##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2008ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number
    001-32293
  HARTFORD LIFE INSURANCE
    COMPANY
 (Exact name of registrant as
    specified in its charter)
  Connecticut(State or other jurisdiction
    of
    incorporation or organization)

06-0974148(I.R.S. Employer
    Identification No.)   200 Hopmeadow Street, Simsbury, Connecticut 06089
 (Address of principal executive
    offices)
  (860) 547-5000
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
 3.75% Secured Medium-Term Notes due 2009 of Hartford Life
    Global Funding
    Trust 2004-001
  Securities registered pursuant to Section 12(g) of the
    Act: None
  þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  12b-2
 Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer þ
    Smaller
    reporting
    company o   Rule 12b-2 o þ
      Form 10-K




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##### 





CONTENTS
  Item



Description

PagePART I

1.

Business*


31A.

Risk Factors


121B.

Unresolved Staff Comments


242.

Properties*


243.

Legal Proceedings


254.

**PART II

5.

Market for Hartford Life Insurance Companys
    Common Equity, Related Stockholder Matters and Issuer Purchases
    of Equity Securities


266.

**7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations *


277A.

Quantitative and Qualitative Disclosures About
    Market Risk


1008.

Financial Statements and Supplementary Data


1009.

Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


1019A.

Controls and Procedures


1019B.

Other Information


101PART III

10.

**11.

**12.

**13.

**14.

Principal Accounting Fees and Services


102PART IV

15.

Exhibits, Financial Statement Schedules


102Signatures


II-1Exhibits Index


II-2     *
    
    Item prepared in accordance with General Instruction I
    (2) of
    Form 10-K**
    
    Item omitted in accordance with General Instruction I
    (2) of
    Form 10-KEX-12.01: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGESEX-23.01: CONSENT OF DELOITTE & TOUCHE, LLPEX-31.01: CERTIFICATIONEX-31.02: CERTIFICATIONEX-32.01: CERTIFICATIONEX-32.02: CERTIFICATION  2




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PART I  Item 1.
    BUSINESS (Dollar Amounts In Millions, Unless Otherwise
    Stated)
  General
      Reporting
    Segments
      Customer
    Service, Technology and Efficiencies
   3




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Risk
    Management
    Retail
        Principal
    Products
  Individual Variable Annuities
 4




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Fixed MVA
  Marketing
    and Distribution
   5




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Competition
      Individual
    Life
    Principal
    Products
    Variable Universal Life
 6




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Universal Life and Interest Sensitive Whole
    Life
  Term Life
  Marketing
    and Distribution
    Competition
         7




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Retirement
    Plans
      Principal
    Products
  403(b)/457
  401(k)
  Marketing
    and Distribution
    Competition
         8




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Institutional
      Principal
    Products
  PPLI Products
  Structured Settlements and/or
  Institutional Annuities
  Longevity assurance
  Income Annuities
  Stable Value Products
 9




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Marketing
    and Distribution
            Competition
          Reserves
   10




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Ceded
    Reinsurance
        ReinsuranceRecoverableTransamerica Life Insurance Company

$
206AXA Corporate Solutions Life Reinsurance Company


208Security Life of Denver Insurance Company


212Swiss Re Life & Health America Inc.


247Transamerica Financial Life Insurance Company


736Connecticut General Life Insurance Company

$
539     Investment
    Operations
   11




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Regulation
    and Premium Rates
      Intellectual
    Property
      Employees 
    Item 1A.
    RISK
    FACTORS   12




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We have
    been materially adversely affected by conditions in the global
    financial markets and economic conditions generally, and may be
    materially adversely affected if these conditions persist or
    deteriorate further in 2009 or if our planned initiatives are
    not effective.
        medium-term
 13




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The
    markets in the United States and elsewhere have been
    experiencing extreme and unprecedented volatility and
    disruption. We are exposed to significant financial and capital
    markets risk, including changes in interest rates, credit
    spreads, equity prices, and foreign exchange rates which may
    have a material adverse effect on our results of operations,
    financial condition and liquidity.
        than-temporary
 14




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non-U.S. non-U.S. dollar
        We may be
    unable to effectively mitigate the impact of equity market
    volatility arising from obligations under annuity product
    guarantees, which may have a material adverse effect on our
    consolidated results of operations, financial condition and cash
    flows.
   15




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The
    amount of statutory capital that we have and the amount of
    statutory capital that we must hold to maintain our financial
    strength and credit ratings and meet other requirements can vary
    significantly from time to time and is sensitive to a number of
    factors outside of our control, including equity market and
    credit market conditions, changes in policyholder behavior and
    changes in rating agency models.
     16




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We have
    experienced and may experience additional downgrades in our
    financial strength or credit ratings, which may make our
    products less attractive and increase our cost of capital, which
    would have a material adverse effect on our business, results of
    operations, financial condition and liquidity.
        Our
    business, results of operations and financial condition may be
    adversely affected by general domestic and international
    economic and business conditions that are less favorable than
    anticipated.
    Our
    valuations of many of our financial instruments include
    methodologies, estimations and assumptions that are subject to
    differing interpretations and could result in changes to
    investment valuations that may materially adversely affect our
    results of operations and financial condition.
   17




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and/or
  Evaluation
    of available-for-sale securities for other-than temporary
    impairment involves subjective determinations and could
    materially impact our results of operations and financial
    condition.
     18




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Losses
    due to nonperformance or defaults by others, including issuers
    of investment securities (which include structured securities
    such as commercial mortgage backed securities and residential
    mortgage backed securities or other high yielding bonds) or
    reinsurance and derivative instrument counterparties, could have
    a material adverse effect on the value of our investments,
    results of operations, financial condition and cash
    flows.
          If
    assumptions used in estimating future gross profits differ from
    actual experience, we may be required to accelerate the
    amortization of DAC and increase reserves for guaranteed minimum
    death benefit, which could have a material adverse effect on our
    results of operations and financial condition.
   19




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If our
    businesses do not perform well, we may be required to recognize
    an impairment of our goodwill or to establish a valuation
    allowance against the deferred income tax asset, which could
    have a material adverse effect on our results of operations and
    financial condition.
  pre-tax,
      The
    occurrence of one or more terrorist attacks in the geographic
    areas we serve or the threat of terrorism in general may have a
    material adverse effect on our business, consolidated operating
    results, financial condition and liquidity.
   20




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We may
    incur losses due to our reinsurers unwillingness or
    inability to meet their obligations under reinsurance contracts
    and the availability, pricing and adequacy of reinsurance may
    not be sufficient to protect us against losses.
    We are
    particularly vulnerable to losses from the incidence and
    severity of catastrophes, both natural and man-made, the
    occurrence of which may have a material adverse effect on our
    financial condition, consolidated results of operations and
    liquidity.
    Competitive
    activity may adversely affect our market share and financial
    results, which could have material adverse effect on our
    business, results of operations and financial
    condition.
   21




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We may
    experience unfavorable judicial or legislative developments that
    could have a material advers effect on our results of
    operations, financial condition and liquidity.
    Potential
    changes in domestic and foreign regulation may increase our
    business costs and required capital levels, which could have a
    material adverse effect on our business, consolidated operating
    results, financial condition and liquidity.
      
    licensing companies and agents to transact business;
    calculating the value of assets to determine compliance with
    statutory requirements;
    mandating certain insurance benefits;
    regulating certain premium rates;
    reviewing and approving policy forms;
    regulating unfair trade and claims practices, including through
    the imposition of restrictions on marketing and sales practices,
    distribution arrangements and payment of inducements;
    establishing statutory capital and reserve requirements and
    solvency standards;
    fixing maximum interest rates on insurance policy loans and
    minimum rates for guaranteed crediting rates on life insurance
    policies and annuity contracts;
    approving changes in control of insurance companies;
    restricting the payment of dividends and other transactions
    between affiliates; 22




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
    establishing assessments and surcharges for guaranty funds,
    second-injury funds and other mandatory pooling arrangements;
    requiring insurers to dividend to policy holders any excess
    profits; and
    regulating the types, amounts and valuation of investments.    We may
    experience difficulty in marketing and distributing products
    through our current and future distribution channels.
    If we are
    unable to maintain the availability of our systems and safeguard
    the security of our data due to the occurrence of disasters or
    other unanticipated events, our ability to conduct business may
    be compromised, which may have a material adverse effect on our
    business, consolidated results of operations, financial
    condition or cash flows.
    If we
    experience difficulties arising from outsourcing relationships,
    our ability to conduct business may be compromised.
   23




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Potential
    changes in federal or state tax laws, including changes
    impacting the availability of the separate account dividend
    received deduction, could adversely affect our business,
    consolidated operating results or financial condition or
    liquidity.
    We may
    not be able to protect our intellectual property and may be
    subject to infringement claims.
    ,
  Item 1B.
    UNRESOLVED
    STAFF COMMENTS    Item 2.
    PROPERTIES    Item 3.
    LEGAL
    PROCEEDINGS   24




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Broker Compensation Litigation
 25




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PART II  Item 5.
    MARKET
    FOR HARTFORD LIFE INSURANCE COMPANYS COMMON EQUITY,
    RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES     26




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Item 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS (Dollar amounts in millions, unless otherwise stated)
  page F-1.
  and/or
  INDEX
  Overview

27

Other

59Critical Accounting Estimates

27

Investments

60Consolidated Results of Operations

40

Investment Credit Risk

69Retail

51

Capital Markets Risk Management

85Individual Life

53

Capital Resources and Liquidity

95Retirement Plans

55

Impact of New Accounting Standards

100Institutional

56  27




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OVERVIEW
                CRITICAL
    ACCOUNTING ESTIMATES
   28




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Life
    Estimated Gross Profits Used in the Valuation and Amortization
    of Assets and Liabilities Associated with Variable Annuity and
    Other Universal Life-Type Contracts
  Accounting
    Policy and Assumptions
  Deferred
    Policy Acquisition Costs and Present Value of Future
    Profits
  SOP 03-1 SOP 03-1 SOP 03-1
  true-up, true-up
   29




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Impact on Earningsfor DACAssumption

Impact to EGPs

AmortizationFuture separate account return increases

Increase: Expected fee income would increase and expected
    claims would decrease.

BenefitFuture separate account return decreases

Decrease:Expected fee income would decrease and expected
    claims would increase.

ChargeFuture mortality increases

Decrease:Expected fee income would decrease because the
    time period in which fees would be collected would be reduced
    and claims would increase.

ChargeFuture mortality decreases

Increase:Expected fee income would increase because the
    time period in which fees would be collected would increase and
    claims would decrease.

BenefitFuture lapse rate increases

Decrease:Expected fee income would decrease because the
    time period in which fees would be collected would be reduced
    and claims would decrease.

ChargeFuture lapse rate decreases

Increase:Expected fee income would increase because the
    time period in which fees would be collected would increase and
    claims would increase.

Benefit       SOP 03-1 SOP 03-1
   30




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Unlock
    and Results
    Death andUnearned


Income


SalesSegment

DAC and


Revenue


Benefit


InducementAfter-tax (Charge) Benefit

PVFP


Reserves


Reserves(1)


Assets


Total(2)Retail

$
(647
)

$
18


$
(75
)

$
(27
)

$
(731
)Individual Life


(29
)


(12
)


(3
)






(44
)Retirement Plans


(49
)














(49
)Total

$
(725
)

$
6


$
(78
)

$
(27
)

$
(824
)     (1)
    
    As a result of the Unlock, death benefit reserves, in Retail,
    increased $389, pre-tax, offset by an increase of $273, pre-tax,
    in reinsurance recoverables.

(2)
    
    The following were the most significant contributors to the
    Unlock amounts recorded during the third quarter of 2008:  
    Actual separate account returns from the period ending
    July 31, 2007 to September 30, 2008 were significantly
    below our aggregated estimated return
    The Company reduced its 20 year projected separate
    account return assumption from 7.8% to 7.2% in the U.S.
    In Retirement Plans, the Company reduced its estimate of
    future fees as plans meet contractual size limits
    (breakpoints) causing a lower fee schedule to apply
    and the Company increased its assumption for future deposits by
    existing plan participants.    Death andUnearned


Income


SalesSegment

DAC and


Revenue


Benefit


InducementAfter-tax (Charge) Benefit

PVFP


Reserves


Reserves(1)


Assets


Total(2)Retail

$
181


$
(5
)

$
(4
)

$
9


$
181Individual Life


24



(8
)










16Retirement Plans


(9
)














(9
)Institutional


1















1Total

$
197


$
(13
)

$
(4
)

$
9


$
189     (1)
    
    As a result of the Unlock, death benefit reserves, in Retail,
    decreased $4, pre-tax, offset by a decrease of $10, pre-tax, in
    reinsurance recoverables.(2)
    
    The following were the most significant contributors to the
    Unlock amounts recorded during the third quarter of 2007: 31




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
    Actual separate account returns were above our aggregated
    estimated return.
    During the third quarter of 2007, the Company estimated gross
    profits using the mean of EGPs derived from a set of stochastic
    scenarios that have been calibrated to our estimated separate
    account return as compared to prior year where we used a single
    deterministic estimation. The impact of this change in
    estimation was a benefit of $20, after-tax, for
    U.S. variable annuities.
    As part of its continual enhancement to its assumption
    setting processes and in connection with its assumption study,
    the Company included dynamic lapse behavior assumptions. Dynamic
    lapses reflect that lapse behavior will be different depending
    upon market movements. The impact of this assumption change
    along with other base lapse rate changes was an approximate
    benefit of $40, after-tax, for U.S. variable annuities.  SOP 03-1
  Variable
    Annuities
  Effect on EGP-related(Increasing separate account returns and decreasing lapse
    rates generally result in benefits.

Balances if  UnlockedDecreasing separate account returns and increasing lapse
    rates generally result in charges.)

(after-tax)(1)If actual separate account returns were 1% above or below our
    aggregated estimated return

$20 - $40(3)If actual lapse rates were 1% above or below our estimated
    aggregate lapse rate

$10 - $25(2)If we changed our future separate account return rate by 1% from
    our aggregated estimated future return

$90 - $120If we changed our future lapse rate by 1% from our estimated
    aggregate future lapse rate

$50 - $80(2)     (1)
    
    These sensitivities are reflective of the results of our 2008
    assumption studies. The Companys EGP models assume that
    separate account returns are earned linearly and that lapses
    occur linearly (except for certain dynamic lapse features)
    throughout the year. Similarly, the sensitivities assume that
    differential separate account and lapse rates are linear and
    parallel and persist for one year from September 30, 2008,
    the date of our third quarter 2008 Unlock, and reflect all
    current in-force and account value data, including the
    corresponding market levels, allocation of funds, policyholder
    behavior and actuarial assumptions. These sensitivities are not
    perfectly linear nor perfectly symmetrical for increases and
    decreases. As such, extrapolating results over a wide range will
    decrease the accuracy of the sensitivities predictive
    ability. Sensitivity results are, in part, based on the current
    in-the-moneyness of various guarantees offered with
    the products. Future market conditions could significantly
    change the sensitivity results.(2)
    
    Sensitivity around lapses assumes lapses increase or decrease
    consistently across all cohort years and products.(3)
    
    The overall actual return generated by the variable annuity
    separate accounts is dependent on several factors, including the
    relative mix of the underlying sub-accounts among bond funds and
    equity funds as well as equity sector weightings and as a result
    of the large proportion of separate account assets invested in
    equity markets, the Companys overall separate account fund
    performance has been reasonably correlated to the overall
    performance of the S&P 500, although no assurance can be
    provided that this correlation will continue in the future.
    Since September 30, 2008, the date of the last unlock, the
    actual return on U.S. variable annuity assets has been 21% below
    our estimated aggregate return. The Company estimates the actual
    return would need to drop by an additional 6% before EGPs in the
    Companys models fall outside of the statistical ranges of
    reasonable EGPs. 32




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Living
    Benefits Required to be Fair Valued
      Pre-SFAS 157
    Fair Value
    
    risk-free rates as represented by the current LIBOR forward
    curve rates;
    forward market volatility assumptions for each underlying index
    based primarily on a blend of observed market implied
    volatility data;
    correlations of market returns across underlying indices based
    on actual observed market returns and relationships over the ten
    years preceding the valuation date;
    three years of history for fund regression; and 33




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
    current risk-free spot rates as represented by the current LIBOR
    spot curve to determine the present value of expected future
    cash flows produced in the stochastic projection process.    Fair
    Value Under SFAS 157
    
    Actively-Managed Volatility Adjustment.  This
    component incorporates the basis differential between the
    observable index implied volatilities used to calculate the
    Pre-SFAS 157 component and the actively-managed funds
    underlying the variable annuity product. The Actively-Managed
    Volatility Adjustment is calculated using historical fund and
    weighted index volatilities.
    Credit Standing Adjustment.  This component
    makes an adjustment that market participants would make to
    reflect the risk that guaranteed benefit obligations or the GMWB
    reinsurance recoverables will not be fulfilled
    (nonperformance risk). SFAS 157 explicitly
    requires nonperformance risk to be reflected in fair value. The
    Company calculates the Credit Standing Adjustment by using
    default rates provided by rating agencies, adjusted for market
    recoverability, reflecting the long-term nature of living
    benefit obligations and the priority of payment on these
    obligations versus long-term debt.
    Market Illiquidity Premium.  This component
    makes an adjustment that market participants would require to
    reflect that guaranteed benefit obligations are illiquid and
    have no market observable exit prices in the capital markets.
    Behavior Risk Margin.  This component adds a
    margin that market participants would require for the risk that
    the Companys assumptions about policyholder behavior used
    in the Pre-SFAS 157 model could differ from actual
    experience. The Behavior Risk Margin is calculated by taking the
    difference between adverse policyholder behavior assumptions and
    the best estimate assumptions used in the Pre-SFAS 157
    model using interest rate and volatility assumptions that the
    Company believes market participants would use in developing
    risk margins.     34




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step-up
  Valuation
    of Investments and Derivative Instruments
    Valuation
    of Fixed Maturity
    Short-Term
    and equity securities, available-for-sale
  and/or
   35




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Quoted Prices in


Significant


SignificantActive Markets for


Observable


UnobservableIdentical Assets


Inputs


InputsLevel 1


Level 2


Level 3


TotalPriced via third party pricing services

$
3,646


$
27,435


$
2,263


$
33,344Priced via independent broker quotations










3,060



3,060Priced via matrices






107



3,084



3,191Priced via other methods(1)










394



394Short-term investments(2)


3,905



1,657







5,562Total

$
7,551


$
29,199


$
8,801


$
45,551% of Total


16.6
%


64.1
%


19.3
%


100.0
%     (1)
    
    Represents securities for which adjustments were made to reduce
    prices received from third parties and certain private equity
    investments that are carried at the Companys determination
    of fair value from inception.(2)
    
    Short-term investments are primarily valued at amortized cost,
    which approximates fair value. 36




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% of TotalFair Value


Fair ValueABSBelow prime

$
1,405



16.0
%Collateralized loan obligations (CLOs)


1,570



17.8
%Other


443



5.0
%CorporateMatrix priced private placements


3,038



34.5
%Other


1,383



15.7
%CMBS


659



7.5
%Preferred stock


48



0.6
%Other


255



2.9
%Total Level 3 securities

$
8,801



100.0
%   
    ABS below prime primarily represents sub-prime and Alt-A
    securities which are classified as Level 3 due to the lack
    of liquidity in the market.
    ABS CLOs represent senior secured bank loan CLOs which are
    primarily priced by independent brokers.
    ABS other primarily represents broker priced securities.
    Corporate matrix priced represents private placement securities
    that are thinly traded and priced using a pricing matrix which
    includes significant non-observable inputs.
    Corporate other primarily represents broker priced public
    securities and private placement securities qualified for sale
    under rule 144A, and long-dated fixed maturities where the
    term of significant inputs may not be sufficient to be deemed
    observable.
    CMBS primarily represents CMBS bonds and commercial real estate
    collateralized debt obligations (CRE CDOs) which
    were either fair valued by the Company or by independent brokers
    due to the illiquidity of this sector.
    Preferred stock primarily represents lower quality preferred
    securities that are less liquid due to market conditions.  Valuation
    of Derivative Instruments, excluding embedded derivatives within
    liability contracts and reinsurance derivatives
   37




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Notional Value


Fair ValueQuoted prices in active markets for identical assets
    (Level 1)

$
4,480


$
Significant observable inputs (Level 2)


19,050



788Significant unobservable inputs (Level 3)


21,108



2,540Total

$
44,638


$
3,328     Notional Value


Fair ValueCredit derivatives

$
2,219


$
(270
)Interest derivatives


3,130



49Equity derivatives


15,729



2,761Other


30



Total Level 3

$
21,108


$
2,540       Evaluation
    of Other-Than-Temporary Impairments on Available-for-Sale
    Securities
      No. 99-20,
 38




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No. 99-20 No. 99-20
  No. 99-20, No. EITF 99-20-1, No. 99-20
    Contingencies
    Relating to Corporate Litigation and Regulatory
    Matters
      Goodwill
    Impairment
   39




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40




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CONSOLIDATED
    RESULTS OF OPERATIONS
  Operating
    Summary
  2008


2007


2006Fee income and other


3,114


$
3,509


$
3,113Earned premiums


984



983



547Net investment income


2,617



3,048



2,728Net realized capital losses(1)


(5,651
)


(934
)


(299
)Total revenues(1)


1,064



6,606



6,089Benefits, losses and loss adjustment expenses


4,044



3,980



3,205Insurance operating costs and other expenses


1,133



1,203



875Amortization of deferred policy acquisition costs


1,525



515



1,175Goodwill impairment


84







Total benefits, claims and expenses


6,786



5,698



5,255Income (loss) before income taxes


(5,722
)


908



834Income tax expense (benefit)


(2,197
)


168



103Net income (loss)(2)

$
(3,525
)

$
740


$
731     (1)
    
    The transition impact related to the SFAS 157 adoption was
    a reduction in revenues of $788, for the year ended
    December 31, 2008. For further discussion of the
    SFAS 157 transition impact, please refer to Note 3 in
    the Notes to the Condensed Consolidated Financial Statements.(2)
    
    The transition impact related to the SFAS 157 adoption was
    a reduction in net income of $311, for the year ended
    December 31, 2008. For further discussion of the
    SFAS 157 transition impact, please refer to Note 3 in
    the Notes to the Condensed Consolidated Financial Statements.  Year
    ended December 31, 2008 compared to the year ended
    December 31, 2007
    
    Realized losses increased as compared to the comparable prior
    year period primarily due to net losses from impairments on
    investment securities as well as increased credit related losses
    and increased losses on GMWB/GMIB/GMAB reinsurance and the
    adoption of SFAS 157. For further discussion, please refer
    to the Realized Capital Gains and Losses by Segment table under
    the Operating Section of the MD&A.
    Life recorded a DAC Unlock charge of $824, after-tax, during the
    third quarter of 2008 as compared to a DAC Unlock benefit of
    $189, after tax, during the third quarter of 2007. See Critical
    Accounting Estimates with Managements Discussion and Analysis
    for a further discussion on the DAC Unlock.
    Declines in assets under management in Retail, primarily driven
    by market depreciation of $37.8 billion for Individual
    Annuity during 2008, drove declines in fee income compared to
    2007.
    Net investment income on securities, available-for-sale, and
    other declined primarily due to declines in limited partnership
    and other alternative investment income and a decrease in
    investment yield for fixed maturities.  Year
    ended December 31, 2007 compared to the year ended
    December 31, 2006
    
    The DAC unlock benefit recorded in the third quarter of 2007.
    Increased income on asset growth in the variable annuity,
    retirement and institutional businesses.
    Increased net investment income primarily due to strong limited
    partnership and other alternative investment income.    
    Increased non-deferrable individual annuity asset based
    commissions.
    Unfavorable mortality in Individual Life. 41




---



##### Table of Contents




    Benefits, losses and loss adjustment expenses increased for the
    year ended December 31, 2007, as a result of the Company
    recording a reserve of $55, after tax, during the second quarter
    of 2007 for regulatory matters.
    During the first quarter of 2006, the Company achieved favorable
    settlements in several cases brought against the Company by
    policyholders regarding their purchase of broad-based leveraged
    corporate owned life insurance (leveraged COLI)
    policies in the early to mid-1990s and therefore, released a
    reserve for these matters of $34, after-tax.
    Realized capital losses increased for the year ended
    December 31, 2007 as compared to the comparable prior year
    periods primarily due to net losses on GMWB derivatives and
    impairments.  Net
    Realized Capital Gains and Losses
    Income
    Taxes
    true-up true-up true-ups
  2007-61, 2007-61 2007-54,
  true-ups
 42




---



##### Table of Contents



Outlook
  Retail
            Individual
    Life
     43




---



##### Table of Contents



Retirement
    Plans
      Institutional
     44




---



##### Table of Contents



Performance
    Measures
  Fee
    Income
    As of and for theYears Ended December 31,Product/Key Indicator Information

2008


2007


2006Retail Individual Variable AnnuitiesAccount value, beginning of period

$
119,071


$
114,365


$
105,314Net flows


(6,235
)


(2,733
)


(3,150
)Change in market value and other


(38,258
)


7,439



12,201Account value, end of period

$
74,578


$
119,071


$
114,365Retirement PlansAccount value, beginning of period

$
27,094


$
23,575


$
19,317Net flows


2,418



1,669



2,545Change in market value and other


(7,314
)


1,850



1,713Account value, end of period

$
22,198


$
27,094


$
23,575Individual LifeVariable universal life account value, end of period

$
4,802


$
7,284


$
6,637Total life insurance in-force


191,861



175,547



159,984S&P 500 IndexYear end closing value


903



1,468



1,418Daily average value


1,220



1,477



1,310   Year
    ended December 31, 2008 compared to year ended
    December 31, 2007
    
    Retail individual variable annuity recorded increased negative
    net flows as a result of increased competition and equity market
    volatility.
    Retirement Plans group annuities has seen positive net flows
    driven by strong sales.
    Individual Life variable universal life account values decreased
    primarily due to equity market declines, partially offset by
    positive net flows. Life insurance in-force growth has occurred
    across multiple product lines, including term, universal life
    and variable universal life. 45




---



##### Table of Contents



Year
    ended December 31, 2007 compared to year ended
    December 31, 2006
  
    Increases in Retail individual variable annuity account values
    as of December 31, 2007 can be primarily attributed to
    market growth during the year and improved net flows due to an
    increase in sales.
    Retirement Plans account values increased for the year ended
    December 31, 2007 due to positive net flows driven by ongoing
    contributions and market appreciation during the year.
    Individual Life variable universal life account values increased
    primarily due to market appreciation and positive net flows.
    Life insurance in-force increased from the prior periods due to
    business growth.  Net
    Investment Spread
      For the Years Ended December 31,2008


2007


2006Retail  Individual Annuity


71.9 bps



172.9 bps



151.1 bpsRetirement Plans


91.4 bps



162.4 bps



146.1 bpsInstitutional  Stable Value


20.5 bps



100.6 bps



84.8 bpsIndividual Life


87.3 bps



130.5 bps



124.3 bps   Year
    ended December 31, 2008 compared to year ended
    December 31, 2007
  
    Retail  Individual Annuity, Retirement Plans,
    Institutional and Individual Life net investment spread
    decreased primarily due to negative earnings on limited
    partnership and other alternative investment income in 2008
    compared to strong earnings in these classes in 2007 and lower
    yields on fixed maturities, partially offset by reduced credited
    rates.  Year
    ended December 31, 2007 compared to year ended
    December 31, 2006
  
    Retail individual annuity, Retirement Plans, Institutional and
    Individual Life net investment spreads increased or remained
    stable, primarily due to a higher allocation of investments in
    higher yield / higher risk investment classes,
    including limited partnerships and other alternative investments
    and relative strong performance of this asset class in 2007.  Expenses
      46




---



##### Table of Contents



For the Years Ended December 31,Retail

2008

2007

2006General insurance expense ratio (individual annuity)

21.0 bps

17.9 bps

17.2 bpsDAC amortization ratio (individual annuity)(1)

162.8%

28.2%

71.5%DAC amortization ratio (individual annuity) excluding DAC
    unlock(1),(2)

50.6%

53.1%

57.4%Individual LifeDeath benefits

$320

$266

$223InstitutionalGeneral insurance expense ratio

14.9 bps

14.7 bps

15.4 bps     (1)
    
    Excludes the effects of realized gains and losses.(2)
    
    See Unlock and Sensitivity Analysis in the Critical Accounting
    Estimates section of the MD&A.  Year
    ended December 31, 2008 compared to year ended
    December 31, 2007
  
    The Retail DAC amortization ratio (individual annuity),
    excluding the effects of the DAC Unlock and realized losses,
    decreased due to the write-off of goodwill and changes in
    assumptions made as part of the 2007 Unlock.
    The Retail general insurance expense ratio increased due to the
    impact of a declining asset base on relatively consistent
    expenses
    Individual Life death benefits increased, primarily due to
    growth of life insurance in-force and unfavorable mortality.
    Institutional general insurance expense ratio is unchanged, as
    additional product development expenses were offset by higher
    assets under management.  Year
    ended December 31, 2007 compared to year ended
    December 31, 2006
  
    The ratio of Retail individual annuity DAC amortization over
    income before taxes and DAC amortization declined in 2007
    primarily due to unlock charge in 2006. DAC unlock charges
    generally have the effect of reducing future DAC amortization
    rates. After an unlock charge, the DAC amortization rate will
    generally decline as amortization expected to occur in future
    years was recorded as part of the unlock charge.
    Retail insurance expenses, net of deferrals, increased due to
    increasing trail commissions on growing variable annuity assets.
    Individual Life death benefits increased in 2007 primarily due
    to growth of life insurance in-force and unfavorable mortality.
    Institutional general insurance expense ratio decreased in 2007
    primarily due to higher assets under management. 47




---



##### Table of Contents



Profitability
    Ratios

2008

2007

2006RetailIndividual annuity return on assets (ROA)

(118.9) bps

52.6 bps

33.4 bpsEffect of net realized gains (losses), net of tax and DAC on
    ROA(1)

(96.4) bps

(13.3) bps

(7.8) bpsEffect of DAC Unlock on ROA(2)

(68.0) bps

15.6 bps

(6.0) bpsROA excluding realized gains (losses) and DAC Unlock

45.5 bps

50.3 bps

47.2 bpsRetirement PlansRetirement Plans (ROA)

(58.4) bps

20.9 bps

43.8 bpsEffect of net realized gains (losses), net of tax and DAC on
    ROA(1)

(68.1) bps

(11.1) bps

(3.3) bpsEffect of DAC Unlock on ROA(2)

(19.9) bps

(3.6) bps

9.3 bpsROA excluding realized gains (losses) and DAC Unlock

29.6 bps

35.6 bps

37.8 bpsInstitutionalInstitutional (ROA)

(89.2) bps

1.3 bps

15.4 bpsEffect of net realized gains (losses), net of tax and DAC on
    ROA(1)

(89.4) bps

(23.3) bps

(5.6) bpsEffect of DAC Unlock on ROA(2)



0.2 bps

ROA excluding realized gains (losses) and DACUnlock

0.2 bps

24.4 bps

21.0 bpsIndividual LifeAfter-tax margin

(6.0)%

15.9%

13.0%Effect of net realized gains (losses), net of tax and DAC on
    after-tax margin(1)

(13.8)%

(1.3)%

(1.7)%Effect of DAC Unlock on after-tax margin(2)

(5.1)%

1.5%

(1.5)%After-tax margin excluding realized gains (losses) and DAC Unlock

12.9%

15.7%

16.2%     (1)
    
    See Realized Capital Gains and Losses by Segment
    table within the this Section of the MD&A(2)
    
    See Unlock and Sensitivity Analysis within the Critical
    Accounting Estimates section of the MD&A  Year
    ended December 31, 2008 compared to year ended
    December 31, 2007
  
    The decrease in Retail  Individual annuity ROA,
    excluding realized gains (losses) and the effect of the DAC
    Unlock, reflects the write-off of goodwill, lower limited
    partnership and other alternative investment income, and the net
    effect of lower fees.
    The decrease in Retirement Plans ROA, excluding realized gains
    (losses) and the effect of the DAC Unlock, was primarily driven
    by lower yields on fixed maturity investments and a decline in
    limited partnership and other alternative investments income, as
    well as higher service and technology costs. Partially
    offsetting these decreases were tax benefits primarily
    associated with DRD. 48




---



##### Table of Contents




    The decrease in Institutionals ROA, excluding realized
    gains (losses), is primarily due to a decline in limited
    partnership and other alternative investment income. The
    decrease is also due to unfavorable mortality and lower yields
    on fixed maturity investments.
    The decrease in Individual Lifes after-tax margin,
    excluding realized gains (losses) and the effect of the DAC
    Unlock, was primarily due to lower net investment income from
    limited partnership and other alternative investments,
    unfavorable mortality, reduced net investment income associated
    with a more efficient capital approach for our secondary
    guarantee universal life business which released assets
    supporting capital and the related net investment income earned
    on those assets (described further in the Outlook
    section) and lower fees from equity market declines, partially
    offset by life insurance in-force growth, lower credited rates
    and higher surrender charges.  Year
    ended December 31, 2007 compared to year ended
    December 31, 2006
  
    The increase in Retail Individual annuitys ROA, excluding
    realized gain (losses) and DAC Unlock, was primarily due to
    increased net investment income on allocated capital and an
    increase in limited partnership and other alternative investment
    income. This was partially offset by an increase in the
    effective tax rate as a result of revisions in the estimates of
    the separate account DRD and FTC.
    The decrease in Retirement Plans ROA, excluding realized gains
    (losses) and DAC Unlock, was primarily due to higher service and
    technology costs.
    The increase in Institutionals ROA, excluding realized
    gains (losses) and DAC Unlock, was primarily due to an increase
    in limited partnership and other alternative investment income
    and increased net investment income on allocated capital.
    Individual Lifes decrease in after-tax margin, excluding
    realized gains (losses) and DAC Unlock, was primarily due to
    unfavorable mortality experience.  Realized
    Capital Gains and Losses by Segment
    Net
    realized gains (losses) for the year ended December 31,
    2008
  Retail



Individual Life



Retirement



Institutional



Other



TotalGains/losses on sales, net


$
(31
)


$
(21
)


$
(38
)


$
166



$
(52
)



24Impairments



(474
)



(235
)



(243
)



(734
)



(202
)



(1,888
)Japanese fixed annuity contract hedges, net























64




64Periodic net coupon settlements on credit derivatives/Japan



(6
)



(2
)



(4
)








(22
)



(34
)SFAS 157 transition impact



(616
)


















(172
)



(788
)Results of variable annuity hedge programGMWB derivatives, net



(631
)























(631
)Macro Hedge Program



40



















34




74Total results of variable annuity hedge program



(591
)


















34




(557
)GMIB/GMAB/GMWB Reinsurance























(1,986
)



(1,986
)Other, net



(191
)



11




13




(215
)



(104
)



(486
)Total net realized capital gains/(losses)



(1,909
)



(247
)



(272
)



(783
)



(2,440
)



(5,651
)Income tax benefit and DAC



(859
)



(89
)



(101
)



(274
)



(854
)



(2,177
)Total gains/(losses), net of tax and DAC


$
(1,050
)


$
(158
)


$
(171
)


$
(509
)


$
(1,586
)



(3,474
)  49




---



##### Table of Contents



Net
    realized gains (losses) for the year ended December 31,
    2007
  Retail



Individual Life



Retirement



Institutional



Other



TotalGains/losses on sales, net


$
17



$
7



$
(11
)


$
13



$
19




45Impairments



(87
)



(19
)



(22
)



(146
)



(65
)



(339
)Japanese fixed annuity contract hedges, net























18




18Periodic net coupon settlements on credit derivatives/Japan



1














3




(44
)



(40
)Results of variable annuity hedge program GMWB derivatives, net



(277
)























(277
)Macro Hedge Program



(10
)


















(2
)



(12
)Total results of variable annuity hedge program



(287
)


















(2
)



(289
)GMIB/GMAB/GMWB Reinsurance























(155
)



(155
)Other, net



(25
)



(14
)



(8
)



(58
)



(69
)



(174
)Total net realized capital gains/(losses)



(381
)



(26
)



(41
)



(188
)



(298
)



(934
)Income tax benefit and DAC



(212
)



(12
)



(13
)



(65
)



(101
)



(403
)Total gains/(losses), net of tax and DAC


$
(169
)


$
(14
)


$
(28
)


$
(123
)


$
(197
)



(531
)   Net
    realized gains (losses) for the year ended December 31,
    2006
  Retail



Individual Life



Retirement



Institutional



Other



TotalGains/losses on sales, net


$
(44
)


$




$
(9
)


$
15



$
2




(36
)Impairments



(6
)



(17
)



(6
)



(32
)



(10
)



(71
)Japanese fixed annuity contract hedges, net























(17
)



(17
)Periodic net coupon settlements on credit derivatives/Japan



3














1




(52
)



(48
)Results of variable annuity hedge program GMWB derivatives, net



(26
)























(26
)Macro Hedge Program



(14
)























(14
)Total results of variable annuity hedge program



(40
)























(40
)GMIB/GMAB/GMWB Reinsurance























(53
)



(53
)Other, net








(5
)



(1
)



(24
)



(4
)



(34
)Total net realized capital gains/(losses)



(87
)



(22
)



(16
)



(40
)



(134
)



(299
)Income tax benefit and DAC



9




(4
)



(9
)



(15
)



(47
)



(66
)Total gains/(losses), net of tax and DAC


$
(96
)


$
(18
)


$
(7
)


$
(25
)


$
(87
)



(233
)  50




---



##### Table of Contents



Year
    ended December 31, 2008 compared to the years ended
    December 31, 2007 and 2006
  Gross Gains and Losses on Sale



Gross gains and losses on sales for the year ended
    December 31, 2008 primarily resulted from the decision to
    reallocate the portfolio to securities with more favorable
    risk/return profiles. Also included was a gain of $141 from the
    sale of a synthetic CDO, as well as losses on sales of HIMCO
    managed CLOs in the first quarter. For more information
    regarding these CLO losses, refer to the Variable Interest
    Entities section below. During the year ended December 31,
    2008, securities sold at a loss were depressed, on average,
    approximately 2% at the respective periods impairment
    review date and were deemed to be temporarily impaired.

Gross gains and losses on sales for the year ended
    December 31, 2007 were primarily comprised of corporate
    securities. During the year ended December 31, 2007,
    securities sold at a loss were depressed, on average,
    approximately 1% at the respective periods impairment
    review date and were deemed to be temporarily impaired.

Gross gains on sales for the year ended December 31, 2006
    were primarily within fixed maturities and were concentrated in
    corporate, U.S. government, and foreign government securities.
    Gross losses on sale for the year ended December 31, 2006
    were primarily within fixed maturities and were concentrated in
    the corporate and CMBS sectors.Impairments



See the Other-Than-Temporary Impairments section of the
    Investments section of the MD&A for information
    on impairment losses.SFAS 157



See Note 3 in the Notes to the Consolidated Financial
    Statements for a discussion of the SFAS 157 transition
    impact.Variable Annuity Hedge Program



See Note 3 in the Notes to the Consolidated Financial
    Statements for a discussion of variable annuity hedge program
    gains and losses.Other



Other, net losses for the year ended December 31, 2008 were
    primarily related to net losses of $304 related to transactional
    foreign currency losses predominately on the internal
    reinsurance of the Japan variable annuity business, which is
    entirely offset in AOCI, resulting from appreciation of the Yen
    and credit derivatives losses of $191 due to significant credit
    spread widening. Also included were losses on HIMCO managed CLOs
    in the first quarter and derivative related losses of $39 in the
    third quarter due to counterparty default related to the
    bankruptcy of Lehman Brothers Holdings Inc. For more information
    regarding the CLO losses, refer to the Variable Interest
    Entities section below.

Other, net losses for the year ended December 31, 2007 were
    primarily driven by the change in value of non-qualifying
    derivatives due to credit spread widening as well as
    fluctuations in interest rates and foreign currency exchange
    rates. Credit spreads widened primarily due to the deterioration
    in the U.S. housing market, tightened lending conditions and the
    markets flight to quality securities. 51




---



##### Table of Contents





Other, net losses for the year ended December 31, 2006 were
    primarily driven from the change in value of non-qualifying
    derivatives due to fluctuations in interest rates and foreign
    currency exchange rates. These losses were partially offset by a
    before-tax benefit of $25 received from the WorldCom security
    settlement.   RETAIL
  Operating
    Summary
  2008


2007


2006Fee income and other

$
1,851


$
2,166


$
1,924Earned premiums


(4
)


(62
)


(86
)Net investment income


768



815



835Net realized capital losses


(1,909
)


(381
)


(87
)Total revenues(1)


706



2,538



2,586Benefits, losses and loss adjustment expenses


1,008



820



819Insurance operating costs and other expenses


554



602



497Amortization of deferred policy acquisition costs and present
    value of future profits


1,251



316



913Goodwill impairment


84







Total benefits, losses and expenses


2,897



1,738



2,229Income (loss) before income taxes


(2,191
)


800



357Income tax expense (benefit)


(911
)


137



(40
)Net income (loss)(2)

$
(1,280
)

$
663


$
397   Account Values

2008


2007


2006Individual variable annuity account values

$
74,578


$
119,071


$
114,365Individual fixed annuity and other account values[3]


11,278



10,243



9,937Total Account Values

$
85,856


$
129,314


$
124,302     (1)
    
    For the year ended December 31, 2008, the transition impact
    related to the SFAS 157 adoption was a reduction in
    revenues of $616. For further discussion of the SFAS 157
    transition impact, refer to Note 3 in the Notes to the
    Consolidated Financial Statements.(2)
    
    For the year ended December 31, 2008, the transition impact
    related to the SFAS 157 adoption was a reduction in net
    income of $209. For further discussion of the SFAS 157
    transition impact, refer to Note 3 in the Notes to the
    Consolidated Financial Statements.(3)
    
    Includes policyholders balances for investment contracts
    and reserves for future policy benefits for insurance contracts    Year
    ended December 31, 2008 compared to the year ended
    December 31, 2007
   52




---



##### Table of Contents




    Fee income and other decreased primarily as a result of lower
    variable annuity fee income of $342 due to a decline in average
    account values. The decrease in average variable annuity account
    values can be attributed to market depreciation of
    $38.2 billion and net outflows of $6.2 billion during
    the year. Net outflows were driven by surrender activity due to
    the aging of the variable annuity in-force block of business,
    volatility in the equity markets and increased sales
    competition, particularly competition related to guaranteed
    living benefits.
    Earned Premiums increased primarily due to an increase in life
    contingent premiums combined with a decrease in reinsurance
    premiums as a result of the lapsing of business covered by
    reinsurance and the significant decline in the equity markets.
    Net investment income was lower primarily due to a $77 decline
    in income from limited partnerships and other alternative
    investments, combined with lower yields on fixed maturity
    investments due to interest rate declines, partially offset by
    an increase in general account assets from increased fixed
    account sales.
    Benefits, losses and loss adjustment expenses increased
    primarily as a result of the impact of the 2008 Unlock which
    increased the benefit ratio used in the calculation of GMDB
    reserves.
    Insurance operating costs and other expenses decreased primarily
    as a result of lower non deferrable asset based trail
    commissions due to equity market declines.
    Amortization of DAC increased, primarily due to the impact of
    the 2008 Unlock charge as compared to the 2007 Unlock benefit,
    offset by DAC amortization benefits associated with increased
    realized capital losses. This was partially offset by a DAC
    benefit associated with the adoption of SFAS 157 at the
    beginning of the first quarter of 2008.
    As a result of testing performed during the fourth quarter of
    2008, all goodwill attributed to the individual annuity business
    in Retail was deemed to be impaired and was written off. For
    further discussion of this impairment, see the Critical
    Accounting Estimates section of the MD&A.
    The effective tax rate increased from 17% in 2007 to 41% in 2008
    primarily due to losses before income taxes in 2008 compared to
    pre-tax earnings in 2007. The impact of DRD and other permanent
    differences caused an increase in the tax benefit to above 35%
    on the 2008 pre-tax loss and a decrease in the tax expense on
    the 2007 pre-tax income.  Year
    ended December 31, 2007 compared to the year ended
    December 31, 2006
    
    Fee income increased for the year ended December 31, 2007
    primarily as a result of growth in variable annuity average
    account values. The year-over-year increase in average variable
    annuity account values can be attributed to market appreciation
    of $7.4 billion during the year. Variable annuities had net
    outflows of $2.7 billion in 2007. Net outflows were driven
    by surrender activity due to the aging of the variable annuity
    inforce block of business and increased sales competition,
    particularly competition related to guaranteed living benefits.
    Net investment income declined for the year ended
    December 31, 2007 due to a decrease in variable annuity
    fixed option account values of 11% or $635. The decrease in
    these account values can be attributed to a combination of
    transfers into separate accounts and surrender activity.
    Offsetting this decrease in net investment income was an
    increase in the returns on limited partnership and other
    alternative investment income of $14, after-tax, for the year
    ended December 31, 2007. 53




---



##### Table of Contents




    Insurance operating costs and other expenses increased for the
    year ended December 31, 2007. These increases were
    principally driven by non-deferrable variable annuity asset
    based commissions, which increased $67 for the year ended
    December 31, 2007 due to a 4% growth in assets under
    management, as well as an increase in the number of contracts
    reaching anniversaries when trail commission payments begin.
    Lower amortization of DAC resulted from the unlock benefit
    during the third quarter of 2007 as compared to an unlock
    expense during the fourth quarter of 2006. For further
    discussion, see Unlock and Sensitivity Analysis in the Critical
    Accounting Estimates section of the MD&A.
    The effective tax rate increased from (11)% to 17% for the year
    ended December 31, 2007 from the prior year period, due to
    an increase in income before income taxes and revisions in the
    estimates of the separate account DRD which resulted from an
    incremental tax of $17, and foreign tax credits.  INDIVIDUAL
    LIFE
  Operating
    Summary
  2008


2007


2006Fee income and other

$
849


$
816


$
825Earned premiums


(65
)


(56
)


(45
)Net investment income


308



331



293Net realized capital losses


(247
)


(26
)


(22
)Total revenues


845



1,065



1,051Benefits, losses and loss adjustment expenses


569



510



447Insurance operating costs and other expenses


200



188



172Amortization of deferred policy acquisition costs and present
    value of future profits


166



117



235Total benefits, losses and expenses


935



815



854Income (loss) before income taxes


(90
)


250



197Income tax expense (benefit)


(39
)


81



60Net income (loss)

$
(51
)

$
169


$
137   Account Values

2008


2007


2006Variable universal life insurance

$
4,802


$
7,284


$
6,637Total account values

$
9,733


$
11,876


$
10,884     Year
    ended December 31, 2008 compared to the year ended
    December 31, 2007
    
    Fee income and other increased primarily due to an increase in
    cost of insurance charges of $47 as a result of growth in
    guaranteed universal life insurance in-force and fees on higher
    surrenders of $12 due to internal exchanges from non-guaranteed
    universal life insurance to variable universal life insurance.
    Partially offsetting these increases are the impacts of the 2008
    and 2007 Unlocks as well as lower variable life fees as a result
    of equity market declines. 54




---



##### Table of Contents




    Earned premiums, which include premiums for ceded reinsurance,
    decreased primarily due to increased ceded reinsurance premiums
    due to life insurance in-force growth.
    Net investment income decreased primarily due to lower
    investment income from limited partnership and other alternative
    investments, lower yields on fixed maturity investments and
    reduced net investment income associated with a more efficient
    capital approach for our secondary guarantee universal life
    business, which released assets supporting capital and the
    related net investment income earned on those assets, (described
    further in the Outlook section), partially offset by
    growth in general account values.
    Benefits, losses and loss adjustment expenses increased as a
    result of higher death benefits consistent with a larger life
    insurance in-force and unfavorable mortality, as well as the
    impact of the 2008 Unlock.
    Insurance operating costs and other increased less than the
    growth of in-force business as a result of active expense
    management efforts.
    Amortization of DAC increased primarily as a result of the
    unlock expense in 2008 as compared to the unlock benefit in
    2007, partially offset by reduced DAC amortization primarily
    attributed to net realized capital losses. This increase had a
    partial offset in amortization of deferred revenues, included in
    fee income.
    Income tax benefits were a result of lower income before income
    taxes primarily due to an increase in realized capital losses
    and DAC amortization.  Year
    ended December 31, 2007 compared to the year ended
    December 31, 2006
    
    Fee income and other decreased primarily due to the impacts of
    the 2007 and 2006 Unlocks. Offsetting the impacts of the
    Unlocks, fee income increased primarily due to higher cost of
    insurance charges, the largest component of fee income, of $35
    primarily driven by growth in variable universal and universal
    life insurance in-force. Variable fee income increased
    consistent with the growth in variable universal life insurance
    account value.
    Earned premiums, which include premiums for ceded reinsurance,
    decreased primarily due to increased ceded reinsurance premiums.
    Net investment income increased consistent with growth in
    general account values. Individual Life earned additional net
    investment income throughout 2007 associated with higher returns
    from limited partnership and other alternative investments.
    Benefits, losses and loss adjustment expenses increased due to
    life insurance in-force growth and unfavorable mortality.
    Insurance operating costs and other expenses increased in 2007
    consistent with life insurance in-force growth.
    Lower amortization of DAC resulted from the unlock benefit in
    2007 as compared to an unlock expense in 2006. This decrease had
    a partial offset in amortization of deferred revenues, included
    in fee income. 55




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##### Table of Contents



RETIREMENT
    PLANS
  Operating
    Summary
  2008


2007


2006Fee income and other

$
212


$
225


$
180Earned premiums


4



4



19Net investment income


342



355



326Net realized capital losses


(272
)


(41
)


(16
)Total revenues


286



543



509Benefits, losses and loss adjustment expenses


271



249



250Insurance operating costs and other expenses


195



169



134Amortization of deferred policy acquisition costs and present
    value of future profits


91



58



(4
)Total benefits, losses and expenses


557



476



380Income (loss) before income taxes


(271
)


67



129Income tax expense (benefit)


(127
)


14



35Net income (loss)

$
(144
)

$
53



94   Account Values

2008


2007


2006403(b)/457 account values

$
10,242


$
12,363


$
11,540401(k) account values


11,956



14,731



12,035Total account values

$
22,198


$
27,094


$
23,575     Year
    ended December 31, 2008 compared to the year ended
    December 31, 2007
    
    Fee income declined as average account values were impacted by
    market depreciation of $7.3 billion, partially offset by
    positive net flows of $2.4 billion over the past four
    quarters.
    Net investment income declined due to a decrease in limited
    partnership and other alternative investment income of $34,
    partially offset by growth in general account assets.
    Insurance operating costs and other expenses increased for the
    year ended December 31, 2008, attributable to higher trail
    commissions from assets under management aging beyond their
    first year; and higher service and technology costs.
    Amortization of deferred policy acquisition costs increased
    primarily as a result of the higher Unlock in the third quarter
    of 2008 as compared to the Unlock in the third quarter of 2007,
    partially offset by DAC amortization benefits associated with
    lower gross profits. For further discussion, see Unlock and
    Sensitivity Analysis in the Critical Accounting Estimates
    section of the MD&A.
    The income tax benefit for 2008 as compared to the prior year
    income tax expense was due to lower income before income taxes
    primarily due to increased realized capital losses, the DAC
    Unlock in 2008 as compared to 2007, and increased tax benefits
    associated with DRD. 56




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##### Table of Contents



Year
    ended December 31, 2007 compared to the year ended
    December 31, 2006
    
    Fee income increased for the year ended December 31, 2007
    primarily due to an increase in 401(k) average account values.
    This growth in 401(k) business is primarily driven by positive
    net flows of $1.8 billion in 2007 resulting from strong
    sales and increased ongoing deposits. Market appreciation
    contributed an additional $888 to assets under management in
    2007.
    Net investment income increased for the year ended
    December 31, 2007 for 403(b)/457 business due to growth in
    general account assets along with an increase in return on
    limited partnership and other alternative investments.
    Insurance operating costs and other expenses increased for the
    year ended December 31, 2007, primarily attributable to
    greater assets under management aging beyond their first year
    resulting in higher trail commissions. Also contributing to
    higher insurance operating costs for the year ended
    December 31, 2007 were higher service and technology costs.
    Benefits, losses and loss adjustment expenses and earned
    premiums decreased for the year ended December 31, 2008
    primarily due to a large case annuitization in the 401(k)
    business of $12 which occurred in the first quarter of 2006.
    This decrease was partially offset by an increase in interest
    credited resulting from the growth in general account assets.
    Higher amortization of DAC resulted from the unlock expense in
    the third quarter of 2007 as compared to an unlock benefit in
    the fourth quarter of 2006. For further discussion, see Unlock
    and Sensitivity Analysis in the Critical Accounting Estimates
    section of the MD&A.  INSTITUTIONAL
  Operating
    Summary
  2008


2007


2006Fee income and other

$
139


$
246


$
119Earned premiums


894



990



607Net investment income


988



1,226



987Net realized capital losses


(783
)


(188
)


(40
)Total revenues


1,238



2,274



1,673Benefits, losses and loss adjustment expenses


1,899



2,066



1,471Insurance operating costs and other expenses


112



183



75Amortization of deferred policy acquisition costs and present
    value of future profits


19



23



32Total benefits, losses and expenses


2,030



2,272



1,578Income (loss) before income taxes


(792
)


2



95Income tax expense (benefit)


(284
)


(5
)


26Net income (loss)


(508
)

$
7


$
69   Account Value

2008


2007


2006Institutional account values(1)

$
23,810


$
24,828


$
21,933Private Placement Life Insurance account values(2)


32,459



32,792



26,131Total account values

$
56,269


$
57,620


$
48,064     (1)
    
    Institutional investment product account values include
    transfers from Retirement Plans of $413 and $350 from the Retail
    segment during 2006.(2)
    
    Includes policyholder balances for investment contracts and
    reserves for future policy benefits for insurance contracts. 57




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##### Table of Contents



Year
    ended December 31, 2008 compared to the year ended
    December 31, 2007
    
    Fee income and other decreased primarily due to lower front-end
    loads on PPLI cases during 2008. PPLI collects front-end loads
    recorded in fee income, offset by corresponding premium taxes
    reported in insurance operating costs and other expenses. For
    2008 and 2007, PPLI deposits of $247 and $5.2 billion,
    respectively, resulted in fee income due to front-end loads of
    $2 and $107, respectively.
    Earned premiums decreased as compared to the prior year due to
    greater amounts of life contingent business sold in 2007. The
    decrease in earned premiums was offset by a corresponding
    decrease in benefits, losses, and loss adjustment expenses.
    Net investment income declined due to negative yields on limited
    partnership and other alternative investments, lower yields on
    fixed maturity investments indexed to LIBOR, and lower assets
    under management. The decline in yield on fixed maturities was
    largely offset by a corresponding decrease in interest credited
    on liabilities reported in benefits, losses, and loss adjustment
    expenses.
    Benefits, losses and loss adjustment expenses decreased
    primarily due to lower changes in reserve as the result of lower
    sales in life contingent business, as well as lower interest
    credited on liabilities indexed to LIBOR. The decrease was
    partially offset by $8 greater mortality loss.
    Insurance operating costs and other expenses decreased due to a
    decline in premium tax, driven by reduced PPLI deposits,
    partially offset by discontinued administrative system projects
    and product development expenses.
    The income tax benefit increased compared to the prior year
    primarily due to a decline in income before taxes primarily due
    to increased realized capital losses.  Year
    ended December 31, 2007 compared to the year ended
    December 31, 2006
    
    PPLI collects front-end loads recorded in fee income, offset by
    corresponding premium taxes reported in insurance operating
    costs and other expenses. During the year ended
    December 31, 2007, PPLI had deposits of $5.2 billion,
    which resulted in an increase in fee income due to front-end
    loads of $107.
    Earned premiums increased for the year ended December 31,
    2007 primarily as a result of increased structured settlement
    life contingent sales, and one large terminal funding life
    contingent case sold in the third quarter. This increase in
    earned premiums was offset by a corresponding increase in
    benefits, losses and loss adjustment expenses.
    Net investment income increased due to higher assets under
    management resulting from positive net flows of
    $1.5 billion during the year, and higher returns on limited
    partnerships and other alternative investments. Net flows were
    favorable primarily as a result of the Companys funding
    agreement backed Investor Notes program.
    Benefits, losses and loss adjustment expenses increased as
    compared to the comparable prior year period primarily due to
    higher assets under management, in addition to one large
    terminal funding life contingent case sold in the third quarter
    of 2007. 58




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##### Table of Contents




    Insurance operating costs and other expenses increased due to
    greater premium tax, driven by increased PPLI deposits.
    The change in income taxes was due to lower income before income
    taxes primarily driven by the increase in realized capital
    losses.  OTHER
  Operating
    Summary
  2008


2007


2006Fee income and other

$
63


$
56


$
65Earned premiums


155



107



52Net investment income


211



321



287Net realized capital losses


(2,440
)


(298
)


(134
)Total revenues(1)


(2,011
)


186



270Benefits, losses and loss adjustment expenses


297



335



218Insurance operating costs and other expenses


72



61



(3
)Amortization of deferred policy acquisition costs and present
    value of future profits


(2
)


1



(1
)Total benefits, losses and expenses


367



397



214Income (loss) before income taxes


(2,378
)


(211
)


56Income tax expense (benefit)


(836
)


(59
)


22Net income (loss)(2)

$
(1,542
)

$
(152
)

$
34     (1)
    
    The transition impact related to the SFAS 157 adoption was
    a reduction in revenues of $172 for Other for the year ended
    December 31,2008. For further discussion of the
    SFAS 157 transition impact, please refer to Note 3 in
    the Notes to the Condensed Consolidated Financial Statements.(2)
    
    The transition impact related to the SFAS 157 adoption was
    a reduction in net income of $102 for Other for the year ended
    December 31, 2008. For further discussion of the
    SFAS 157 transition impact, please refer to Note 3 in
    the Notes to the Condensed Consolidated Financial Statements.    Year
    ended December 31, 2008 compared to the year ended
    December 31, 2007
  
    Net investment income declined due to a decrease in investment
    yields on fixed maturities and declines in limited partnership
    and other alternative investment income.
    See Realized Capital Gains and Losses by Segment table under the
    Consolidated Operating summary section of the MD&A.
    The decrease in benefits, losses and loss adjustment expenses
    for the year ended December 31, 2008 was primarily due to a
    charge recorded in 2007 of $55, after-tax, for regulatory
    matters.
    Insurance operating costs and other expenses decreased,
    primarily due to a charge of $21 for regulatory matters in the
    second quarter of 2007, a decline in 2008 expenses now allocated
    to other segments partially offset by increased tax expenses due
    to a state tax credit that was recorded in the third quarter of
    2007. 59




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##### Table of Contents



Year
    ended December 31, 2007 compared to the year ended
    December 31, 2006
    
    Also contributing to the change in insurance operating costs and
    other expenses was an increase of $20 for the year ended
    December 31, 2007, as a result of recording penalties
    related to regulatory matters during the second quarter of 2007.
    During the year, the Company recorded an insurance recovery of
    $9 against the litigation costs associated with regulatory
    matters.
    Benefits, losses and loss adjustment expenses increased $55,
    after tax for the year ended December 31, 2007, as a result
    of the Company recording a reserve during the second quarter of
    2007 for regulatory matters.
    See Realized Capital Gains and Losses by Segment table under the
    Consolidated Operating summary section of the MD&A.  INVESTMENTS
  General
           60




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##### Table of Contents



Other-Than-Temporary
      Composition
    of Invested Assets
  December 31,


December 31,2008


2007Amount


Percent


Amount


PercentFixed maturities, available-for-sale, at fair value

$
39,560



72.1
%

$
45,611



82.9
%Equity securities, available-for-sale, at fair value


429



0.8
%


722



1.3
%Mortgage loans, at amortized cost(1)


4,896



8.9
%


4,166



7.5
%Policy loans, at outstanding balance


2,154



3.9
%


2,016



3.7
%Limited partnerships and other alternative investments(2)


1,033



1.9
%


1,246



2.3
%Short-term investments


5,562



10.2
%


752



1.4
%Other investments(3)


1,234



2.2
%


480



0.9
%Total investments

$
54,868



100.0
%

$
54,993



100.0
%     (1)
    
    Consist of commercial and agricultural loans.(2)
    
    Includes a real estate joint venture.(3)
    
    Primarily relates to derivative instruments.     61




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##### Table of Contents



Composition
    of Limited Partnerships and Other Alternative
    Investments
  December 31,


December 31,2008


2007Amount


Percent


Amount


PercentHedge funds(1)

$
263



25.5
%

$
514



41.3
%Mortgage and real estate(2)


228



22.1
%


272



21.8
%Mezzanine debt(3)


78



7.5
%


61



4.9
%Private equity and other(4)


464



44.9
%


399



32.0
%Total

$
1,033



100.0
%

$
1,246



100.0
%     (1)
    
    Hedge funds include investments in funds of funds as well as
    direct funds. The hedge funds of funds invest in approximately
    25 to 50 different hedge funds within a variety of investment
    styles. Examples of hedge fund strategies include long/short
    equity or credit, event driven strategies and structured credit.(2)
    
    Mortgage and real estate funds consist of investments in funds
    whose assets consist of mortgage loans, participations in
    mortgage loans, mezzanine loans or other notes which may be
    below investment grade credit quality as well as equity real
    estate. Also included is the investment in a real estate joint
    venture.(3)
    
    Mezzanine debt funds consist of investments in funds whose
    assets consist of subordinated debt that often times
    incorporates equity-based options such as warrants and a limited
    amount of direct equity investments.(4)
    
    Private equity and other funds primarily consist of investments
    in funds whose assets typically consist of a diversified pool of
    investments in small non-public businesses with high growth
    potential.  Investment
    Results
    2008


2007


2006(Before-tax)

Amount


Yield(1)


Amount


Yield(1)


Amount


Yield(1)Fixed maturities(2)

$
2,487



5.2
%

$
2,710



6.0
%

$
2,459



5.8
%Equity securities, available-for-sale


38



5.3
%


48



7.2
%


12



4.3
%Mortgage loans


251



5.6
%


227



6.4
%


126



6.4
%Policy loans


136



6.5
%


132



6.5
%


140



7.0
%Limited partnerships and other alternative investments


(203
)


(16.8
)%


112



13.0
%


67



12.5
%Other(3)


(43
)






(125
)






(26
)


Investment expense


(49
)






(56
)






(50
)


Total net investment income (loss)

$
2,617



4.7
%

$
3,048



6.1
%

$
2,728



5.8
%     (1)
    
    Yields calculated using investment income before investment
    expenses divided by the monthly weighted average invested assets
    at cost, amortized cost, or adjusted carrying value, as
    applicable excluding collateral received associated with the
    securities lending program and consolidated variable interest
    entity minority interests. Included in the fixed maturity yield
    is Other income (loss) as it primarily relates to fixed
    maturities (see footnote (3) below). Included in the total
    net investment income yield is investment expense.(2)
    
    Includes net investment income on short-term bonds.(3)
    
    Includes fees associated with securities lending activities of
    $60, $84 and $0, respectively, for the years ended
    December 31, 2008, 2007 and 2006. The income from
    securities lending activities is included within fixed
    maturities. Also included are derivatives that qualify for hedge
    accounting under SFAS 133. These derivatives hedge fixed
    maturities. 62




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##### Table of Contents



Year
    ended December 31, 2008 compared to the year ended
    December 31, 2007
    Year
    ended December 31, 2007 compared to the year ended
    December 31, 2006
      (Before-tax)

2008


2007


2006Gross gains on sale

$
383


$
187


$
199Gross losses on sale


(359
)


(142
)


(235
)Impairments


(1,888
)


(339
)


(71
)Japanese fixed annuity contract hedges, net(1)


64



18



(17
)Periodic net coupon settlements on credit derivatives/Japan


(34
)


(40
)


(48
)SFAS 157 transition impact(2)


(788
)






Results of variable annuity hedge programU.S. GMWB derivatives, net


(631
)


(277
)


(26
)Macro hedge program


74



(12
)


(14
)Total results of variable annuity hedge program


(557
)


(289
)


(40
)GMIB/GMAB/GMWB reinsurance


(1,986
)


(155
)


(53
)Other, net(3)


(486
)


(174
)


(34
)Net realized capital losses, before-tax

$
(5,651
)

$
(934
)

$
(299
)     (1)
    
    Relates to the Japanese fixed annuity product (product and
    related derivative hedging instruments excluding periodic net
    coupon settlements).(2)
    
    Includes SFAS 157 implementation losses of $616 related to
    GMWB embedded derivatives and $148 and $24 related to free
    standing derivatives associated with the reinsurance of GMIB and
    GMAB liabilities, respectively.(3)
    
    Primarily consists of changes in fair value on non-qualifying
    derivatives, hedge ineffectiveness on qualifying derivative
    instruments, foreign currency gains and losses, and other
    investment gains and losses. 63




---



##### Table of Contents



Year
    ended December 31, 2008 compared to the years ended
    December 31, 2007 and 2006
  Gross Gains and Losses on Sale



Gross gains and losses on sales for the year ended
    December 31, 2008 primarily resulted from the decision to
    reallocate the portfolio to securities with more favorable
    risk/return profiles. Also included was a gain of $141 from the
    sale of a synthetic CDO, as well as losses on sales of HIMCO
    managed CLOs in the first quarter. For more information
    regarding these CLO losses, refer to the Variable Interest
    Entities section below. During the year ended December 31,
    2008, securities sold at a loss were depressed, on average,
    approximately 2% at the respective periods impairment
    review date and were deemed to be temporarily impaired.

Gross gains and losses on sales for the year ended
    December 31, 2007 were primarily comprised of corporate
    securities. During the year ended December 31, 2007,
    securities sold at a loss were depressed, on average,
    approximately 1% at the respective periods impairment
    review date and were deemed to be temporarily impaired.

Gross gains on sales for the year ended December 31, 2006
    were primarily within fixed maturities and were concentrated in
    corporate, U.S. government, and foreign government securities.
    Gross losses on sale for the year ended December 31, 2006
    were primarily within fixed maturities and were concentrated in
    the corporate and CMBS sectors.Impairments



See the Other-Than-Temporary Impairments section that follows
    for information on impairment losses.SFAS 157



See Note 3 in the Notes to the Consolidated Financial
    Statements for a discussion of the SFAS 157 transition
    impact.Variable Annuity Hedge Program



See Note 3 in the Notes to the Consolidated Financial
    Statements for a discussion of variable annuity hedge program
    gains and losses.Other



Other, net losses for the year ended December 31, 2008 were
    primarily related to net losses of $304 related to transactional
    foreign currency losses predominately on the internal
    reinsurance of the Japan variable annuity business, which is
    entirely offset in AOCI, resulting from appreciation of the Yen
    and credit derivatives losses of $191 due to significant credit
    spread widening. Also included were losses on HIMCO managed CLOs
    in the first quarter and derivative related losses of $39 in the
    third quarter due to counterparty default related to the
    bankruptcy of Lehman Brothers Holdings Inc. For more information
    regarding the CLO losses, refer to the Variable Interest
    Entities section below.

Other, net losses for the year ended December 31, 2007 were
    primarily driven by the change in value of non-qualifying
    derivatives due to credit spread widening as well as
    fluctuations in interest rates and foreign currency exchange
    rates. Credit spreads widened primarily due to the deterioration
    in the U.S. housing market, tightened lending conditions and the
    markets flight to quality securities.

Other, net losses for the year ended December 31, 2006 were
    primarily driven from the change in value of non-qualifying
    derivatives due to fluctuations in interest rates and foreign
    currency exchange rates. These losses were partially offset by a
    before-tax benefit of $25 received from the WorldCom security
    settlement.  64




---



##### Table of Contents



Separate
    Account Products
    Securities
    Lending
      December 31, 2008Cash CollateralThirty days or less

$
810Thirty one to 90 days


342Over three to six months


261Over six to nine months


424Total

$
1,837   Variable
    Interest Entities (VIE)
       65




---



##### Table of Contents



December 31, 2008


December 31, 2007Maximum








MaximumTotal


Total


Exposure


Total


Total


ExposureAssets


Liabilities(1)


to Loss(2)


Assets


Liabilities(1)


to LossCLOs

$
339


$
89


$
237


$
128


$
73


$
74Limited partnerships


151



72



79



309



121



188Other investments


249



103



166



296



126



178Total

$
739


$
264


$
482


$
733


$
320


$
440     (1)
    
    Creditors have no recourse against the Company in the event of
    default by the VIE.(2)
    
    The Companys maximum exposure to loss represents the
    maximum loss amount that the Company could recognize as a
    reduction in net investment income or as a realized capital loss
    and is the consolidated assets net of liabilities at cost. The
    Company has no implied or unfunded commitments to these VIEs.         66




---



##### Table of Contents



December 31, 2008


December 31, 2007Maximum








MaximumExposure








ExposureAssets


Liabilities


to Loss


Assets


Liabilities


to LossCLOs

$
280


$



$
316


$
11


$



$
14CDOs


3







13



61







86Total(1)

$
283


$



$
329


$
72


$



$
100     (1)
    
    Maximum exposure to loss represents the Companys
    investment in securities issued by CLOs/CDOs at cost. The
    Company has no implied or unfunded commitments to these VIEs.      Other-Than-Temporary
    Impairments
  other-than-temporarily
 67




---



##### Table of Contents



2008


2007


2006ABSSub-prime residential mortgages

$
214


$
188


$
1Other


11



18



7CMBSBonds


55



6



IOs


68







1CRE CDOs


212







CMOs/MBS


29







CorporateFinancial Services


803



40



Other


325



64



59EquitiesFinancial Services


128







Other


28



18



3Other


15



5



Total other-than-temporary impairments

$
1,888


$
339


$
71     2008
          2007
   68




---



##### Table of Contents



2006
    INVESTMENT
    CREDIT RISK
        December 31, 2008Percentage ofFair Value


Stockholders EquityGovernment of Japan

$
1,869



99
%JPMorgan Chase & Company


263



14
%General Electric Company


231



12
%Credit Suisse Group


202



11
%Citigroup Inc.


185



10
%Verizon Communications


179



10
%     Derivative
    Instruments
       69




---



##### Table of Contents



70




---



##### Table of Contents



Credit
    Default Swaps
  December 31, 2008


December 31, 2007Initial








InitialNotional


Premium





Notional


PremiumAmount


Received


Fair Value


Amount


Received


Fair ValueAssuming credit risk

$
834


$
(1
)

$
(306
)

$
1,718


$
(101
)

$
(234
)Reducing credit risk


2,633



(1
)


246



3,494



(1
)


56Total credit default swaps

$
3,467


$
(2
)

$
(60
)

$
5,212


$
(102
)

$
(178
)       Available-for-Sale
    Securities
    Fixed
    Maturities by Credit Quality
  December 31, 2008


December 31, 2007Percent








Percentof Total








of TotalAmortized


Fair


Fair


Amortized


Fair


FairCost


Value


Value


Cost


Value


ValueAAA

$
10,316


$
7,368



18.6
%

$
14,217


$
13,879



30.5
%AA


7,304



5,704



14.4
%


6,015



5,700



12.5
%A


11,590



9,626



24.4
%


10,887



10,999



24.1
%BBB


10,292



8,288



21.0
%


9,980



9,937



21.8
%United States Government/Government agencies


7,200



7,289



18.4
%


3,262



3,295



7.2
%BB & below


1,742



1,285



3.2
%


1,847



1,801



3.9
%Total fixed maturities

$
48,444


$
39,560



100.0
%

$
46,208


$
45,611



100.0
%    71




---



##### Table of Contents



available-for-sale
  Available-for-Sale Securities by TypeDecember 31, 2008


December 31, 2007Cost or


Gross


Gross





Percent of


Cost or


Gross


Gross





Percent ofAmortized


Unrealized


Unrealized


Fair


Total Fair


Amortized


Unrealized


Unrealized


Fair


Total FairCost


Gains


Losses


Value


Value


Cost


Gains


Losses


Value


ValueABSAuto

$
432


$



$
(106
)

$
326



0.8
%

$
536


$
1


$
(12
)

$
525



1.2
%Collateralized loan obligations (CLOs)(1)


2,107







(537
)


1,570



4.0
%


1,841







(79
)


1,762



3.9
%Credit cards


751







(152
)


599



1.5
%


826



2



(18
)


810



1.8
%Residential mortgage backed (RMBS)(2)


2,171



4



(769
)


1,406



3.6
%


2,558



6



(294
)


2,270



5.0
%Student loan


697







(254
)


443



1.1
%


719







(37
)


682



1.5
%Other(3)


937



5



(316
)


626



1.6
%


1,122



15



(79
)


1,058



2.2
%CMBSAgency backed(4)


243



8







251



0.6
%


249



6







255



0.6
%Bonds


7,160



1



(2,719
)


4,442



11.2
%


8,351



75



(239
)


8,187



17.9
%CRE CDOs


1,566



2



(1,170
)


398



1.0
%


1,872







(319
)


1,553



3.4
%Interest only (IOs)


840



12



(196
)


656



1.7
%


1,043



78



(14
)


1,107



2.4
%CMOsAgency backed


539



30



(3
)


566



1.4
%


793



18



(3
)


808



1.8
%Non-agency backed(5)


320







(102
)


218



0.6
%


411



4



(2
)


413



0.9
%Corporate (6)Basic industry


1,459



5



(233
)


1,231



3.1
%


1,552



45



(19
)


1,578



3.5
%Capital goods


1,656



26



(201
)


1,481



3.7
%


1,460



72



(14
)


1,518



3.3
%Consumer cyclical


1,588



29



(244
)


1,373



3.5
%


1,886



72



(34
)


1,924



4.2
%Consumer non-cyclical


2,455



46



(172
)


2,329



5.9
%


2,023



72



(19
)


2,076



4.6
%Energy


1,320



19



(118
)


1,221



3.1
%


1,117



53



(8
)


1,162



2.5
%Financial services


5,563



163



(994
)


4,732



12.0
%


6,906



184



(308
)


6,782



14.9
%Technology and communications


2,597



69



(248
)


2,418



6.1
%


2,455



141



(22
)


2,574



5.6
%Transportation


410



8



(67
)


351



0.9
%


312



10



(7
)


315



0.7
%Utilities


3,189



76



(376
)


2,889



7.3
%


2,797



138



(70
)


2,865



6.3
%Other(7)


1,015







(305
)


710



1.8
%


1,420



20



(70
)


1,370



3.0
%Government/Government agencies Foreign


2,094



86



(33
)


2,147



5.4
%


465



35



(2
)


498



1.1
%United States


5,033



75



(39
)


5,069



12.8
%


516



14



(1
)


529



1.2
%MBS


1,385



23



(5
)


1,403



3.5
%


1,750



15



(15
)


1,750



3.8
%Municipal


917



8



(220
)


705



1.8
%


1,226



32



(20
)


1,238



2.7
%Redeemable preferred stock






















2



2



(2
)


2



Fixed maturities

$
48,444


$
695


$
(9,579
)

$
39,560



100.0
%

$
46,208


$
1,110


$
(1,707
)

$
45,611



100.0
%Equity securities, available-for-sale Financial Services


334







(107
)


227







515







(45
)


470Other


276



3



(77
)


202







248



10



(6
)


252Total securities, available-for-sale

$
49,054


$
698


$
(9,763
)

$
39,989






$
46,971


$
1,120


$
(1,758
)

$
46,333     (1)
    
    As of December 31, 2008, 99% of these senior secured bank
    loan CLOs were AAA rated with an average subordination of 29%.(2)
    
    Includes securities with an amortized cost and fair value of $9
    and $6, respectively, as of December 31, 2008, and $30 and
    $28, respectively, as of December 31, 2007, which were
    backed by pools of loans issued to prime borrowers. Includes
    securities with an amortized cost and fair value of $86 and $58,
    respectively, as of December 31, 2008, and $91 and $82,
    respectively, as of December 31, 2007, which were backed by
    pools of loans issued to Alt-A borrowers.(3)
    
    Includes CDO securities with an amortized cost and fair value of
    $8 and $5, respectively, as of December 31, 2008, and $16
    and $15, respectively, as of December 31, 2007 that contain
    a below-prime residential mortgage loan component. Typically
    these CDOs are also backed by assets other than below-prime
    loans.(4)
    
    Represents securities with pools of loans by the Small Business
    Administration whose issued loans are backed by the full faith
    and credit of the U.S. government.(5)
    
    Includes securities with an amortized cost and fair value of
    $170 and $108, respectively, as of December 31, 2008, and
    $212 as of December 31, 2007 which were backed by pools of
    loans issued to Alt-A borrowers.(6)
    
    As of December 31, 2008 and 2007, 95% and 93%,
    respectively, of corporate securities were rated investment
    grade. 72




---



##### Table of Contents



(7)
    
    Includes structured investments with an amortized cost and fair
    value of $326 and $222, respectively, as of December 31,
    2008, and $561 and $523, respectively, as of December 31,
    2007. The underlying securities supporting these investments are
    primarily diversified pools of investment grade corporate
    issuers which can withstand a 15% cumulative default rate,
    assuming a 35% recovery.      Financial
    Services
      Financial Services by Credit QualityDecember 31, 2008


December 31, 2007Percent of








Percent ofAmortized





Total Fair


Amortized





Total FairCost


Fair Value


Value


Cost


Fair Value


ValueAAA

$
463


$
394



8.0
%

$
404


$
397



5.5
%AA


1,422



1,240



25.0
%


2,200



2,131



29.4
%A


3,386



2,834



57.1
%


3,780



3,752



51.7
%BBB


537



411



8.3
%


795



739



10.2
%BB & below


89



80



1.6
%


242



233



3.2
%Total

$
5,897


$
4,959



100.0
%

$
7,421


$
7,252



100.0
%  73




---



##### Table of Contents



Financial Services by Credit QualityDecember 31, 2008


December 31, 2007Percent of








Percent ofAmortized





Total Fair


Amortized





Total FairCost


Fair Value


Value


Cost


Fair Value


ValueAAA

$
169


$
122



4.3
%

$
300


$
296



6.8
%AA


778



697



24.5
%


1,205



1,157



26.7
%A


2,087



1,724



60.7
%


2,321



2,313



53.3
%BBB


299



229



8.1
%


438



399



9.2
%BB & below


71



68



2.4
%


179



171



4.0
%Total

$
3,404


$
2,840



100.0
%

$
4,443


$
4,336



100.0
%   Sub-Prime
    Residential Mortgage Loans
      Sub-Prime
    Residential Mortgage Loans(1)(2)(3)(4)
  December 31, 2008(5)AAA


AA


A


BBB


BB and Below


TotalAmortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair





FairCost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value


Amortized Cost


Value2003 & Prior

$
26


$
22


$
129


$
109


$
48


$
35


$
17


$
13


$
34


$
19


$
254


$
1982004


108



79



303



240











8



7











419



3262005


73



56



525



353



138



70



24



16



22



18



782



5132006


45



41



109



50



10



5



87



35



96



36



347



1672007


42



27



40



9



33



15



35



19



132



73



282



143Total

$
294


$
225


$
1,106


$
761


$
229


$
125


$
171


$
90


$
284


$
146


$
2,084


$
1,347Credit protection

39.3%

48.3%

32.1%

23.5%

20.1%

41.4%   74




---



##### Table of Contents



December 31, 2007AAA


AA


A


BBB


BB and Below


TotalAmortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value2003 & Prior

$
50


$
49


$
180


$
168


$
79


$
66


$
6


$
5


$
7


$
6


$
322


$
2942004


129



127



304



276



























433



4032005


83



77



762



683



8



5



10



3



29



19



892



7872006


336



304



48



39



1



1



2



1



3



1



390



3462007


262



227



66



37



52



44



17



17



19



20



416



345Total

$
860


$
784


$
1,360


$
1,203


$
140


$
116


$
35


$
26


$
58


$
46


$
2,453


$
2,175Credit protection

32.3%

47.9%

22.7%

23.1%

19.2%

40.7%     (1)
    
    The vintage year represents the year the underlying loans in the
    pool were originated.(2)
    
    The Companys exposure to second lien residential mortgages
    is composed primarily of loans to prime and Alt-A borrowers, of
    which approximately over half were wrapped by monoline insurers.
    These securities are included in the table above and have an
    amortized cost and fair value of $120 and $60, respectively, as
    of December 31, 2008 and $206 and $170, respectively, as of
    December 31, 2007.(3)
    
    As of December 31, 2008, the weighted average life of the
    sub-prime residential mortgage portfolio was 3.8 years.(4)
    
    Approximately 88% of the portfolio is backed by adjustable rate
    mortgages.(5)
    
    The credit qualities above include downgrades which have shifted
    the portfolio from higher rated assets to lower rated assets
    since December 31, 2007.    Sub-Prime
    Residential Mortgage Loans(1)(2)(3)(4)
  December 31, 2008(5)AAA


AA


A


BBB


BB and Below


TotalAmortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value2003 & Prior

$
15


$
11


$
71


$
59


$
24


$
19


$
11


$
7


$
20


$
13


$
141


$
1092004


99



72



198



157











4



3











301



2322005


53



40



444



306



83



42



23



16



22



18



625



4222006


32



29



90



38



8



4



54



23



70



28



254



1222007


14



9



25



5



21



7



10



6



119



67



189



94Total

$
213


$
161


$
828


$
565


$
136


$
72


$
102


$
55


$
231


$
126


$
1,510


$
979Credit protection

39.6%

48.6%

32.0%

24.1%

21.1%

41.5%   75




---



##### Table of Contents



December 31, 2007AAA


AA


A


BBB


BB and Below


TotalAmortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value2003 & Prior

$
23


$
23


$
95


$
87


$
49


$
41


$
4


$
3


$
3


$
3


$
174


$
1572004


112



111



199



181



























311



2922005


63



58



624



559



8



5



10



4



27



16



732



6422006


241



217



29



24











1



1











271



2422007


165



143



55



30



37



36



8



8



11



13



276



230Total

$
604


$
552


$
1,002


$
881


$
94


$
82


$
23


$
16


$
41


$
32


$
1,764


$
1,563Credit protection

32.7%

48.4%

24.1%

27.9%

23.3%

41.4%     (1)
    
    The vintage year represents the year the underlying loans in the
    pool were originated.(2)
    
    The Companys exposure to second lien residential mortgages
    is composed primarily of loans to prime and Alt-A borrowers.
    These securities are included in the table above and have an
    amortized cost and fair value of $61 and $36, respectively, as
    of December 31, 2008 and $145 and $118, respectively, as of
    December 31, 2007.(3)
    
    As of December 31, 2008, the weighted average life of the
    sub-prime residential mortgage portfolio was 3.9 years.(4)
    
    Approximately 93% of the portfolio is backed by adjustable rate
    mortgages.(5)
    
    The credit qualities above include downgrades which have shifted
    the portfolio from higher rated assets to lower rated assets
    since December 31, 2007.  Commercial
    Mortgage Loans
    CMBS 
    Bonds(1)
  December 31, 2008AAA


AA


A


BBB


BB and Below


TotalAmortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value2003 & Prior

$
1,492


$
1,365


$
259


$
179


$
71


$
40


$
11


$
8


$
23


$
16


$
1,856


$
1,6082004


365



317



53



22



41



15



20



8











479



3622005


561



428



243



93



235



109



48



23











1,087



6532006


1,732



1,025



228



76



353



140



354



129



39



12



2,706



1,3822007


528



256



263



90



102



31



134



59



5



1



1,032



437Total

$
4,678


$
3,391


$
1,046


$
460


$
802


$
335


$
567


$
227


$
67


$
29


$
7,160


$
4,442Credit protection

24.7%

18.6%

12.6%

4.9%

4.3%

20.6%   76




---



##### Table of Contents



December 31, 2007AAA


AA


A


BBB


BB and Below


TotalAmortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value2003 & Prior

$
1,953


$
1,983


$
296


$
303


$
100


$
99


$
7


$
7


$
26


$
29


$
2,382


$
2,4212004


368



370



56



55



53



50



21



19











498



4942005


623



615



247



236



255



247



67



65



22



19



1,214



1,1822006


1,940



1,890



263



254



428



414



392



352



18



17



3,041



2,9272007


673



662



263



249



102



91



175



158



3



3



1,216



1,163Total

$
5,557


$
5,520


$
1,125


$
1,097


$
938


$
902


$
662


$
601


$
69


$
68


$
8,351


$
8,187Credit protection

23.8%

16.4%

13.6%

6.8%3.7%

20.6%     (1)
    
    The vintage year represents the year the pool of loans was
    originated.    CMBS 
    Bonds(1)
  December 31, 2008AAA


AA


A


BBB


BB and Below


TotalAmortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value2003 & Prior

$
747


$
675


$
111


$
79


$
30


$
19


$
7


$
4


$
14


$
10


$
909


$
7872004


214



187



18



9



22



9



11



6











265



2112005


277



201



168



70



174



87



41



20











660



3782006


1,218



716



192



68



277



107



271



99



26



8



1,984



9982007


319



142



183



71



64



20



106



51



3



1



675



285Total

$
2,775


$
1,921


$
672


$
297


$
567


$
242


$
436


$
180


$
43


$
19


$
4,493


$
2,659Credit protection

24.9%

20.9%

13.9%

4.9%

5.2%

20.8%   December 31, 2007AAA


AA


A


BBB


BB and Below


TotalAmortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value2003 & Prior

$
1,116


$
1,129


$
126


$
128


$
52


$
52


$
3


$
3


$
18


$
20


$
1,315


$
1,3322004


213



214



21



21



35



33



11



10











280



2782005


310



304



168



160



197



193



49



47



22



19



746



7232006


1,372



1,326



201



195



334



323



306



272



10



9



2,223



2,1252007


377



369



183



174



64



58



129



117



2



2



755



720Total

$
3,388


$
3,342


$
699


$
678


$
682


$
659


$
498


$
449


$
52


$
50


$
5,319


$
5,178Credit protection

24.8%

21.2%

16.7%

7.4%

3.9%

21.5%     (1)
    
    The vintage year represents the year the pool of loans was
    originated. 77




---



##### Table of Contents



CMBS 
    CRE CDOs(1)(2)(3)
  December 31, 2008(4)AAA


AA


A


BBB


BB and Below


TotalAmortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value2003 & Prior

$
127


$
43


$
90


$
28


$
59


$
14


$
48


$
6


$
30


$
5


$
354


$
962004


118



35



16



5



31



9



12



2



13



2



190



532005


71



29



58



12



56



10



10



2



1







196



532006


222



68



83



18



74



19



15



2











394



1072007


126



40



106



19



101



10



11



1











344



702008


39



11



22



5



24



3



3















88



19Total

$
703


$
226


$
375


$
87


$
345


$
65


$
99


$
13


$
44


$
7


$
1,566


$
398Credit protection

27.1%

21.3%

17.9%

17.0%

57.5%

23.9%   December 31, 2007AAA


AA


A


BBB


BB and Below


TotalAmortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value2003 & Prior

$
270


$
228


$
70


$
58


$
31


$
22


$
7


$
7


$



$



$
378


$
3152004


86



69



16



13



11



8



4



3











117



932005


79



65



34



26



10



7



2



1











125



992006


436



386



142



113



187



145



50



38











815



6822007


206



177



129



107



79



63



23



17











437



364Total

$
1,077


$
925


$
391


$
317


$
318


$
245


$
86


$
66


$



$



$
1,872


$
1,553Credit protection

31.5%

27.1%

16.7%

10.4%



27.5%     (1)
    
    The vintage year represents the year that the underlying
    collateral in the pool was originated. Individual CDO market
    value is allocated by the proportion of collateral within each
    vintage year.(2)
    
    As of December 31, 2008, approximately 30% of the
    underlying CMBS CRE CDO collateral are seasoned, below
    investment grade securities.(3)
    
    For certain CDOs, the collateral manager has the ability
    to reinvest proceeds that become available, primarily from
    collateral maturities. The increase in the 2008 vintage year
    represents reinvestment under these CDOs.(4)
    
    The credit qualities above include downgrades since
    December 31, 2007.    CMBS 
    CRE CDOs(1)(2)(3)
  December 31, 2008(4)AAA


AA


A


BBB


BB and Below


TotalAmortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value2003 & Prior

$
120


$
40


$
65


$
17


$
20


$
4


$
26


$
3


$
18


$
3


$
249


$
672004


85



25



13



3



11



3



8



1



8



1



125



332005


60



24



50



11



37



6



8



2











155



432006


160



49



60



13



52



14



9



2











281



782007


89



26



79



14



88



9



5



1











261



502008


30



8



17



4



20



2



1















68



14Total

$
544


$
172


$
284


$
62


$
228


$
38


$
57


$
9


$
26


$
4


$
1,139


$
285Credit protection

31.1%

20.5%

16.5%

15.7%

59.9%

25.4%   78




---



##### Table of Contents



December 31, 2007AAA


AA


A


BBB


BB and Below


TotalAmortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value2003 & Prior

$
182


$
153


$
48


$
38


$
13


$
10


$
5


$
4


$



$



$
248


$
2052004


59



48



13



11



6



5



3



2











81



662005


50



41



32



24



9



7



1















92



722006


323



286



113



91



150



118



42



32











628



5272007


126



107



90



74



67



53



16



11











299



245Total

$
740


$
635


$
296


$
238


$
245


$
193


$
67


$
49


$



$



$
1,348


$
1,115Credit protection

34.1%24.7%17.1%10.1%28.0%     (1)
    
    The vintage year represents the year that the underlying
    collateral in the pool was originated. Individual CDO market
    value is allocated by the proportion of collateral within each
    vintage year.(2)
    
    As of December 31, 2008, approximately 28% of the
    underlying CMBS CRE CDO collateral are seasoned, below
    investment grade securities.(3)
    
    For certain CDOs, the collateral manager has the ability
    to reinvest proceeds that become available, primarily from
    collateral maturities. The increase in the 2008 vintage year
    represents reinvestment under these CDOs.(4)
    
    The credit qualities above include downgrades since
    December 31, 2007.    CMBS IOs (1)December 31, 2008


December 31, 2007AAA


AAAAmortized





AmortizedCost


Fair Value


Cost


Fair Value2003 & Prior

$
295


$
287


$
367


$
4112004


158



119



209



2182005


200



136



235



2432006


93



54



110



1132007


94



60



122



122Total

$
840


$
656


$
1,043


$
1,107     (1)
    
    The vintage year represents the year the pool of loans was
    originated    CMBS IOs(1)December 31, 2008


December 31, 2007AAA


AAAAmortized





AmortizedCost


Fair Value


Cost


Fair Value2003 & Prior

$
131


$
127


$
178


$
2002004


86



68



118



1222005


109



74



127



1322006


45



27



56



582007


44



28



58



59Total

$
415


$
324


$
537


$
571     (1)
    
    The vintage year represents the year the pool of loans was
    originated 79




---



##### Table of Contents



Commercial Mortgage Loans on Real Estate by RegionDecember 31, 2008


December 31, 2007Carrying


Percent of


Carrying


Percent ofValue


Total


Value


TotalEast North Central

$
121



2.5
%

$
101



2.4
%Middle Atlantic


556



11.4
%


503



12.1
%Mountain


115



2.3
%


101



2.4
%New England


407



8.3
%


348



8.4
%Pacific


1,205



24.6
%


959



23.0
%South Atlantic


665



13.6
%


749



18.0
%West North Central


56



1.1
%


25



0.6
%West South Central


205



4.2
%


179



4.3
%Other(1)


1,566



32.0
%


1,201



28.8
%Total

$
4,896



100.0
%

$
4,166



100.0
%     (1)
    
    Includes multi-regional properties.  Commercial Mortgage Loans on Real Estate by Property TypeDecember 31,


December 31,2008


2007Carrying


Percent of


Carrying


Percent ofValue


Total


Value


TotalIndustrial

$
790



16.1
%

$
424



10.2
%Lodging


383



7.8
%


424



10.2
%Agricultural


435



8.9
%


236



5.7
%Multifamily


798



16.3
%


708



17.0
%Office


1,456



29.8
%


1,550



37.2
%Retail


790



16.1
%


702



16.8
%Other


244



5.0
%


122



2.9
%Total

$
4,896



100.0
%

$
4,166



100.0
%   Consumer
    Loans
   80




---



##### Table of Contents



ABS
    Consumer Loans
  December 31, 2008AAA


AA


A


BBB


BB and Below


TotalAmortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


ValueAuto(1)

$
108


$
84


$
7


$
6


$
142


$
103


$
160


$
123


$
15


$
10


$
432


$
326Credit card(2)


313



273



6



4



97



86



278



197



57



39



751



599Student loan(3)


272



143



306



229



119



71



















697



443Total

$
693


$
500


$
319


$
239


$
358


$
260


$
438


$
320


$
72


$
49


$
1,880


$
1,368   December 31, 2007AAA


AA


A


BBB


BB and Below


TotalAmortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


ValueAuto(1)

$
204


$
201


$
7


$
7


$
151


$
148


$
154


$
150


$
20


$
19


$
536


$
525Credit card(2)


156



157



19



19



130



130



521



504











826



810Student loan(3)


290



274



308



293



121



115



















719



682Total

$
650


$
632


$
334


$
319


$
402


$
393


$
675


$
654


$
20


$
19


$
2,081


$
2,017     (1)
    
    Includes monoline insured securities with an amortized cost and
    fair value of $35 and $28, respectively, at December 31,
    2008, and amortized cost and fair value of $42 at
    December 31, 2007. Additionally, approximately 12% of the
    auto consumer loan-backed securities were issued by lenders
    whose primary business is to sub-prime borrowers.(2)
    
    As of December 31, 2008, approximately 8% of the securities
    were issued by lenders that lend primarily to sub-prime
    borrowers.(3)
    
    Includes monoline insured securities with an amortized cost and
    fair value of $102 and $38, respectively, at December 31,
    2008, and amortized cost and fair value of $102 and $93,
    respectively, at December 31, 2007. Additionally,
    approximately half of the student loan-backed exposure is
    guaranteed by the Federal Family Education Loan Program, with
    the remainder comprised of loans to prime-borrowers.    ABS
    Consumer Loans
  December 31, 2008AAA


AA


A


BBB


BB and Below


TotalAmortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


ValueAuto(1)

$
49


$
37


$
4


$
4


$
58


$
37


$
57


$
43


$
2


$
1


$
170


$
122Credit card(2)


60



46











54



50



166



131



50



34



330



261Student loan(3)


177



101



230



172



63



40



















470



313Total

$
286


$
184


$
234


$
176


$
175


$
127


$
223


$
174


$
52


$
35


$
970


$
696   December 31, 2007AAA


AA


A


BBB


BB and Below


TotalAmortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


Value


Cost


ValueAuto(1)

$
74


$
73


$
1


$



$
62


$
61


$
56


$
54


$
7


$
6


$
200


$
194Credit card(2)


61



62











45



45



316



309











422



416Student loan(3)


195



184



229



218



64



60



















488



462Total

$
330


$
319


$
230


$
218


$
171


$
166


$
372


$
363


$
7


$
6


$
1,110


$
1,072  81




---



##### Table of Contents



(1)
    
    Includes monoline insured securities with an amortized cost and
    fair value of $33 and $26, respectively, at December 31,
    2008, and amortized cost and fair value of $42 at
    December 31, 2007. Additionally, approximately 15% of the
    auto consumer loan-backed securities were issued by lenders
    whose primary business is to sub-prime borrowers.(2)
    
    As of December 31, 2008, approximately 15% of the
    securities were issued by lenders that lend primarily to
    sub-prime borrowers.(3)
    
    Includes monoline insured securities with an amortized cost and
    fair value of $2 and $1, respectively, at December 31,
    2008, and amortized cost and fair value of $2 at
    December 31, 2007. Additionally, approximately half of the
    student loan-backed exposure is guaranteed by the Federal Family
    Education Loan Program, with the remainder comprised of loans to
    prime-borrowers.  Monoline
    Insured Securities
    Security
    Unrealized Loss Aging
    Consolidated SecuritiesDecember 31, 2008


December 31, 2007Cost or











Cost orAmortized


Fair


Unrealized





Amortized


Fair


UnrealizedItems


Cost


Value


Loss


Items


Cost


Value


LossThree months or less


1,039


$
11,458


$
10,538


$
(920
)


929


$
6,580


$
6,321


$
(259
)Greater than three to six months


596



3,599



2,817



(782
)


747



8,023



7,411



(612
)Greater than six to nine months


535



4,554



3,735



(819
)


465



5,238



4,795



(443
)Greater than nine to twelve months


360



3,107



2,183



(924
)


193



1,917



1,763



(154
)Greater than twelve months


1,626



16,303



9,985



(6,318
)


1,165



5,971



5,681



(290
)Total


4,156


$
39,021


$
29,258


$
(9,763
)


3,499


$
27,729


$
25,971


$
(1,758
)  82




---



##### Table of Contents



Securitized Assets Depressed over 20%December 31, 2008


December 31, 2007Cost or











Cost orAmortized


Fair


Unrealized





Amortized


Fair


UnrealizedConsecutive Months

Items


Cost


Value


Loss


Items


Cost


Value


LossThree months or less


709


$
8,326


$
4,772


$
(3,554
)


115


$
918


$
613


$
(305
)Greater than three to six months


78



773



315



(458
)


18



130



76



(54
)Greater than six to nine months


139



1,686



620



(1,066
)














Greater than nine to twelve months


91



739



170



(569
)














Greater than twelve months


17



203



34



(169
)


3



33



22



(11
)Total


1,034


$
11,727


$
5,911


$
(5,816
)


136


$
1,081


$
711


$
(370
)   All Other Securities Depressed over 20%December 31, 2008


December 31, 2007Cost or











Cost orAmortized


Fair


Unrealized





Amortized


Fair


UnrealizedConsecutive Months

Items


Cost


Value


Loss


Items


Cost


Value


LossThree months or less


568


$
6,396


$
4,210


$
(2,186
)


52


$
65


$
50


$
(15
)Greater than three to six months


26



224



116



(108
)


5



30



5



(25
)Greater than six to nine months


20



250



139



(111
)














Greater than nine to twelve months


3



99



61



(38
)














Greater than twelve months


















1



2



1



(1
)Total


617


$
6,969


$
4,526


$
(2,443
)


58


$
97


$
56


$
(41
)   Consolidated Securities Depressed over 20%December 31, 2008


December 31, 2007Cost or











Cost orAmortized


Fair


Unrealized





Amortized


Fair


UnrealizedConsecutive Months

Items


Cost


Value


Loss


Items


Cost


Value


LossThree months or less


1,277


$
14,722


$
8,982


$
(5,740
)


167


$
983


$
663


$
(320
)Greater than three to six months


104



997



431



(566
)


23



160



81



(79
)Greater than six to nine months


159



1,936



759



(1,177
)














Greater than nine to twelve months


94



838



231



(607
)














Greater than twelve months


17



203



34



(169
)


4



35



23



(12
)Total


1,651


$
18,696


$
10,437


$
(8,259
)


194


$
1,178


$
767


$
(411
)  83




---



##### Table of Contents



Securitized Assets Depressed over 50%(included in the depressed over 20% table above)December 31, 2008


December 31, 2007Cost or











Cost orAmortized


Fair


Unrealized





Amortized


Fair


UnrealizedConsecutive Months

Items


Cost


Value


Loss


Items


Cost


Value


LossThree months or less


440


$
5,156


$
1,733


$
(3,423
)


21


$
81


$
29


$
(52
)Greater than three to six months


36



292



48



(244
)














Greater than six to nine months


17



124



18



(106
)














Greater than nine to twelve months






























Greater than twelve months






























Total


493


$
5,572


$
1,799


$
(3,773
)


21


$
81


$
29


$
(52
)   All Other Securities Depressed over 50%(included in the depressed over 20% table above)December 31, 2008


December 31, 2007Cost or











Cost orAmortized


Fair


Unrealized





Amortized


Fair


UnrealizedConsecutive Months

Items


Cost


Value


Loss


Items


Cost


Value


LossThree months or less


74


$
832


$
352


$
(480
)


6



2



1



(1
)Greater than three to six months


















2



17



1



(16
)Greater than six to nine months






























Greater than nine to twelve months






























Greater than twelve months






























Total


74


$
832


$
352


$
(480
)


8



19



2



(17
)   Consolidated Securities Depressed over 50%(included in the depressed over 20% table above)December 31, 2008


December 31, 2007Cost or











Cost orAmortized


Fair


Unrealized





Amortized


Fair


UnrealizedConsecutive Months

Items


Cost


Value


Loss


Items


Cost


Value


LossThree months or less


514


$
5,988


$
2,085


$
(3,903
)


27


$
83


$
30


$
(53
)Greater than three to six months


36



292



48



(244
)


2



17



1



(16
)Greater than six to nine months


17



124



18



(106
)














Greater than nine to twelve months






























Greater than twelve months






























Total


567


$
6,404


$
2,151


$
(4,253
)


29


$
100


$
31


$
(69
)   Securitized
    Assets
   84




---



##### Table of Contents



All
    Other Securities
        and/or
  CAPITAL
    MARKETS RISK MANAGEMENT
    Market
    Risk
  and/or
  Interest
    Rate Risk
  and/or
 85




---



##### Table of Contents



Credit
    Risk
   86




---



##### Table of Contents



Equity
    Risk
     87




---



##### Table of Contents



Foreign
    Currency Exchange Risk
  non-U.S. dollar
  Derivative
    Instruments
                  Key
    Market Risk Exposures
     88




---



##### Table of Contents



non-U.S. dollar non-U.S. dollar
  Interest
    Rate Risk
  and/or
  Fixed
    Maturity Investments
    Liabilities
        and/or
  Derivatives
   89




---



##### Table of Contents



Calculated
    Interest Rate Sensitivity
    Change in Net Economic Value as of December 31,2008


2007Basis point shift


−100



+ 100



−100



+ 100Amount

$
(133
)

$
84


$
(145
)

$
59       Change in Fair Value as of December 31,2008


2007Basis point shift


−100



+ 100



−100



+ 100Amount

$
458


$
(434
)

$
354


$
(342
)    90




---



##### Table of Contents



Equity
    Product Risk
      
    reduce the value of assets under management and the amount of
    fee income generated from those assets;
    increase the liability for direct GMWB benefits and reinsured
    GMAB, GMWB and GMIB benefits, resulting in realized capital
    losses;
    increase the value of derivative assets used to hedge product
    guarantees resulting in realized capital gains;
    increase the Companys net amount at risk for GMDB
    benefits; and
    decrease the Companys actual gross profits, resulting in a
    negative
    true-up to
    current period DAC amortization
    increase the amount of required statutory capital necessary to
    maintain target risk based capital (RBC) ratios.    
    turn customer sentiment toward equity-linked products negative,
    causing a decline in sales;
    cause a significant decrease in the range of reasonable
    estimates of future gross profits used in the Companys
    quantitative assessment of its modeled estimates of gross
    profits. If, in a given financial statement period, the modeled
    estimates of gross profits are determined to be unreasonable,
    the Company will accelerate the amount of DAC amortization in
    that period. Particularly in the case of variable annuities, an
    acceleration of DAC amortization could potentially cause a
    material adverse deviation in that periods earnings, but
    it would not affect the Companys cash flow or liquidity
    position. See Life Estimated Gross Profits Used in the Valuation
    and Amortization of Assets and Liabilities Associated with
    Variable Annuity and Other Universal Life-Type Contracts within
    Critical Accounting Estimates for further information on DAC and
    related equity market sensitivities;
    increase costs under the Companys hedging program; and  GMWB
    and Intercompany Reinsurance of GMIB, GMWB and
    GMAB
       91




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##### Table of Contents



GMDB
    and Intercompany Reinsurance of GMDB
  SOP 03-1, Accounting and Reporting by Insurance Enterprises for Certain
    Nontraditional Long-Duration Contracts and for Separate
    Accounts,
      Product
    Guarantee Accounting Models
  SOP 03-1. SOP 03-1. SOP 03-1
  Equity
    Product Risk
    Management
      Reinsurance
   92




---



##### Table of Contents



Derivative
    Hedging Programs
               93




---



##### Table of Contents



% ofGMWB


GMWBAccount


AccountRisk Management Strategy

Duration

Value


ValueEntire GMWB risk reinsured with a third party

Life of the product

$
10,225



27
%Capital markets risk transferred to a third
    party  behavior risk retained by the Company

Designed to cover the
    effective life of the product


10,464



27
%Dynamic hedging of capital markets risk using various derivative
    instruments(1)

Weighted average of  5 years


17,628



46
%$
38,317



100
%     (1)
    
    During the fourth quarter of 2008, the Company maintained a
    reduced level of dynamic hedge protection on U.S. GAAP earnings
    while placing a greater relative emphasis on the protection of
    statutory surplus. This shift in emphasis includes the macro
    hedge program.  Equity
    Risk Impact on Statutory Capital and Risked Based
    Capital
    Foreign
    Currency Exchange Risk
  non-U.S. dollar non-U.S. dollar
  Fixed
    Maturity Investments
  non-U.S. dollar non-U.S. dollar non-U.S. dollar
  Liabilities
  non-U.S. dollar
   94




---



##### Table of Contents



non-U.S. dollar
  CAPITAL
    RESOURCES AND LIQUIDITY
    Debt
  Consumer
    Notes
  No. 333-137215),
     95




---



##### Table of Contents



Off-Balance
    Sheet Arrangements and Aggregate Contractual
    Obligations
    Payments Due by PeriodLess than








More thanTotal


1 Year


1-3 Years


3-5 Years


5 YearsOperating leases(1)


29



10



12



6



1Consumer Notes(2)


1,583



73



285



583



642Other long-term liabilities


5,739



5,668











71Life and Annuity obligations(3)


345,973



23,619



42,493



40,514



239,347Total


353,324



29,370



42,790



41,103



240,061     (1)
    
    Includes future minimum lease payments on operating lease
    agreements. See Note 10 of Notes to Consolidated Financial
    Statements for additional discussion on lease commitments.(2)
    
    Consumer notes include principal payments, contractual interest
    for fixed rate notes, interest based on current rates for
    floating rate notes, and the market value of embedded
    derivatives for equity  linked notes. See
    Note 12 of Notes to Consolidated Financial Statements for
    additional discussion of consumer notes.(3)
    
    Estimated Life and Annuity obligations include death and
    disability claims, other charges associated with policyholder
    reserves, policy surrenders and policyholder dividends, offset
    by expected future deposits on in-force contracts. Estimated
    contractual policyholder obligations are based on mortality,
    morbidity and lapse assumptions comparable with the
    Companys historical experience, modified for recent
    observed trends. The Company has also assumed market growth
    consistent with assumptions used in amortizing deferred
    acquisition costs. In contrast to this table the majority of the
    Companys obligations are recorded on the balance sheet at
    the current account values, as described in the Critical
    Accounting Policies, the Companys recorded liability does
    not incorporate an expectation of future market growth or future
    deposits. Therefore, the estimated contractual policyholder
    obligations presented in this table significantly exceed the
    liabilities recorded in reserve for future policy benefits and
    unpaid loss and loss adjustment expenses, other policyholder
    funds and benefits payable and separate account liabilities. Due
    to the significance of the assumptions used, the amounts
    presented could materially differ from actual results.  Dividends
    Cash Flow

2008


2007


2006Net cash provided by operating activities

$
1,249


$
2,559


$
2,765Net cash used for investing activities


(6,561
)


(4,329
)


(4,348
)Net cash provided by financing activities


5,268



1,873



1,644Cash  End of Year

$
241


$
281


$
186   Year ended December 31, 2008 compared to Year-ended
    December 31, 2007
 96




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##### Table of Contents



Year ended December 31, 2007 compared to Year-ended
    December 31, 2006
  Equity
    Markets
    Ratings
        medium-term
      A.M. Best


Fitch


Standard & Poors


MoodysInsurance RatingsHartford Life Insurance Company


A+



A



AA−



A1Hartford Life and Annuity Insurance Company


A+



A



AA−



A1Other RatingsHartford Life Insurance Company:Short term rating










A-1+



P-1Consumer notes


a+



A−



AA−



A2       Statutory
    Capital
   97




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##### Table of Contents




    Costs incurred by the Company to acquire insurance policies are
    deferred under US GAAP while those costs are expensed
    immediately under US STAT.
    Temporary differences between the book and tax basis of an asset
    or liability which are recorded as deferred tax assets are
    evaluated for recoverability under US GAAP while those amounts
    deferred are subject to limitations under US STAT.
    Certain assumptions used in the determination of Life benefit
    reserves are prescribed under US STAT and are intended to be
    conservative, while the assumptions used under US GAAP are
    generally the Companys best estimates. In addition, the
    methodologies used for determining life reserve amounts are
    different between US STAT and U.S. GAAP. Annuity reserving and
    cash-flow testing for death and living benefit reserves under US
    STAT are generally addressed by the Commissioners Annuity
    Reserving Valuation Methodology and the related Actuarial
    Guidelines. Under these Actuarial Guidelines, in general, future
    cash flows associated with the variable annuity business are
    included in these methodologies with estimates of future fee
    revenues, claim payments, expenses, reinsurance impacts and
    hedging impacts. At December 31, 2008, in determining the
    cash-flow impacts related to future hedging, assumptions were
    made in the scenarios that generate reserve requirements, about
    the potential future decreases in the hedge benefits and
    increases in hedge costs which resulted in increased reserve
    requirements. Reserves for death and living benefits under U.S.
    GAAP are either considered embedded derivatives and recorded at
    fair value or they may be considered
    SOP 03-1
    reserves.
    The difference between the amortized cost and fair value of
    fixed maturity and other investments, net of tax, is recorded as
    an increase or decrease to the carrying value of the related
    asset and to equity under US GAAP, while US STAT only records
    certain securities at fair value, such as equity securities and
    certain lower rated bonds required by the NAIC to be recorded at
    the lower of amortized cost or fair value. In the case of the
    Companys market value adjusted (MVA) fixed annuity
    products, invested assets are marked to fair value (including
    the impact of audit spreads) and liabilities are marked to fair
    value (but generally excluding the impacts of audit spreads) for
    statutory purposes only. In the case of the Companys
    market value adjusted (MVA) fixed annuity products, invested
    assets are marked to fair value (including the impact of credit
    spreads) and liabilities are marked to fair value (but generally
    actual credit spreads are not fully reflected) for statutory
    purposes only.
    US STAT for life insurance companies establishes a formula
    reserve for realized and unrealized losses due to default and
    equity risks associated with certain invested assets (the Asset
    Valuation Reserve), while US GAAP does not. Also, for those
    realized gains and losses caused by changes in interest rates,
    US STAT for life insurance companies defers and amortizes the
    gains and losses, caused by changes in interest rates, into
    income over the original life to maturity of the asset sold (the
    Interest Maintenance Reserve) while US GAAP does not.
    Goodwill arising from the acquisition of a business is tested
    for recoverability on an annual basis (or more frequently, as
    necessary) for US GAAP, while under US STAT goodwill is
    amortized over a period not to exceed 10 years and the
    amount of goodwill is limited. 98




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##### Table of Contents



Risk-based
    Capital
      Sensitivity
    
    In general, as equity market levels decline, our reserves for
    death and living benefit guarantees associated with variable
    annuity contracts increases, sometimes at a greater than linear
    rate, reducing statutory surplus levels. In addition, as equity
    market levels increase, generally surplus levels will increase.
    RBC ratios will also tend to increase when equity markets
    increase. However, as a result of a number of factors and market
    conditions, including the level of hedging costs and other risk
    transfer activities, reserve requirements for death and living
    benefit guarantees and RBC requirements could increase resulting
    in lower RBC ratios.
    As the value of certain fixed-income and equity securities in
    our investment portfolio decreases, due in part to credit spread
    widening, statutory surplus and RBC ratios may decrease.
    As the value of certain derivative instruments that do not get
    hedge accounting decreases, statutory surplus and RBC ratios may
    decrease.
    Our statutory surplus is also impacted by widening credit
    spreads as a result of the accounting for the assets and
    liabilities in our fixed market value adjusted (MVA)
    annuities. Statutory separate account assets supporting the
    fixed MVA annuities are recorded at fair value. In determining
    the statutory reserve for the fixed MVA annuities, we are
    required to use current crediting rates. In many capital market
    scenarios, current crediting rates are highly correlated with
    market rates implicit in the fair value of statutory separate
    account assets. As a result, the change in statutory reserve
    from period to period will likely substantially offset the
    change in the fair value of the statutory separate account
    assets. However, in periods of volatile credit markets, such as
    we are now experiencing, actual credit spreads on investment
    assets may increase sharply for certain sub-sectors of the
    overall credit market, resulting in statutory separate account
    asset market value losses. As actual credit spreads are not
    fully reflected in the current crediting rates, the calculation
    of statutory reserves will not substantially offset the change
    in fair value of the statutory separate account assets resulting
    in reductions in statutory surplus and create funding
    obligations to the statutory separate account.   99




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##### Table of Contents



Contingencies
  Legal Proceedings
  Regulatory Developments
    Legislative
    Initiatives
  and/or
  Guaranty
    Fund and Other Insurance-related Assessments
    No. 97-3,
  IMPACT OF
    NEW ACCOUNTING STANDARDS
    Item 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK    Item 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA   100




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##### Table of Contents



Item 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    Item 9A.
    CONTROLS
    AND PROCEDURES  Evaluation
    of disclosure controls and procedures
  Rule 13a-15(e)) Rule 13a-15(e)
  Managements
    annual report on internal control over financial
    reporting
  Rule 13a-15(f)
          Changes
    in internal control over financial reporting
    Item 9B.
    OTHER
    INFORMATION   101




---



##### Table of Contents



PART III  Item 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES    Year Ended


Year EndedDecember 31,


December 31,2008


2007(1) Audit fees


8,867,018



6,492,776(2) Audit-related fees(a)


564,131



(3) Tax fees






(4) All other fees






     (a)
    
    Fees for the year ended December 31, 2008 principally
    consisted of internal control reviews.     PART IV  Item 15.
    EXHIBITS,
    FINANCIAL STATEMENT SCHEDULES    Consolidated Financial Statements.
  Consolidated Financial Statement Schedules.
  Exhibits.
 102




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##### Table of Contents



INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
  Page(s)Report of Independent Registered Public
    Accounting Firm


F-2Consolidated Statements of Operations 
    For the Years Ended December 31, 2008, 2007 and 2006


F-3Consolidated Balance Sheets  As of
    December 31, 2008 and 2007


F-4Consolidated Statements of Changes in
    Stockholders Equity  For the Years Ended
    December 31, 2008, 2007 and 2006


F-5Consolidated Statements of Cash Flows 
    For the Years Ended December 31, 2008, 2007 and 2006


F-6Notes to Consolidated Financial Statements


F-7Schedule I  Summary of
    Investments  Other Than Investments in Affiliates


S-1Schedule III  Supplementary
    Insurance Information


S-2Schedule IV  Reinsurance


S-3   F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM      S-1 S-3.
            F-2




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES



Consolidated
    Statements of Operations  For the Years Ended December 31,2008


2007


2006(In millions)RevenuesFee income and other

$
3,114


$
3,509


$
3,113Earned premiums


984



983



547Net investment income


2,617



3,048



2,728Net realized capital losses


(5,651
)


(934
)


(299
)Total revenues


1,064



6,606



6,089Benefits, losses and expensesBenefits, loss and loss adjustment expenses


4,044



3,980



3,205Insurance expenses and other


1,120



1,192



853Amortization of deferred policy acquisition costs and present
    value of future profits


1,525



515



1,175Goodwill impairment


84







Dividends to policyholders


13



11



22Total benefits, losses and expenses


6,786



5,698



5,255Income (loss) before income tax expense


(5,722
)


908



834Income tax expense (benefit)


(2,197
)


168



103Net income (loss)

$
(3,525
)

$
740


$
731    F-3




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIESConsolidated Balance Sheets
  As of December 31,2008


2007(In millions,except for share data)ASSETSInvestmentsFixed maturities, available-for-sale, at fair value (amortized
    cost of $48,444 and $46,208)

$
39,560


$
45,611Equity securities, available for sale, at fair value (cost of
    $610 and $763)


429



722Policy loans, at outstanding balance


2,154



2,016Mortgage loans on real estate


4,896



4,166Limited partnership and other alternative investments


1,033



1,246Other investments


1,234



480Short-term investments


5,562



752Total investments


54,868



54,993Cash


241



281Premiums receivable and agents balances


17



28Reinsurance recoverables


3,193



1,730Deferred income taxes


3,447



Deferred policy acquisition costs and present value of future
    profits


9,727



8,393Goodwill


102



186Other assets


3,011



1,348Separate account assets


129,774



199,253Total assets

$
204,380


$
266,212LIABILITIESReserve for future policy benefits and unpaid losses and loss
    adjustment expenses


10,555


$
9,396Other policyholder funds and benefits payable


52,569



42,377Consumer notes


1,210



809Deferred income taxes






124Other liabilities


8,394



6,621Separate account liabilities


129,774



199,253Total liabilities


202,502



258,580Commitments and contingent liabilities (Note 10)






Stockholders EquityCommon stock  1,000 shares authorized, issued
    and outstanding, par value $5,690


6



6Capital surplus


4,718



2,888Accumulated other comprehensive loss, net of tax


(4,371
)


(469
)Retained earnings


1,525



5,207Total stockholders equity


1,878



7,632Total liabilities and stockholders equity

$
204,380


$
266,212    F-4




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  Consolidated
    Statements Of Changes In Stockholders Equity


Accumulated OtherComprehensive Income (Loss)Net Unrealized


Net (Loss)Capital


Gain On Cash


ForeignGains (Losses)


Flow Hedging


Currency





TotalCommon


Capital


On Securities,


Instruments,


Translation


Retained


StockholdersStock


Surplus


Net of Tax


Net of Tax


Adjustments


Earnings


Equity(In millions)2008Balance, December 31, 2007

$
6


$
2,888


$
(332
)

$
(137
)

$



$
5,207


$
7,632Comprehensive incomeNet loss






















(3,525
)


(3,525
)Other comprehensive income, net of tax(1) Net change in
    unrealized capital gains (losses) on securities(2)










(4,479
)














(4,479
)Net gains on cash flow hedging instruments














577











577Cumulative translation adjustments


























Total other comprehensive loss


























(3,902
)Total comprehensive loss


























(7,427
)Capital contribution from parent(3)






1,830



















1,830Dividends declared






















(154
)


(154
)Cumulative effect of accounting changes, net of tax






















(3
)


(3
)Balance, December 31, 2008

$
6


$
4,718


$
(4,811
)

$
440


$



$
1,525


$
1,8782007Balance, December 31, 2006

$
6


$
2,586


$
500


$
(210
)

$
1


$
4,777


$
7,660Comprehensive incomeNet income






















740



740Other comprehensive income, net of tax(1)Net change in unrealized capital gains (losses) on securities(2)










(832
)














(832
)Net loss on cash flow hedging instruments














73











73Cumulative translation adjustments


















(1
)






(1
)Total other comprehensive income


























(760
)Total comprehensive income


























(20
)Capital contribution from parent






302



















302Dividends declared






















(307
)


(307
)Cumulative effect of accounting changes, net of tax






















(3
)


(3
)Balance, December 31, 2007

$
6


$
2,888


$
(332
)

$
(137
)

$



$
5,207


$
7,6322006Balance, December 31, 2005

$
6


$
2,405


$
577


$
(113
)

$
(1
)

$
4,463


$
7,337Comprehensive incomeNet income






















731



731Other comprehensive income, net of tax(1)Net change in unrealized capital gains (losses) on securities(2)










(77
)














(77
)Net gains on cash flow hedging instruments














(97
)










(97
)Cumulative translation adjustments


















2







2Total other comprehensive income


























(172
)Total comprehensive income


























559Capital contribution from parent






181



















181Dividends declared






















(417
)


(417
)Cumulative effect of accounting changes, net of tax


























Balance, December 31, 2006

$
6


$
2,586


$
500


$
(210
)

$
1


$
4,777


$
7,660     (1)
    
    Net change in unrealized capital gain on securities is reflected
    net of tax provision (benefit) and other items of $2,412, $448
    and $(42) for the years ended December 31, 2008, 2007 and
    2006, respectively. Net (loss) gain on cash flow hedging
    instruments is net of tax provision (benefit) of $(310) , $(39)
    and $(52) for the years ended December 31, 2008, 2007 and
    2006, respectively. There is no tax effect on cumulative
    translation adjustments.(2)
    
    There were reclassification adjustments for after-tax gains
    (losses) realized in net income of $(1,358), $(140), and $(75)
    for the years ended December 31, 2008, 2007 and 2006,
    respectively.(3)
    
    The Company received a noncash asset capital contribution of
    $180 from its parent company during 2008   F-5




---



##### Table of Contents





HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  Consolidated
    Statements of Cash Flows
  For the Years Ended December 31,2008


2007


2006(In millions)Operating ActivitiesNet income(loss)

$
(3,525
)

$
740


$
731Adjustments to reconcile net income(loss) to net cash
    provided by operating activitiesAmortization of deferred policy acquisition costs and present
    value of future profits


1,525



515



1,175Additions to deferred policy acquisition costs and present value
    of future profits


(1,111
)


(1,400
)


(1,351
)Change in:Reserve for future policy benefits, unpaid losses and loss
    adjustment expenses


1,159



1,187



836Reinsurance recoverables


(28
)


(236
)


(47
)Receivables


80



190



11Payables and accruals


(360
)


560



210Accrued and deferred income taxes


(2,114
)


(102
)


340Net realized capital losses


5,651



934



299Depreciation and amortization


78



438



404Goodwill impairment


84







Other, net


(190
)


(267
)


157Net cash provided by operating activities

$
1,249


$
2,559


$
2,765Investing ActivitiesProceeds from the sale/maturity/prepayment of:Fixed maturities and short-term investments, available for sale

$
11,989


$
15,892


$
19,517Equity securities, available-for-sale


126



296



249Mortgage loans


325



958



301Partnerships


250



175



91Derivatives


1,676







Payments for the purchase of:Fixed maturities and short-term investments, available for sale


(18,132
)


(18,780
)


(22,017
)Equity securities, available-for-sale


(144
)


(484
)


(455
)Mortgage loans


(1,067
)


(2,492
)


(1,574
)Partnerships


(330
)


(607
)


(496
)Derivatives






(237
)


(84
)Change in policy loans, net


(139
)


(6
)


(39
)Change in payables for collateral under securities lending, net


(974
)


1,306



788Change in all other, net


(141
)


(350
)


(629
)Net cash used for investing activities

$
(6,561
)

$
(4,329
)

$
(4,348
)Financing ActivitiesDeposits and other additions to investment and universal
    life-type contracts


21,990



32,396



26,991Withdrawals and other deductions from investment and universal
    life-type contracts


(27,713
)


(30,433
)


(26,687
)Net transfers (to)/from separate accounts related to investment
    and universal life-type contracts


7,079



(606
)


1,382Issuance of structured financing


2,001







Capital contributions


1,650



270



Dividends paid


(140
)

$
(305
)

$
(300
)Proceeds from issuance of consumer notes


445



551



258Repayment at maturity of consumer notes


(44
)






Net cash provided by financing activities

$
5,268


$
1,873


$
1,644Impact of foreign exchange


4



(8
)


1Net (decrease) increase in cash


(40
)


95



62Cash  beginning of year


281



186



124Cash  end of year

$
241


$
281


$
186Supplemental Disclosure of Cash Flow Information:Net Cash Paid (Received) During the Year for:Income taxes

$
(245
)

$
125


$
(163
)     Supplemental
    schedule of noncash operating and financing
    activities:
   F-6




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (Dollar amounts in millions, unless otherwise stated)
  1.
    Basis of
    Presentation and Accounting Policies  Basis of
    Presentation
        Consolidation
    Use of
    Estimates
      Adoption
    of New Accounting Standards
  Amendments
    to the Impairment Guidance of EITF Issue
    No. 99-20
  No. EITF 99-20-1, No. 99-20, EITF 99-20-1). No. 99-20,
 F-7




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  EITF 99-20-1
  FSP
    FAS 140-4
    and FIN 46(R)-8, Disclosures by Public Entities
    (Enterprises) about Transfers of Financial Assets and Interests
    in Variable Interest Entities
  FAS 140-4 FAS 140-4
  Disclosures
    about Credit Derivatives and Certain Guarantees: An Amendment of
    FASB Statement No. 133 and FASB Interpretation No. 45;
    and Clarification of the Effective Date of FASB Statement
    No. 161
  No. FAS 133-1 FIN 45-4 FAS 133-1 FIN 45-4). FAS 133-1 FIN 45-4 FAS 133-1 FIN 45-4
  Fair
    Value Measurements
     F-8




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  No. 02-3, (EITF 02-3).
  No. FAS 157-2, FAS 157-2) FAS 157-2
  
    Nonfinancial assets and nonfinancial liabilities initially
    measured at fair value in a business combination that are not
    subsequently remeasured at fair value;
    Reporting units measured at fair value in the goodwill
    impairment test as described in SFAS No. 142,
    Goodwill and Other Intangible Assets
    (SFAS 142), and nonfinancial assets and
    nonfinancial liabilities measured at fair value in the
    SFAS 142 goodwill impairment test, if applicable; and
    Nonfinancial long-lived assets measured at fair value for
    impairment assessment under SFAS No. 144,
    Accounting for the Impairment or Disposal of Long-Lived
    Assets.  FAS 157-2, FAS 157-2.
  Fair
    Value Option for Financial Assets and Financial
    Liabilities
    Amendment
    of FASB Interpretation No. 39
  No. FIN 39-1, FIN 39-1). FIN 39-1 FIN 39-1 FIN 39-1 FIN 39-1 FIN 39-1 FIN 39-1.
  Accounting
    for Uncertainty in Income Taxes, an interpretation of FASB
    Statement No. 109
   F-9




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Accounting
    by Insurance Enterprises for Deferred Acquisition Costs
    (DAC) in Connection with Modifications or Exchanges
    of Insurance Contracts
  05-1, (SOP 05-1). SOP 05-1 SOP 05-1 SOP 05-1
  Future
    Adoption of New Accounting Standards
  Disclosures
    about Derivative Instruments and Hedging
    Activities
   F-10




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Business
    Combinations
    
    Most of the identifiable assets acquired, liabilities assumed
    and any noncontrolling interest in the acquiree shall be
    measured at their acquisition-date fair values in accordance
    with SFAS 157 fair value rather than SFAS 141s
    requirement based on estimated fair values;
    Acquisition-related costs incurred by the acquirer shall be
    expensed in the periods in which the costs are incurred rather
    than included in the cost of the acquired entity;
    Goodwill shall be measured as the excess of the consideration
    transferred, including the fair value of any contingent
    consideration, plus the fair value of any noncontrolling
    interest in the acquiree, over the fair values of the acquired
    identifiable net assets, rather than measured as the excess of
    the cost of the acquired entity over the estimated fair values
    of the acquired identifiable net assets;
    Contractual pre-acquisition contingencies are to be recognized
    at their acquisition date fair values and noncontractual
    pre-acquisition contingencies are to be recognized at their
    acquisition date fair values only if it is more likely than not
    that the contingency gives rise to an asset or liability,
    whereas SFAS 141 generally permits the deferred recognition
    of pre-acquisition contingencies until the recognition criteria
    of SFAS No. 5, Accounting for
    Contingencies are met; and
    Contingent consideration shall be recognized at the acquisition
    date rather than when the contingency is resolved and
    consideration is issued or becomes issuable.    Noncontrolling
    Interests in Consolidated Financial Statements, an amendment of
    ARB No. 51
   F-11




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accounting
    Policies
  Investments
    Other-Than-Temporary
    Impairments on Available-for-Sale Securities
    and/or
  No. 99-20, No. 99-20 No. 99-20
 F-12




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. 99-20, No. EITF 99-20-1, No. 99-20.
    Mortgage
    Loan Impairments
    Net
    Realized Capital Gains and Losses
    Net
    Investment Income
   F-13




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and/or
  Derivative
    Instruments
  Overview
      Accounting
    and Financial Statement Presentation of Derivative Instruments
    and Hedging Activities
    and/or
  Fair-Value
    Hedges
   F-14




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Cash-Flow
    Hedges
    Foreign-Currency
    Hedges
    Other
    Investment and/or Risk Management Activities
  and/or and/or
  Hedge
    Documentation and Effectiveness Testing
    Discontinuance
    of Hedge Accounting
       F-15




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Embedded
    Derivatives
    Credit
    Risk
    Product
    Derivatives
     F-16




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Separate
    Accounts
    Deferred
    Policy Acquisition Costs and Present Value of Future
    Profits
  SOP 03-1 SOP 03-1 SOP 03-1
  true-up, true-up
      SOP 03-1
 F-17




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  SOP 03-1
    Unlock
    and Results
    SalesSegment




Unearned Revenue


Death and Income


InducementAfter-tax (charge) benefit

DAC and PVFP


Reserves


Benefit Reserves(1)


Assets


Total(2)Retail

$
(647
)

$
18


$
(75
)

$
(27
)

$
(731
)Individual Life


(29
)


(12
)


(3
)






(44
)Retirement Plans


(49
)














(49
)Total

$
(725
)

$
6


$
(78
)

$
(27
)

$
(824
)     (1)
    
    As a result of the Unlock, death benefit reserves, in Retail,
    increased $389, pre-tax, offset by an increase of $273, pre-tax,
    in reinsurance recoverables.(2)
    
    The following were the most significant contributors to the
    Unlock amounts recorded during the third quarter of 2008:  
    Actual separate account returns from the period ending
    July 31, 2007 to September 30, 2008 were significantly
    below our aggregated estimated return
    The Company reduced its 20 year projected separate account
    return assumption from 7.8% to 7.2% in the U.S. F-18




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   
    In Retirement Plans, the Company reduced its estimate of future
    fees as plans meet contractual size
    limits(breakpoints) causing a lower fee schedule to
    apply and the Company increased its assumption for future
    deposits by existing plan participants.    SalesSegment




Unearned Revenue


Death and Income


InducementAfter-tax (charge) benefit

DAC and PVFP


Reserves


Benefit Reserves(1)


Assets


Total(2)Retail

$
181


$
(5
)

$
(4
)

$
9


$
181Individual Life


24



(8
)










16Retirement Plans


(9
)














(9
)Institutional


1















1Total

$
197


$
(13
)

$
(4
)

$
9


$
189     (1)
    
    As a result of the Unlock, death benefit reserves, in Retail,
    decreased $4, pre-tax, offset by a decrease of $10, pre-tax, in
    reinsurance recoverables.(2)
    
    The following were the most significant contributors to the
    Unlock amounts recorded during the third quarter of 2007:  
    Actual separate account returns were above our aggregated
    estimated return.
    During the third quarter of 2007, the Company estimated gross
    profits using the mean of EGPs derived from a set of stochastic
    scenarios that have been calibrated to our estimated separate
    account return as compared to prior year where we used a single
    deterministic estimation. The impact of this change in
    estimation was a benefit of $20, after-tax, for
    U.S. variable annuities.
    As part of its continual enhancement to its assumption setting
    processes and in connection with its assumption study, the
    Company included dynamic lapse behavior assumptions. Dynamic
    lapses reflect that lapse behavior will be different depending
    upon market movements. The impact of this assumption change
    along with other base lapse rate changes was an approximate
    benefit of $40, after-tax, for U.S. variable annuities.    Reserve
    for Future Policy Benefits and Unpaid Losses and Loss Adjustment
    Expenses
   F-19




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Other
    Policyholder Funds and Benefits Payable
      Revenue
    Recognition
   F-20




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Dividends
    to Policyholders
      Reinsurance
        Goodwill
    Income
    Taxes
    Contingencies
   F-21




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2.
    Segment
    Information               F-22




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For the Years EndedDecember 31,Revenues by Product Line

2008


2007


2006RevenuesLifeEarned premiums, fees, and other considerationsRetailIndividual annuity:Individual variable annuity

$
1,849


$
2,103


$
1,835Fixed/MVA Annuity


(5
)


1



3Other


3







Total Retail


1,847



2,104



1,838Individual LifeTotal Individual Life


784



760



780Total Individual Markets Group


2,631



2,864



2,618Retirement Plans401(k)


174



179



154403(b)/457


42



50



45Total Retirement Plans


216



229



199InstitutionalIIP


915



1,012



623PPLI


118



224



103Total Institutional


1,033



1,236



726Other


218



163



117Total Life premiums, fees, and other considerations


4,098



4,492



3,660Net investment income


2,617



3,048



2,728Net realized capital losses


(5,651
)


(934
)


(299
)Total Life

$
1,064


$
6,606


$
6,089   F-23




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  For the Years Ended December 31,2008


2007


2006Net Income (Loss)Retail

$
(1,280
)

$
663


$
397Retirement Plans


(144
)


53



94Institutional


(508
)


7



69Individual Life


(51
)


169



137Other


(1,542
)


(152
)


34Total net income

$
(3,525
)

$
740


$
731Net investment incomeRetail

$
768


$
815


$
835Individual Life


308



331



293Retirement Plans


342



355



326Institutional


988



1,226



987Other


211



321



287Total net investment income

$
2,617


$
3,048


$
2,728Amortization of deferred policy acquisition and present value
    of future profitsRetail


1,251


$
316


$
913Individual Life


166



117



235Retirement Plans


91



58



(4
)Institutional


19



23



32Other


(2
)


1



(1
)Total amortization of DAC

$
1,525


$
515


$
1,175Income tax expense (benefit)Retail


(911
)

$
137


$
(40
)Individual Life


(39
)


81



60Retirement Plans


(127
)


14



35Institutional


(284
)


(5
)


26Other


(836
)


(59
)


22Total income tax expense

$
(2,197
)

$
168


$
103   F-24




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31,2008


2007AssetsRetail

$
96,529


$
135,244Individual Life


13,244



15,151Retirement Plans


22,570



28,157Institutional


59,643



77,990Other


12,394



9,670Total assets

$
204,380


$
266,212DACRetail

$
5,695


$
5,182Individual Life


3,000



2,411Retirement Plans


877



658Institutional


156



143Other


(1
)


(1
)Total DAC

$
9,727


$
8,393Reserve for Future Policy BenefitsRetail

$
1,334


$
944Individual Life


726



685Retirement Plans


313



333Institutional


7,467



6,657Other


715



777Total Reserve for Future Policy Benefits

$
10,555


$
9,396Other Policyholder FundsRetail

$
22,122


$
15,391Individual Life


5,553



5,210Retirement Plans


6,437



5,591Institutional


11,249



12,455Other


7,208



3,730Total Other Policyholder Funds

$
52,569


$
42,377   3.
    Fair
    Value Measurements    Accounting
    for Guaranteed Benefits Offered With Variable
    Annuities
  No. 03-1
 F-25




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (SOP 03-1). SOP 03-1.
  Guaranteed
    Benefits Accounted for at Fair Value Prior to
    SFAS 157
          
    Reinsured GMIB:  Effective July 31, 2006,
    a subsidiary of the Company, Hartford Life and Annuity Insurance
    Company (HLAI), entered into a reinsurance agreement
    with Hartford Life, Insurance KK (HLIKK), a wholly
    owned Japanese subsidiary of Hartford Life, Inc. (Hartford
    Life). Through this agreement, HLIKK agreed to cede and
    HLAI agreed to reinsure 100% of the risks associated with the
    in-force, as of July 31, 2006, and F-26




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  prospective GMIB riders issued by HLIKK on its variable annuity
    business except for policies and GMIB riders issued prior to
    April 1, 2005. The agreement also includes GMDB on covered
    contracts that have an associated GMIB rider. The GMDB portion
    of the rider is accounted for under
    SOP 03-1.  
    Reinsured GMAB:  Effective September 30,
    2007, HLAI entered into another reinsurance agreement where
    HLIKK agreed to cede and HLAI agreed to reinsure 100% of the
    risks associated with the in-force and prospective GMAB riders
    issued by HLIKK on certain of its variable annuity business. The
    GMAB provides the policyholder with the GRB if the account value
    is less than premiums after an accumulation period, generally
    10 years, and if the account value has not dropped below
    80% of the initial deposit, at which point a GMIB must either be
    exercised or the policyholder can elect to surrender 80% of the
    initial deposit without a surrender charge. The GRB is generally
    equal to premiums less surrenders. During the fourth quarter of
    2008, nearly all contractholder account values had dropped below
    80% of the initial deposit, at which point the GMIB was
    exercised.
    Reinsured GMWB:  Effective February 29,
    2008, HLAI entered into a reinsurance agreement where HLIKK
    agreed to cede and HLAI agreed to reinsure 100% of the risks
    associated with the in-force and prospective GMWB riders issued
    by HLIKK on certain variable annuity business.      Derivatives
    That Hedge Capital Markets Risk for Guaranteed Minimum Benefits
    Accounted for as Derivatives
    GMWB
    Reinsurance
    Customized
    Derivatives
   F-27




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  EITF 02-3
  Other
    Derivative Instruments
    Adoption
    of SFAS 157 for Guaranteed Benefits Offered With Variable
    Annuities That are Required to be Fair Valued
    Pre-SFAS 157
    Fair Value
      
    risk-free rates as represented by the current LIBOR forward
    curve rates;
    forward market volatility assumptions for each underlying index
    based primarily on a blend of observed market implied
    volatility data;
    correlations of market returns across underlying indices based
    on actual observed market returns and relationships over the ten
    years preceding the valuation date;
    three years of history for fund regression; and F-28




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   
    current risk-free spot rates as represented by the current LIBOR
    spot curve to determine the present value of expected future
    cash flows produced in the stochastic projection process.    Fair
    Value Under SFAS 157
    
    Actively-Managed Volatility Adjustment.  This
    component incorporates the basis differential between the
    observable index implied volatilities used to calculate the
    Pre-SFAS 157 component and the actively-managed funds
    underlying the variable annuity product. The Actively-Managed
    Volatility Adjustment is calculated using historical fund and
    weighted index volatilities.
    Credit Standing Adjustment.  This component
    makes an adjustment that market participants would make to
    reflect the risk that guaranteed benefit obligations or the GMWB
    reinsurance recoverables will not be fulfilled
    (nonperformance risk). SFAS 157 explicitly
    requires nonperformance risk to be reflected in fair value. The
    Company calculates the Credit Standing Adjustment by using
    default rates provided by rating agencies, adjusted for market
    recoverability, reflecting the long-term nature of living
    benefit obligations and the priority of payment on these
    obligations versus long-term debt.
    Market Illiquidity Premium.  This component
    makes an adjustment that market participants would require to
    reflect that guaranteed benefit obligations are illiquid and
    have no market observable exit prices in the capital markets.
    Behavior Risk Margin.  This component adds a
    margin that market participants would require for the risk that
    the Companys assumptions about policyholder behavior used
    in the Pre-SFAS 157 model could differ from actual
    experience. The Behavior Risk Margin is calculated by taking the
    difference between adverse policyholder behavior assumptions and
    the best estimate assumptions used in the Pre-SFAS 157
    model using interest rate and volatility assumptions that the
    Company believes market participants would use in developing
    risk margins.  SFAS 157
    Transition
  EITF 02-3.
 F-29




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      EITF 02-3
      TransitionSFAS 157


Pre-SFAS 157


Adjustment GainFair Value


Fair Value


(Loss)Asset (Liability)


Asset (Liability)


[Before DAC and Tax]Guaranteed BenefitsU.S. Guaranteed Minimum Withdrawal Benefits

$
(1,114
)

$
(553
)

$
(561
)Non-Life Contingent Portion of for Life
    GuaranteedMinimum Withdrawal Benefits


(319
)


(154
)


(165
)Reinsured Guaranteed Living Benefits Guaranteed Minimum
    Income Benefits


(220
)


(72
)


(148
)Guaranteed Minimum Accumulation Benefits


(22
)


2



(24
)Total


(242
)


(70
)


(172
)Total Guaranteed Benefits


(1,675
)


(777
)


(898
)GMWB Reinsurance


238



128



110Total

$
(1,437
)

$
(649
)

$
(788
)     TransitionAdjustmentGain (Loss)[Before Tax andDAC Amortization]Actively-Managed Volatility Adjustment

$
(100
)Credit Standing Adjustment


5Market Illiquidity Premium


(258
)Behavior Risk Margin


(435
)Total SFAS 157 Transition Adjustment Before tax and DAC
    amortization

$
(788
)  F-30




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fair
    Value Disclosures
    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 1
    securities include highly liquid U.S. Treasury securities,
    money market funds, certain mortgage-backed securities, and
    exchange traded equity and derivative securities.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
    Companys best estimate of an amount that could be realized
    in a current market exchange absent actual market exchanges. F-31




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Quoted Pricesin Active


Significant


SignificantMarkets for


Observable


UnobservableIdentical Assets


Inputs


InputsTotal


(Level 1)


(Level 2)


(Level 3)Assets accounted for at fair value on a recurring basisFixed maturities, available-for-sale

$
39,560


$
3,502


$
27,316


$
8,742Equity securities, available-for-sale


429



144



226



59Other investmentsOther derivatives used to hedge U.S. GMWB


600







13



587Other derivatives(1)


522







588



(66
)Total Other investments


1,122







601



521Short-term investments


5,562



3,905



1,657



Reinsurance recoverables


1,302











1,302Separate account assets(2)(5)


126,367



94,394



31,187



786Total assets accounted for at fair value on a recurring
    basis

$
174,342


$
101,945


$
60,987


$
11,410Liabilities accounted for at fair value on a recurring
    basisOther policyholder funds and benefits payable U.S. GMWB

$
(6,526
)

$



$



$
(6,526
)Reinsured Japan GMIB


(2,581
)










(2,581
)Reinsured Japan GMAB


(1
)










(1
)Reinsured Japan GMWB


(34
)










(34
)Institutional Notes


(41
)










(41
)Equity Linked Notes


(8
)










(8
)Total other policyholder funds and benefits payable


(9,191
)










(9,191
)Customized derivatives used to hedge U.S. GMWB


941











941Other derivatives used to hedge U.S. GMWB


1,123







14



1,109Macro hedge program


137











137Other investments


5







173



(168
)Total Other liabilities


2,206







187



2,019Consumer notes(4)


(5
)










(5
)Total liabilities accounted for at fair value on a recurring
    basis

$
(6,990
)





$
187


$
(7,177
)     (1)
    
    Includes over-the-counter derivative instruments in a net asset
    value position which may require the counterparty to pledge
    collateral to the Company. At December 31, 2008, $507 was
    the amount of cash collateral liability that was netted against
    the derivative asset value on the condensed consolidated balance
    sheet, and is excluded from the table above. See footnote 3
    below for derivative liabilities. F-32




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (2)
    
    Pursuant to the conditions set forth in
    SOP 03-1,
    the value of separate account liabilities is set to equal the
    fair value for separate account assets.(3)
    
    Includes over-the-counter derivative instruments in a net
    negative market value (derivative liability). In the
    SFAS 157 Level 3 roll forward table included below in
    this Note, the derivative asset and liability are referred to as
    freestanding derivatives and are presented on a net
    basis.(4)
    
    Represents embedded derivatives associated with non-funding
    agreement-backed consumer equity-linked notes.(5)
    
    Excludes approximately $3 billion of investment sales
    receivable net of investment purchases payable that are not
    subject to SFAS 157.    Determination
    of fair values
    Fixed
    Maturity, Short- Term and Equity Securities,
    Available-for-Sale
  and/or
   F-33




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            % of TotalFair Value


Fair ValueABSBelow Prime


1,405



16.0
%Collateralized Loan Obligations (CLOs)


1,570



17.8
%Other


443



5.0
%CorporateMatrix priced private placements


3,038



34.5
%Other


1,383



15.7
%Commercial mortgage-backed securities (CMBS)


659



7.5
%Preferred stock


48



0.6
%Other


255



2.9
%Total Level 3 securities


8,801



100.0
%  F-34




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  
    ABS below prime primarily represents sub-prime and Alt-A
    securities which are classified as Level 3 due to the lack
    of liquidity in the market.
    ABS CLOs represent senior secured bank loan CLOs which are
    primarily priced by independent brokers.
    ABS Other primarily represents broker priced securities.
    Corporate-matrix priced represents private placement securities
    that are thinly traded and priced using a pricing matrix which
    includes significant non-observable inputs.
    Corporate- other primarily represents broker-priced public
    securities and private placement securities qualified for sale
    under rule 144A and long-dated fixed maturities where the
    term of significant inputs may not be sufficient to be deemed
    observable.
    CMBS primarily represents CMBS bonds and commercial real estate
    collateralized debt obligations (CRE CDOs) which
    were either fair valued by the Company or by independent brokers
    due to the illiquidity of this sector.
    Preferred stock primarily represents lower quality preferred
    securities that are less liquid due to market conditions.  Derivative
    Instruments, including embedded derivatives within
    investments
           F-35




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    U.S. GMWB
    Reinsurance Derivative
    Separate
    Account Assets
  and/or
  GMWB
    Embedded Derivatives and Reinsured GMWB, GMAB and GMIB
    Free-Standing Derivatives (in Other Policyholder Funds and
    Benefits Payable)
    Assets
    and Liabilities Measured at Fair Value on a Recurring Basis
    Using Significant Unobservable Inputs
    (Level 3)
   F-36




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Roll-forward of Financial Instruments Measured at Fair Value
    on a Recurring Basis Using Significant Unobservable Inputs
    (Level 3) for the twelve months from January 1,
    2008 to December 31, 2008
  Changes inunrealizedgains (losses)included in netRealized/unrealized











income relatedgains (losses)








SFAS 157


to financialSFAS 157 Fair


included in:


Purchases,


Transfers in


Fair value


instrumentsvalue as of


Net





issuances,


and/or


as of


still held atJanuary 1,


income





and


(out) of


December 31,


December 31,2008


(2),(3)


AOCI(5)


settlements


Level 3(7)


2008


2008(3)AssetsFixed maturities

$
13,558


$
(659
)

$
(3,382
)

$
526


$
(1,301
)

$
8,742


$
(515
)Equity securities,
    available-for-sale


563



1



(27
)


3



(481
)


59



(2
)Freestanding derivatives(4)Customized derivatives used to hedge U.S. GMWB


91



850















941



850Other freestanding derivatives used to hedge U.S. GMWB


564



1,161







(29
)






1,696



1,043Macro hedge program


18



85







34







137



102Other freestanding derivatives


(303
)


(316
)


16



271



98



(234
)


(225
)Total Freestanding Derivatives


370



1,780



16



276



98



2,540



1,770Reinsurance recoverable (1),(2),(9)


238



962







102







1,302



962Separate accounts(6)


701



(204
)






(26
)


315



786



(73
)Supplemental Asset Information:Total freestanding derivatives used to hedge U.S. GMWB including
    those in Levels 1, 2 and 3(10)


643



3,374







(1,353
)






2,664



3,374LiabilitiesOther policyholder funds and benefits payable accounted for at
    fair value(2)U.S. GMWB

$
(1,433
)

$
(4,967
)

$



$
(126
)

$



$
(6,526
)

$
(4,967
)Reinsured Japan GMIB


(220
)


(2,000
)


(256
)


(105
)






(2,581
)


(2,000
)Reinsured Japan GMWB






(28
)


(3
)


(3
)






(34
)


(28
)Reinsured Japan GMAB


(22
)


32



(2
)


(9
)






(1
)


32Institutional Notes


(24
)


(17
)














(41
)


(17
)Equity Linked Notes


(21
)


13















(8
)


13Total other policyholder funds and benefits payable accounted
    for at fair value(2)


(1,720
)


(6,967
)


(261
)


(243
)






(9,191
)


(6,967
)Consumer notes


(5
)


5







(5
)






(5
)


5Supplemental Information:Net U.S. GMWB (Embedded derivatives, freestanding derivatives
    including those in Levels 1, 2 and 3 and reinsurance
    recoverable)(8)


(552
)


(631
)






(1,377
)






(2,560
)


(631
)     (1)
    
    The January 1, 2008 fair value of $238 includes the
    pre-SFAS 157 fair value of $128 and transitional adjustment
    of $110.(2)
    
    The Company classifies all the gains and losses on GMWB
    reinsurance derivatives and GMWB embedded derivatives and
    reinsured GMWB, GMIB and GMAB free standing derivatives as
    unrealized gains/losses for F-37




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  purposes of disclosure in this table because it is impracticable
    to track on a
    contract-by-contract
    basis the realized gains/losses for these derivatives and
    embedded derivatives.(3)
    
    All amounts in these columns are reported in net realized
    capital gains/losses, except for $6 for the twelve months ending
    December 31, 2008, which is reported in benefits, losses
    and loss adjustment expenses. All amounts are before income
    taxes and amortization of DAC.(4)
    
    The freestanding derivatives, excluding reinsurance derivatives
    instruments, are reported in this table on a net basis for
    asset/ (liability) positions and reported on the consolidated
    balance sheet in other investments and other liabilities.(5)
    
    AOCI refers to Accumulated other comprehensive
    income in the consolidated statement of changes in
    stockholders equity. All amounts are before income taxes
    and amortization of DAC.(6)
    
    The realized/unrealized gains (losses) included in net income
    for separate account assets are offset by an equal amount for
    separate account liabilities which results in a net zero impact
    on net income for the Company.(7)
    
    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.(8)
    
    The net loss on U.S. GMWB since January 1, 2008 was
    primarily related to liability model assumption updates for
    mortality in the first quarter and market-based hedge
    ineffectiveness due to extremely volatile capital markets in the
    second half of 2008.(9)
    
    During July 2008, the Company reinsured, with a third party,
    U.S. GMWB risks associated with approximately $7.8 billion
    of account value sold between 2003 and 2006. The reinsurance
    agreement is an 80% quota-share agreement. The third
    partys financial strength is rated A+ by A.M. Best,
    AA- by Standard and Poors and Aa2 by Moodys. The
    reinsurance agreement will be accounted for as a freestanding
    derivative.(10)
    
    The Purchases, issuances, and settlements primarily
    relates to the receipt of cash on futures and option contracts
    classified as Level 1 and interest rate, currency and
    credit default swaps classified as Level 2.   F-38




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Roll-forward
    for the twelve months from January 1, 2007 to
    December 31, 2007
  TotalRealized/unrealized





Fair value asFair value as of


gains (losses)


Purchases,


ofJanuary 1,


included in:


issuances, and


December 31,2007


Net income


settlements


2007AssetsCustomized derivatives used to hedge US GMWB

$



$
50


$



$
50Other freestanding derivatives used to hedge US GMWB


346



198



48



592Reinsurance recoverable for US GMWB


(22
)


127



23



128LiabilitiesOther policyholder funds and benefits payable accounted for at
    fair valueUS GMWB

$
53


$
(661
)

$
(99
)

$
(707
)Reinsured Japan GMIB


119



(159
)


(32
)


(72
)Reinsured Japan GMAB






3



(1
)


2Institutional Notes


4



(28
)






(24
)Equity Linked Notes






1



(22
)


(21
)Total other policyholder funds and benefits payable accounted
    for at fair value


176



(844
)


(154
)


(822
)Supplemental Information:Net US GMWB (Embedded derivative, freestanding derivatives and
    reinsurance recoverable)(1)


377



(286
)


(28
)


63     (1)
    
    The net loss on US GMWB was primarily due to liability model
    assumption updates made during the second and third quarter to
    reflect newly reliable market inputs for volatility and model
    refinements. F-39




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     December 31, 2008


December 31, 2007Notional


Fair


Notional


FairAmount


Value


Amount


ValueReinsurance recoverables for U.S. GMWB(1)

$
11,437


$
1,302


$
6,579


$
128Customized derivatives used to hedge U.S. GMWB(2)


10,464



941



12,784



50Freestanding derivatives used to hedge U.S. GMWB


8,156



1,723



8,573



592U.S. GMWB(3)


46,734



(6,526
)


44,852



(707
)Reinsured Japan GMIB(4)


20,062



(2,581
)


15,297



(72
)Reinsured Japan GMWB(3)


361



(34
)






Reinsured Japan GMAB(5)


130



(1
)


2,768



2Macro hedge program(6)


2,188



137



661



18Consumer Notes


70



(5
)


19



(5
)Equity Linked Notes


55



(8
)


50



(21
)Total

$
99,657


$
(5,052
)

$
91,583


$
(15
)     The decrease in the net fair value of the derivative instruments
    in the table above was primarily due to the adoption of
    SFAS 157 and the net effects of capital market movements
    during 2008.(1)
    
    The increase in notional amount of the reinsurance recoverables
    for U.S. GMWB was primarily due to the execution of a
    reinsurance transaction in July 2008.(2)
    
    The decrease in notional amount of customized derivatives used
    to hedge U.S. GMWB was primarily due to current market
    conditions causing policyholder account values to decrease. The
    notional on these customized derivatives is the policyholder
    account value.(3)
    
    The increase in notional amount of embedded derivatives
    associated with GMWB riders is primarily due to additional
    product sales.(4)
    
    The increase in notional amount of the internal reinsurance
    associated with GMIB was primarily due to the strengthening of
    the yen as compared to the U.S. dollar.(5)
    
    The decrease in notional amount of the Japan GMAB embedded
    derivative is primarily due to a significant decline in the
    equity markets triggering policyholders to elect the GMIB
    feature or lump sum payout in Japans 3Win product.(6)
    
    The increase in notional amount of the macro hedge program is
    primarily due to the rebalancing of the Companys risk
    management program to place a greater relative emphasis on the
    protection of statutory surplus.  Financial
    Instruments Not Carried at Fair Value
   F-40




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008


2007Carrying


Fair


Carrying


FairAmount


Value


Amount


ValueAssetsPolicy loans

$
2,154


$
2,366


$
2,061


$
2,061Mortgage loans on real estate


4,896



4,265



4,166



4,169LiabilitiesOther policyholder funds and benefits payable(1)

$
14,421



14,158


$
15,148


$
15,097Consumer Notes


1,204



1,188



804



809     (1)
    
    Excludes group accident and health and universal life insurance
    contracts, including corporate owned life insurance.
    
    Fair value for policy loans and consumer notes were estimated
    using discounted cash flow calculations.
    
    Fair values for mortgage loans on real estate were estimated
    using discounted cash flow calculations based on current
    incremental lending rates for similar type loans.    4.
    Investments
    and Derivative Instruments  For the Years Ended December 31,Components of Net Investment Income

2008


2007


2006Fixed maturities(1)

$
2,487


$
2,710


$
2,459Equity securities,
    available-for-sale


38



48



12Mortgage loans


251



227



126Policy loans


136



132



140Limited partnerships and other alternative investments


(203
)


112



67Other investments


(43
)


(125
)


(26
)Gross investment income


2,666



3,104



2,778Less: Investment expenses


49



56



50Net investment income

$
2,617


$
3,048


$
2,728Components of Net Realized Capital Gains (Losses)Fixed maturities

$
(1,698
)

$
(248
)

$
(105
)Equity securities


(166
)


(46
)


(3
)Foreign currency transaction remeasurements


(450
)


102



18Derivatives and other(2)


(3,337
)


(742
)


(209
)Net realized capital gains (losses)

$
(5,651
)

$
(934
)

$
(299
)     (1)
    
    Includes income on short-term bonds.(2)
    
    Primarily consists of changes in fair value on non-qualifying
    derivatives, hedge ineffectiveness on qualifying derivative
    instruments, foreign currency gains and losses, and other
    investment gains and losses.  F-41




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Components of Net Unrealized Gains (Losses) on

For the Years Ended December 31,Available-for-Sale Securities

2008


2007


2006Fixed maturities

$
(8,884
)

$
(597
)

$
800Equity securities


(181
)


(42
)


8Net unrealized gains (losses) credited to policyholders


(101
)


3



(4
)Net unrealized gains (losses)


(9,166
)


(636
)


804Deferred income taxes and other items


(4,355
)


(304
)


304Net unrealized gains (losses), net of tax  end of year


(4,811
)


(332
)


500Net unrealized gains (losses), net of tax  beginning
    of year


(332
)


500



577Change in unrealized gains (losses) on
    available-for-sale
    securities

$
(4,479
)

$
(832
)

$
(77
)   Components
    of
    Available-for-Sale
    Securities
  December 31, 2008


December 31, 2007Cost or


Gross


Gross





Cost or


Gross


GrossAmortized


Unrealized


Unrealized





Amortized


Unrealized


Unrealized


FairCost


Gains


Losses


Fair Value


Cost


Gains


Losses


ValueABS

$
7,095


$
9


$
(2,134
)

$
4,970


$
7,602


$
24


$
(519
)

$
7,107CMBSAgency backed


243



8







251



249



6







255Non-agency backed


9,566



15



(4,085
)


5,496



11,266



153



(572
)


10,847CMOsAgency backed


539



30



(3
)


566



793



18



(3
)


808Non-agency backed


320







(102
)


218



411



4



(2
)


413Corporate


21,252



441



(2,958
)


18,735



21,928



807



(571
)


22,164Government/government agenciesForeign


2,094



86



(33
)


2,147



465



35



(2
)


498United States


5,033



75



(39
)


5,069



516



14



(1
)


529MBS


1,385



23



(5
)


1,403



1,750



15



(15
)


1,750States, municipalities and political subdivisions


917



8



(220
)


705



1,226



32



(20
)


1,238Redeemable preferred stock


















2



2



(2
)


2Fixed maturities


48,444



695



(9,579
)


39,560



46,208


$
1,110


$
(1,707
)

$
45,611Equity securities,
    available-for-sale


610



3



(184
)


429



763



10



(51
)


722Total securities,
    available-for-sale

$
49,054


$
698


$
(9,763
)

$
39,989


$
46,971



1,120



(1,758
)


46,333     December 31, 2008Maturity

Amortized Cost


Fair ValueOne year or less

$
1,511


$
1,564Over one year through five years


9,297



8,757Over five years through ten years


9,035



8,154Over ten years


19,262



13,928Subtotal


39,105



32,403ABS, MBS, and CMOs


9,339



7,157Total

$
48,444


$
39,560    F-42




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Sales of
    Fixed Maturity and
    Available-for-Sale
    Equity Security Investments
  For the Years Ended December 31,2008


2007


2006Sale of Fixed MaturitiesSale proceeds

$
9,366


$
12,415


$
16,159Gross gains


291



246



210Gross losses


(433
)


(135
)


(230
)Sale of Equity Securities,
    Available-for-SaleSale proceeds

$
126


$
296


$
249Gross gains


11



12



5Gross losses


(21
)


(7
)


(5
)   Concentration
    of Credit Risk
      December 31, 2008Percentage ofFair Value


Stockholders EquityGovernment of Japan

$
1,869



99
%JPMorgan Chase & Company


263



14
%General Electric Company


231



12
%Credit Suisse Group


202



11
%Citigroup Inc.


185



10
%Verizon Communications


179



10
%        F-43




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Security
    Unrealized Loss Aging
  other-than-temporarily other-than-temporary Other-Than-Temporary Available-for-Sale
  available-for-sale
  December 31, 2008Less than 12 Months


12 Months or More


TotalAmortized


Fair


Unrealized


Amortized


Fair


Unrealized


Amortized


Fair


UnrealizedCost


Value


Losses


Cost


Value


Losses


Cost


Value


LossesABS

$
1,475


$
1,169


$
(306
)

$
5,463


$
3,635


$
(1,828
)

$
6,938


$
4,804


$
(2,134
)CMBS  Non-agency backed


4,108



2,992



(1,116
)


5,300



2,331



(2,969
)


9,408



5,323



(4,085
)CMOsAgency backed


39



38



(1
)


32



30



(2
)


71



68



(3
)Non-agency backed


252



176



(76
)


68



42



(26
)


320



218



(102
)Corporate


11,101



9,500



(1,601
)


4,757



3,400



(1,357
)


15,858



12,900



(2,958
)Government/government agenciesForeign


788



762



(26
)


29



22



(7
)


817



784



(33
)United States


3,952



3,913



(39
)


38



38







3,990



3,951



(39
)MBS


46



46







183



178



(5
)


229



224



(5
)States, municipalities and political subdivisions


524



381



(143
)


297



220



(77
)


821



601



(220
)Total fixed maturities


22,285



18,977



(3,308
)


16,167



9,896



(6,271
)


38,452



28,873



(9,579
)Equity securities,
    available-for-sale


433



296



(137
)


136



89



(47
)


569



385



(184
)Total temporarily impaired securities

$
22,718


$
19,273


$
(3,445
)

$
16,303


$
9,985


$
(6,318
)

$
39,021


$
29,258


$
(9,763
)   F-44




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31, 2007Less than 12 Months


12 Months or More


TotalAmortized


Fair


Unrealized


Amortized


Fair


Unrealized


Amortized


Fair


UnrealizedCost


Value


Losses


Cost


Value


Losses


Cost


Value


LossesABS

$
6,271


$
5,789


$
(482
)

$
497



460


$
(37
)

$
6,768


$
6,249


$
(519
)CMBS  Non-agency backed


5,493



5,010



(483
)


1,808



1,719



(89
)


7,301



6,729



(572
)CMOsAgency backed


270



268



(2
)


60



59



(1
)


330



327



(3
)Non-agency backed


97



96



(1
)


33



32



(1
)


130



128



(2
)Corporate


8,354



7,920



(434
)


2,554



2,417



(137
)


10,908



10,337



(571
)Government/government agenciesForeign


86



84



(2
)


43



43







129



127



(2
)United States


136



135



(1
)


7



7







143



142



(1
)MBS


49



48



(1
)


760



746



(14
)


809



794



(15
)States, municipalities and political subdivisions


383



373



(10
)


189



179



(10
)


572



552



(20
)Redeemable preferred stock


4



2



(2
)














4



2



(2
)Total fixed maturities


21,143



19,725



(1,418
)


5,951



5,662



(289
)


27,094



25,387



(1,707
)Equity securities,
    available-for-sale


615



565



(50
)


20



19



(1
)


635



584



(51
)Total temporarily impaired securities

$
21,758


$
20,290


$
(1,468
)

$
5,971


$
5,681


$
(290
)

$
27,729


$
25,971


$
(1,758
)   available-for-sale
      Securitized Assets Depressed over 20%December 31, 2008


December 31, 2007Cost or











Cost orAmortized


Fair


Unrealized





Amortized


Fair


UnrealizedConsecutive Months

Items


Cost


Value


Loss


Items


Cost


Value


LossThree months or less


709


$
8,326


$
4,772


$
(3,554
)


115


$
918


$
613


$
(305
)Greater than three to six months


78



773



315



(458
)


18



130



76



(54
)Greater than six to nine months


139



1,686



620



(1,066
)














Greater than nine to twelve months


91



739



170



(569
)














Greater than twelve months


17



203



34



(169
)


3



33



22



(11
)Total


1,034


$
11,727


$
5,911


$
(5,816
)


136


$
1,081


$
711


$
(370
)   F-45




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  All Other Securities Depressed over 20%December 31, 2008


December 31, 2007Cost or











Cost orAmortized


Fair


Unrealized





Amortized


Fair


UnrealizedConsecutive Months

Items


Cost


Value


Loss


Items


Cost


Value


LossThree months or less


568


$
6,396


$
4,210


$
(2,186
)


52


$
65


$
50


$
(15
)Greater than three to six months


26



224



116



(108
)


5



30



5



(25
)Greater than six to nine months


20



250



139



(111
)














Greater than nine to twelve months


3



99



61



(38
)














Greater than twelve months


















1



2



1



(1
)Total


617


$
6,969


$
4,526


$
(2,443
)


58


$
97


$
56


$
(41
)   sub-prime
    Mortgage
    Loans
     F-46




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Commercial Mortgage Loans on Real Estate by RegionDecember 31, 2008


December 31, 2007Carrying


Percent of


Carrying


Percent ofValue


Total


Value


TotalEast North Central

$
121



2.5
%

$
101



2.4
%Middle Atlantic


556



11.4
%


503



12.1
%Mountain


115



2.3
%


101



2.4
%New England


407



8.3
%


348



8.4
%Pacific


1,205



24.6
%


959



23.0
%South Atlantic


665



13.6
%


749



18.0
%West North Central


56



1.1
%


25



0.6
%West South Central


205



4.2
%


179



4.3
%Other(1)


1,566



32.0
%


1,201



28.8
%Total

$
4,896



100.0
%

$
4,166



100.0
%     (1)
    
    Includes multi-regional properties.  Commercial Mortgage Loans on Real Estate by Property TypeDecember 31, 2008


December 31, 2007Carrying


Percent of


Carrying


Percent ofValue


Total


Value


TotalIndustrial

$
790



16.1
%

$
424



10.2
%Lodging


383



7.8
%


424



10.2
%Agricultural


435



8.9
%


236



5.7
%Multifamily


798



16.3
%


708



17.0
%Office


1,456



29.8
%


1,550



37.2
%Retail


790



16.1
%


702



16.8
%Other


244



5.0
%


122



2.9
%Total

$
4,896



100.0
%

$
4,166



100.0
%   Variable
    Interest Entities (VIE)
       F-47




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      December 31, 2008


December 31, 2007Maximum








MaximumTotal


Total


Exposure


Total


Total


ExposureAssets


Liabilities(1)


to Loss(2)


Assets


Liabilities(1)


to LossCLOs

$
339


$
89


$
237


$
128


$
73


$
74Limited partnerships


151



72



79



309



121



188Other investments


249



103



166



296



126



178Total

$
739


$
264


$
482


$
733


$
320


$
440     (1)
    
    Creditors have no recourse against the Company in the event of
    default by the VIE.(2)
    
    The Companys maximum exposure to loss represents the
    maximum loss amount that the Company could recognize as a
    reduction in net investment income or as a realized capital loss
    and is the consolidated assets net of liabilities at cost. The
    Company has no implied or unfunded commitments to these VIEs.         F-48




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      December 31, 2008


December 31, 2007Maximum








MaximumExposure








ExposureAssets


Liabilities


to Loss


Assets


Liabilities


to LossCLOs

$




280


$



$
316






$
11


$



$
14CDOs






3







13







61







86Total(1)

$




283


$



$
329


$




72


$



$
100     (1)
    
    Maximum exposure to loss represents the Companys
    investment in securities issued by CLOs/CDOs at cost. The
    Company has no implied or unfunded commitments to these VIEs.      Derivative
    Instruments
  Overview
    and/or
   F-49




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Asset Values


Liability Values2008


2007


2008


2007Fixed maturities,
    available-for-sale

$



$



$
3


$
Other investments


1,122



446







Reinsurance recoverables


1,302



128







Other policyholder funds and benefits payable






2



9,150



801Consumer notes










5



5Other liabilities(1)


2,206











354Total

$
4,630


$
576


$
9,158


$
1,160     (1)
    
    Included in Other liabilities on the balance sheet is a
    liability value of $2,531 and $114 related to derivative
    collateral as of December 31, 2008 and 2007, respectively.    F-50




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Hedge Ineffectiveness,Notional Amount


Fair Value


Before-taxHedging Strategy

2008


2007


2008


2007


2008


2007Cash-Flow HedgesInterest rate swapsInterest rate swaps are primarily used to convert interest
    receipts on floating-rate fixed maturity securities to fixed
    rates. These derivatives are predominantly used to better match
    cash receipts from assets with cash disbursements required to
    fund liabilities.The Company also enters into forward starting swap agreements to
    hedge the interest rate exposure related to the purchase of
    fixed-rate securities or the anticipated future cash flows of
    floating-rate fixed maturity securities due to changes in the
    benchmark interest rate, London-Interbank Offered Rate
    (LIBOR). These derivatives are primarily structured
    to hedge interest rate risk inherent in the assumptions used to
    price certain liabilities.Interest rate swaps are also used to hedge a portion of the
    Companys floating-rate guaranteed investment contracts.
    These derivatives convert the floating-rate guaranteed
    investment contract payments to a fixed rate to better match the
    cash receipts earned from the supporting investment
    portfolio.

$
6,798


$
4,019


$
422


$
73


$
7



2Foreign currency swapsForeign 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 swapped to
    minimize cash flow fluctuations due to changes in currency
    rates. In addition, foreign currency swaps are also used to
    convert foreign denominated cash flows associated with certain
    liability payments to U.S. dollars in order to minimize cash
    flow fluctuations due to changes in currency rates.


1,005



1,226



(21
)


(269
)


1



(2
)Total cash-flow hedges

$
7,803


$
5,245


$
401


$
(196
)

$
8


$
 F-51




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Hedge Ineffectiveness,Notional Amount


Fair Value


Before-taxHedging Strategy

2008


2007


2008


2007


2008


2007Fair-Value HedgesInterest rate swapsInterest rate swaps are used to hedge the changes in fair value
    of certain fixed rate liabilities and fixed maturity securities
    due to changes in the benchmark interest rate, LIBOR.


2,138



3,594



(86
)


(38
)


(1
)


Foreign currency swapsForeign currency swaps are used to hedge the changes in fair
    value of certain foreign denominated fixed rate liabilities due
    to changes in foreign currency rates


696



696



(57
)


25







Total fair-value hedges

$
2,834


$
4,290


$
(143
)

$
(13
)

$
(1
)

$
Total cash-flow and fair-value hedges

$
10,637


$
9,535


$
258


$
(209
)

$
7


$
   DerivativeChange inValue,Notional Amount


Fair Value


Before-taxHedging Strategy

2008


2007


2008


2007


2008


2007Non-qualifying StrategiesInterest rate swaps, caps, floors, and forwardsThe Company uses interest rate swaps, caps and floors to manage
    duration risk between assets and liabilities in certain
    portfolios. In addition, the Company enters into interest rate
    swaps to terminate existing swaps, thereby offsetting the
    changes in value of the original swap. As of December 31,
    2008 and 2007, the notional amount of interest rate swaps in
    offsetting relationships was $3.9 billion and
    $1.2 billion, respectively.The Company may also use interest rate forwards to replicate the
    purchase of mortgage-backed securities to manage duration risk
    and liquidity.

$
5,269


$
6,666


$
(90
)





$
3


$
22Foreign currency swaps, forwards, and swaptionsThe Company enters into foreign currency swaps and forwards to
    hedge the foreign currency exposures in certain of its foreign
    fixed maturity investments. F-52




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  DerivativeChange inValue,Notional Amount


Fair Value


Before-taxHedging Strategy

2008


2007


2008


2007


2008


2007The Company also enters into foreign currency interest rate
    swaps and swaptions to hedge Yen interest rate exposures related
    to certain liability contracts sold in Japan.


389



199



10



(8
)


27



(8
)Credit default swaps that sell credit protectionThe Company enters into credit default swap agreements in which
    the Company assumes credit risk of an individual entity,
    referenced index or asset pool. These contracts entitle the
    Company to receive a periodic fee in exchange for an obligation
    to compensate the derivative counterparty should a credit event
    occur on the part of the referenced security issuers. Also
    included are embedded derivatives associated with credit linked
    notes with a notional amount of $106 and $131 as of
    December 31, 2008 and 2007, respectively. The maximum
    potential future exposure to the Company is the notional amount
    of the swap contracts, which is $940 and $1,849, before-tax, as
    of December 31, 2008 and 2007, respectively.


940



1,849



(309
)


(235
)


(313
)


(128
)Total return and credit index swapsThe Company also assumes credit risk through total return and
    credit index swaps which reference a specific index or
    collateral portfolio. The maximum potential future exposure to
    the Company for the credit index swaps is the notional value and
    for the total return swaps is the cash collateral associated
    with the transaction, which has termination triggers that limit
    investment losses. The Company had no exposure to such contracts
    at December 31, 2008. As of December 31, 2007, the
    maximum potential future exposure to the Company from such
    contracts was $983, before-tax.






1,731







(62
)


(99
)


(74
) F-53




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  DerivativeChange inValue,Notional Amount


Fair Value


Before-taxHedging Strategy

2008


2007


2008


2007


2008


2007Credit default swaps that purchase credit protectionThe Company enters into credit default swap agreements in which
    the Company reduces credit risk to an individual entity. These
    contracts require the Company to pay a derivative counterparty a
    periodic fee in exchange for compensation from the counterparty
    should a credit event occur on the part of the referenced
    security issuer. The Company enters into these agreements as an
    efficient means to reduce credit exposure to specified issuers
    or sectors.


2,633



3,494



246



56



211



59Credit default swaps in offsetting positionsThe Company enters into credit default swap agreements to
    terminate existing credit default swaps, thereby offsetting the
    changes in value of the original swap going forward.


1,453







(8
)










Japanese fixed annuity hedging instrumentsThe Company enters into currency rate swaps and forwards to
    mitigate the foreign currency exchange rate and Yen interest
    rate exposures associated with the Yen denominated individual
    fixed annuity product. The associated liability is adjusted for
    changes in spot rates which was $450 and $(102), before-tax, as
    of December 31, 2008 and 2007, respectively, and offsets
    the derivative change in value.


2,334



1,849



383



(115
)


487



53GMWB product derivativesThe Company offers certain variable annuity products with a GMWB
    rider primarily in the U.S and Japan. The GMWB is a bifurcated
    embedded derivative that provides the policyholder with a GRB if
    the account value is reduced to zero through a combination of
    market declines and withdrawals. The GRB is generally equal to
    premiums less withdrawals. The policyholder also has the option,
    after a specified time period, to reset the GRB to the
    then-current account value, if greater. The notional value of
    the embedded derivative is the GRB balance. For a further
    discussion, see the Derivative Instruments section of
    Note 2.

$
46,734


$
44,852


$
(6,526
)

$
(707
)

$
(5,719
)

$
(661
) F-54




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  DerivativeChange inValue,Notional Amount


Fair Value


Before-taxHedging Strategy

2008


2007


2008


2007


2008


2007GMWB reinsurance contractsThe Company has entered into reinsurance arrangements to offset
    a portion of its risk exposure to the GMWB for the remaining
    lives of covered variable annuity contracts. Reinsurance
    contracts covering GMWB are accounted for as free-standing
    derivatives. The notional amount of the reinsurance contracts is
    the GRB amount.


11,798


$
6,579



1,268



128



1,073



127GMWB hedging instrumentsThe Company enters into derivative contracts to partially
    economically hedge exposure to the volatility associated with
    the portion of the GMWB liabilities which are not reinsured.
    These derivative contracts include customized swaps, interest
    rate swaps and futures, and equity swaps, put and call options,
    and futures, on certain indices including the S&P 500
    index, EAFE index, and NASDAQ index.


18,620



21,357



2,664



642



3,374



257Guaranteed minimum benefit product reinsurance contractsReinsurance arrangements are used to offset the Companys
    exposure to the GMIB and GMAB embedded derivatives for the lives
    of the host variable annuity contracts. The reinsurance
    contracts are accounted for as free-standing derivative
    contracts. The notional amount of the reinsurance contracts is
    the Yen denominated GRB balance value converted at the year-end
    Yen to U.S. dollar foreign spot exchange rate.


20,192



18,065



(2,582
)


(70
)


(2,133
)


(156
)Equity index swaps, options, and futuresThe Company offers certain equity indexed products, which may
    contain an embedded derivative that requires bifurcation. The
    Company enters into S&P index swaps and options to
    economically hedge the equity volatility risk associated with
    these embedded derivatives. In addition, the Company is exposed
    to bifurcated options embedded in certain fixed maturity
    investments.The Company may also enter into equity indexed futures to hedge
    the equity volatility of certain liability contracts.


249



149



(14
)


(22
)


(23
)


2 F-55




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  DerivativeChange inValue,Notional Amount


Fair Value


Before-taxHedging Strategy

2008


2007


2008


2007


2008


2007Japan variable annuity hedging instrumentsThe Company enters into foreign currency forward and option
    contracts that convert euros to Yen in order to economically
    hedge the foreign currency risk associated with certain Japanese
    variable annuity products.


259







35







40



(10
)Macro hedge programThe Company utilizes option contracts as well as futures
    contracts to partially economically hedge the statutory reserve
    impact of equity risk arising primarily from GMDB and GMWB
    obligations against a decline in the equity markets.


2,188



661



137



18



74



(12
)Coinsurance and modified coinsurance reinsurance contractDuring 2007, a subsidiary insurance company entered into a
    coinsurance with funds withheld and modified coinsurance
    reinsurance agreement (Agreement) with an affiliate
    reinsurance company to provide statutory surplus relief for
    certain life insurance policies. The Agreement is accounted for
    as a financing transaction for GAAP and includes a compound
    embedded derivative.


1,068



655















Total non-qualifying strategies

$
114,126


$
108,106


$
(4,786
)

$
(375
)

$
(2,998
)

$
(529
)Total derivatives(1)

$
124,763


$
117,641


$
(4,528
)

$
(584
)

$
(2,991
)

$
(529
)     (1)
    
    Derivative change in value includes hedge ineffectiveness for
    cash-flow and fair-value hedges and total change in value,
    including periodic derivative net coupon settlements, for
    derivatives in non-qualifying strategies.  Change
    in Notional Amount
        
    For a discussion on the increase in notional amount of
    derivatives associated with GMWB riders refer to Note 3. F-56




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   
    For a discussion on the increase in notional amount of
    derivatives associated with GMIB reinsured from a related party
    refer to Note 3.
    The Company increased the notional amount of derivatives
    associated with the macro hedge program. During the three months
    ended December 31, 2008, the Company rebalanced its risk
    management program to place a greater relative emphasis on the
    protection of statutory surplus. As a result, the Company added
    the equivalent of $1.9 billion notional of equity futures
    as part of the macro hedge program to partially economically
    hedge the statutory reserve impact of equity risk arising
    primarily from GMDB and GMWB obligations against a decline in
    the equity markets.
    For a discussion on the decline in notional amount related to
    derivatives associated with GMAB reinsured from a related party
    refer to Note 4.
    The notional amount related to credit derivatives declined
    primarily due to terminations and maturities of credit
    derivatives, which reduced the overall net credit exposure
    assumed by the Company through credit derivatives.  Change
    in Fair Value
    
    For a discussion on the decrease in fair value on GMWB related
    derivatives refer to note 3.
    For a discussion on the decrease in fair value of derivatives
    associated with the reinsurance of GMIB, GMWB and GMAB reinsured
    from a related party refer to Note 3.
    The fair value of the Japanese fixed annuity hedging instruments
    increased primarily due to the Japanese Yen strengthening
    against the U.S. dollar.
    The fair value of interest rate derivatives increased primarily
    due to a decline in interest rates as well as an increase in
    notional amount.
    The fair value of foreign currency swaps hedging foreign fixed
    rate bonds increased primarily due to the U.S. dollar
    strengthening against the euro.  Net
    Realized Capital Gains (Losses)
    
    For a discussion on the net loss on derivatives associated with
    GMIB reinsured from a related party refer to Note 3.
    For a discussion on the net loss on derivatives associated with
    GMWB related hedging derivatives refer to Note 3.
    The net loss on credit default swaps was primarily due to losses
    on credit derivatives that sell credit protection, partially
    offset by gains on credit derivatives that purchase credit
    protection, both resulting from credit spreads widening
    significantly during the year.
    The gain on the Japanese fixed annuity hedging instruments was
    primarily a result of the Japanese Yen strengthening against the
    U.S. dollar.
    The net gain on the macro hedge program was primarily driven by
    a decline in the equity markets, partially offset by losses due
    to swap spreads tightening.    
    For a discussion on the net loss associated with GMWB related
    derivatives refer to Note 3. F-57




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   
    The net loss on credit derivatives, including credit default
    swaps, credit index swaps, and total return swaps, was a result
    of credit spreads widening.
    For a discussion on the loss on derivatives associated with GMIB
    reinsured from a related party refer to Note 3.
    The gain on the Japanese fixed annuity hedging instruments was
    primarily a result of the Japanese Yen strengthening against the
    U.S. dollar.      Credit
    Risk Assumed through Credit Derivatives
   F-58




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    As of December 31, 2008Weighted


Underlying Referenced CreditAverage


Obligation(s)(1)

Offsetting


OffsettingCredit Derivative type by derivative

Notional





Years to





Average Credit

Notional


Fairrisk exposure

Amount(2)


Fair Value


Maturity


Type


Rating

Amount(3)


Value(3)Single name credit default swapsInvestment grade risk exposure

$
47


$




4 years



Corporate Credit


A-

$
35


$
(9
)Below investment grade risk exposure


46



(12
)


4 years



Corporate Credit


CCC+






Basket credit default swaps(4)Investment grade risk exposure


1,139



(196
)


5 years



Corporate Credit


A-


489



8Investment grade risk exposure


203



(70
)


42 years



CMBS Credit


AAA


203



70Below investment grade risk exposure


125



(104
)


6 years



Corporate Credit


BB+






Credit linked notesInvestment grade risk exposure


106



95



2 years



Corporate Credit


BBB+






Total

$
1,666


$
(287
)











$
727


$
69     (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 $1.3 billion 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. Also includes $175 of
    customized diversified portfolios of corporate issuers.  Securities
    Lending and Collateral Arrangements
   F-59




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      December 31,Loaned Securities and Collateral Pledged

2008


2007ABS

$



$
4CMOs






21CMBS






244Corporate


1,386



1,554MBS


374



221Government/Government AgenciesForeign






14United States


215



303Short-term


617



1Preferred stock


9



53Total

$
2,601


$
2,415   FIN 39-1, FIN 39-1,
  Securities
    on Deposit with States
    5.
    Reinsurance   F-60




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ReinsuranceRecoverableTransamerica Life Insurance Company

$
206AXA Corporate Solutions Life Reinsurance Company


208Security Life of Denver Insurance Company


212Swiss Re Life & Health America Inc.


247Transamerica Financial Life Insurance Company


736Connecticut General Life Insurance Company

$
539       For the Years Ended December 31,2008


2007


2006Gross fee income, earned premiums and other

$
4,732


$
5,173


$
4,360Reinsurance assumed


48



13



19Reinsurance ceded


(682
)


(694
)


(719
)Net fee income, earned premiums and other

$
4,098


$
4,492


$
3,660        F-61




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##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  6.
    Deferred
    Policy Acquisition Costs and Present Value of Future
    Profits    2008


2007


2006Balance, January 1, before cumulative effect of
    accounting change, pre-tax

$
8,393


$
7,334


$
7,101Cumulative effect of accounting change, pre-tax
    (SOP 05-1)






(20
)


Balance, January 1, as adjusted


8,393



7,314



7,101Deferred costs


1,111



1,400



1,351Amortization  Deferred policy acquisitions costs and
    present value of future profits


(408
)


(817
)


(1,033
)Amortization  Unlock, pre-tax (1)


(1,117
)


302



(142
)Adjustments to unrealized gains and losses on securities
    available-for-sale
    and other


1,748



194



57Balance, December 31

$
9,727


$
8,393


$
7,334     (1)
    
    For a discussion of unlock effects, see Unlock Results in
    Note 1.    For the Years Ended December 31,2009

$
262010

$
242011

$
212012

$
202013

$
18   7.
    Goodwill
    and Other Intangible Assets    December 31,


December 31,Reporting Unit

2008


2007Individual Annuity

$



$
84Individual Life


102



102Total

$
102


$
186    F-62




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    8.
    Separate
    Accounts, Death Benefits and Other Insurance Benefit
    Features      and/or SOP 03-1
  UL SecondaryGMDB(1)


Guarantees(1)Liability balance as of January 1, 2008

$
531


$
19Incurred


231



21Unlock


389



Paid


(269
)


Liability balance as of December 31, 2008

$
882


$
40     (1)
    
    The reinsurance recoverable asset related to the GMDB was $593
    as of December 31, 2008. The reinsurance recoverable asset
    related to the UL Secondary Guarantees was $16 as of
    December 31, 2008.  UL Second aryGMDB(1)


Guarantees(1)Liability balance as of January 1, 2007

$
476



7Incurred


144



12Unlock


(4
)


Paid


(85
)


Liability balance as of December 31, 2007

$
531



19     (1)
    
    The reinsurance recoverable asset related to the GMDB was $325
    as of December 31, 2007. The reinsurance recoverable asset
    related to the UL Secondary Guarantees was $10 as of
    December 31, 2007.  SOP 03-1 SOP 03-1
 F-63




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  SOP 03-1 SOP 03-1
  SOP 03-1
  GMDB:
  
    1,000 stochastically generated investment performance scenarios
    for all issue years
    For all issue years, the weighted average return is 8.3%; it
    varies by asset class with a low of 3% for cash and a high of 9%
    for aggressive equities.
    Discount rate of 7.5% for issue year 2002 & prior; discount
    rate of 7% for issue year 2003 & 2004 and discount rate of
    5.6% for issue year 2005  2008.
    Volatilities also vary by asset class with a low of 1% for cash,
    a high of 15% for aggressive equities, and a weighted average of
    11%.
    100% of the Hartford experience mortality table was used for the
    mortality assumptions
    Lapse rates by calendar year vary from a low of 8% to a high of
    11%, with an average of 10%  UL
    Secondary Guarantees:
  
    Discount rate of 4.75% for issue year 2004, discount rate of
    4.5% for issue year 2005 & 2006, discount rate of 4.25% for
    issue year 2007 and discount rate of 3.5% for issue year 2008.
    100% of the Hartford pricing mortality table for mortality
    assumptions.
    Lapse rates for single life policies average 4% in policy years
    1-10, declining to 0% by age 95. Lapse rate for last survivor
    policies declining to 0.5% by age 91. F-64




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Breakdown
    of Variable Annuity Account Value by GMDB Type at
    December 31, 2008
  Retained Net


Weighted AverageAccount


Net Amount


Amount


Attained Age ofMaximum anniversary value (MAV)(1)

Value


at Risk


at Risk(8)


AnnuitantMAV only

$
25,961


$
14,743


$
5,019



66With 5% rollup(2)


1,858



1,153



481



65With Earnings Protection Benefit Rider (EPB)(3)


5,068



2,447



241



62With 5% rollup & EPB


742



400



75



65Total MAV


33,629



18,743



5,816Asset Protection Benefit (APB)(4)


25,601



11,985



6,634



63Lifetime Income Benefit (LIB)(5)


1,137



487



487



61Reset (6) (5-7 years)


3,440



1,190



1,189



67Return of Premium (7)/Other


17,321



3,889



3,638



58Total

$
81,128


$
36,294


$
17,764



63     (1)
    
    MAV: the death benefit is the greatest of current account value,
    net premiums paid and the highest account value on any
    anniversary before age 80 (adjusted for withdrawals).(2)
    
    Rollup: the death benefit is the greatest of the MAV, current
    account value, net premium paid and premiums (adjusted for
    withdrawals) accumulated at generally 5% simple interest up to
    the earlier of age 80 or 100% of adjusted premiums.(3)
    
    EPB: the death benefit is the greatest of the MAV, current
    account value, or contract value plus a percentage of the
    contracts growth. The contracts growth is account
    value less premiums net of withdrawals, subject to a cap of 200%
    of premiums net of withdrawals.(4)
    
    APB: the death benefit is the greater of current account value
    or MAV, not to exceed current account value plus 25% times the
    greater of net premiums and MAV (each adjusted for premiums in
    the past 12 months).(5)
    
    LIB: the death benefit is the greatest of current account value,
    net premiums paid, or for certain contracts a benefit amount
    that ratchets over time, generally based on market performance.(6)
    
    Reset: the death benefit is the greatest of current account
    value, net premiums paid and the most recent five to seven year
    anniversary account value before age 80 (adjusted for
    withdrawals).(7)
    
    Return of premium: the death benefit is the greater of current
    account value and net premiums paid.(8)
    
    Net amount at risk and retained net amount at risk are highly
    sensitive to equity market movements. For example, as equity
    market declines, net amount at risk and retained net amount at
    risk will generally increase.    9.
    Sales
    Inducements   F-65




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008


2007Balance, beginning of period

$
445


$
397Cumulative effect of accounting change, pre-tax
    (SOP 05-1)






(1
)Balance, January 1, as adjusted


445



396Sales inducements deferred


131



97Unlock


(18
)


(15
)Amortization charged to income


(43
)


(33
)Balance, end of period

$
515


$
445   10.
    Commitments
    and Contingencies  Litigation
       F-66




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Regulatory
    Developments -
      Commitments
      2009

$
102010


72011


52012


42013


2Thereafter


1Total

$
29   Tax
    Matters
   F-67




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    provision-to-filed-return true-up true-up true-ups
  2007-61, 2007-61 2007-54,
  true-ups
  Unfunded
    Commitments
    Guaranty
    Fund and Other Insurance-related Assessments
   F-68




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. 97-3,
  11.
    Income
    Tax      For the Years Ended December 31,2008


2007


2006Income Tax Expense (Benefit)Current  U.S. Federal

$
(722
)

$
106


$
115Deferred  U.S. Federal Excluding NOL Carryforward


(756
)


62



(12
) Net Operating Loss Carryforward


(719
)






Total Deferred


(1475
)


62



(12
)Total Income tax expense (benefit)

$
(2,197
)

$
168


$
103     For the Years Ended December 31,2008


2007


2006Tax provision at the U.S. federal statutory rate

$
(2,003
)

$
318


$
292Dividends received deduction


(176
)


(155
)


(174
)Penalties






7



Foreign related investments


(16
)


(11
)


(10
)Other


(2
)


9



(5
)Total

$
(2,197
)

$
168


$
103  F-69




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Deferred Tax Assets

2008


2007Tax basis deferred policy acquisition costs

$
660


$
682Net unrealized loss on investments


2,924



294Investment-related items


2,408



455NOL Carryover


719



Minimum tax credit


229



239Capital Loss Carryforward


23



Foreign tax credit carryovers


18



Other


18



17Total Deferred Tax Assets


6,999



1,687Deferred Tax LiabilitiesFinancial statement deferred policy acquisition costs and
    reserves


(3,511
)


(1,775
)Employee benefits


(41
)


(36
)Total Deferred Tax Liabilities


(3,552
)


(1,811
)Total Deferred Tax Asset (Liability)

$
3,447


$
(124
)         non-U.S. income
  12.
    Debt  Debt
  Consumer
    Notes
  No. 333-137215),
 F-70




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        13.
    Statutory
    Results      For the Years Ended December 31,2008


2007


2006Statutory net income

$
(2,534
)

$
255


$
777Statutory capital and surplus

$
4,073


$
4,448


$
3,276    F-71




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      14.
    Pension
    Plans, Postretirement, Health Care and Life Insurance Benefit
    and Savings Plans  Pension
    Plans
    Investment
    and Savings Plan
    15.
    Stock
    Compensation Plans    F-72




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Stock
    Plan
        Stock
    Option Awards
      Share
    Awards
   F-73




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Employee
    Stock Purchase Plan
    16.
    Transactions
    with Affiliates      in-force in-force after-tax.
   F-74




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  12-year
    SOP 03-1 (SOP 03-1).
      17.
    Quarterly
    Results for 2008 and 2007 (unaudited)  March 31,


June 30,


September 30,


December 31,2008


2007


2008


2007


2008


2007


2008


2007Revenues

$
70


$
1,692


$
1,806


$
1,660


$
(213
)

$
1,751


$
(599
)

$
1,503Benefits, claims and expenses


1,055



1,360



1,423



1,551



2,673



1,337



1,635



1,450Net income (loss)(1)


(596
)


262



324



110



(1,824
)


290



(1,429
)


78     (1)
    
    Included in the three months ended September 30, 2008 are
    net realized capital losses of $1.9 billion and a DAC
    unlock charge of $824. Included in the three months ended
    December 31, 2008 are net realized capital losses of
    $2.0 billion F-75




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIESSCHEDULE I 
    SUMMARY OF INVESTMENTS  OTHER THAN INVESTMENTS IN
    AFFILIATES
  As of December 31, 2008Amount atWhich Shown onType of Investment

Cost


Fair Value


Balance Sheet($ in millions)Fixed MaturitiesBonds and notesU.S. government and government agencies and authorities
    (guaranteed and sponsored)

$
5,033


$
5,069


$
5,069U.S. government and government agencies and authorities
    (guaranteed and sponsored)  asset-backed


2,167



2,220



2,220States, municipalities and political subdivisions


917



705



705International governments


2,094



2,147



2,147Public utilities


3,189



2,889



2,889All other corporate bonds including international


18,063



15,846



15,846All other mortgage-backed and asset-backed securities


16,981



10,684



10,684Total fixed maturities


48,444



39,560



39,560Equity SecuritiesCommon stocksIndustrial, miscellaneous and all other


184



129



129Nonredeemable preferred stocks


426



300



300Total equity securities


610



429



429Real Estate


101



101



101Short-term Investments


5,562



5,562



5,562Other InvestmentsMortgage loans on real estate


4,896



4,265



4,896Policy loans


2,154



2,366



2,154Investments in partnerships and trusts


1,033



1,033



1,033Other invested assets


657



1,133



1,133Total other investments


8,740



8,797



9,216Total investments

$
63,457


$
54,449


$
54,868  S-1




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIESSCHEDULE III 
    SUPPLEMENTARY INSURANCE INFORMATION
    For the Years Ended December 31, 2008, 2007 and
    2006
  Net


Benefits,





AmortizationFee








Realized


Claims and





of DeferredIncome





Net


Capital


Claim


Insurance


Policy


Dividendsand


Earned


Investment


Gains


Adjustment


Expenses and


Acquisition


to Policy-


GoodwillSegment

Other


Premiums


Income


(Losses)


Expenses


Other


Costs


Holders


Impairment(In million)2008Retail Products Group

$
1,851


$
(4
)

$
768


$
(1,909
)

$
1,008


$
554


$
1,251


$



$
84Retirement Plans


212



4



342



(272
)


271



195



91







Institutional Solutions Group


139



894



988



(783
)


1,899



112



19







Individual Life


849



(65
)


308



(247
)


569



198



166



2



Other


63



155



211



(2,440
)


297



61



(2
)


11



Consolidated operations

$
3,114


$
984


$
2,617


$
(5,651
)

$
4,044


$
1,120


$
1,525


$
13


$
842007Retail Products Group

$
2,166


$
(62
)

$
815


$
(381
)

$
820


$
602


$
316


$



$
Retirement Plans


225



4



355



(41
)


249



169



58







Institutional Solutions Group


246



990



1,226



(188
)


2,066



183



23







Individual Life


816



(56
)


331



(26
)


510



185



117



3



Other


56



107



321



(298
)


335



53



1



8



Consolidated operations

$
3,509


$
983


$
3,048


$
(934
)

$
3,980


$
1,192


$
515


$
11


$
2006Retail Products Group

$
1,924


$
(86
)

$
835


$
(87
)

$
819


$
497


$
913


$



$
Retirement Plans


180



19



326



(16
)


250



134



(4
)






Institutional Solutions Group


119



607



987



(40
)


1,471



75



32







Individual Life


825



(45
)


293



(22
)


447



170



235



2



Other


65



52



287



(134
)


218



(23
)


(1
)


20



Consolidated operations

$
3,113



547



2,728


$
(299
)

$
3,205


$
853


$
1,175


$
22


$
  S-2




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIESSCHEDULE IV 
    REINSURANCE
  AssumedCeded to


from





Percentage ofGross


Other


Other


Net


Amount AssumedAmount


Companies


Companies


Amount


to Net(In millions)For the year ended December 31, 2008Life insurance in force

$
353,030



142,912



2,264



212,382







1.07
%Fee income, earned premiums and otherLife insurance and annuities

$
4,427



446



48



4,029







Accident and health insurance


305



236







69







1.19
%Total fee income, earned premiums and other


4,732



682



48



4,098







1.17
%For the year ended December 31, 2007Life insurance in force

$
346,205


$
147,021


$
2,349


$
201,533







1.2
%Fee income, earned premiums and otherLife insurance and annuities

$
4,867


$
451


$
9


$
4,425







0.1
%Accident and health insurance


306



243



4



67







6.0
%Total fee income, earned premiums and other

$
5,173


$
694


$
13


$
4,492







0.2
%For the year ended December 31, 2006Life insurance in force

$
340,345


$
164,125


$
6,822


$
183,042







1.3
%Fee income, earned premiums and otherLife insurance and annuities

$
4,072


$
457


$
12


$
3,627







0.3
%Accident and health insurance


288



262



7



33







21.2
%Total fee income, earned premiums and other

$
4,360


$
719


$
19


$
3,660







0.5
%  S-3




---



##### Table of Contents



SIGNATURES      /s/  Ernest
    M. McNeill          Signature

Title

Date/s/  John
    C. WaltersJohn
    C. Walters

Chairman, President, Chief Executive Officer

February 11, 2009/s/  Glenn
    D. LammeyGlenn
    D. Lammey

Executive Vice President, Chief Financial Officer and Director

February 11, 2009/s/  Ernest
    M. McNeill JrErnest
    M. McNeill Jr

Senior Vice President and Chief Accounting Officer

February 11, 2009/s/  Gregory
    McGreevyGregory
    McGreevy

Director

February 11, 2009  II-1




---



##### Table of Contents



HARTFORD
    LIFE INSURANCE COMPANY AND SUBSIDIARIESFORM 10-K
    For the Fiscal Year Ended December 31, 2008EXHIBITS INDEX
  Exhibit #3
.01

Restated Certificate of Incorporation of Hartford Life Insurance
    Company was filed as Exhibit 3.01 to Hartford Life
    Insurance Companys
    Form 10-K
    filed for the year ended December 31, 2007 and is
    incorporated herein by reference.3
.02

By-Laws of Hartford Life Insurance Company was filed as
    Exhibit 3.02 to Hartford Life Insurance Companys
    Form 10-K
    filed for the year ended December 31, 2007 and is
    incorporated herein by reference.4
.01

Restated Certificate of Incorporation and By-Laws of Hartford
    Life Insurance Company (included as Exhibits 3.01 and 3.02,
    respectively).10
.01

Management Agreement among Hartford Life Insurance Company,
    certain of its affiliates and Hartford Investment Services, Inc.
    was filed as Exhibit 10.4 to Hartford Life, Inc.s
    Form 10-Q
    filed for the quarter ended June 30, 1997 (File
    No. 1-12749)
    and is incorporated herein by reference.10
.02

Management Agreement between Hartford Life Insurance Company and
    The Hartford Investment Management Company was filed as
    Exhibit 10.3 to Hartford Life, Inc.s
    Form 10-Q
    filed for the quarter ended June 30, 1997 (File
    No. 1-12749)
    and is incorporated herein by reference.12
.01

Computation of Ratio of Earnings to Fixed Charges is filed
    herewith.23
.01

Consent of Deloitte & Touche, LLP, filed herewith.31
.01

Certification of John C. Walters, pursuant to Section 302
    of the Sarbanes-Oxley Act of 200231
.02

Certification of Glenn D. Lammey, pursuant to Section 302
    of the Sarbanes-Oxley Act of 200232
.01

Certification of John C. Walters, pursuant to Section 906
    of the Sarbanes-Oxley Act of 200232
.02

Certification of Glenn D. Lammey, pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002  II-2