/01/2052 1FE 61745M NR 0 1,274,506 0 19,222 04/01/2033 1FE 61746W GB 0 30,529 0 458 02/01/2033 1FE 61746W HF 0 34,464 0 495 07/01/2033 1FE 61746W WT 3 80,927 0 902 09/01/2037 1FE 655042 AC 3 250,000 0 8,688 03/15/2009 1FE 674135 DM 7 36,542 0 511 03/01/2017 1FE 67773# AD 2 313,006 0 9,077 02/15/2026 2 74438W AB 2 86,887 0 1,296 05/01/2034 1FE 69348H BK 3 467,909 0 8,406 02/01/2010 1FE
QE05.6 SCHEDULE D - PART 4 Show All Long-Term Bonds and Stock Sold, Redeemed or Otherwise Disposed of During the Current Quarter
6 1 4 NUMBER OF CUSIP 2 3 DISPOSAL 5 SHARES OF 7 8 IDENTIFICATION DESCRIPTION FOREIGN DATE NAME OF PURCHASER STOCK CONSIDERATION PAR VALUE -------------------------------------------------------------------------------------------------------- 73664# AA 8 PORTLAND NATURAL GAS TRANSMISSION 03/30/2009 SCHEDULED REDEMPTION 70,364 70,364 74160M DK 5 PRIME_04-CL1 03/01/2009 SCHEDULED REDEMPTION 53,175 53,175 75970J AX 4 RAMC_07-1 03/01/2009 SCHEDULED REDEMPTION 771,290 771,290 760985 FA 4 RAMP_01-RS3 03/01/2009 SCHEDULED REDEMPTION 107,668 107,668 760985 GQ 8 RAMP_02-RS1 03/01/2009 SCHEDULED REDEMPTION 18,218 18,218 86359A PY 3 SASC_03-BC2 03/25/2009 SCHEDULED REDEMPTION 160,767 160,767 805564 GS 4 SAST_00-3 03/01/2009 Various 50,904 50,904 83162C NX 7 SBAP_04-20H 02/01/2009 SCHEDULED REDEMPTION 323,536 323,536 83162C PR 8 SBAP_05-20G 01/01/2009 SCHEDULED REDEMPTION 400,435 400,435 83162C PS 6 SBAP_05-20H 02/01/2009 SCHEDULED REDEMPTION 134,871 134,871 83162C QX 4 SBAP_07-20C 03/01/2009 SCHEDULED REDEMPTION 560,406 560,406 83162C QY 2 SBAP_07-20D 03/26/2009 Various 8,450,591 8,107,272 79548C BH 8 SBM7_01-C1 03/01/2009 SCHEDULED REDEMPTION 99,160 99,160 79549A JJ 9 SBM7_01-C2 03/01/2009 SCHEDULED REDEMPTION 69,636 69,636 82567D AE 4 SHURGARD STORAGE CENTER INC 02/12/2009 TENDER TRANSACTION 2,000,000 2,000,000 84860R AA 1 SPMF_06-1A 03/01/2009 SCHEDULED REDEMPTION 51,289 51,289 85458# AA 2 STANLEY ACCOUNT VALUE PLAN TRUST 03/30/2009 SCHEDULED REDEMPTION 14,616 14,616 866348 AA 3 SUMM_02-1 03/12/2009 SCHEDULED REDEMPTION 227,841 227,841 878742 AE 5 TECK COMINCO LIMITED A 03/26/2009 Various 1,918,500 3,900,000 89352L AE 0 TRANSCANADA PIPELINES LTD A 01/21/2009 MATURED 2,750,000 2,750,000 90783X AA 9 UNION PACIFIC 2007-3 PASS THROUGH 01/02/2009 SCHEDULED REDEMPTION 500,366 500,366 92344G AT 3 VERIZON GLOBAL FUNDING CORPORATION 01/20/2009 STIFEL, NICOLAUS & CO 751,982 700,000 924172 D@ 5 VERMONT TRANSCO LLC SERIES L FMB 01/01/2009 SCHEDULED REDEMPTION 11,991 11,991 863572 L9 2 WAMU_00-1 03/25/2009 SCHEDULED REDEMPTION 29,604 29,604 929766 BJ 1 WBCMT_02-C2 03/01/2009 SCHEDULED REDEMPTION 93,420 93,420 929766 B8 5 WBCMT_05-C17 03/01/2009 SCHEDULED REDEMPTION 130,309 130,309 92976B FP 2 WBCMT_06-C24 03/01/2009 SCHEDULED REDEMPTION 41,256 41,256 94985F AA 6 WFALT_07-PA2 03/01/2009 SCHEDULED REDEMPTION 320,529 320,529 949837 AA 6 WFMBS_07-10 03/01/2009 SCHEDULED REDEMPTION 687,436 687,436 98472# AF 6 YANCEY BROS CO SENIOR HIMCO OPERATIONAL SECURED 02/17/2009 TRANSACTION 11,625,000 12,500,000 3899999 Total - Bonds - Industrial & Miscellaneous 126,108,595 144,446,239 BONDS - CREDIT TENANT LOANS 93114CAA 9 LEHMAN C.P. INC. WAL-MART LEASE-BK 03/10/2009 SCHEDULED REDEMPTION 176,109 176,109 4199999 Total - Bonds - Credit Tenant Loans 176,109 176,109 BONDS - HYBRUD SECURITIES 125577AX 4 CIT GROUP INC 01/07/2009 Various 508,650 1,447,000 4899999 Total - Bonds - Hybrid Securities 508,650 1,447,000 8399997 Total - Bonds - Part 4 5,321,093,242 5,091,925,917 8399999 Total - Bonds 5,321,093,242 5,091,925,917 9999999 Total - Bonds, Preferred and Common Stocks 5,321,093,242 XXX CHANGE IN BOOK/ADJUSTED CARRYING VALUE ------------------------------------------------------------ 13 10 CURRENT 15 PRIOR YEAR 11 12 YEAR'S 14 TOTAL BOOK/ UNREALIZED CURRENT OTHER THAN TOTAL FOREIGN 1 ADJUSTED VALUATION YEAR'S TEMPORARY CHANGE IN EXCHANGE CUSIP 9 CARRYING INCREASE/ (AMORTIZATION)/ IMPAIRMENT B./A.C.V. CHANGE IN IDENTIFICATION ACTUAL COST VALUE (DECREASE) ACCRETION RECOGNIZED (11+12-13) B./A.C.V. -------------------------------------------------------------------------------------------------------- 73664# AA 8 70,364 70,364 0 74160M DK 5 54,573 54,450 (1,275) (1,275) 75970J AX 4 771,282 771,287 2 2 760985 FA 4 112,900 110,899 (3,231) (3,231) 760985 GQ 8 17,766 17,889 328 328 86359A PY 3 156,899 160,606 161 161 805564 GS 4 54,749 80,092 (593) (593) 83162C NX 7 323,941 323,959 (423) (423) 83162C PR 8 378,744 378,414 22,021 22,021 83162C PS 6 130,340 130,270 4,601 4,601 83162C QX 4 560,406 560,406 0 83162C QY 2 8,107,272 8,107,272 0 79548C BH 8 102,780 100,412 (1,253) (1,253) 79549A JJ 9 76,283 71,668 (2,032) (2,032) 82567D AE 4 2,104,247 2,104,119 (5,215) (5,215) 84860R AA 1 51,273 51,275 14 14 85458# AA 2 14,616 14,616 0 866348 AA 3 227,841 227,841 0 878742 AE 5 1,548,008 1,549,976 1,541 1,541 89352L AE 0 2,726,983 2,749,689 311 311 90783X AA 9 500,366 500,366 0 92344G AT 3 791,784 741,664 (624) (624) 924172 D@ 5 11,991 11,991 0 863572 L9 2 29,604 29,604 0 929766 BJ 1 93,417 93,419 1 1 929766 B8 5 130,956 130,449 (140) (140) 92976B FP 2 41,462 41,493 (238) (238) 94985F AA 6 313,731 314,186 6,343 6,343 949837 AA 6 674,009 675,634 11,802 11,802 98472# AF 6 12,500,000 12,500,000 0 3899999 142,873,107 142,407,647 0 140,923 0 140,923 0 BONDS - CREDIT TENANT LOANS 93114CAA 9 200,389 191,371 (15,262) (15,262) 4199999 200,389 191,371 0 (15,262) 0 (15,262) 0 BONDS - HYBRUD SECURITIES 125577AX 4 403,260 403,511 4 (4) (0) 4899999 403,260 403,511 4 (4) 0 (0) 0 8399997 5,306,927,337 2,640,379,149 4 (1,115,817) 0 (1,115,814) 30,181,311 8399999 5,306,927,337 2,640,379,149 4 (1,115,817) 0 (1,115,814) 30,181,311 9999999 5,306,927,337 2,640,379,149 4 (1,115,817) 0 (1,115,814) 30,181,311 22 17 20 NAIC 16 FOREIGN 18 19 BOND DESIG- BOOK/ EXCHANGE REALIZED TOTAL INTEREST/ NATION ADJUSTED GAIN GAIN GAIN STOCK OR 1 CARRYING (LOSS) (LOSS) (LOSS) DIVIDENDS 21 MARKET CUSIP VALUE AT ON ON ON RECEIVED MATURITY INDICATOR IDENTIFICATION DISPOSAL DATE DISPOSAL DISPOSAL DISPOSAL DURING YEAR DATE (A) -------------------------------------------------------------------------------------------------- 73664# AA 8 70,364 0 1,038 12/31/2018 2 74160M DK 5 53,175 0 756 02/01/2034 1FE 75970J AX 4 771,290 0 10,327 04/01/2037 1FE 760985 FA 4 107,668 0 1,443 10/01/2031 2FE 760985 GQ 8 18,218 0 240 01/01/2032 1FE 86359A PY 3 160,767 0 517 02/25/2033 1FE 805564 GS 4 50,904 0 1,108 12/01/2030 1FE 83162C NX 7 323,536 0 8,563 08/01/2024 1FE 83162C PR 8 400,435 0 9,603 07/01/2025 1FE 83162C PS 6 134,871 0 3,498 08/01/2025 1FE 83162C QX 4 560,406 0 14,760 03/01/2027 1FE 83162C QY 2 8,107,272 343,319 343,319 209,545 04/01/2027 1FE 79548C BH 8 99,160 0 1,440 12/01/2035 1FE 79549A JJ 9 69,636 0 945 10/01/2011 1FE 82567D AE 4 2,098,904 (98,904) (98,904) 73,194 02/22/2011 1FE 84860R AA 1 51,289 0 657 03/01/2024 2FE 85458# AA 2 14,616 0 197 12/31/2009 1 866348 AA 3 227,841 0 613 08/12/2047 1FE 878742 AE 5 1,551,517 366,983 366,983 119,182 10/01/2035 3FE 89352L AE 0 2,750,000 0 59,492 01/21/2009 1FE 90783X AA 9 500,366 0 15,451 01/02/2031 1FE 92344G AT 3 741,039 10,943 10,943 20,363 09/01/2012 1FE 924172 D@ 5 11,991 0 219 04/01/2018 1 863572 L9 2 29,604 0 118 01/25/2040 1FE 929766 BJ 1 93,420 0 856 11/01/2034 1FE 929766 B8 5 130,309 0 1,402 03/01/2042 1FE 92976B FP 2 41,256 0 513 03/01/2045 1FE 94985F AA 6 320,529 0 4,383 06/01/2037 3FE 949837 AA 6 687,436 0 9,843 07/01/2037 1FE 98472# AF 6 12,500,000 (875,000) (875,000) 322,628 09/30/2015 3 3899999 142,442,157 0 (16,333,562) (16,333,562) 3,480,539 XXX XXX BONDS - CREDIT TENANT LOANS 93114CAA 9 176,109 0 3,408 01/10/2017 1 4199999 176,109 0 0 0 3,408 XXX XXX BONDS - HYBRUD SECURITIES 125577AX 4 403,511 105,139 105,139 28,294 03/15/2067 3FE 4899999 403,511 0 105,139 105,139 28,294 XXX XXX 8399997 5,304,653,879 46,702,821 (30,263,457) 16,439,364 25,541,037 XXX XXX 8399999 5,304,653,879 46,702,821 (30,263,457) 16,439,364 25,541,037 XXX XXX 9999999 5,304,653,879 46,702,821 (30,263,457) 16,439,364 25,541,037 XXX XXX
(a) For all common stock bearing the NAIC market indicator "U" provide: the number of such issues: 0. SCH. DB-PART A-SECTION 1 NONE SCH. DB-PART B-SECTION 1 NONE SCH. DB-PART C-SECTION 1 NONE SCH. DB-PART D-SECTION 1 NONE QE06, QE07 SCHEDULE E - PART 1 - CASH Month End Depository Balances
4 5 AMOUNT OF AMOUNT OF INTEREST INTEREST BOOK BALANCE AT END OF EACH MONTH 3 RECEIVED ACCRUED DURING CURRENT QUARTER RATE DURING AT CURRENT -------------------------------------- 1 2 OF CURRENT STATEMENT 6 7 8 9 DEPOSITORY CODE INTEREST QUARTER DATE FIRST MONTH SECOND MONTH THIRD MONTH * ---------------------------------------- ---- -------- --------- ---------- ------------ ------------ ------------ --- OPEN DEPOSITORIES Bank of America N.A. Springfield, MA 100,000 160,000 100,000 XXX (Hartford) Bank of America N.A. Springfield, MA 3,283,632 2,083,962 1,088,945 XXX (Hartford) Bank of America N.A. Springfield, MA 25,000 73,668 158,101 XXX (Hartford) Bank of America N.A. Springfield, MA 230,643 273,026 314,919 XXX (Hartford) Bank One, NA Chicago, IL 185,773 179,701 211,413 XXX JPMorgan Chase Bank - London, England 347,761 339,813 342,703 XXX GB JPMorgan Chase Bank - London, England 148,141,697 57,982,225 56,570,962 XXX GB JPMorgan Chase Bank, New York City, NY 4,954,851 888 (1,070,830)XXX National Association. JPMorgan Chase Bank, New York City, NY 67,500 234,817 208,140 XXX National Association. JPMorgan Chase Bank, New York City, NY 999 18,625,999 525 XXX National Association. State Street Bank and Boston, MA 10,366 251,019 8,434 XXX Trust Company U.S. Bank N.A. Milwaukee, WI 94,240 178,362 136,595 XXX (Cincinnati) Wachovia Bank N.A. Avondale, PA 178,409 140,049 138,249 XXX ((NJ/PA/NY) Wells Fargo Bank, N.A San Francisco, CA 319,964 277,919 163,136 XXX Wells Fargo Bank, N.A San Francisco, CA 10,829,676 10,736,370 10,339,304 XXX 0199998. Deposits in.59 depositories that do not exceed the allowable limit in any one depository (see Instructions) - Open Depositories XXX XXX 94 502,773 338,569 440,594 XXX --- --- --- ----------- ---------- ---------- --- 0199999. Total Open Depositories XXX XXX 94 0 169,273,284 91,876,387 69,151,190 XXX --- --- --- --- ----------- ---------- ---------- --- 0399999. Total Cash on Deposit XXX XXX 94 0 169,273,284 91,876,387 69,151,190 XXX --- --- --- --- ----------- ---------- ---------- --- 0599999. Total Cash XXX XXX 94 0 169,273,284 91,876,387 69,151,190 XXX === === === === =========== ========== ========== ===
QE08 SCHEDULE E - PART 2 - CASH EQUIVALENTS Show Investments Owned End of Current Quarter
7 AMOUNT OF 8 4 6 INTEREST AMOUNT 3 RATE 5 BOOK/ADJUSTED DUE RECEIVED 1 2 DATE OF MATURITY CARRYING & DURING DESCRIPTION CODE ACQUIRED INTEREST DATE VALUE ACCRUED YEAR ------------------------------- ---- ---------- -------- ------------ --------------- -------- -------- INDUSTRIAL AND MISCELLANEOUS (UNAFFILIATED) - ISSUER OBLIGATIONS DEUT GSI 03/31/2009 0.190 04/01/2009 1,775,000 3299999. Industrial and Miscellaneous (Unaffiliated) - Issuer Obligations 1,775,000 0 0 3899999. Total - Industrial and Miscellaneous (Unaffiliated) 1,775,000 0 0 TOTAL 7799999. Subtotals - Issuer Obligations 1,775,000 0 0 8399999. Subtotals - Bonds 1,775,000 0 0 8699999. Total - Cash Equivalents 1,775,000 0 0
QE09 PART C OTHER INFORMATION ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS (a) All financial statements are included in Part A and Part B of the Registration Statement. (b) (1) (a) Resolution of the Board of Directors of Hartford Life and Annuity Insurance Company ("Hartford") authorizing the establishment of the Separate Account. (1) (1) (b) Resolution of the Board of Directors of Hartford Life and Annuity Insurance Company ("Hartford") authorizing the Re-Designation of the Separate Account. (2) (2) Not applicable. (3) (a) Amended and Restated Principal Underwriter Agreement. (3) (3) (b) Form of Dealer Agreement. (4) (4) Form of Individual Flexible Premium Variable Annuity Contract. (1) (5) Form of Application. (1) (6) (a) Certificates of Incorporation of Hartford. (5) (6) (b) Bylaws of Hartford. (5) (7) Form of Reinsurance Agreement. (3) (8) Form of Fund Participation Agreement. (6) (9) Opinion and Consent of Richard J. Wirth, Assistant General Counsel. (10) Consent of Deloitte & Touche LLP. (11) No financial Statements are omitted. (12) Not applicable. (99) Copy of Power of Attorney. ------------ (1) Incorporated by reference to the Post-Effective Amendment No. 2 to the Registration Statement File No. 33-73572, filed on May 1, 1995. (2) Incorporated by reference to Post-Effective Amendment No. 8, to the Registration Statement File No. 333-69429, filed on April 9, 2001. (3) Incorporated by reference to Post-Effective Amendment No. 3, to the Registration Statement File No. 333-148564, filed on February 9, 2009. (4) Incorporated by reference to Post-Effective Amendment No. 3, to the Registration Statement File No. 33-73572, filed on May 1, 1996. (5) Incorporated by reference to Post-Effective Amendment No. 7, to the Registration Statement File No. 333-136545, filed on May 1, 2009. (6) Incorporated by reference to Post-Effective Amendment No. 7, to the Registration Statement File No. 333-119418, filed September 17, 2008. ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
NAME POSITION WITH HARTFORD ------------------------------------------------------------------------------------------------------------------ Ricardo Anzaldua Senior Vice President, Assistant Secretary Robert Arena Executive Vice President David A. Carlson Director of Taxes, Senior Vice President Richard G. Costello Assistant Secretary Rochelle S. Cummings Vice President James Davey Executive Vice President Jennifer J. Geisler Senior Vice President Ronald R. Gendreau Executive Vice President John N. Giamalis Senior Vice President, Treasurer Christopher M. Grinnell Assistant Vice President Daniel R. Guilbert Actuary, Vice President Christopher J. Hanlon Senior Vice President Susan M. Hess Vice President Charles E. Hunt Vice President Donald C. Hunt Secretary Jeannie M. Iannello Vice President Anne Iezzi Chief Compliance Officer, Vice President Stephen T. Joyce Executive Vice President Thomas P. Kalmbach Actuary, Vice President John F. Keenan Senior Vice President Michael Knipper Senior Vice President Diane Krajewski Assistant Vice President Alan J. Kreczko Executive Vice President, General Counsel Glenn D. Lammey Chief Financial Officer, Executive Vice President, Director* Dawn M. LeBlanc Assistant Vice President Debra L. Ludovissie Assistant Vice President Kenneth A. McCullum Actuary, Senior Vice President Gregory McGreevey Executive Vice President, Chief Investment Officer and Director* Ernest M. McNeill, Jr. Senior Vice President, Chief Accounting Officer* William P. Meaney Senior Vice President Jonathan L. Mercier Assistant Vice President Peter J. Michalik Vice President John J. Mittelstadt Assistant Vice President Brian Murphy Executive Vice President Brian O'Connell Chief Information Officer, Vice President Jamie Ohl Senior Vice President Colleen B. Pernerewski Chief Compliance Officer of Separate Accounts Craig R. Raymond Senior Vice President Sharon A. Ritchey Executive Vice President Michael J. Roscoe Actuary, Vice President Richard Rubin Assistant Vice President Wade A. Seward Vice President D. Keith Sloane Senior Vice President Richard Smolinski Actuary, Assistant Vice President Martin A. Swanson Vice President Charles D. Tatro Actuary, Vice President James E. Trimble Chief Actuary, Senior Vice President Charles N. Vest Actuary, Vice President Andrew J. Waggoner Vice President Jean H. Walker Vice President John C. Walters President, Chief Executive Officer, Chairman of the Board, Director* Richard J. Wirth Assistant Vice President
Unless otherwise indicated, the principal business address of each of the above individuals is Hartford Plaza, Hartford, Connecticut 06115. *Denotes date of election to Board of Directors. ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR REGISTRANT. Incorporated by reference to Post-Effective Amendment No. 3, to the Registration Statement File No. 333-148564, filed on February 9, 2009. ITEM 27. NUMBER OF CONTRACT OWNERS As of February 28, 2009, there were 101,649 Contract Owners. ITEM 28. INDEMNIFICATION Section 33-776 of the Connecticut General Statutes states that: "a corporation may provide indemnification of, or advance expenses to, a director, officer, employee or agent only as permitted by sections 33-770 to 33-779, inclusive." ARTICLE VIII, Section 1(a) of the By-laws of the Depositor (as amended and restated effective July 25, 2000) provides that the Corporation, to the fullest extent permitted by applicable law as then in effect, shall indemnify any person who was or is a director or officer of the Corporation and who was or is threatened to be made a defendant or respondent in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative and whether formal or informal (including, without limitation, any action, suit or proceeding by or in the right of the Corporation to procure a judgment in its favor) (each, a Proceeding"), by reason of the fact that such a person was or is a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee or agent of another domestic or foreign corporation, partnership, joint venture, trust, employee benefit plan or other entity (a "Covered Entity"), against all expenses (including attorneys' fees), judgments, fines and amounts paid in settlement and actually and reasonably incurred by such person in connection with such Proceeding. Any such former or present director or officer of the Corporation finally determined to be entitled to indemnification as provided in this Article VIII is hereinafter called an "Indemnitee". Until such final determination is made such former or present director or officer shall be a "Potential Indemnitee" for purposes of this Article VIII. Notwithstanding the foregoing provisions of this Section 1(a), the Corporation shall not indemnify an Indemnitee with respect to any Proceeding commenced by such Indemnitee unless the commencement of such Proceeding by such Indemnitee has been approved by a majority vote of the Disinterested Directors (as defined in Section 5(d)); provided however, that such approval of a majority of the Disinterested Directors shall not be required with respect to any Proceeding commenced by such Indemnitee after a Change in Control (as defined in Section 5(d)) has occurred. Insofar as indemnification for liability arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. ITEM 29. PRINCIPAL UNDERWRITERS (a) HSD acts as principal underwriter for the following investment companies: Hartford Life Insurance Company - Separate Account One Hartford Life Insurance Company - Separate Account Two Hartford Life Insurance Company - Separate Account Two (DC Variable Account I) Hartford Life Insurance Company - Separate Account Two (DC Variable Account II) Hartford Life Insurance Company - Separate Account Two (QP Variable Account) Hartford Life Insurance Company - Separate Account Two (Variable Account "A") Hartford Life Insurance Company - Separate Account Two (NQ Variable Account) Hartford Life Insurance Company - Separate Account Ten Hartford Life Insurance Company - Separate Account Three Hartford Life Insurance Company - Separate Account Five Hartford Life Insurance Company - Separate Account Seven Hartford Life Insurance Company - Separate Account Eleven Hartford Life Insurance Company - Separate Account Twelve Hartford Life and Annuity Insurance Company - Separate Account One Hartford Life and Annuity Insurance Company - Separate Account Ten Hartford Life and Annuity Insurance Company - Separate Account Three Hartford Life and Annuity Insurance Company - Separate Account Five Hartford Life and Annuity Insurance Company - Separate Account Six Hartford Life and Annuity Insurance Company - Separate Account Seven (b) Directors and Officers of HSD
POSITIONS AND OFFICES NAME WITH UNDERWRITER ---------------------------------------------------------------------------------------------------------------- Robert Arena (1) Senior Vice President/ Business Line Principal and Director Diana Benken (1) Chief Financial Officer and Controller/FINOP Christopher S. Conner (2) AML Compliance Officer and Chief Compliance Officer Kevin M. Connor (2) Director James Davey (1) Executive Vice President and Director Peter E. Delahanty (1) Senior Vice President/IIP Marketing John N. Giamalis (3) Treasurer Stephen T. Joyce (1) Senior Vice President/Business Line Principal Kenneth A. McCullum (1) Senior Vice President Vernon Meyer (1) Senior Vice President Jamie Ohl (1) Senior Vice President/Business Line Principal Mark A. Sides (4) Chief Legal Officer and Secretary Keith D. Sloane Senior Vice President Martin A. Swanson (1) Vice President/Marketing John C. Walters (1) Chief Executive Officer and President and Director
------------ (1) Address: 200 Hopmeadow Street, Simsbury, CT 06089 (2) Address: 1500 Liberty Ridge Dr., Wayne, PA 19087 (3) Address: One Hartford Plaza, Hartford, CT 06115 (4) Address: 500 Bielenberg Dr., Woodbury, MN 55125 ITEM 30. LOCATION OF ACCOUNTS AND RECORDS All of the accounts, books, records or other documents required to by kept by Section 31(a) of the Investment Company Act of 1940 and rules thereunder are maintained by Hartford at 200 Hopmeadow Street, Simsbury, Connecticut 06089. ITEM 31. MANAGEMENT SERVICES All management contracts are discussed in Part A and Part B of this Registration Statement. ITEM 32. UNDERTAKINGS (a) The Registrant hereby undertakes to file a post-effective amendment to this Registration Statement as frequently as is necessary to ensure that the audited financial statements in the Registration Statement are never more than 16 months old so long as payments under the variable annuity contracts may be accepted. (b) The Registrant hereby undertakes to include either (1) as part of any application to purchase a contract offered by the Prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a post card or similar written communication affixed to or included in the Prospectus that the applicant can remove to send for a Statement of Additional Information. (c) The Registrant hereby undertakes to deliver any Statement of Additional Information and any financial statements required to be made available under this Form promptly upon written or oral request. (d) Hartford hereby represents that the aggregate fees and charges under the Contracts are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by Hartford. The Registrant is relying on the no-action letter issued by the Division of Investment Management to American Counsel of Life Insurance, Ref. No. IP-6-88, November 28, 1988. The Registrant has complied with conditions one through four of the no-action letter. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all the requirements for effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Registration Statement to be signed on its behalf, in the Town of Simsbury, and State of Connecticut on this 1st day of May, 2009. HARTFORD LIFE AND ANNUITY INSURANCE COMPANY SEPARATE ACCOUNT TEN (Registrant) By: John C. Walters* *By: /s/ Richard J. Wirth ----------------------------------- ----------------------------------- John C. Walters, Richard J. Wirth President, Chief Executive Officer Attorney-in-Fact and Chairman of the Board
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY (Depositor) By: John C. Walters* ----------------------------------- John C. Walters, President, Chief Executive Officer and Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons and in the capacities and on the dates indicated. Glenn D. Lammey, Chief Financial Officer, Executive Vice President, Director* Gregory McGreevey, Executive Vice President and Chief Financial Officer, Director* *By: /s/ Richard J. Wirth ----------------------------------- Ernest M. McNeill, Jr., Chief Accounting Officer, Richard J. Wirth Senior Vice President* Attorney-in-Fact John C. Walters, President, Chief Executive Officer and Chairman Date: May 1, 2009 of the Board, Director*
033-73572 EXHIBIT INDEX (9) Opinion and Consent of Richard J. Wirth, Assistant General Counsel. (10) Consent of Deloitte & Touche LLP. (99) Copy of Power of Attorney.