##### Table of Contents



FORM 10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


|           |  |                                                                                     
|---------- |  | ------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                     
|[X]        |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



| |  |  | For the fiscal year ended December 31, 2002
| |  |  | -------------------------------------------

OR

|      |  |                                                                                         
|----- |  | ----------------------------------------------------------------------------------------
|[   ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



| |  |  | For the transition period from                      to
| |  |  | ------------------------------------------------------

Commission file number 1-12749

HARTFORD LIFE, INC.

(Exact name of registrant as specified in its charter)


|                                                                        |  |                                                   
|----------------------------------------------------------------------- |  | --------------------------------------------------
|Delaware
(State or other jurisdiction of
incorporation or organization) |  | 06-1470915
(I.R.S. Employer
Identification Number)

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:

| |  |                                                                                
| |  | -------------------------------------------------------------------------------
| |  | 7.2% Trust Preferred Securities, Series A, issued by Hartford Life Capital I   
| |  | 7.625% Trust Preferred Securities, Series B, issued by Hartford Life Capital II
| |  | 7.375% Senior Notes due March 1, 2031                                          

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]   No[   ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [   ]   No[X]

The aggregate market value of the shares of Common Stock held by non-affiliates
of the registrant as of June 28, 2002 was $0, because all of the outstanding
shares of Common Stock were owned by Hartford Fire Insurance Company, a direct
wholly owned subsidiary of The Hartford Financial Services Group, Inc.

As of February 28, 2003, there were outstanding 1,000 shares of Common Stock,
$0.01 par value per share, of the registrant.

The registrant meets the conditions set forth in General Instruction I (1) (a)
and (b) of Form 10-K and is therefore filing this form with the reduced
disclosure format.





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TABLE OF CONTENTS



|                                 |                                                                                                                |  |  |  |  |  |  | 
|-------------------------------- | -------------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                          
|                                 | Item 1. BUSINESS OF HARTFORD LIFE (Dollar amounts in millions, except for share data, unless otherwise stated)
|                                 | Item 2. PROPERTIES                                                                                            
|                                 | Item 3. LEGAL PROCEEDINGS                                                                                     
|PART II                         
|                                 | Item 5. MARKET FOR HARTFORD LIFES COMMON STOCK AND RELATED STOCKHOLDER MATTERS                               
|                                 | Item 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                 
|                                 | Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                           
|                                 | Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                           
|                                 | Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                  
|PART III                        
|                                 | Item 14. CONTROLS AND PROCEDURES                                                                              
|PART IV                         
|                                 | Item 15. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K                                    
|SIGNATURES                      
|COMPUTATION OF RATIO OF EARNINGS
|CONSENT OF DELOITTE & TOUCHE LLP



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HARTFORD LIFE LOGO

Hartford Life, Inc. and its subsidiaries (Hartford Life) is a leading financial
services and insurance organization providing investment products such as
variable annuities and mutual funds, individual and corporate owned life
insurance and group benefits products.

A subsidiary of The Hartford Financial Services Group, Inc., Hartford Life is
the nations largest writer of individual variable annuities, the number three
writer of group disability insurance, and a top provider of individual variable
life insurance.

CONTENTS

|         |  |      |    |             |  |                                                                                        |  |  |        | 
|-------- |  | ---- | -- | ----------- |  | -------------------------------------------------------------------------------------- |  |  | ------ | 
|         |  | ITEM |    | DESCRIPTION |  | PAGE                                                                                  
|PART I   |  |      | 1  |             |  | Business of Hartford Life*                                                             |  |  | 3      | 
|         |  |      | 2  |             |  | Properties*                                                                            |  |  | 10     | 
|         |  |      | 3  |             |  | Legal Proceedings                                                                      |  |  | 10     | 
|         |  |      | 4  |             |  | **                                                                                     |  |  |        | 
|PART II  |  |      | 5  |             |  | Market for Hartford Lifes Common Stock and Related Stockholder Matters                |  |  | 11     | 
|         |  |      | 6  |             |  | **                                                                                     |  |  |        | 
|         |  |      | 7  |             |  | Managements Discussion and Analysis of Financial Condition and
Results of Operations* |  |  | 12     | 
|         |  |      | 7A |             |  | Quantitative and Qualitative Disclosures About Market Risk                             |  |  | 43     | 
|         |  |      | 8  |             |  | Financial Statements and Supplementary Data                                            |  |  | 43     | 
|         |  |      | 9  |             |  | Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure   |  |  | 43     | 
|PART III |  |      | 10 |             |  | **                                                                                     |  |  |        | 
|         |  |      | 11 |             |  | **                                                                                     |  |  |        | 
|         |  |      | 12 |             |  | **                                                                                     |  |  |        | 
|         |  |      | 13 |             |  | **                                                                                     |  |  |        | 
|         |  |      | 14 |             |  | Controls and Procedures                                                                |  |  |        | 
|PART IV  |  |      | 15 |             |  | Exhibits, Financial Statements, Schedules and Reports on Form 8-K                      |  |  | 43     | 
|         |  |      |    |             |  | Signatures                                                                             |  |  | II-1   | 
|         |  |      |    |             |  | Certifications                                                                         |  |  | II-2-3 | 
|         |  |      |    |             |  | Exhibits Index                                                                         |  |  | II-4   | 



|*** |  | 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-K
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------

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PART I




Item 1. BUSINESS OF HARTFORD LIFE(Dollar amounts in millions, except for share data, unless otherwise stated)

General

Hartford Life, Inc. and its subsidiaries (Hartford Life or the Company), an
indirect subsidiary of The Hartford Financial Services Group, Inc. (The
Hartford), is headquartered in Simsbury, Connecticut and is a leading
financial services and insurance organization. Hartford Life provides (i)
investment products, including variable annuities, fixed market value adjusted
(MVA) annuities, mutual funds and retirement plan services for the savings
and retirement needs of over 1.5 million customers, (ii) life insurance for
wealth protection, accumulation and transfer needs for approximately 740,000
customers, (iii) group benefits products such as group life and group
disability insurance for the benefit of millions of individuals and (iv)
corporate owned life insurance, which includes life insurance policies
purchased by a company on the lives of its employees. The Company is one of
the largest sellers of individual variable annuities, variable life insurance
and group disability insurance in the United States. In addition, in 2001 The
Hartford Mutual Funds, Inc. reached $12 billion in assets faster than any other
retail-oriented mutual fund family in history, according to Strategic Insight.
As of December 31, 2002, retail mutual fund assets were $14.2 billion. The
Companys strong position in each of its core businesses provides an
opportunity to increase the sale of the Companys products and services as
individuals increasingly save and plan for retirement, protect themselves and
their families against disability or death and engage in estate planning. In
an effort to advance the Companys strategy of growing its life and asset
accumulation businesses, The Hartford acquired the individual life insurance,
annuity and mutual fund businesses of Fortis on April 2, 2001. (For additional
information, see the Capital Resources and Liquidity section of the MD&A and
Note 20 of Notes to Consolidated Financial Statements). In addition, Hartford
Lifes Japanese operation achieved $1.4 billion in variable annuity sales for
the year ended December 31, 2002, bringing account values related to Japan to
more than $1.7 billion as of December 31, 2002.

Hartford Life is among the largest consolidated life insurance groups in the
United States based on statutory assets as of December 31, 2001. In the past
year, the Companys total assets under management, which include $15.3 billion
of third-party assets invested in the Companys mutual funds and 529 College
Savings Plans, decreased 2% to $165.1 billion at December 31, 2002 from $168.4
billion at December 31, 2001. Hartford Life generated revenues of $6.4
billion, $6.5 billion and $6.0 billion in 2002, 2001 and 2000, respectively.
Additionally, the Company generated net income of $557, $685 and $575 in 2002,
2001 and 2000, respectively.

Customer Service, Technology and Economies of Scale

The Company maintains advantageous economies of scale and operating
efficiencies due to its growth, attention to expense and claims management and
commitment to customer service and technology. These advantages allow the
Company to competitively price its products for its distribution network and
policyholders. The Company continues to achieve operating efficiencies in its
Investment Products segment. Operating expenses associated with the Companys
individual annuity products as a percentage of total individual annuity account
values have been reduced since 1992, declining from 43 basis points to 25 basis
points in 2002. In addition, the Company utilizes computer technology to
enhance communications within the Company and throughout its distribution
network in order to improve the Companys efficiency in marketing, selling and
servicing its products and, as a result, provides high-quality customer
service. In recognition of excellence in customer service for variable
annuities, Hartford Life was awarded the 2002 Annuity Service Award by DALBAR
Inc., a recognized independent financial services research organization, for
the seventh consecutive year. Hartford Life is the only company to receive
this prestigious award in every year of the awards existence. Also, in both
2002 and 2001, The Hartford Mutual Funds, Inc. was named the leading mid-sized
fund complex in the industry for top service providers, according to a survey
of broker-dealers conducted by DALBAR Inc. Additionally, the Companys
Individual Life Division won its second consecutive DALBAR award for service of
life insurance customers and its first DALBAR Intermediary Service Award in
2002.

Risk Management

The Companys product designs, prudent underwriting standards and risk
management techniques are structured to protect it against disintermediation
risk and greater than expected mortality and morbidity experience. As of
December 31, 2002, the Company had limited exposure to disintermediation risk
on approximately 96% of its domestic life insurance and annuity liabilities
through the use of non-guaranteed separate accounts, MVA features, policy
loans, surrender charges and non-surrenderability provisions. The Company
effectively utilizes prudent underwriting to select and price insurance risks
and regularly monitors mortality and morbidity assumptions to determine if
experience remains consistent with these assumptions and to ensure that its
product pricing remains appropriate. The Company also enforces disciplined
claims management to protect itself against greater than expected morbidity
experience.

Reporting Segments

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Hartford Life, headquartered in Simsbury, Connecticut, is organized into four
reportable operating segments: Investment Products, Individual Life, Group
Benefits and Corporate Owned Life Insurance (COLI). The Company includes in
Other corporate items not directly allocable to any of its reportable
operating segments, principally interest expense, as well as its international
operations, which are primarily located in Japan and Latin America, realized
capital gains and losses and intersegment eliminations. The following is a
description of each segment, including a discussion of principal products,
methods of distribution and competitive environments. Additional information
on Hartford Lifes segments may be found in the MD&A and Note 19 of Notes to
Consolidated Financial Statements.

Investment Products

The Investment Products segment focuses, through the sale of individual
variable and fixed annuities, mutual funds, retirement plan services and other
investment products, on the savings and retirement needs of the growing number
of individuals who are preparing for retirement or who have already retired.
From December 31, 1997 to December 31, 2002, this segments assets under
management grew to $110.2 billion from $71.3 billion, a five year compounded
annual growth rate of 9.4%. Investment Products generated revenues of $2.6
billion, $2.5 billion and $2.4 billion in 2002, 2001 and 2000, respectively, of
which individual annuities accounted for $1.5 billion in 2002, 2001 and 2000.
Net income in the Investment Products segment was $432, $463 and $424 in 2002,
2001 and 2000, respectively.

The Company sells both variable and fixed individual annuity products through a
wide distribution network of national and regional broker-dealer organizations,
banks and other financial institutions and independent financial advisors. The
Company is a market leader in the annuity industry with sales of $11.6 billion,
$10.0 billion and $10.7 billion in 2002, 2001 and 2000, respectively. The
Company was the largest seller of individual retail variable annuities in the
United States with sales of $10.3 billion in 2002 and $9.0 billion in 2001 and
2000. In addition, the Company continues to be the largest seller of
individual retail variable annuities through banks in the United States.

The Companys total account value related to individual annuity products was
$74.9 billion as of December 31, 2002. Of this total account value, $64.3
billion, or 86%, related to individual variable annuity products and $10.6
billion, or 14%, related primarily to fixed MVA annuity products. In 2001, the
Companys total account value related to individual annuity products was $84.2
billion. Of this total account value, $74.6 billion, or 89%, related to
individual variable annuity products and $9.6 billion, or 11%, related
primarily to fixed MVA annuity products.

In addition to its leading position in individual annuities, Hartford Life
continues to emerge as a significant participant in the mutual fund business
and is among the top providers of retirement products and services, including
asset management and plan administration sold to small and medium size
corporations pursuant to Section 401(k) of the Internal Revenue Code of 1986,
as amended (referred to as 401(k)) and to municipalities pursuant to Section
457 and 403(b) of the Internal Revenue Code
of 1986, as amended (referred to as Section 457 and 403(b), respectively).
The Company also provides structured settlement contracts, terminal funding
products and other investment products such as guaranteed investment contracts
(GICs). In 2002, the Company began selling a 529 college savings product.

As previously mentioned, The Hartford acquired the individual annuity and
mutual fund businesses of Fortis, Inc. in 2001. This acquisition increased
assets under management in the Companys fast growing mutual fund business by
20%, helped solidify the Companys strong position in variable annuities and
strengthened the Companys 401(k) sales.

Principal Products

Individual Variable Annuities Hartford Life earns fees, based on
policyholders account values, for managing variable annuity assets and
maintaining policyholder accounts. The Company uses specified portions of the
periodic deposits paid by a customer to purchase units in one or more mutual
funds as directed by the customer, who then assumes the investment performance
risks and rewards. As a result, variable annuities permit policyholders to
choose aggressive or conservative investment strategies, as they deem
appropriate, without affecting the composition and quality of assets in the
Companys general account. These products offer the policyholder a variety of
equity and fixed income options, as well as the ability to earn a guaranteed
rate of interest in the general account of the Company. The Company offers an
enhanced guaranteed rate of interest for a specified period of time (no longer
than twelve months) if the policyholder elects to dollar-cost average funds
from the Companys general account into one or more non-guaranteed separate
accounts. Due to this enhanced rate and the volatility experienced in the
overall equity markets, this option continues to be popular with policyholders.
Additionally, the Investment Products segment sells variable annuity contracts
that offer various guaranteed death benefits. For certain guaranteed death
benefits, The Hartford pays the greater of (1) the account value at death; (2)
the sum of all premium payments less prior withdrawals; or (3) the maximum
anniversary value of the contract, plus any premium payments since the contract
anniversary, minus any withdrawals following the contract anniversary.

Policyholders may make deposits of varying amounts at regular or irregular
intervals and the value of these assets fluctuates in accordance with the
investment performance of the funds selected by the policyholder. To encourage
persistency, many of the

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Companys individual variable annuities are subject to
withdrawal restrictions and surrender charges. Surrender charges range up to
8% of the contracts initial deposit less withdrawals, and reduce to zero on a
sliding scale, usually within seven policy years. Volatility experienced by
the equity markets over the past few years did not cause a significant increase
in variable annuity surrenders, demonstrating that policyholders are generally
aware of the long-term nature of these products. Individual variable annuity
account values of $64.3 billion as of December 31, 2002, have grown
significantly from $13.1 billion as of December 31, 1994, due to strong net
cash flow, resulting from high levels of sales, low levels of surrenders and
equity market appreciation. Approximately 88% and 94% of the individual
variable annuity account values were held in non-guaranteed separate accounts
as of December 31, 2002 and 2001, respectively.

In August 2002, the Company introduced Principal First, a new guaranteed
withdrawal benefit rider which is sold in conjunction with the Companys
variable annuity contracts. The Principal First rider provides a guaranteed
withdrawal benefit that gives the policyholder the right to make periodic
surrenders that total an amount equal to the policyholders premium payments.
This guarantee will remain in effect if periodic surrenders do not exceed an
amount equal to 7% of premium payments each contract year. If the policyholder
chooses to surrender an amount more than 7% in a contract year, then the
guarantee may be reduced to an amount less than premium payments.

The assets underlying the Companys variable annuities are managed both
internally and by outside money managers, while the Company provides all policy
administration services. The Company utilizes a select group of money
managers, such as Wellington Management Company, LLP (Wellington); Hartford
Investment Management Company (HIMCO), a wholly-owned subsidiary of The
Hartford; Putnam Financial Services, Inc. (Putnam); American Funds; MFS
Investment Management (MFS); Franklin
Templeton Group; and AIM Investments (AIM). All have an interest in the
continued growth in sales of the Companys products and greatly enhance the
marketability of the Companys annuities and the strength of its product
offerings. The Director variable annuity, which is managed in part by
Wellington, continues to be the industry leader in terms of retail sales. In
addition, Hartford Leaders, which is a multi-manager variable annuity that
combines the product manufacturing, wholesaling and service capabilities of the
Company with the investment management expertise of four of the nations most
successful investment management organizations: American Funds, Franklin
Templeton Group, AIM and MFS, has quickly emerged as a strong selling product
for the Company and ranks in the top 5 in the industry.

Fixed MVA Annuities Fixed MVA annuities are fixed rate annuity contracts
which guarantee a specific sum of money to be paid in the future, either as a
lump sum or as monthly income. In the event that a policyholder surrenders a
policy prior to the end of the guarantee period, the MVA feature increases or
decreases the cash surrender value of the annuity in respect of any interest
rate decreases or increases, respectively, thereby protecting the Company from
losses due to higher interest rates at the time of surrender. The amount of
payment will not fluctuate due to adverse changes in the Companys investment
return, mortality experience or expenses. The Companys primary fixed MVA
annuities have terms varying from one to ten years with an average term of
approximately eight years. Account values of fixed MVA annuities were $10.6
billion and $9.6 billion as of December 31, 2002 and 2001, respectively.

Mutual Funds In September 1996, Hartford Life launched a family of retail
mutual funds for which the Company provides investment management and
administrative services. The fund family has grown significantly from 8 funds
at inception to the current offering of 33 funds, including the addition of
five new fixed income funds introduced in 2002. The Companys funds are
managed by Wellington and HIMCO. The Company has entered into agreements with
over 960 financial services firms to distribute these mutual funds.

The Company charges fees to the shareholders of the mutual funds, which are
recorded as revenue by the Company. Investors can purchase shares in the
mutual funds, all of which are registered with the Securities and Exchange
Commission, in accordance with the Investment Company Act of 1940. The mutual
funds are owned by the shareholders of those funds and not by the Company. As
such, the mutual fund assets and liabilities, as well as related investment
returns, are not reflected in the Companys consolidated financial statements.
Total retail mutual fund assets under management were $14.2 billion and $15.9
billion as of December 31, 2002 and 2001, respectively.

Governmental The Company sells retirement plan products and services to
municipalities under Section 457 plans. The Company offers a number of
different investment products, including variable annuities and fixed products,
to the employees in Section 457 plans. Generally, with the variable products,
the Company manages the fixed income funds and certain other outside money
managers act as advisors to the equity funds offered in Section 457 plans
administered by the Company. As of December 31, 2002, the Company administered
over 3,000 plans under Section 457 and 403(b). Total governmental assets under
management were $7.9 billion and $8.6 billion as of December 31, 2002 and 2001,
respectively.

Corporate The Company sells retirement plan products and services to
corporations under Section 401(k) plans targeting the small and medium case
markets. The Company believes these markets are under-penetrated in comparison
to the large case market. As of December 31, 2002, the Company administered
over 4,100 Section 401(k) plans. Total corporate assets under management were
$3.4 billion and $2.6 billion as of December 31, 2002 and 2001, respectively.

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Institutional Investment Products The Company sells structured settlement
contracts which provide for periodic payments to an injured person or survivor
for a generally determinable number of years, typically in settlement of a
claim under a liability policy in lieu of a lump sum settlement. The Companys
structured settlements are sold through The Hartfords Property & Casualty
insurance operations as well as specialty brokers. The Company also markets
other annuity contracts for special purposes such as the funding of terminated
defined benefit pension plans. In addition, the Company offers GICs and
short-term funding agreements. Total institutional investment products assets
under management were $9.7 billion and $9.1 billion as of December 31, 2002 and
2001, respectively.

Section 529 Plans Hartford Life introduced a tax advantaged college savings
product (529 plan) in March 2002 called SMART 529. SMART 529 is a
state-sponsored education savings program established by the State of West
Virginia which offers an easy way for both residents of West Virginia and
out-of-state participants to plan for a college education. In 1996, Congress
created a tax-advantaged college savings program as part of Section 529 of the
Internal Revenue Code (the Code). The 529 Plan is an investment plan
operated by a state, designed to help families save for future college costs.
On January 1, 2002, 529 Plans became federal tax-exempt for qualified
withdrawals.

SMART 529 is designed to be flexible by allowing investors to choose from a
wide variety of investment portfolios to match their risk preference to help
investors accumulate savings for college. An individual can open a SMART 529
account for anyone, at any age. The SMART 529 product complements the
Companys existing offering of investment products (mutual funds, variable
annuities, 401(k), 457 and 403(b) plans). It also leverages the Companys
capabilities in distribution, service and fund performance. Total 529 Plan
assets under management were $87 as of December 31, 2002.

Marketing and Distribution

The Investment Products distribution network is based on managements strategy
of utilizing multiple and competing distribution channels to achieve the
broadest distribution to reach target customers. The success of the Companys
marketing and distribution system depends on its product offerings, fund
performance, successful utilization of wholesaling organizations, quality of
customer service, and relationships with national and regional broker-dealer
firms, banks and other financial institutions, and independent financial
advisors (through which the sale of the Companys retail investment products to
customers is consummated).

Hartford Life maintains a distribution network of approximately 1,500
broker-dealers and approximately 500 banks. As of September 30, 2002, the
Company was selling products through 24 of the 25 largest retail banks in the
United States, including proprietary relationships with 12 of the top 25. The
Company periodically negotiates provisions and terms of its relationships with
unaffiliated parties, and there can be no assurance that such terms will remain
acceptable to the Company or such third parties. The Companys primary
wholesaler of its individual annuities and mutual funds is its wholly-owned
subsidiary, PLANCO Financial Services, Inc. and its affiliate, PLANCO,
Incorporated (collectively PLANCO). PLANCO is one of the nations largest
wholesalers of individual annuities and has played a significant role in The
Hartfords growth over the past decade. As a wholesaler, PLANCO distributes
The Companys fixed and variable annuities, mutual funds, 401(k) plans and 529
Plans by providing sales support to registered representatives, financial
planners and broker-dealers at brokerage firms and banks across the United
States. Owning PLANCO secures an important distribution channel for the
Company and gives the Company a wholesale distribution platform which it can
expand in terms of both the number of individuals wholesaling its products and
the portfolio of products which they wholesale. In addition, the Company uses
internal personnel with extensive experience in the Section 457 market, as well
as access to the Section 401(k) market, to sell its products and services in
the retirement plan and institutional markets.

Competition

The Investment Products segment competes with numerous other insurance
companies as well as certain banks, securities brokerage firms, independent
financial advisors and other financial intermediaries marketing annuities,
mutual funds and other retirement-oriented products. Product sales are affected
by competitive factors such as investment performance ratings, product design,
visibility in the marketplace, financial strength ratings, distribution
capabilities, levels of charges and credited rates, reputation and customer
service.

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Individual Life

The Individual Life segment provides life insurance solutions to a wide array
of partners to solve the wealth protection, accumulation and transfer needs of
their affluent, emerging affluent and business insurance clients. The
individual life business acquired from Fortis in 2001 added significant scale
to the Companys Individual Life segment, contributing to the significant
increase in life insurance in force. As of December 31, 2002, life insurance
in force increased 5% to $126.7 billion, from $120.3 billion as of December 31,
2001. Account values decreased 4% to $7.6 billion as of December 31, 2002 from
$7.9 billion as of December 31, 2001. Revenues were $958, $890 and $640 in
2002, 2001 and 2000, respectively. Net income in the Individual Life segment
was $133, $121 and $79 in 2002, 2001 and 2000, respectively.

Principal Products

Hartford Life holds a significant market share in the variable life product
market. In 2002, the Companys new sales of individual life insurance were 82%
variable life, 13% universal life and other, and 5% term life insurance.

Variable Life Variable life insurance provides a return linked to an
underlying investment portfolio and the Company allows policyholders to
determine their desired asset mix among a variety of underlying mutual funds.
As the return on the investment portfolio increases or decreases, the surrender
value of the variable life policy will increase or decrease, and, under certain
policyholder options or market conditions, the death benefit may also increase
or decrease. The Companys single premium variable life product provides a
death benefit to the policy beneficiary based on a single premium deposit. The
Companys second-to-die products are distinguished from other products in that
two lives are insured rather than one, and the policy proceeds are paid upon
the death of both insureds. Second-to-die policies are frequently used in
estate planning for a married couple. Variable life account values were $3.6
billion and $4.0 billion as of December 31, 2002 and 2001, respectively.

Universal Life and Interest Sensitive Whole Life Universal life and interest
sensitive whole life insurance coverages provide life insurance with adjustable
rates of return based on current interest rates. The Company offers both
flexible and fixed premium policies and provides policyholders with flexibility
in the available coverage, the timing and amount of premium payments and the
amount of the death benefit, provided there are sufficient policy funds to
cover all policy charges for the coming period. The Company also sells
universal life insurance policies with a second-to-die feature similar to that
of the variable life insurance product offered. Universal life and interest
sensitive whole life account values were $3.1 billion as of December 31, 2002
and 2001.

Marketing and Distribution

Consistent with the Companys strategy to access multiple distribution outlets,
the Individual Life distribution organization has been developed to penetrate a
multitude of retail sales channels. These include independent life insurance
sales professionals; agents of other companies; national, regional and
independent broker-dealers; banks, financial planners, certified public
accountants and property and casualty insurance organizations. The primary
organization used to wholesale Hartford Lifes products to these outlets is a
group of highly qualified life insurance professionals with specialized
training in sophisticated life insurance sales. These individuals are
generally employees of the Company who are managed through a regional sales
office system.

Competition

The Individual Life segment competes with approximately 1,800 life insurance
companies in the United States, as well as other financial intermediaries
marketing insurance products. Competitive factors related to this segment are
primarily the breadth and quality of life insurance products offered, pricing,
relationships with third-party distributors, effectiveness of wholesaling
support, pricing and availability of reinsurance, and the quality of
underwriting and customer service.

Group Benefits

The Group Benefits segment sells group life and group disability insurance, as
well as other products, including stop loss, accidental death and
dismemberment, travel accident and other special risk coverage to employers and
associations. The Company also offers disability underwriting, administration,
claims processing services and reinsurance to other insurers and self-funded
employer plans. Generally, policies sold in this segment are term insurance.
Typically policies are sold with one, two or three year rate guarantees
depending upon the product. This allows the Company to adjust the rates or
terms of its policies in order to minimize the adverse effect of various market
trends, including declining interest rates and other factors. In the
disability market, the Company focuses on strong underwriting and claims
management to derive a competitive advantage. The Group Benefits segment
generated revenues of $2.6 billion, $2.5 billion and $2.2 billion in 2002, 2001
and 2000, respectively, of which group disability insurance accounted for $1.2
billion, $1.1 billion and $964 and group life insurance accounted for $1.0
billion, $902 and $810, respectively. The Company held group disability
reserves of $2.5 billion and $2.4 billion and group life reserves of $765 and
$706, as of December 31, 2002 and 2001, respectively. Net income in the Group
Benefits segment was $128, $106 and $90 in 2002, 2001 and 2000, respectively.

Principal Products

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Group Disability Hartford Life is one of the largest participants in the
large case market of the group disability insurance business. The large case
market, as defined by the Company, generally consists of group disability
policies covering over 500 employees in a particular company. The Company is
continuing its focus on the small case and medium case group markets,
emphasizing name recognition and reputation as well as the Companys managed
disability approach to claims and administration. The Companys efforts in the
group disability market focus on early intervention, return-to-work programs
and successful rehabilitation. Over the last several years, the focus of new
disability products introduced is to provide incentives for employees to return
to independence. The Company also works with disability claimants to improve
the receipt rate of Social Security offsets (i.e., reducing payment of benefits
by the amount of Social Security payments received).

The Companys short-term disability benefit plans provide a weekly benefit
amount (typically 60% to 70% of the employees earned income up to a specified
maximum benefit) to insured employees when they are unable to work due to an
accident or illness. Long-term disability insurance provides a monthly benefit
for those extended periods of time not covered by a short-term disability
benefit plan when insured employees are unable to work due to disability.
Employees may receive total or partial disability benefits. Most of these
policies begin providing benefits following a 90 or 180 day waiting period and
generally continue providing benefits until the employee reaches age 65.
Long-term disability benefits are paid monthly and are limited to a portion,
generally 50-70%, of the employees earned income up to a specified maximum
benefit.

Group Life Group term life insurance provides term coverage to employees and
their dependents for a specified period and has no accumulation of cash values.
The Company offers options for its basic group life insurance coverage,
including portability of coverage and a living benefit option, whereby
terminally ill policyholders can receive death benefits prior to their deaths.
In addition, the Company offers premium waiver and accidental death and
dismemberment coverages to employee groups.

Other Hartford Life provides excess of loss medical coverage (known as stop
loss insurance) to employers who self-fund their medical plans and pay claims
using the services of a third party administrator. The Company also provides
travel accident, hospital indemnity and other coverages (including group life
and disability) primarily to individual membership of various associations, as
well as employee groups. A significant Medicare supplement customer of the
company had been the members of the Retired Officers Association, an
organization consisting of retired military officers. Congress passed
legislation, effective in the fourth quarter of 2001, whereby retired military
officers age 65 and older will receive full medical insurance, eliminating the
need for Medicare supplement insurance. This legislation reduced the Companys
premium revenue by $131 in 2002, compared to 2001.

Marketing and Distribution

The Company uses an experienced group of Company employees, managed through a
regional sales office system, to distribute its group insurance products and
services through a variety of distribution outlets, including brokers,
consultants, third-party administrators and trade associations. The Company
intends to continue to expand the system over the coming years in areas that
offer the highest growth potential.

Competition

The Group Benefits business remains highly competitive. Competitive factors
primarily affecting Group Benefits are the variety and quality of products and
services offered, the price quoted for coverage and services, the Companys
relationships with its third-party distributors, and the quality of customer
service. Group Benefits competes with numerous other insurance companies and
other financial intermediaries marketing insurance products. However, many of
these businesses have relatively high barriers to entry and there have been
very few new entrants over the past few years.

Corporate Owned Life Insurance (COLI)

Hartford Life is a leader in the COLI market, which includes life insurance
policies purchased by a company on the lives of its employees, with the company
or a trust sponsored by the company named as the beneficiary under the policy.
Until the passage of Health Insurance Portability and Accountability Act of
1996 (HIPAA), the Company sold two principal types of COLI, leveraged and
variable products. Leveraged COLI is a fixed premium life insurance policy
owned by a company or a trust sponsored by a company. HIPAA phased out the
deductibility of interest on policy loans under leveraged COLI at the end of
1998, virtually eliminating all future sales of leveraged COLI. Variable COLI
continues to be a product used by employers to fund non-qualified benefits or
other postemployment benefit liabilities.

Variable COLI account values were $19.7 billion and $18.0 billion as of
December 31, 2002 and 2001, respectively. Leveraged COLI account values
decreased to $3.3 billion as of December 31, 2002 from $4.3 billion as of
December 31, 2001, primarily due to the continuing effects of HIPAA. COLI
generated revenues of $592, $719 and $767 in 2002, 2001 and 2000, respectively
and net income of $32, $37 and $34 in 2002, 2001 and 2000, respectively.

Reserves

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In accordance with applicable insurance regulations under which the Company
operates, life insurance subsidiaries of Hartford Life establish and carry as
liabilities actuarially determined reserves which are calculated to meet the
Companys future obligations. Reserves for life insurance and disability
contracts are based on actuarially recognized methods using prescribed
morbidity and mortality tables in general use in the United States, which are
modified to reflect the Companys actual experience when appropriate. These
reserves are computed at amounts that, with additions from estimated premiums
to be received and with interest on such reserves compounded annually at
certain assumed rates, are expected to be sufficient to meet the Companys
policy obligations at their maturities or in the event of an insureds
disability or death. Reserves also include unearned premiums, premium
deposits, claims incurred but not reported and claims reported but not yet
paid. Reserves for assumed reinsurance are computed in a manner that is
comparable to direct insurance reserves. Additional information on Hartford
Life reserves may be found in the Critical Accounting Estimates section of the
MD&A under Reserves .

Ceded Reinsurance

In accordance with normal industry practice, Hartford Life is involved in both
the cession and assumption of insurance with other insurance and reinsurance
companies. As of December 31, 2002, the largest amount of life insurance
retained on any one life by any one of the life operations was approximately
$2.5. In addition, the Company reinsures the majority of the minimum death
benefit guarantee and the guaranteed withdrawal benefits offered in connection
with its variable annuity contracts. Such transfer does not relieve Hartford
Life of its primary liability and, as such, failure of reinsurers to honor
their obligations could result in losses to Hartford Life. Hartford Life also
assumes reinsurance from other insurers. The Company evaluates the financial
condition of its reinsurers and monitors concentrations of
credit risk. For the years ended December 31, 2002, 2001 and 2000, the Company
did not make any significant changes in the terms under which reinsurance is
ceded to other insurers.

Investment Operations

An important element of the financial results of Hartford Life is return on
invested assets. The Companys investment operations are managed by Hartford
Investment Management Company (HIMCO) a wholly owned subsidiary of The
Hartford. Hartford Lifes investments have been separated into specific
portfolios, which support specific classes of product liabilities. HIMCO works
closely with the product lines to develop investment guidelines, including
duration targets, asset allocation and convexity constraints, asset/liability
mismatch tolerances and return objectives, to ensure that the product lines
individual risk and return objectives are met.

The Companys primary objective for its general account and guaranteed separate
accounts is to maximize after-tax returns consistent with acceptable risk
parameters, including the management of the interest rate sensitivity of
invested assets and the generation of sufficient liquidity, relative to that of
corporate and policyholder obligations.

For a further discussion of Hartford Lifes approach to managing risks,
including derivative utilization, see the Capital Markets Risk Management
section of the MD&A, as well as Notes 2(g), 2(h) and 6 of Notes to Consolidated
Financial Statements.

Regulation and Premium Rates

Although there has been some deregulation with respect to large commercial
insurers in recent years, insurance companies, for the most part, are still
subject to comprehensive and detailed regulation and supervision throughout the
United States. The extent of such regulation varies, but generally has its
source in statutes which delegate regulatory, supervisory and administrative
powers to state insurance departments. Such powers relate to, among other
things, the standards of solvency that must be met and maintained; the
licensing of insurers and their agents; the nature of and limitations on
investments; establishing premium rates; claim handling and trade practices;
restrictions on the size of risks which may be insured under a single policy;
deposits of securities for the benefit of policyholders; approval of policy
forms; periodic examinations of the affairs of companies; annual and other
reports required to be filed on the financial condition of companies or for
other purposes; fixing maximum interest rates on life insurance policy loans
and minimum rates for accumulation of surrender values; and the adequacy of
reserves and other necessary provisions for unearned premiums, unpaid claims
and claim adjustment expenses and other liabilities, both reported and
unreported.

Most states have enacted legislation that regulates insurance holding company
systems such as Hartford Life. This legislation provides that each insurance
company in the system is required to register with the insurance department of
its state of domicile and furnish information concerning the operations of
companies within the holding company system which may materially affect the
operations, management or financial condition of the insurers within the
system. All transactions within a holding company system affecting insurers
must be fair and equitable. Notice to the insurance departments is required
prior to the consummation of transactions affecting the ownership or control of
an insurer and of certain material transactions between an insurer and any
entity in its holding company system. In addition, certain of such
transactions cannot be consummated without the applicable insurance
departments prior approval.

The extent of insurance regulation on business outside the United States varies
significantly among the countries in which the Company operates. Some
countries have minimal regulatory requirements, while others regulate insurers
extensively. Foreign insurers in many countries are faced with greater
restrictions than domestic competitors domiciled in that particular
jurisdiction. The Companys international operations are comprised of insurers
licensed in their respective countries and, therefore, are subject to the
generally less restrictive domestic insurance regulations.

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Ratings

Reference is made to the Capital Resources and Liquidity section of the MD&A
under Ratings.

Risk-Based Capital

Reference is made to the Capital Resources and Liquidity section of the MD&A
under Risk-Based Capital.

Legislative and Regulatory Initiatives

Reference is made to the Regulatory Matters and Contingencies section of the
MD&A under Legislative and Regulatory Initiatives.

Insolvency Fund

Reference is made to the Regulatory Matters and Contingencies section of the
MD&A under Guaranty Fund.

NAIC Proposals

Reference is made to the Regulatory Matters and Contingencies section of the
MD&A under NAIC Codification.

Dependence on Certain Third Party Relationships

Reference is made to the Regulatory Matters and Contingencies section of the
MD&A under Dependence on Certain Third Party Relationships.

Employees

Hartford Life had approximately 6,600 employees at December 31, 2002.




Item 2. PROPERTIES

Hartford Lifes principal executive offices are located in Simsbury,
Connecticut. The Companys home office complex consists of approximately 655
thousand square feet, and is leased from a third party by Hartford Fire
Insurance Company (Hartford Fire), a direct subsidiary of The Hartford. This
lease expires in the year 2009. Expenses associated with these offices are
allocated on a direct basis to Hartford Life by Hartford Fire. The Company
believes its properties and facilities are suitable and adequate for current
operations.




Item 3. LEGAL PROCEEDINGS

Hartford Life is involved or may become involved in various legal actions, in
the normal course of its business, in which claims for alleged economic and
punitive damages have been or may be asserted, some for substantial amounts.
Some of the pending litigation has been filed as purported class actions and
some actions have been filed in certain jurisdictions that permit punitive
damage awards that are disproportionate to the actual damages incurred.
Although there can be no assurances, at the present time, the Company does not
anticipate that the ultimate liability arising from potential, pending or
threatened legal actions, after consideration of provisions made for estimated
losses and costs of defense, will have a material adverse effect on the
financial condition or operating results of the Company.

On March 15, 2002, a jury in the U.S. District Court for the Eastern District
of Missouri issued a verdict in Bancorp Services, LLC (Bancorp) v. Hartford
Life Insurance Company (HLIC), et al. in favor of Bancorp in the amount of
$118. The case involved claims of patent infringement, misappropriation of
trade secrets, and breach of contract against HLIC and its affiliate
International Corporate Marketing Group, Inc. (ICMG). The judge dismissed
the patent infringement claim on summary judgment. The
jurys award was based on the last two claims. On August 28, 2002, the Court
entered an order awarding Bancorp prejudgment interest on the breach of
contract claim in the amount of $16.

HLIC and ICMG have appealed the judgment on the trade secret and breach of
contract claims. Bancorp has cross-appealed the pretrial dismissal of its
patent infringement claim. The Companys management, based on the advice of
its legal counsel, believes that there is a substantial likelihood that the
judgment will not survive at its current amount. Based on the advice of legal
counsel regarding the potential outcomes of this litigation, the Company
recorded an $11 after-tax charge in the first quarter of 2002 to increase
litigation reserves associated with this matter. Should HLIC and ICMG not
succeed in eliminating or reducing the judgment, a significant additional
expense would be recorded in the future related to this matter.

The Company is involved in arbitration with one of its primary reinsurers
relating to policies with death benefit guarantees written from 1994 to 1999.
The arbitration involves alleged breaches under the reinsurance treaties.
Although the Company believes that its

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position in this pending arbitration is
strong, an adverse outcome could result in a decrease to the Companys
statutory surplus and capital and potentially increase the death benefit costs
incurred by the Company in the future. The arbitration hearing was held during
the fourth quarter of 2002, but no decision has been rendered.




PART II




|        |  |                                                                        
|------- |  | -----------------------------------------------------------------------
|Item 5. |  | MARKET FOR HARTFORD LIFES COMMON STOCK AND RELATED STOCKHOLDER
MATTERS

All of the Companys outstanding shares are ultimately owned by The Hartford.
As of February 28, 2003, the Company had issued and outstanding 1,000 shares of
Common Stock at $0.01 par value per share.

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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)

Managements Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) addresses the financial condition of Hartford Life, Inc.
and its subsidiaries (Hartford Life or the Company) as of December 31,
2002, compared with December 31, 2001, and its results of operations for the
three years ended December 31, 2002, 2001 and 2000. This discussion should be
read in conjunction with the Consolidated Financial Statements and related
Notes beginning on page F-1.

Certain of the statements contained herein (other than statements of
historical fact) are forward-looking statements. These forward-looking
statements are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 and include estimates and assumptions
related to economic, competitive and legislative developments. These
forward-looking statements are subject to change and uncertainty which are, in
many instances, beyond the Companys control and have been made based upon
managements expectations and beliefs concerning future developments and their
potential effect upon the Company. There can be no assurance that future
developments will be in accordance with managements expectations or that the
effect of future developments on Hartford Life will be those anticipated by
management. Actual results could differ materially from those expected by the
Company, depending on the outcome of various factors. These factors include:
the effect of changes in interest rates, the stock markets or other financial
markets; stronger than anticipated competitive activity; unfavorable
legislative, regulatory or judicial developments; the Companys ability to distribute its products through
distribution channels, both current and future; the uncertain impact of the
Bush Administrations budget proposal relating to the distribution of
nontaxable dividends to shareholders and the creation of new tax-favored
individual savings accounts, if adopted, on the Company; the availability of
reinsurance to protect the Company against losses and the impact of
increasing and uncertain
reinsurance rates; the possibility of higher loss costs than anticipated; the
possibility of general economic and business conditions that are less
favorable than anticipated; the effect of assessments and other surcharges for
guaranty funds; a downgrade in the Companys claims-paying, financial strength
or credit ratings; the ability of the Companys subsidiaries to pay dividends
to the Company; and other factors described in such forward-looking
statements.

Certain reclassifications have been made to prior year financial information to
conform to the current year presentation.

INDEX

|                                                      |  |  |    | 
|----------------------------------------------------- |  |  | -- | 
|Critical Accounting Estimates                         |  |  | 12 | 
|Consolidated Results of Operations: Operating Summary |  |  | 15 | 
|Investment Products                                   |  |  | 17 | 
|Individual Life                                       |  |  | 19 | 
|Group Benefits                                        |  |  | 20 | 
|Corporate Owned Life Insurance (COLI)                 |  |  | 21 | 
|Investments                                           |  |  | 22 | 
|Capital Markets Risk Management                       |  |  | 25 | 
|Capital Resources and Liquidity                       |  |  | 36 | 
|Effect of Inflation                                   |  |  | 43 | 

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements, in conformity with accounting
principles generally accepted in the United States, requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

The Company has identified the following estimates as critical in that they
involve a higher degree of judgment and are subject to a significant degree of
variability: valuation of investments and derivative instruments; deferred
policy acquisition costs; reserves and accounting for contingencies. In
developing these estimates management makes subjective and complex judgments
that are inherently uncertain and subject to material change as facts and
circumstances develop. Although variability is inherent in these estimates,
management believes the amounts provided are appropriate based upon the facts
available upon compilation of the financial statements.

Valuation of Investments and Derivative Instruments

The Companys investments in both fixed maturities, which include bonds,
redeemable preferred stock and commercial paper, and equity securities, which
include common and non-redeemable preferred stocks, are classified as
available for sale in accordance with Statement of Financial Accounting
Standards (SFAS) No. 115, Accounting for Certain Investments in Debt and
Equity Securities. Accordingly, these securities are carried at fair value
with the after-tax difference from amortized cost, as adjusted for the effect
of deducting the life and pension policyholders share related to the Companys
immediate participation guaranteed contracts and the

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related change in
amortization of deferred policy acquisition costs, reflected in stockholders
equity as a component of accumulated other comprehensive income. Policy loans
are carried at outstanding balance, which approximates fair value. Other
invested assets consist primarily of limited partnership investments that are
accounted for by the equity method. The Companys net income from partnerships
is included in net investment income. Other investments also include mortgage
loans at amortized cost and derivatives at fair value.

The fair value of securities is based upon quoted market prices or broker
quotations when available. Where market prices or broker quotations are not
available, management typically estimates the fair value based upon discounted
cash flow, applying current interest rates for similar financial instruments
with comparable terms and credit quality. The estimated fair value of a
financial instrument may differ significantly from the amount that could be
realized if the security were sold immediately. Derivative instruments are
reported at fair value based upon internally established valuations that are
consistent with external valuation models, quotations furnished by dealers in
such instrument or market quotations.

One of the significant estimations inherent in the valuation of investments is
the evaluation of other than temporary impairments. The evaluation for other
than temporary impairments is a quantitative and qualitative process which is
subject to risks and uncertainties in the determination of whether declines in
the fair value of investments are other than temporary. The risks and
uncertainties include changes in general economic conditions, the issuers
financial condition or near term recovery prospects and the effects of changes
in interest rates. In addition, for securitized financial assets with
contractual cash flows (e.g. asset-backed securities), projections of expected
future cash flows may change based upon new information regarding the
performance of the underlying collateral pools. The Companys accounting
policy requires that a decline in the value of a security below its amortized
cost basis be assessed to determine if the decline is other than temporary. If
so, the security is deemed to be impaired and a charge is recorded in net
realized capital losses equal to the difference between the fair value and
amortized cost basis of the security. The fair value of the impaired
investment becomes its new cost basis. The Company has a security monitoring
process comprised of a committee of investment and accounting professionals
that identifies securities that, due to certain characteristics are subjected
to an enhanced analysis on a quarterly basis. Such characteristics include,
but are not limited to: a deterioration of the financial condition of the
issuer, the magnitude and duration of unrealized losses, credit rating and
industry category.

The primary factors considered in evaluating whether a decline in value for
corporate issued securities is other than temporary include: (a) the length of
time and the extent to which the fair value has been less than cost, (b) the
financial condition and near-term prospects of the issuer, (c) whether the
debtor is current on contractually obligated interest and principal payments,
and (d) the intent and ability of the Company to retain the investment for a
period of time sufficient to allow for any anticipated recovery. Additionally,
for certain securitized financial assets with contractual cash flows (including
asset-backed securities), Emerging Issues Task Force (EITF) Issue No. 99-20
Recognition of Interest Income and Impairment on Purchased and Retained
Beneficial Interests in Securitized Financial Assets requires the Company to
periodically update its best estimate of cash flows over the life of the
security. If management estimates that the fair value of its securitized
financial asset is less than its carrying amount and there has been a decrease
in the present value of the estimated cash flows since the last revised
estimate, considering both timing and amount, then an other than temporary
impairment charge is recognized. Furthermore, for securities expected to be
sold, an other than temporary impairment charge is recognized if the Company
does not expect the fair value of a security to recover to amortized cost prior
to the expected date of sale. Once an impairment charge has been recorded, the
Company then continues to review the other than temporarily impaired securities
for appropriate valuation on an ongoing basis.

Deferred Policy Acquisition Costs

Policy acquisition costs, which include commissions and certain other expenses
that vary with and are primarily associated with acquiring business, are
deferred and amortized over the estimated lives of the contracts, usually 20
years. The deferred costs are recorded as an asset commonly referred to as
deferred policy acquisition costs (DAC). At December 31, 2002 and 2001, the
carrying value of the Companys DAC was $5.2 billion and $5.0 billion,
respectively.

DAC related to traditional policies are amortized over the premium-paying
period in proportion to the present value of annual expected premium income.
Adjustments are made each year to recognize actual experience as compared to
assumed experience for the current period.

DAC related to investment contracts and universal life-type contracts are
deferred and amortized using the retrospective deposit method. Under the
retrospective deposit method, acquisition costs are amortized in proportion to
the present value of estimated gross profits (EGPs) from projected
investment, mortality and expense margins and surrender charges. A portion of
the DAC amortization is allocated to realized gains and losses. The DAC
balance is also adjusted by an amount that represents the change in
amortization of deferred policy acquisition costs that would have been required
as a charge or credit to operations had unrealized amounts been realized.
Actual gross profits can vary from managements estimates, resulting in
increases or decreases in the rate of amortization.

The Company regularly evaluates its estimated gross profits to determine if
actual experience or other evidence suggests that earlier estimates should be
revised. Several assumptions considered to be significant in the development
of EGPs include separate account fund performance, surrender and lapse rates,
estimated interest spread and estimated mortality. The separate account fund

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performance assumption is critical to the development of the EGPs related to
the Companys variable annuity and variable life
insurance businesses. The average long-term rate of assumed separate account
fund performance used in estimating gross profits for the variable annuity and
variable life business was 9% at December 31, 2002 and 2001. For all other
products including fixed annuities and other universal life type contracts the
average assumed investment yield ranged from 5% to 8.5% for the years ended
December 31, 2002 and 2001.

Due to the increased volatility and precipitous decline experienced by the U.S.
equity markets in 2002, the Company enhanced its DAC evaluation process during
the course of the year. The Company developed sophisticated modeling
capabilities, which allowed it to run 250 stochastically determined scenarios
of separate account fund performance. These scenarios were then utilized to
calculate a reasonable range of estimates for the present value of future gross
profits. This range is then compared to the present value of future gross
profits currently utilized in the DAC amortization model. As of December 31,
2002, the current estimate falls within the reasonable range, and therefore,
the Company does not believe there is evidence to suggest a revision to the
EGPs is necessary.

Additionally, the Company has performed various sensitivity analyses with
respect to separate account fund performance to provide an indication of future
separate account fund performance levels, which could result in the need to
revise future EGPs. The Company has estimated that a revision to the future
EGPs is unlikely in 2003 in the event that the separate account fund
performance meets or exceeds the Companys long-term assumption of 9% and that
a revision is likely if the overall separate account fund performance is
negative for the year. In the event that separate account fund performance
falls between 0% and 9% during
2003, the Company will need to evaluate the actual gross profits versus the
mean EGPs generated by the stochastic DAC analysis and determine whether or not
to make a revision to the future EGPs. Factors that will influence this
determination include the degree of volatility in separate account fund
performance, when during the year performance becomes negative and shifts in
asset allocation within the separate account made by policyholders. The
overall return generated by the separate account 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. The Companys
overall separate account fund performance has been reasonably correlated to the
overall performance of the S&P 500 Index, although no assurance can be provided
that this correlation will continue in the future.

Should the Company change its assumptions utilized to develop EGPs (commonly
referred to as unlocking) the Company would record a charge (or credit) to
bring its DAC balance to the level it would have been had EGPs been calculated
using the new assumptions from the date of each policy. The Company evaluates
all critical assumptions utilized to develop EGPs (e.g. lapse, mortality) and
will make a revision to future EGPs to the extent that actual experience is
significantly different than expected.

The overall recoverability of the DAC asset is dependent on the future
profitability of the business. The Company tests the aggregate recoverability
of the DAC asset by comparing the amounts deferred to total EGPs. In addition,
the Company routinely stress tests its DAC asset for recoverability against
severe declines in its separate account assets, which could occur if the equity
markets experienced another significant sell-off, as the majority of
policyholders money held in the separate accounts is invested in the equity
market. As of December 31, 2002, separate account assets could fall 25% and
the Company believes its DAC asset would still be recoverable.

Reserves

The Companys insurance subsidiaries establish and carry as liabilities
actuarially determined reserves which are calculated to meet Hartford Lifes
future obligations. Reserves for life insurance and disability contracts are
based on actuarially recognized methods using prescribed morbidity and
mortality tables in general use in the United States, which are modified to
reflect The Companys actual experience when appropriate. These reserves are
computed at amounts that, with additions from estimated premiums to be received
and with interest on such reserves compounded annually at certain assumed
rates, are expected to be sufficient to meet the Companys policy obligations
at their maturities or in the event of an insureds death. Changes in or
deviations from the assumptions used for mortality, morbidity, expected future
premiums and interest can significantly affect the Companys reserve levels and
related future operations. Reserves also include unearned premiums, premium
deposits, claims incurred but not reported (IBNR) and claims reported but not
yet paid. Reserves for assumed reinsurance are computed in a manner that is
comparable to direct insurance reserves.

The liability for policy benefits for universal life-type contracts and
interest-sensitive whole life policies is equal to the balance that accrues to
the benefit of policyholders, including credited interest, amounts that have
been assessed to compensate the Company for services to be performed over
future periods, and any amounts previously assessed against policyholders that
are refundable on termination of the contract.

For investment contracts, policyholder liabilities are equal to the accumulated
policy account values, which consist of an accumulation of deposit payments
plus credited interest, less withdrawals and amounts assessed through the end
of the period. Certain investment contracts include provisions whereby a
guaranteed minimum death benefit is provided in the event that the
contractholders account value at death is below the guaranteed value.
Although the Company reinsures the majority of the death benefit guarantees
associated with its in-force block of business, declines in the equity market
may increase the Companys net exposure to death benefits under these
contracts. In addition, these contracts contain various provisions for
determining the amount of the death benefit guaranteed following the withdrawal
of a portion of the account value by the policyholder. Partial withdrawals
under certain of these contracts may not result in a reduction in the
guaranteed minimum death benefit in proportion to the portion surrendered. The
Company records the death benefit costs, net of reinsurance, as they are
incurred.

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For the Companys group disability policies, the level of reserves is based on
a variety of factors including particular diagnoses, termination rates and
benefit levels.

Accounting for Contingencies

Management follows the requirements of SFAS No. 5 Accounting for
Contingencies. This statement requires management to evaluate each contingent
matter separately. The evaluation is a two-step process, including:
determining a likelihood of loss, and, if a loss is likely, developing a
potential range of loss. Management establishes reserves for these
contingencies at its best estimate, or, if no one number within the range of
possible losses is more likely than any other, the Company records an estimated
reserve at the low end of the range of losses. The majority of contingencies
currently being evaluated by the Company relate to litigation and tax matters,
which are inherently difficult to evaluate and subject to significant changes.

CONSOLIDATED RESULTS OF OPERATIONS

Hartford Life provides investment and retirement products such as variable and
fixed annuities, mutual funds and retirement plan services; individual and
corporate owned life insurance; and, group benefit products, such as group life
and group disability insurance.

The Company derives its revenues principally from: (a) fee income, including
asset management fees, on separate account and mutual fund assets and mortality
and expense fees, as well as cost of insurance charges; (b) fully insured
premiums; (c) certain other fees; and (d) net investment income on general
account assets. Asset management fees and mortality and expense fees are
primarily generated from separate account assets, which are deposited with the
Company through the sale of variable annuity and variable life products and
mutual funds. Cost of insurance charges are assessed on the net amount at risk
for investment-oriented life insurance products. Premium revenues are derived
primarily from the sale of group life and group disability insurance products.

The Companys expenses essentially consist of interest credited to
policyholders on general account liabilities, insurance benefits provided,
dividends to policyholders, costs of selling and servicing the various products
offered by the Company, and other general business expenses.

The Companys profitability depends largely on the amount of assets under
management, the level of fully insured premiums, the adequacy of product
pricing and underwriting discipline, claims management and operating
efficiencies, and its ability to earn target spreads between earned investment
rates on general account assets and credited rates to customers. The level of
assets under management is generally impacted by equity market performance,
persistency of the in-force block of business, sales and other deposits, as
well as any acquired blocks of business.

Operating Summary

|                                                                                      |                                                                              |                                        |       |       |      |      |       |       |     |   |       |       |     |  
|------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | -------------------------------------- | ----- | ----- | ---- | ---- | ----- | ----- | --- | - | ----- | ----- | --- | -
|                                                                                      |                                                                              |                                        |       |       |      |      |       |       |     |   |       |      
|                                                                                      |                                                                              | 2002                                   |       | 2001  |      | 2000
|                                                                                      |                                                                              |                                        |       |       |      |     
|Fee income                                                                            |                                                                              | $                                      | 2,577 |       |      | $    | 2,633 |       |     | $ | 2,484 |      
|Earned premiums                                                                       |                                                                              |                                        | 2,187 |       |      |      | 2,142 |       |     |   | 1,886 |      
|Net investment income                                                                 |                                                                              |                                        | 1,858 |       |      |      | 1,779 |       |     |   | 1,592 |      
|Other revenue                                                                         |                                                                              |                                        | 120   |       |      |      | 128   |       |     |   | 116   |      
|Net realized capital losses                                                           |                                                                              |                                        | (317  | )     |      |      | (133  | )     |     |   | (88   | )    
|                                                                                      |                                                                              |                                        |       |       |      |      |       |       |     |   |       |      
|                                                                                      | Total revenues                                                               |                                        |       | 6,425 |      |      |       | 6,549 |     |   |       | 5,990 |    
|                                                                                      |                                                                              |                                        |       |       |      |      |       |       |     |   |       |      
|Benefits, claims and claim adjustment expenses                                        |                                                                              |                                        | 3,648 |       |      |      | 3,611 |       |     |   | 3,162 |      
|Insurance operating costs and expenses                                                |                                                                              |                                        | 1,438 |       |      |      | 1,390 |       |     |   | 1,281 |      
|Amortization of deferred policy acquisition costs and present value of
future profits |                                                                              |                                        | 628   |       |      |      | 642   |       |     |   | 671   |      
|Interest expense                                                                      |                                                                              |                                        | 112   |       |      |      | 104   |       |     |   | 66    |      
|Goodwill amortization                                                                 |                                                                              |                                        |      |       |      |      | 24    |       |     |   | 6     |      
|Other expenses                                                                        |                                                                              |                                        | 32    |       |      |      | 13    |       |     |   | 16    |      
|                                                                                      |                                                                              |                                        |       |       |      |      |       |       |     |   |       |      
|                                                                                      | Total benefits, claims and expenses                                          |                                        |       | 5,858 |      |      |       | 5,784 |     |   |       | 5,202 |    
|                                                                                      |                                                                              |                                        |       |       |      |      |       |       |     |   |       |      
|                                                                                      | Income before income tax expense and cumulative effect of
accounting changes |                                        |       | 567   |      |      |       | 765   |     |   |       | 788   |    
|                                                                                      | Income tax expense                                                           |                                        |       | 10    |      |      |       | 54    |     |   |       | 213   |    
|                                                                                      | Cumulative effect of accounting changes, net of tax [1]                      |                                        |       |      |      |      |       | (26   | )   |   |       |      |    
|                                                                                      |                                                                              |                                        |       |       |      |      |       |       |     |   |       |      
|                                                                                      | Net income                                                                   |                                        |       | 557   |      |      |       | 685   |     |   |       | 575   |    
|Less: Cumulative effect of accounting changes, net of tax [1]                         |                                                                              |                                        |      |       |      |      | (26   | )     |     |   |      |      
|                                                                                      |                                                                              | Net realized capital losses, after-tax |       |       | (196 | )    |       |       | (89 | ) |       |       | (57 | )
|                                                                                      |                                                                              |                                        |       |       |      |      |       |       |     |   |       |      
|                                                                                      | Operating income [2]                                                         |                                        | $     | 753   |      |      | $     | 800   |     |   | $     | 632   |    
|                                                                                      |                                                                              |                                        |       |       |      |      |       |       |     |   |       |      

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|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[1] |  | For the year ended December 31, 2001, represents the cumulative
impact of the Companys adoption of SFAS No. 133 of $(23) and EITF
Issue 99-20 of $(3)                                                                                                                                                                                                                                                                                                                                                                                                      
|[2] |  | For the year ended December 31, 2002, includes $76 tax benefit
related to separate account investment activity and an $8 after-tax
benefit related to September 11. Additionally, for the year ended
December 31, 2002, includes $11 after-tax expense related to the
Bancorp litigation. For the year ended December 31, 2001, includes
$130 tax benefit related to separate account investment activity and
$20 of after-tax losses related to September 11. For the year ended
December 31, 2000, includes $32 tax benefit related to favorable tax
items

Hartford Life defines operating income as after-tax operational results
excluding, as applicable, net realized capital gains and losses, restructuring
charges, losses from early retirement of debt, the cumulative effect of
accounting changes and certain other items. Operating income is a performance
measure used by the Company in the management of its operations. Management
believes that this performance measure delineates the results of operations of
the Companys ongoing businesses in a manner that allows for a better
understanding of the underlying trends in the Companys current business.
However, operating income should only be analyzed in conjunction with, and not
in lieu of, net income and may not be comparable to other performance measures
used by the Companys competitors.

Hartford Life consists of the following reportable operating segments:
Investment Products, Individual Life, Group Benefits and COLI. In addition,
Hartford Life includes in an Other category its international operations, which
are primarily located in Japan and Latin America, and corporate items not
directly allocable to any of its reportable operating segments.

On April 2, 2001, The Hartford acquired the United States individual life
insurance, annuity and mutual fund businesses of Fortis. This transaction was
accounted for as a purchase and, as such, the revenues and expenses generated
by this business from April 2, 2001 forward are included in Lifes consolidated
results of operations. (For further disclosure, see Note 20 of Notes
to Consolidated Financial Statements).

On June 27, 2000, The Hartford acquired all of the outstanding shares of Class
A common stock of Hartford Life which The Hartford did not already own (The
Hartford Acquisition). The Hartford Acquisition was accomplished through an
offer to all Hartford Life shareholders to tender their shares to The Hartford
for cash consideration of $50.50 per share. Subsequent to the tender offer, a
newly formed wholly-owned subsidiary of The Hartford was merged into Hartford
Life, as a result of which, Hartford Life became an indirect wholly-owned
subsidiary of The Hartford. Those shareholders who had not tendered their
shares in the tender offer also received $50.50 in cash in exchange for their
shares in the subsequent merger.

2002 Compared to 2001Revenues decreased $124, or 2%, primarily driven by
realized capital losses of $317 in 2002 as compared to $133 in 2001. (See the
Investments section for further discussion of investment results and related
realized capital losses.) Additionally, COLI experienced a decline in revenues
of $127, or 18%, as a result of the decrease in leveraged COLI account values
as compared to a year ago, which was offset by revenue growth across its other
operating segments. Revenues related to the
Investment Products segment increased $91, or 4%, as a result of continued
growth related to its institutional investment product business, which more
than offset the decline of $40, or 3%, in revenues within the individual
annuity operation. Lower assets under management due to the decline in the
equity markets are the principal driver of declining revenues for the
individual annuity operation. The Group Benefits segment experienced an
increase in revenues of $75, or 3%, as a result of strong sales to new
customers and solid persistency within the in-force block of business.
Additionally, Individual Life revenues increased by $68, or 8%, as a result of
the Fortis acquisition and increased life insurance in force.

Expenses increased $30, or 1%, due to a lower benefit recorded related to
favorable resolution of dividends-received deduction (DRD)-related tax items
(see also the discussion of DRD tax issues at Note 17(c)), an increase in
benefits and claims of $37, or 1%, due primarily to growth in the Group
Benefits segment and higher death benefits in the Investment Products segment,
as a result of the lower equity markets and additional expense related to the
Fortis acquisition. These increases were offset by a decrease in income tax
expense, due to lower pre-tax income as compared to a year ago. Expenses
increased $122, or 6%, in the Investment Products segment, principally related
to the growth in the institutional investment product business and a $31
increase in death benefits related to the individual annuity operation, as a
result of depressed contractowner account values driven by the lower equity
markets. In addition, 2002 expenses include $11, after-tax, of accrued
expenses recorded within the COLI segment related to the Bancorp litigation.
(For a discussion of the Bancorp litigation, see Note 17(a) of Notes to
Consolidated Financial Statements.) Also included in expenses was an after-tax
benefit of $8, recorded within Other, associated with favorable development
related to Lifes estimated September 11 exposure.

Net income and operating income decreased $128, or 19%, and $47, or 6%,
respectively, due to the decline in revenues and increase in expenses described
above. In 2002 Hartford Life recognized an $8 after-tax benefit due to
favorable development related to September 11. In 2001, the Company recorded a
$20 after-tax loss related to September 11. Excluding the impact of September
11, net income decreased $156, or 22%, and operating income decreased $75, or
9%. Net income for the Investment Products segment was down $31, or 7%, as
growth in the other investment products businesses, particularly institutional
investment products, was more

16



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than offset by the decline in revenues in the
individual annuity operation, which was negatively impacted by the lower equity
markets. COLI net income decreased $5, or 14%. Excluding the impact of
September 11, COLIs net income decreased $7, or 18%, primarily the result of
the charge associated with the Bancorp litigation. The declines in net income
for those segments were partially offset by increases in net income for the
Group Benefits and Individual Life segments. Group Benefits earnings increased
$22, or 21%. Excluding the impact of September 11, Group Benefits net income
increased $20, or 19%. The increases were principally driven by ongoing
premium growth and stable loss and expense ratios and improving loss ratios.
Individual Life net income increased $12, or 10%. Excluding the impact of
September 11, Individual Lifes net income increased $9, or 7%, as the result
of the Fortis acquisition. Other net income decreased $126 and operating
income decreased $45, or 62%. In 2002, Life recognized an $8 after-tax benefit
due to favorable development related to September 11 in Other. In 2001, Life
recorded a $13 after-tax loss related to September 11 in Other. Excluding the
impact of September 11, Other net income decreased $147 and operating income
decreased $66, or 77%. The decline in net income of the Other segment is
principally due to a higher realized capitalized losses and a lower tax benefit
recorded in 2002 compared to 2001 as discussed above.

2001 Compared to 2000Revenues increased $559, or 9%, primarily related to
the growth across each of Hartford Lifes primary operating segments,
particularly the Individual Life and Group Benefits segments, where revenues
increased $250, or 39%, and $300, or 14%, respectively. The revenue growth in
the Individual Life segment was primarily due to higher earned fee income and
net investment income resulting from the business acquired from Fortis. The
Group Benefits segment experienced higher earned premiums due to strong sales
and persistency. The Investment Products segment also contributed to the
revenue increase as a result of higher fee income in the retail mutual fund
business and higher net investment income in the institutional business.
Revenues related to the Companys Individual Annuity business were down $46 or
3%, primarily due to lower fee income as a result of the lower equity markets
in 2001. Additionally, COLI revenues were below prior year due to a decrease
in variable COLI sales and the declining block of leveraged COLI business.

Benefits claims and expenses increased $582, or 11%, primarily associated with
the growth in the Companys revenues discussed above.

Net income increased $110, or 19%, and operating income increased $168, or 27%,
led by the Individual Life and Group Benefits segments where net income
increased $42, or 53% and $16, or 18%, respectively. In addition, the 2001
results include a $130 federal income tax benefit primarily related to separate
account investment activity and a $20 loss associated with the impact of
September 11. Additionally, 2000 results include a benefit of $32 also related
to favorable tax items. Excluding these tax items and the impact of September
11, net income increased $32, or 6%, and operating income increased $90, or
15%, for the year ended December 31, 2001, as each of the Companys operating
segments experienced growth from a year ago.

Segment Results

Below is a summary of net income (loss) by segment.

|                               |            |   |      |     |      |   |      |     |  |   |     |     | 
|------------------------------ | ---------- | - | ---- | --- | ---- | - | ---- | --- |  | - | --- | --- | 
|                               |            |   | 2002 |     | 2001 |   | 2000
|                               |            |   |      |     |      |   |     
|Investment Products            |            | $ | 432  |     |      | $ | 463  |     |  | $ | 424 |    
|Individual Life                |            |   | 133  |     |      |   | 121  |     |  |   | 79  |    
|Group Benefits                 |            |   | 128  |     |      |   | 106  |     |  |   | 90  |    
|Corporate Owned Life Insurance |            |   | 32   |     |      |   | 37   |     |  |   | 34  |    
|Other                          |            |   | (168 | )   |      |   | (42  | )   |  |   | (52 | )  
|                               |            |   |      |     |      |   |      |     |  |   |     |    
|                               | Net income |   | $    | 557 |      |   | $    | 685 |  |   | $   | 575 | 
|                               |            |   |      |     |      |   |      |     |  |   |     |    

A description of each segment as well as an analysis of the operating results
summarized above is included on the following pages. Deferred Acquisition
Costs, Reserves and Investments are discussed in separate sections.

INVESTMENT PRODUCTS

Operating Summary

|                                                                                      |                                     |   |       |       |      |   |       |       |  |   |       |       | 
|------------------------------------------------------------------------------------- | ----------------------------------- | - | ----- | ----- | ---- | - | ----- | ----- |  | - | ----- | ----- | 
|                                                                                      |                                     |   |       |       |      |   |       |       |  |   |       |      
|                                                                                      |                                     |   |       |       |      |   |       |       |  |   |       |      
|                                                                                      |                                     |   | 2002  |       | 2001 |   | 2000 
|                                                                                      |                                     |   |       |       |      |   |      
|Fee income and other                                                                  |                                     | $ | 1,518 |       |      | $ | 1,620 |       |  | $ | 1,639 |      
|Net investment income                                                                 |                                     |   | 1,079 |       |      |   | 886   |       |  |   | 741   |      
|                                                                                      |                                     |   |       |       |      |   |       |       |  |   |       |      
|                                                                                      | Total revenues                      |   |       | 2,597 |      |   |       | 2,506 |  |   |       | 2,380 | 
|                                                                                      |                                     |   |       |       |      |   |       |       |  |   |       |      
|Benefits, claims and claim adjustment expenses                                        |                                     |   | 944   |       |      |   | 819   |       |  |   | 700   |      
|Insurance operating costs and other expenses                                          |                                     |   | 648   |       |      |   | 608   |       |  |   | 551   |      
|Amortization of deferred policy acquisition costs and present value of
future profits |                                     |   | 444   |       |      |   | 461   |       |  |   | 516   |      
|                                                                                      |                                     |   |       |       |      |   |       |       |  |   |       |      
|                                                                                      | Total benefits, claims and expenses |   |       | 2,036 |      |   |       | 1,888 |  |   |       | 1,767 | 
|                                                                                      |                                     |   |       |       |      |   |       |       |  |   |       |      

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|                                           |                                                   |   |        |         |  |   |        |         |  |   |        |         | 
|------------------------------------------ | ------------------------------------------------- | - | ------ | ------- |  | - | ------ | ------- |  | - | ------ | ------- | 
|                                           | Income before income tax expense                  |   |        | 561     |  |   |        | 618     |  |   |        | 613     | 
|Income tax expense                         |                                                   |   | 129    |         |  |   | 155    |         |  |   | 189    |        
|                                           |                                                   |   |        |         |  |   |        |         |  |   |        |        
|                                           | Net income                                        |   | $      | 432     |  |   | $      | 463     |  |   | $      | 424     | 
|                                           |                                                   |   |        |         |  |   |        |         |  |   |        |        
|Individual variable annuity account values |                                                   | $ | 64,343 |         |  | $ | 74,581 |         |  | $ | 78,174 |        
|Other individual annuity account values    |                                                   |   | 10,565 |         |  |   | 9,572  |         |  |   | 9,059  |        
|Other investment products account values   |                                                   |   | 19,921 |         |  |   | 19,322 |         |  |   | 17,376 |        
|                                           |                                                   |   |        |         |  |   |        |         |  |   |        |        
|                                           | Total account values                              |   |        | 94,829  |  |   |        | 103,475 |  |   |        | 104,609 | 
|Mutual fund assets under management        |                                                   |   | 15,321 |         |  |   | 16,809 |         |  |   | 11,432 |        
|                                           |                                                   |   |        |         |  |   |        |         |  |   |        |        
|                                           | Total Investment Products assets under management |   | $      | 110,150 |  |   | $      | 120,284 |  |   | $      | 116,041 | 
|                                           |                                                   |   |        |         |  |   |        |         |  |   |        |        

The Investment Products segment focuses on the savings and retirement needs of
the growing number of individuals who are preparing for retirement or have
already retired through the sale of individual variable and fixed
annuities, mutual funds, retirement plan services and other investment products. The
Company is both a leading writer of individual variable annuities and a top
seller of individual variable annuities
through banks in the United States. In addition, in 2001 The Hartford Mutual
Funds, Inc. reached $12 billion in assets faster than any other retail-oriented
mutual fund family in history, according to Strategic Insight.

2002 Compared to 2001Revenues in the Investment Products segment increased
$91, or 4%. These increases in revenues are primarily driven by growth in the
institutional investment product business, where related assets under
management increased $669, or 7%, to $9.7 billion as of December 31, 2002.
This revenue increase was partially offset by lower fee income related to the
individual annuity operation as average account values decreased from $85.7
billion to $79.5 billion compared to prior year, primarily due to the lower
equity markets.

Expenses increased $122, or 6%, driven by increases of $84, or 11%, in interest
credited on general account assets, $61, or 6%, in commissions and wholesaling
expenses, and $31 in individual annuity death benefit costs due to the lower
equity markets, and an increase of $37, or 23%, in operating expenses incurred
by other investment products, primarily driven by the mutual fund business.
Partially offsetting these increases was a $34, or 8%, decrease in amortization
of policy acquisition costs related to the individual annuity business, which
declined as a result of lower gross profits, driven by the decrease in fee
income and the increase in death benefit costs.

Net income decreased $31, or 7%, driven by the continued lower equity markets
resulting in the decline in revenues in the individual annuity operation and
increases in the death benefit costs incurred by the individual annuity
operation. The decrease in individual annuity revenues was significantly
offset by growth in revenues related to other investment products, particularly
the institutional investment product business. (For discussion of the
potential future financial statement impact of continued declines in the equity
market on the Investment Products segment, see the Capital Markets Risk
Management section under Market Risk.)

2001 Compared to 2000Revenues in the Investment Products segment increased
$126, or 5%, driven primarily by other investment products. Fee income from
other investment products increased $59, or 21%, principally due to growth in
Lifes mutual fund assets under management. Mutual fund assets increased $5.4
billion, or 47%, to $16.8 billion as of December 31, 2001, due to strong sales
and the inclusion of the mutual fund assets acquired from Fortis. Net
investment income from other investment products increased $113, or 20%, due
mostly to growth in the institutional business, where account values were $9.1
billion at December 31, 2001, an increase of $1.4 billion, or 18%, from a year
ago. The increase in revenues from other investment products was partially
offset by individual annuity revenues, which decreased $46, or 3%. Fee income
and net investment income from the individual annuity business acquired from
Fortis helped to partially offset lower revenues in the individual annuity
operation which was primarily associated with decreased account values
resulting from the lower equity markets as compared to the prior year.
Individual annuity account values at December 31, 2001 were $84.2 billion, a
decrease of $3.1 billion, or 4%, from December 31, 2000.

Benefits, claims and expenses increased $121, or 7%, driven by higher interest
credited and insurance operating expenses related to other investment products
consistent with the revenue growth described above. Interest credited related
to other investment products increased $83, or 18%, while insurance operating
expenses increased $44, or 17%. Also, individual annuity benefits and claims
expenses increased $35, or 14%, principally due to the business acquired from
Fortis and higher death benefits resulting from the lower equity markets in
2001. Individual annuitys insurance operating costs increased $13, or 4%, due
to the business acquired from Fortis. Excluding Fortis, individual annuitys
operating expenses decreased $39, or 4%, from prior year, driven by
managements continued focus on maintaining operating expense levels.
Partially offsetting the increase in benefits, claims, and insurance operating
costs was a decrease in amortization of deferred policy acquisition costs
resulting from the lower gross profits associated with the individual annuity
business. In addition, income tax expense for the twelve months ended December
31, 2001 was $118, a $45, or 28%, decrease due to lower pretax operating income
and the ongoing tax impact related to separate account investment activity.

Net income increased $39, or 9%. These increases were driven by the growth in
revenues in other investment products described above, the favorable impact of
Fortis and the lower effective tax rate related to the individual annuity
business.

Outlook

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Management believes the market for retirement products continues to expand as
individuals increasingly save and plan for retirement. Demographic trends
suggest that as the baby boom generation matures, a significant portion of
the United States population will allocate a greater percentage of their
disposable incomes to saving for their retirement years due to uncertainty
surrounding the Social Security system and increases in average life
expectancy. As this market grows, particularly for variable annuities and
mutual funds, new companies are continually entering the market, aggressively
seeking distribution channels and pursuing market share. One factor which
could impact the Investment Products segment is the Presidents tax proposal.
See the Legislative Initiatives section of The Capital Resources and Liquidity
Section for further discussion of this proposed legislation.

The individual annuity segment continues to be impacted by the lower equity
markets in terms of lower assets under management. However, the Company
experienced strong sales of annuities, which were $11.6 billion in 2002 as
compared to $10.0 billion in 2001. Partially contributing to the growth in
sales is Hartford Lifes introduction of Principal First, a guaranteed
withdrawal benefit rider, which was developed in response to our customers
needs. Based on VARDS, the Company had 9.4% market share as of December 31,
2002 as compared to 8.7% at December 31, 2001. (For discussion of the
potential future financial statement impact of continued declines in the equity
market on the Investment Products segment, see the Capital Markets Risk
Management section under Equity Risk.)

Management believes that it has developed and implemented strategies to
maintain and enhance its position as a market leader in the financial services
industry. For example, The Hartford introduced a tax advantaged college
savings product (529 plan) in early 2002 called SMART 529. SMART 529 is a
state-sponsored education savings program established by the State of West
Virginia which offers an easy way for both the residents of West Virginia and
out-of-state participants to invest for a college education. The SMART 529
product complements Hartford Lifes existing offering of investment products
(mutual funds, variable annuities, 401 (k), 457 and 403 (b) plans). It also
leverages the Companys capabilities in distribution, service and fund
performance. In its first year the SMART 529 product has been well received by
many Americans saving for college.

INDIVIDUAL LIFE

Operating Summary

|                                                  |                                     |      |         |      |  |      |         |     |  |   |        |     | 
|------------------------------------------------- | ----------------------------------- | ---- | ------- | ---- |  | ---- | ------- | --- |  | - | ------ | --- | 
|                                                  |                                     |      |         |      |  |      |         |     |  |   |        |    
|                                                  |                                     | 2002 |         | 2001 |  | 2000
|                                                  |                                     |      |         |      |  |      |        
|Fee income and other                              |                                     | $    | 697     |      |  | $    | 647     |     |  | $ | 459    |    
|Net investment income                             |                                     |      | 261     |      |  |      | 243     |     |  |   | 181    |    
|                                                  |                                     |      |         |      |  |      |         |     |  |   |        |    
|                                                  | Total revenues                      |      |         | 958  |  |      |         | 890 |  |   |        | 640 | 
|                                                  |                                     |      |         |      |  |      |         |     |  |   |        |    
|Benefits, claims and claim adjustment expenses    |                                     |      | 443     |      |  |      | 385     |     |  |   | 274    |    
|Amortization of deferred policy acquisition costs |                                     |      | 160     |      |  |      | 168     |     |  |   | 145    |    
|Insurance operating costs and other expenses      |                                     |      | 159     |      |  |      | 159     |     |  |   | 103    |    
|                                                  |                                     |      |         |      |  |      |         |     |  |   |        |    
|                                                  | Total benefits, claims and expenses |      |         | 762  |  |      |         | 712 |  |   |        | 522 | 
|                                                  |                                     |      |         |      |  |      |         |     |  |   |        |    
|                                                  | Income before income tax expense    |      |         | 196  |  |      |         | 178 |  |   |        | 118 | 
|Income tax expense                                |                                     |      | 63      |      |  |      | 57      |     |  |   | 39     |    
|                                                  |                                     |      |         |      |  |      |         |     |  |   |        |    
|                                                  | Net income                          |      | $       | 133  |  |      | $       | 121 |  |   | $      | 79  | 
|                                                  |                                     |      |         |      |  |      |         |     |  |   |        |    
|Variable life account values                      |                                     | $    | 3,648   |      |  | $    | 3,993   |     |  |   | 2,947  |    
|Total account values                              |                                     | $    | 7,557   |      |  | $    | 7,868   |     |  |   | 5,849  |    
|                                                  |                                     |      |         |      |  |      |         |     |  |   |        |    
|Variable life insurance in force                  |                                     | $    | 66,715  |      |  | $    | 61,617  |     |  |   | 33,460 |    
|Total life insurance in force                     |                                     | $    | 126,680 |      |  | $    | 120,269 |     |  |   | 75,113 |    
|                                                  |                                     |      |         |      |  |      |         |     |  |   |        |    

The Individual Life segment provides life insurance solutions to a wide array
of partners to solve the wealth protection, accumulation and transfer needs of
their affluent, emerging affluent and business insurance clients.
Additionally, the Fortis transaction, through the addition of a retail broker
dealer, which has been renamed Woodbury Financial Services, has allowed the
Individual Life segment to increase its reach in the emerging affluent market.

2002 Compared to 2001Revenues in the Individual Life segment increased $68,
or 8%, primarily driven by business growth including the impact of the Fortis
transaction. However, the Company sold $173 of new business in 2002 as
compared to $228 in 2001.

Expenses increased $56, or 7%, principally driven by the growth in the business
resulting from the Fortis acquisition. In addition, mortality experience
(expressed as death claims as a percentage of net amount at risk) for 2002
increased as compared to the prior year, but was in line with managements
expectations.

Net income increased $12, or 10%. Individual Life incurred an after-tax loss
of $3 related to September 11 in the third quarter of 2001. Excluding this
loss, Individual Lifes earnings increased $9, or 7%, for the year ended
December 31, 2002, due to the contribution to earnings from the Fortis
transaction.

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2001 Compared to 2000Revenues in the Individual Life segment increased
$250, or 39%, primarily due to the business acquired from Fortis. Fee income,
including cost of insurance charges, increased $180, or 40%, driven principally
by growth in the variable life business where account values increased $1.0
billion, or 35%, and life insurance in force increased $28.2 billion, or 84%,
from 2000. In addition, net investment income on general account business
(universal life, interest sensitive whole life and term life) increased $66, or
34%, consistent with the growth in related account values.

Benefits, claims and expenses increased $190, or 36%, due principally to the
growth in revenues described above. Although death benefits were higher in
2001 than the prior year as a result of the increase in life insurance in
force, year-to-date mortality experience (expressed as death claims as a
percentage of net amount at risk) for 2001 was within pricing assumptions.

Net income increased $42, or 53%, primarily due to the revenue growth described
above. Individual Life incurred an after-tax loss of $3 related to September
11. Excluding this loss, net income increased $45, or 57%, primarily due to
the growth factors described above.

Outlook

Individual Life sales continue to be impacted by the lower equity markets,
uncertainty surrounding estate tax legislation, and aggressive competition from
universal life providers. However, The Hartfords acquisition of the United
States individual life insurance business of Fortis has increased its scale
while broadening its distribution capabilities as described above.
Additionally, the Company continues to introduce new and enhanced products,
which are expected to increase universal life sales.

GROUP BENEFITS

Operating Summary

|                                               |                                     |   |       |       |      |   |       |       |  |   |       |       | 
|---------------------------------------------- | ----------------------------------- | - | ----- | ----- | ---- | - | ----- | ----- |  | - | ----- | ----- | 
|                                               |                                     |   |       |       |      |   |       |       |  |   |       |      
|                                               |                                     |   |       |       |      |   |       |       |  |   |       |      
|                                               |                                     |   | 2002  |       | 2001 |   | 2000 
|                                               |                                     |   |       |       |      |   |      
|Earned premiums and other                      |                                     | $ | 2,327 |       |      | $ | 2,259 |       |  | $ | 1,981 |      
|Net investment income                          |                                     |   | 255   |       |      |   | 248   |       |  |   | 226   |      
|                                               |                                     |   |       |       |      |   |       |       |  |   |       |      
|                                               | Total revenues                      |   |       | 2,582 |      |   |       | 2,507 |  |   |       | 2,207 | 
|                                               |                                     |   |       |       |      |   |       |       |  |   |       |      
|Benefits, claims and claim adjustment expenses |                                     |   | 1,878 |       |      |   | 1,874 |       |  |   | 1,643 |      
|Insurance operating costs and other expenses   |                                     |   | 541   |       |      |   | 498   |       |  |   | 450   |      
|                                               |                                     |   |       |       |      |   |       |       |  |   |       |      
|                                               | Total benefits, claims and expenses |   |       | 2,419 |      |   |       | 2,372 |  |   |       | 2,093 | 
|                                               |                                     |   |       |       |      |   |       |       |  |   |       |      
|                                               | Income before income tax expense    |   |       | 163   |      |   |       | 135   |  |   |       | 114   | 
|Income tax expense                             |                                     |   | 35    |       |      |   | 29    |       |  |   | 24    |      
|                                               |                                     |   |       |       |      |   |       |       |  |   |       |      
|                                               | Net income                          |   | $     | 128   |      |   | $     | 106   |  |   | $     | 90    | 
|                                               |                                     |   |       |       |      |   |       |       |  |   |       |      

Hartford Life is a leading provider of group benefits, and through this segment
sells group life and group disability insurance as well as other products,
including stop loss and supplementary medical coverages to employers and
employer sponsored plans, accidental death and dismemberment, travel accident
and other special risk coverages to employers and associations. The Company
also offers disability underwriting, administration, claims processing services
and reinsurance to other insurers and self-funded employer plans.

2002 Compared to 2001Revenues in the Group Benefits segment increased $75
or 3%, and excluding buyouts, increased $159 or 7%, driven primarily by growth
in premiums, which increased $66, or 3%. The growth in premiums was due to an
increase of $281, or 14%, in fully insured ongoing premiums, as a result of
steady persistency and pricing actions on the in-force block of business and
strong sales to new customers. Offsetting this increase was a decrease in
military Medicare supplement premiums of $131 resulting from federal
legislation effective in the fourth quarter of 2001. This legislation provides
retired military officers age 65 and older with full medical insurance paid for
by the government, eliminating the need for Medicare supplement insurance.
Additionally, premium revenues for 2002 were offset by a $84 decrease in total
buyouts. Buyouts involve the acquisition of claim liabilities from another
carrier for a purchase price calculated to cover the run off of those
liabilities plus administration expenses and profit. Due to the nature of the
buyout marketplace, the predictability of buyout premiums is uncertain. Fully
insured ongoing sales were $597, an increase of $66, or 12%.

Total expenses increased $53 or 2%, and excluding buyouts, increased $137 or
6%. The increase in expenses is consistent with the growth in revenues
previously described. Benefits and claims expenses, excluding buyouts,
increased $88, or 5%. The segments loss ratio (defined as benefits, claims and
claim adjustment expenses as a percentage of premiums and other considerations
excluding buyouts) was approximately 81% down slightly from 82% in 2001.
Insurance operating costs and other expenses increased $43, or 9%, due to the
fully insured ongoing premium growth previously described and continued
investments in technology and service. The segments ratio of insurance
operating costs and other expenses to premiums and other considerations was
approximately 23%, consistent with prior year.

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Net income increased $22, or 21%.
Group Benefits incurred an after-tax loss of $2 related to September 11 in the
third quarter of 2001. Excluding this loss, earnings increased $20, or 19%,
for the year ended December 31, 2002 compared to a year ago. The increase in
earnings is due to the increase in premium revenues and favorable loss costs,
which was partially offset by increased insurance operating costs and other
expenses as previously described.

2001 Compared to 2000Revenues in the Group Benefits segment increased $300,
or 14%, driven primarily by growth in premiums, which increased $278, or 14%,
due to solid persistency and increased premium rates related to the in force
block of business, and strong sales to new customers. Fully insured ongoing
sales for the year ended December 31, 2001 were $531, an increase of $85, or
19%, compared to 2000. Additionally, net investment income increased $22, or
10%, due to the overall growth in the in-force business.

Total benefits, claims and expenses increased $279, or 13%, driven primarily by
higher benefits and claims which increased $231, or 14%. These increases are
consistent with the growth in the business described above as the 2001 loss
ratio (defined as benefits and claims and claim adjustment expenses as a
percentage of premiums and other considerations excluding buyouts) has remained
relatively consistent compared to the 2000 loss ratio. In addition, expenses
other than benefits and claims increased $48, or 11%, for the year ended
December 31, 2001, also consistent with the overall growth in the segment.

Net income increased $16, or 18%, driven by overall revenue growth and
consistent loss and expense ratios as compared to the prior year. Group
Benefits incurred an after-tax loss of $2 related to September 11; excluding
this loss, operating income increased $18, or 20%.

Outlook

Employees continue to look to the workplace for a broader and ever expanding
array of insurance products. As employers design benefit strategies to attract
and retain employees, while attempting to control their benefit costs,
management believes that the need for the Group Benefits segments products
will continue to expand. This, combined with the significant number of
employees who currently do not have coverage or adequate levels of coverage,
creates unique opportunities for our products and services. Current market
conditions, including low interest rates, rising medical costs, and cost
containment pressure on employers, create a challenging business environment.
However, our strength in claim and risk management, service and distribution
will enable the Group Benefits segment to continue to capitalize on market
opportunities despite the challenging business environment.

CORPORATE OWNED LIFE INSURANCE (COLI)

|                                               |                      |                                     |        |        |     |      |        |        |     |   |        |        |     | 
|---------------------------------------------- | -------------------- | ----------------------------------- | ------ | ------ | --- | ---- | ------ | ------ | --- | - | ------ | ------ | --- | 
|Operating Summary                              |                      |                                     |        |        |     |      |        |        |     |   |        |       
|                                               |                      | 2002                                |        | 2001   |     | 2000
|                                               |                      |                                     |        |        |     |      |        |       
|Fee income and other                           |                      | $                                   | 316    |        |     | $    | 367    |        |     | $ | 401    |       
|Net investment income                          |                      |                                     | 276    |        |     |      | 352    |        |     |   | 366    |       
|                                               |                      |                                     |        |        |     |      |        |        |     |   |        |       
|                                               |                      | Total revenues                      |        |        | 592 |      |        |        | 719 |   |        |        | 767 | 
|                                               |                      |                                     |        |        |     |      |        |        |     |   |        |       
|Benefits, claims and claim adjustment expenses |                      |                                     | 401    |        |     |      | 514    |        |     |   | 545    |       
|Insurance operating costs and expenses         |                      |                                     | 82     |        |     |      | 84     |        |     |   | 102    |       
|Dividends to policyholders                     |                      |                                     | 62     |        |     |      | 66     |        |     |   | 67     |       
|                                               |                      |                                     |        |        |     |      |        |        |     |   |        |       
|                                               |                      | Total benefits, claims and expenses |        |        | 545 |      |        |        | 664 |   |        |        | 714 | 
|                                               |                      |                                     |        |        |     |      |        |        |     |   |        |       
|                                               |                      | Income before income tax expense    |        |        | 47  |      |        |        | 55  |   |        |        | 53  | 
|Income tax expense                             |                      |                                     | 15     |        |     |      | 18     |        |     |   | 19     |       
|                                               |                      |                                     |        |        |     |      |        |        |     |   |        |       
|                                               |                      | Net income                          |        | $      | 32  |      |        | $      | 37  |   |        | $      | 34  | 
|                                               |                      |                                     |        |        |     |      |        |        |     |   |        |       
|Variable COLI account values                   |                      | $                                   | 19,674 |        |     | $    | 18,019 |        |     | $ | 15,937 |       
|Leveraged COLI account values                  |                      |                                     | 3,321  |        |     |      | 4,315  |        |     |   | 4,978  |       
|                                               |                      |                                     |        |        |     |      |        |        |     |   |        |       
|                                               | Total account values |                                     | $      | 22,995 |     |      | $      | 22,334 |     |   | $      | 20,915 |    
|                                               |                      |                                     |        |        |     |      |        |        |     |   |        |       

Hartford Life is a leader in the COLI market, which includes life insurance
policies purchased by a company on the lives of its employees, with the company
or a trust sponsored by the company named as beneficiary under the policy.
Until the Health Insurance Portability and Accountability Act of 1996
(HIPAA), the Company sold two principal types of COLI business: leveraged and
variable products. Leveraged COLI is a fixed premium life insurance policy
owned by a company or a trust sponsored by a company. HIPAA phased out the
deductibility of interest on policy loans under leveraged COLI through the end
of 1998, virtually eliminating all future sales of this product. Variable COLI
continues to be a product used by employers to fund non-qualified benefits or
other postemployment benefit liabilities.

2002 Compared to 2001COLI revenues decreased $127, or 18%, primarily related
to lower net investment and fee income due to the declining block of leveraged
COLI, where related account values declined by $994, or 23%. Net investment
income decreased $76, or 22%, while fee income decreased $50, or 14%.

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Expenses decreased $122, or 18%, which is relatively consistent with the
decrease in revenues described above. However, the decrease was partially
offset by $11, after-tax, in accrued litigation expenses related to the Bancorp
dispute. (For a discussion of the Bancorp litigation, see
Note 17(a) of Notes to
Consolidated Financial Statements.)

Net income decreased $5, or 14%, compared to prior year. COLI incurred an
after-tax loss of $2 related to September 11 in the third quarter of 2001.
Excluding the impact of September 11, COLIs net income decreased $7, or 18%,
principally due to the $11 after-tax expense accrued in connection with the
Bancorp litigation.

2001 Compared to 2000COLI revenues decreased $48, or 6%, mostly due to lower
fee income and net investment income. Fee income and other decreased $34, or
8%, due to a decline in variable COLI sales and deposits which were
approximately $1.5 billion in 2001 as compared to $2.9 billion in 2000. In
addition, net investment income decreased $14, or 4%, due primarily to lower
interest rates and the decline in leveraged COLI account values.

Benefits, claims and expenses decreased $50, or 7%, directly related to the
decrease in revenue discussed above.

Net income increased $3, or 9%, primarily due to the overall growth in variable
COLI business and earnings associated with the leveraged COLI business
recaptured in 1998. COLI incurred an after-tax loss of $2 related to September
11; excluding this charge, operating income increased $5, or 15%.

Outlook

The focus of this segment is variable COLI, which continues to be a product
generally used by employers to fund non-qualified benefits or other
postemployment benefit liabilities. The leveraged COLI product has been an
important contributor to The Hartfords profitability in recent years and will
continue to contribute to the profitability of The Hartford in the future,
although the level of profit has declined in 2002, compared to 2001. COLI
continues to be subject to a changing legislative and regulatory environment
that could have a material adverse effect on its business.

INVESTMENTS

Hartford Lifes general account
and guaranteed separate account investment portfolios are managed by Hartford
Investment Management Company, a wholly-owned subsidiary of The Hartford.
Hartford Investment Management Company is responsible for monitoring and
managing the asset/liability profile, establishing investment objectives and
guidelines, and determining, within specified risk tolerances and investment
guidelines, the appropriate asset allocation, duration, convexity and other
characteristics of the portfolios. Security selection and monitoring
functions are performed by asset class specialists working within dedicated
portfolio management teams.

The primary investment objective of the Companys general account is to
maximize after-tax returns consistent with acceptable risk parameters
(including the management of the interest rate sensitivity of invested assets
relative to that of policyholder obligations) as discussed in the Capital
Markets Risk Management section under Market Risk  Interest Rate Risk. An
additional objective is to generate sufficient liquidity to meet corporate and
policyholder obligations.

The Companys general account consists of a diversified portfolio of
investments. Although all the assets of the general account support the
Companys general account liabilities, the Hartford Investment Management
Company has developed separate investment portfolios for specific classes of
product liabilities within the general account. The Hartford Investment
Management Company works closely with the business lines to develop specific
investment guidelines, including duration targets, asset allocation and
convexity constraints, asset/liability mismatch tolerances and return
objectives for each product line in order to achieve each product lines
individual risk and return objectives.

Fluctuations in interest rates affect the Companys return on, and the fair
value of, fixed maturity investments, which comprised approximately 87% and 82%
of the fair value of its invested assets as of December 31, 2002 and 2001,
respectively. Other events beyond the Companys control could also adversely
impact the fair value of these investments. Specifically, a downgrade of an
issuers credit rating or default of payment by an issuer could reduce the
Companys investment return.

The Company also invests in unaffiliated limited partnership arrangements in
order to further diversify its investment portfolio. These limited
partnerships represent approximately 2% and 3% of the fair value of its
invested assets as of December 31, 2002 and 2001, respectively. Limited
partnerships are typically less liquid than direct investments in fixed income
or equity investments. Market volatility and other factors beyond the
Companys control can adversely affect the value of these investments. Because
the Company is a limited partner, its ability to control the timing or the
realization of the related investment income is restricted.

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A decrease in the fair value of any investment that is deemed other than
temporary would result in the Companys recognition of a realized capital loss
in its financial results prior to the actual sale of the investment. See
Companys discussion of evaluation of other than temporary impairment in
Critical Accounting Estimates under  Valuation of Investments and Derivative
Instruments.

The weighted average duration of the fixed maturity portfolio was 4.8 and 4.9
as of December 31, 2002 and 2001, respectively. Duration is defined as the
approximate percentage change in market price of the portfolio for a 100 basis
point change in interest rates. For example, if interest rates increased by
100 basis points, the fair value of the portfolio would be expected to decrease
by approximately 4.8% and 4.9% as of December 31, 2002 and 2001, respectively.
The following table identifies the invested assets by type held in the general
account as of December 31, 2002 and 2001.

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|                                     |                   |   |        |        |         |  |        |       |         |   |        |        |  |  |      |       |  
|------------------------------------ | ----------------- | - | ------ | ------ | ------- |  | ------ | ----- | ------- | - | ------ | ------ |  |  | ---- | ----- | -
|Composition of Invested Assets       |                   |   |        |       
|                                     |                   |   |        |       
|                                     |                   |   | 2002   |        | 2001   
|                                     |                   |   |        |        |        
|                                     |                   |   | Amount |        | Percent |  | Amount |       | Percent
|                                     |                   |   |        |        |         |  |        |       |        
|Fixed maturities, at fair value      |                   | $ | 29,377 |        |         |  | 86.7   | %     |         | $ | 23,301 |        |  |  | 82.1 | %    
|Equity securities, at fair value     |                   |   | 458    |        |         |  | 1.3    | %     |         |   | 428    |        |  |  | 1.5  | %    
|Policy loans, at outstanding balance |                   |   | 2,934  |        |         |  | 8.7    | %     |         |   | 3,317  |        |  |  | 11.7 | %    
|Limited partnerships, at fair value  |                   |   | 519    |        |         |  | 1.5    | %     |         |   | 811    |        |  |  | 2.9  | %    
|Other investments                    |                   |   | 603    |        |         |  | 1.8    | %     |         |   | 520    |        |  |  | 1.8  | %    
|                                     |                   |   |        |        |         |  |        |       |         |   |        |        |  |  |      |      
|                                     | Total investments |   | $      | 33,891 |         |  |        | 100.0 | %       |   | $      | 28,377 |  |  |      | 100.0 | %
|                                     |                   |   |        |        |         |  |        |       |         |   |        |        |  |  |      |      

During 2002, fixed maturity investments increased 26% primarily due to
increased operating cash flows, transfers into the general account from the
variable annuity separate account, and an increase in fair value due to a lower
interest rate environment. Limited partnerships decreased $292, or 36%, due to
redemptions and a tactical decision to reallocate funds to other asset classes.

The following table identifies, by type, the fixed maturity securities held in
the general account as of December 31, 2002 and 2001.

|                                               |                        |   |            |        |         |  |            |       |         |   |        |        |  |  |      |       |  
|---------------------------------------------- | ---------------------- | - | ---------- | ------ | ------- |  | ---------- | ----- | ------- | - | ------ | ------ |  |  | ---- | ----- | -
|Fixed Maturities by Type                       |                        |   |            |       
|                                               |                        |   |            |       
|                                               |                        |   | 2002       |        | 2001   
|                                               |                        |   |            |        |        
|                                               |                        |   | Fair Value |        | Percent |  | Fair Value |       | Percent
|                                               |                        |   |            |        |         |  |            |       |        
|Corporate                                      |                        | $ | 14,596     |        |         |  | 49.7       | %     |         | $ | 11,419 |        |  |  | 49.0 | %    
|Commercial mortgage-backed securities (CMBS)   |                        |   | 4,234      |        |         |  | 14.4       | %     |         |   | 3,029  |        |  |  | 13.0 | %    
|Asset-backed securities (ABS)                  |                        |   | 3,954      |        |         |  | 13.5       | %     |         |   | 3,427  |        |  |  | 14.7 | %    
|Municipal  tax-exempt                         |                        |   | 2,000      |        |         |  | 6.8        | %     |         |   | 1,565  |        |  |  | 6.7  | %    
|Mortgage-backed securities (MBS)  agency      |                        |   | 1,851      |        |         |  | 6.3        | %     |         |   | 981    |        |  |  | 4.2  | %    
|Collateralized mortgage obligations (CMO)      |                        |   | 691        |        |         |  | 2.4        | %     |         |   | 767    |        |  |  | 3.3  | %    
|Government/Government agencies  Foreign       |                        |   | 526        |        |         |  | 1.8        | %     |         |   | 390    |        |  |  | 1.7  | %    
|Government/Government agencies  United States |                        |   | 360        |        |         |  | 1.2        | %     |         |   | 374    |        |  |  | 1.6  | %    
|Municipal  taxable                            |                        |   | 31         |        |         |  | 0.1        | %     |         |   | 47     |        |  |  | 0.2  | %    
|Short-term                                     |                        |   | 1,100      |        |         |  | 3.7        | %     |         |   | 1,245  |        |  |  | 5.3  | %    
|Redeemable preferred stock                     |                        |   | 34         |        |         |  | 0.1        | %     |         |   | 57     |        |  |  | 0.3  | %    
|                                               |                        |   |            |        |         |  |            |       |         |   |        |        |  |  |      |      
|                                               | Total fixed maturities |   | $          | 29,377 |         |  |            | 100.0 | %       |   | $      | 23,301 |  |  |      | 100.0 | %
|                                               |                        |   |            |        |         |  |            |       |         |   |        |        |  |  |      |      

There were no material changes in asset allocation during 2002 and 2001.

As of December 31, 2002 and 2001, 18% and 21%, respectively, of the Companys
fixed maturities were invested in private placement securities (including 11%
and 12% of Rule 144A offerings as of December 31, 2002 and December 31, 2001,
respectively). Private placement securities are generally less liquid than
public securities. However, private placements generally have covenants
designed to compensate for liquidity risk. Most of the private placement
securities in the Companys portfolio are rated by nationally recognized rating
agencies. (For further discussion of the Companys investment credit policies,
see the Capital Markets Risk Management section under Credit Risk.)

Investment Results

The following table summarizes Hartford Lifes investment results.

|                                                     |  |      |       |      |  |      |       |   |  |   |       |  
|---------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | -
|(before-tax)                                         |  | 2002 |       | 2001 |  | 2000
|                                                     |  |      |       |      |  |     
|Net investment income  excluding policy loan income |  | $    | 1,604 |      |  | $    | 1,472 |   |  | $ | 1,284 |  
|Policy loan income                                   |  |      | 254   |      |  |      | 307   |   |  |   | 308   |  
|                                                     |  |      |       |      |  |      |       |   |  |   |       |  
|Net investment income  total                        |  | $    | 1,858 |      |  | $    | 1,779 |   |  | $ | 1,592 |  
|Yield on average invested assets [1]                 |  |      | 6.2   | %    |  |      | 7.0   | % |  |   | 7.0   | %
|Net realized capital losses                          |  | $    | (317  | )    |  | $    | (133  | ) |  | $ | (88   | )
|                                                     |  |      |       |      |  |      |       |   |  |   |       |  



---

| |  | [1] Represents net investment income (excluding net realized capital losses)
divided by average invested assets at cost (fixed maturities at amortized
cost).
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

2002 Compared to 2001 Net investment income, excluding policy loan income,
increased $132, or 9%. The increase was primarily due to income earned on the
previously discussed higher invested asset base partially offset by $36 lower
income on limited

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partnerships and the impact of lower interest rates.
Yields on average invested assets decreased as a result of lower rates on new
investment purchases, decreased policy loan income, and decreased income on
limited partnerships.

Included in 2002 net realized capital losses were write-downs for other than
temporary impairments on primarily corporate and asset-backed fixed maturities
of $363. Write-downs on corporate fixed maturities totaled $185 and included
impairments in the communications and technology sector of $142 (including a
$74 loss related to securities issued by WorldCom Corporation), and the
utilities sector of $32. Write-downs on asset-backed securities totaled $167
and included impairments of securities backed by aircraft lease receivables of
$73, corporate debt of $35, manufactured housing receivables of $16, mutual
fund fee receivables of $16, and on various other asset-backed securities
totaling $27. Also included in 2002 net realized capital losses were
write-downs for other than temporary impairments on equity securities of $17.
These losses were partially offset by gains from the sale of fixed maturity
securities.

2001 Compared to 2000 Net investment income, excluding policy loan income,
increased $188, or 15%. The increase was primarily due to income earned on
the higher asset base of fixed maturity investments, partially offset by lower
yields on fixed maturities in the third and fourth quarters of 2001. Yields
on overall average invested assets were flat.

Included in 2001 net realized capital losses were write-downs for other than
temporary impairments on primarily corporate and asset- backed fixed maturities
of $105. Write-downs on corporate securities totaled $63 and included
impairments in the utilities sector of $37 and the communications and
technology sector of $17. Write-downs on corporate fixed maturities in the
utilities sector were on securities issued by Enron Corporation. Write-downs
on asset-backed securities totaled $31 and included impairments of securities
backed by corporate debt of $14 and on various other asset-backed securities
totaling $17. Also included in net realized capital losses is a $35 loss
recognized on the sale of the Companys interest in an Argentine insurance
joint venture, in addition to losses associated with the credit deterioration
of certain investments in which the Company has an indirect economic interest.
These losses were partially offset by gains from the sale of fixed maturities.

Separate Account Products

Separate account products are those for which a separate investment and
liability account is maintained on behalf of the policyholder. The Companys
separate accounts reflect two categories of risk assumption: non-guaranteed
separate accounts totaling $95.6 billion and $104.6 billion as of December 31,
2002 and 2001, respectively, wherein the policyholder assumes substantially all
the risk and reward; and guaranteed separate accounts totaling $11.5 billion
and $10.1 billion as of December 31, 2002 and 2001, respectively, wherein
Hartford Life contractually guarantees either a minimum return or the account
value to the policyholder. Guaranteed separate account products primarily
consist of modified guaranteed individual annuities and modified guaranteed
life insurance and generally include market value adjustment features and
surrender charges to mitigate the risk of disintermediation. The primary
investment objective of guaranteed separate accounts is to maximize after-tax
returns consistent with acceptable risk parameters, including the management of
the interest rate sensitivity of invested assets relative to that of
policyholder obligations, as discussed in the Capital Markets Risk Management
section under Market Risk  Interest Rate Risk.

Investment objectives for non-guaranteed separate accounts vary by fund account
type, as outlined in the applicable fund prospectus or separate account plan of
operations. Non-guaranteed separate account products include variable
annuities, variable life insurance contracts and variable COLI.

CAPITAL MARKETS RISK MANAGEMENT

Hartford Life has a disciplined approach to managing risks associated with its
capital markets and asset/liability management activities. Investment
portfolio management is organized to focus investment management expertise on
specific classes of investments, while asset/liability management is the
responsibility of a dedicated risk management unit supporting Hartford Life,
including guaranteed separate accounts. Derivative instruments are utilized in
compliance with established Company policy and regulatory requirements and are
monitored internally and reviewed by senior management.

Hartford Life is exposed to two primary sources of investment and
asset/liability management risk: credit risk, relating to the uncertainty
associated with the ability of an obligor or counterparty to make timely
payments of principal and/or interest, and market risk, relating to the market
price and/or cash flow variability associated with changes in interest rates,
securities prices, market indices, yield curves or currency exchange rates.
The Company does not hold any financial instruments purchased for trading
purposes.

Credit Risk

Hartford Life has established investment credit policies that focus on the
credit quality of obligors and counterparties, limit credit concentrations,
encourage diversification and require frequent creditworthiness reviews.
Investment activity, including setting of policy and defining acceptable risk
levels, is subject to regular review and approval by senior management and
reported to the Finance Committee of the Board of Directors of The Hartford.

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The Company invests primarily in securities which are rated investment grade
and has established exposure limits, diversification standards and review
procedures for all credit risks including borrower, issuer and counterparty.
Creditworthiness of specific obligors is determined by an internal credit
evaluation supplemented by consideration of external determinants of
creditworthiness, typically ratings assigned by nationally recognized ratings
agencies. Obligor, asset sector and industry concentrations are subject to
established limits and monitored on a regular basis.

Hartford Life is not exposed to any credit concentration risk of a single
issuer greater than 10% of the Companys stockholders equity.

Derivative Instruments

The Companys derivatives counterparty exposure policy establishes market-based
credit limits, favors long-term financial stability and creditworthiness, and
typically requires credit enhancement/credit risk reducing agreements. Credit
risk is measured as the amount owed to the Company based on current market
conditions and potential payment obligations between the Company and its
counterparties. Credit exposures are generally quantified weekly and netted,
and collateral is pledged to and held by, or on behalf of, the Company to the
extent the current value of derivatives exceeds exposure policy thresholds.

The Company periodically enters into swap agreements in which the Company
assumes credit exposure from a single entity, referenced index or asset pool.
Total return swaps involve the periodic exchange of payments with other
parties, at specified intervals, calculated using the agreed upon index and
notional principal amounts. Generally, no cash or principal payments are
exchanged at the inception of the contract. Typically, at the time a swap is
entered into, the cash flow streams exchanged by the counterparties are equal
in value.

Credit default swaps involve a transfer of credit risk from one party to
another in exchange for periodic payments. One party to the contract will make
a payment based on an agreed upon rate and a notional
amount. The second party will only make a payment when there is a credit
event, and such payment will be equal to the notional value of the swap
contract, and in return, the second party will receive the debt obligation of
the first party.

As of December 31, 2002 and 2001, the notional value of total return and credit
default swaps totaled $497 and $230, respectively, and the swap fair value
totaled $(41) and $(51), respectively.

The following table identifies fixed maturity securities, including guaranteed
separate accounts, for the Companys operations by credit quality. The ratings
referenced in the tables are based on the ratings of nationally recognized
rating organizations or, if not rated, assigned based on the Companys internal
analysis of such securities. In addition, an aging of the gross unrealized
loss position is presented for fixed maturity and equity securities.

As of December 31, 2002 and 2001, over 94% and 96%, respectively, of the fixed
maturity portfolio was invested in securities rated investment grade (BBB and
above). During 2002, the percentage of BB and below rated fixed maturity
investments increased due to increased downgrades of corporate and asset backed
securities.

|                                             |                                                    |   |                |        |            |   |            |        |                  |  |            |       |            |   |        |        |                  |   |        |        |  |  |      |       |  
|-------------------------------------------- | -------------------------------------------------- | - | -------------- | ------ | ---------- | - | ---------- | ------ | ---------------- |  | ---------- | ----- | ---------- | - | ------ | ------ | ---------------- | - | ------ | ------ |  |  | ---- | ----- | -
|Fixed Maturities by Credit Quality          
|                                            
|                                             |                                                    |   |                |        |            |   | 2002       |        |                  |  |            |       |            |   | 2001   |        |                 
|                                             |                                                    |   |                |        |            |   |            |        | Percent of Total |  |            |       |            |   |        |        | Percent of Total
|                                             |                                                    |   | Amortized Cost |        | Fair Value |   | Fair Value |        | Amortized Cost   |  | Fair Value |       | Fair Value
|                                             |                                                    |   |                |        |            |   |            |        |                  |  |            |       |           
|United States Government/Government agencies |                                                    | $ | 3,596          |        |            | $ | 3,737      |        |                  |  | 9.2        | %     |            | $ | 2,573  |        |                  | $ | 2,639  |        |  |  | 8.0  | %    
|AAA                                          |                                                    |   | 6,519          |        |            |   | 6,960      |        |                  |  | 17.2       | %     |            |   | 4,915  |        |                  |   | 5,070  |        |  |  | 15.3 | %    
|AA                                           |                                                    |   | 4,161          |        |            |   | 4,396      |        |                  |  | 10.9       | %     |            |   | 3,570  |        |                  |   | 3,644  |        |  |  | 11.0 | %    
|A                                            |                                                    |   | 11,745         |        |            |   | 12,467     |        |                  |  | 30.8       | %     |            |   | 11,330 |        |                  |   | 11,528 |        |  |  | 34.8 | %    
|BBB                                          |                                                    |   | 9,211          |        |            |   | 9,665      |        |                  |  | 23.9       | %     |            |   | 7,611  |        |                  |   | 7,644  |        |  |  | 23.1 | %    
|BB & below                                   |                                                    |   | 2,148          |        |            |   | 2,084      |        |                  |  | 5.2        | %     |            |   | 1,214  |        |                  |   | 1,148  |        |  |  | 3.4  | %    
|Short-term                                   |                                                    |   | 1,153          |        |            |   | 1,153      |        |                  |  | 2.8        | %     |            |   | 1,470  |        |                  |   | 1,470  |        |  |  | 4.4  | %    
|                                             |                                                    |   |                |        |            |   |            |        |                  |  |            |       |            |   |        |        |                  |   |        |        |  |  |      |      
|                                             | Total fixed maturities                             |   | $              | 38,533 |            |   | $          | 40,462 |                  |  |            | 100.0 | %          |   | $      | 32,683 |                  |   | $      | 33,143 |  |  |      | 100.0 | %
|                                             |                                                    |   |                |        |            |   |            |        |                  |  |            |       |            |   |        |        |                  |   |        |        |  |  |      |      
|                                             | Total general account fixed maturities             |   | $              | 27,982 |            |   | $          | 29,377 |                  |  |            | 72.6  | %          |   | $      | 23,010 |                  |   | $      | 23,301 |  |  |      | 70.3  | %
|                                             |                                                    |   |                |        |            |   |            |        |                  |  |            |       |            |   |        |        |                  |   |        |        |  |  |      |      
|                                             | Total guaranteed separate account fixed
maturities |   | $              | 10,551 |            |   | $          | 11,085 |                  |  |            | 27.4  | %          |   | $      | 9,673  |                  |   | $      | 9,842  |  |  |      | 29.7  | %
|                                             |                                                    |   |                |        |            |   |            |        |                  |  |            |       |            |   |        |        |                  |   |        |        |  |  |      |      

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The Companys total and below investment grade (BIG) fixed maturity and
equity securities held as of December 31, 2002 and 2001 that were in an
unrealized loss position are presented in the tables below by length of time
the security was in an unrealized loss position.

|                                          |       |   |                  |       |                           |   |                                            |       |                |   |            |      |                 |   |     |       |  |   |     |       |  |   |     |      |  
|----------------------------------------- | ----- | - | ---------------- | ----- | ------------------------- | - | ------------------------------------------ | ----- | -------------- | - | ---------- | ---- | --------------- | - | --- | ----- |  | - | --- | ----- |  | - | --- | ---- | -
|                                          |       |   |                  |       |                           |   | Unrealized Loss Aging at December 31, 2002 |       |                |   |           
|                                          |       |   |                  |       |                           |   |                                            |       |                |   |           
|                                          |       |   | Total Securities |       | BIG and Equity Securities
|                                          |       |   |                  |       |                          
|                                          |       |   | Amortized Cost   |       | Fair Value                |   | Unrealized Loss                            |       | Amortized Cost |   | Fair Value |      | Unrealized Loss
|                                          |       |   |                  |       |                           |   |                                            |       |                |   |            |      |                
|Three months or less                      |       | $ | 1,532            |       |                           | $ | 1,459                                      |       |                | $ | (73        | )    |                 | $ | 162 |       |  | $ | 130 |       |  | $ | (32 | )   
|Greater than three months to six months   |       |   | 1,294            |       |                           |   | 1,239                                      |       |                |   | (55        | )    |                 |   | 208 |       |  |   | 185 |       |  |   | (23 | )   
|Greater than six months to nine months    |       |   | 568              |       |                           |   | 508                                        |       |                |   | (60        | )    |                 |   | 175 |       |  |   | 145 |       |  |   | (30 | )   
|Greater than nine months to twelve
months |       |   | 1,334            |       |                           |   | 1,264                                      |       |                |   | (70        | )    |                 |   | 330 |       |  |   | 293 |       |  |   | (37 | )   
|Greater than twelve months                |       |   | 2,135            |       |                           |   | 1,927                                      |       |                |   | (208       | )    |                 |   | 501 |       |  |   | 431 |       |  |   | (70 | )   
|                                          |       |   |                  |       |                           |   |                                            |       |                |   |            |      |                 |   |     |       |  |   |     |       |  |   |     |     
|                                          | Total |   | $                | 6,863 |                           |   | $                                          | 6,397 |                |   | $          | (466 | )               |   | $   | 1,376 |  |   | $   | 1,184 |  |   | $   | (192 | )
|                                          |       |   |                  |       |                           |   |                                            |       |                |   |            |      |                 |   |     |       |  |   |     |       |  |   |     |     

The total securities that were in an unrealized loss position for longer than
six months as of December 31, 2002 primarily consisted of corporate and
asset-backed securities. The significant corporate security industry sectors
of banking and financial services, utilities, technology and communications and
airlines comprised of 20%, 13%, 13% and 3%, respectively, of the greater than
six months unrealized loss amount. Asset-backed securities comprised 33% of
the greater than six month unrealized loss amount and included securities
backed by corporate debt, aircraft lease receivables and credit card
receivables. At December 31, 2002, the Company held no securities of a single
issuer that were at an unrealized loss in excess of 4% of total unrealized
losses. The total unrealized loss position of $(466) consisted of $(344) in
general account losses and $(122) in guaranteed separate account losses.

The BIG and equity securities that were in an unrealized loss position for
longer than six months as of December 31, 2002 primarily consisted of corporate
securities in the technology and communications and utilities sectors as well
as asset-backed securities backed by corporate debt, equipment loans and credit
card receivables. The technology and communications and utilities sectors
along with diversified equity mutual funds and asset-backed securities
comprised 26%, 22%, 18% and 15%, respectively, of the BIG and equity securities
that were in an unrealized loss position for greater than six months at
December 31, 2002. The total unrealized loss position of BIG and equity
securities of $(192) consisted of $(157) in general account losses and $(35) in
guaranteed separate account losses.

|                                          |       |   |                  |        |                           |   |                                            |        |                |   |            |      |                 |   |     |     |  |   |     |     |  |   |     |      |  
|----------------------------------------- | ----- | - | ---------------- | ------ | ------------------------- | - | ------------------------------------------ | ------ | -------------- | - | ---------- | ---- | --------------- | - | --- | --- |  | - | --- | --- |  | - | --- | ---- | -
|                                          |       |   |                  |        |                           |   | Unrealized Loss Aging at December 31, 2001 |        |                |   |           
|                                          |       |   |                  |        |                           |   |                                            |        |                |   |           
|                                          |       |   | Total Securities |        | BIG and Equity Securities
|                                          |       |   |                  |        |                          
|                                          |       |   | Amortized Cost   |        | Fair Value                |   | Unrealized Loss                            |        | Amortized Cost |   | Fair Value |      | Unrealized Loss
|                                          |       |   |                  |        |                           |   |                                            |        |                |   |            |      |                
|Three months or less                      |       | $ | 5,075            |        |                           | $ | 4,932                                      |        |                | $ | (143       | )    |                 | $ | 269 |     |  | $ | 242 |     |  | $ | (27 | )   
|Greater than three months to six months   |       |   | 755              |        |                           |   | 686                                        |        |                |   | (69        | )    |                 |   | 99  |     |  |   | 77  |     |  |   | (22 | )   
|Greater than six months to nine months    |       |   | 487              |        |                           |   | 464                                        |        |                |   | (23        | )    |                 |   | 63  |     |  |   | 58  |     |  |   | (5  | )   
|Greater than nine months to twelve
months |       |   | 2,128            |        |                           |   | 2,051                                      |        |                |   | (77        | )    |                 |   | 245 |     |  |   | 217 |     |  |   | (28 | )   
|Greater than twelve months                |       |   | 2,113            |        |                           |   | 1,949                                      |        |                |   | (164       | )    |                 |   | 323 |     |  |   | 277 |     |  |   | (46 | )   
|                                          |       |   |                  |        |                           |   |                                            |        |                |   |            |      |                 |   |     |     |  |   |     |     |  |   |     |     
|                                          | Total |   | $                | 10,558 |                           |   | $                                          | 10,082 |                |   | $          | (476 | )               |   | $   | 999 |  |   | $   | 871 |  |   | $   | (128 | )
|                                          |       |   |                  |        |                           |   |                                            |        |                |   |            |      |                 |   |     |     |  |   |     |     |  |   |     |     

The total securities that were in an unrealized loss position for longer than
six months as of December 31, 2001 primarily consisted of corporate and
asset-backed securities. The significant corporate security industry sectors
that were in an unrealized loss position for greater than six months included
banking and financial services of 22%. The communications and technology,
utilities and petroleum sectors comprised 13%, 12%, and 4%, respectively of the
total securities that were in an unrealized loss position at December 31, 2001
for greater than six months. Asset-backed securities comprised 19% of the
greater than six month unrealized loss amount, and included securities backed
by corporate debt, franchise loans, aircraft lease receivables, credit card
receivables, and manufactured housing receivables. At December 31, 2001, the
Company held no securities of a single issuer that were at an unrealized loss
in excess of 3% of total unrealized losses. The total unrealized loss position
of $(476) consisted of $(370) in general account losses and $(106) in
guaranteed separate account losses.

The BIG and equity securities that were in an unrealized loss position for
longer than six months as of December 31, 2001 primarily consisted of corporate
securities in the utilities and technology and communications sectors as well
as asset-backed securities backed by primarily manufactured housing
receivables, corporate debt and equipment lease receivables. Diversified
equity mutual funds, asset-backed securities, technology and communications
sector securities and utilities sector securities comprised 28%, 21%, 18% and
14%, respectively, of the BIG securities in a unrealized loss position at
December 31, 2001 for greater than six months. The total unrealized loss
position of BIG and equity securities of $(128) consisted of $(90) in general
account losses and $(38) in guaranteed separate account losses.

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As part of our ongoing monitoring process by a committee of investment and
accounting professionals, the Company has reviewed these securities and
concluded that there were no additional other than temporary impairments as of
December 31, 2002 and 2001. Due to the issuers continued satisfaction of the
securities obligations in accordance with their contractual terms and their
continued expectation to do so, as well as our evaluation of the fundamentals
of the issuers financial condition, the Company believes that the prices of
the securities in the sectors identified above, were temporarily depressed
primarily as a result of a market dislocation and generally poor cyclical
economic conditions and sentiment. See the Critical Accounting Estimates
section in the MD&A for the factors considered in evaluating other than
temporary impairments.

The evaluation for other than temporary impairments is a quantitative and
qualitative process which is subject to risks and uncertainties in the
determination of whether declines in the fair value of investments are other
than temporary. The risks and uncertainties include changes in general
economic conditions, the issuers financial condition or near term recovery
prospects and the effects of changes in interest rates. In addition, for
securitized financial assets with contractual cash flows (e.g. asset-backed
securities), projections of expected future cash flows may change based upon
new information regarding the performance of the underlying collateral.

Market Risk

Hartford Life has material exposure to both interest rate and equity market
risk. The Company analyzes interest rate risk using various models including
multi-scenario cash flow projection models that forecast cash flows of the
liabilities and their supporting investments, including derivative instruments.

Hartford Life has several objectives in managing market risk. The Company is
responsible for maximizing after-tax returns within acceptable risk parameters,
including the management of the interest rate sensitivity of invested assets
and the generation of sufficient liquidity to that of corporate and
policyholder obligations. Hartford Lifes fixed maturity portfolios have
material market exposure to interest rate risk. The Company continually
monitors these exposures and makes portfolio adjustments to manage these risks
within established limits.

Downward movement in market interest rates during 2002 resulted in a
significant increase in the unrealized appreciation of the fixed maturity
security portfolio from 2001. However, Hartford Lifes asset allocation and
its exposure to market risk as of December 31, 2002 have not changed materially
from its position at December 31, 2001.

Derivative Instruments

Hartford Life utilizes a variety of derivative instruments, including swaps,
caps, floors, forwards and exchange traded futures and options, in compliance
with Company policy and regulatory requirements in order to achieve one of four
Company approved objectives: to hedge risk arising from interest rate, price or
currency exchange rate volatility; to manage liquidity; to control transaction
costs; or to enter into income enhancement and replication transactions.
Interest rate swaps involve the periodic exchange of payments with other
parties, at specified intervals, calculated using the agreed upon rates and
notional principal amounts. Generally, no cash or principal payments are
exchanged at the inception of the contract. Typically, at the time a swap is
entered into, the cash flow streams exchanged by the counterparties are equal
in value.

Foreign currency swaps exchange an initial principal amount in two currencies,
agreeing to re-exchange the currencies at a future date, at an agreed exchange
rate. There is also periodic exchange of payments at specified intervals
calculated using the agreed upon rates and exchanged principal amounts.

Interest rate cap and floor contracts entitle the purchaser to receive from the
issuer at specified dates, the amount, if any, by which a specified market rate
exceeds the cap strike rate or falls below the floor strike rate, applied to a
notional principal amount. A premium payment is made by the purchaser of the
contract at its inception, and no principal payments are exchanged.

Forward contracts are customized commitments to either purchase or sell
designated financial instruments, at a future date, for a specified price and
may be settled in cash or through delivery of the underlying instrument.

Financial futures are standardized commitments to either purchase or sell
designated financial instruments, at a future date, for a specified price and
may be settled in cash or through delivery of the underlying instrument.
Futures contracts trade on organized exchanges. Margin requirements for
futures are met by pledging securities, and changes in the futures contract
values are settled daily in cash.

Option contracts grant the purchaser, for a premium payment, the right to
either purchase from or sell to the issuer a financial instrument at a
specified price, within a specified period or on a stated date.

Derivative activities are monitored by an internal compliance unit, reviewed
frequently by senior management and reported to the Finance Committee of the
Board of Directors. The notional amounts of derivative contracts represent the
basis upon which pay or receive amounts are calculated and are not reflective
of credit risk. Notional amounts pertaining to derivative instruments used in
the

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management of market risk for both general and guaranteed separate accounts
at December 31, 2002 and 2001 totaled $11.3 billion and $9.7 billion,
respectively.

The following discussions focus on the key market risk exposures within
Hartford Life.

Interest Rate Risk

Hartford Lifes general account and guaranteed separate account exposure to
interest rate risk relates to the market price and/or cash flow variability
associated with changes in market interest rates. Changes in interest rates
can potentially impact Hartford Lifes profitability. In certain scenarios
where interest rates are volatile, the Company could be exposed to
disintermediation risk and reduction in net interest rate spread or profit
margins.

Hartford Lifes general account and guaranteed separate account investment
portfolios primarily consist of investment grade, fixed maturity securities,
including corporate bonds, asset-backed securities, commercial mortgage-backed
securities, tax-exempt municipal securities and collateralized mortgage
obligations. The fair value of these and Hartford Lifes other invested assets
fluctuates depending on the interest rate environment and other general
economic conditions. During periods of declining interest rates, paydowns on
mortgage-backed securities and collateralized mortgage obligations increase as
the underlying mortgages are prepaid. During such periods, the Company
generally will not be able to reinvest the proceeds of any such prepayments at
comparable yields. Conversely, during periods of rising interest rates, the
rate of prepayments generally declines, exposing the Company to the possibility
of asset/liability cash flow and yield mismatch. (For further discussion of
the Companys risk management techniques to manage this market risk, see the
Asset and Liability Management Strategies Used to Manage Market Risk
discussed below.)

As described above, Hartford Life holds a significant fixed maturity portfolio
that includes both fixed and variable rate securities. The following table
reflects the principal amounts of Hartford Lifes general and
guaranteed separate accounts fixed and variable rate fixed maturity portfolios,
along with the respective weighted average coupons by estimated maturity year
at December 31, 2002. Comparative totals are included as of December 31, 2001.
Expected maturities differ from contractual maturities due to call or
prepayment provisions. The weighted average coupon (WAC) on variable rate
securities is based on spot rates as of December 31, 2002 and 2001, and is
primarily based on London Interbank Offered Rate (LIBOR). Callable bonds and
notes are distributed to either call dates or maturity, depending on which date
produces the most conservative yield. Asset-backed securities, collateralized
mortgage obligations and mortgage-backed securities are distributed based on
estimates of the rate of future prepayments of principal over the remaining
life of the securities. These estimates are developed using prepayment speeds
provided in broker consensus data. Such estimates are derived from prepayment
speeds previously experienced at the interest rate levels projected for the
underlying collateral. Actual prepayment experience may vary from these
estimates. Financial instruments with certain leverage features have been
included in each of the fixed maturity categories. These instruments have not
been separately displayed because they were immaterial to the Hartford Life
investment portfolio.

|                        |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |        |   |  |      |        |      |  |   |        |  
|----------------------- | ---------- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | ---------- |  | ----- | ----- | ----- |  | - | ----- | - |  | - | ------ | - |  | ---- | ------ | ---- |  | - | ------ | -
|                        |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |        |   |  | 2002 |        | 2001
|                        |            |  | 2003 |       | 2004 |  | 2005 |       | 2006 |  | 2007 |       | Thereafter |  | Total |       | Total
|                        |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |      
|Callable Bonds          |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |        |   |  |      |        |      |  |   |       
|Fixed Rate              |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |        |   |  |      |        |      |  |   |       
|                        | Par value  |  | $    | 11    |      |  | $    | 25    |      |  | $    | 123   |            |  | $     | 24    |       |  | $ | 24    |   |  | $ | 3,304  |   |  | $    | 3,511  |      |  | $ | 2,924  |  
|                        | WAC        |  |      | 6.6   | %    |  |      | 7.2   | %    |  |      | 4.6   | %          |  |       | 7.6   | %     |  |   | 8.1   | % |  |   | 4.0    | % |  |      | 4.1    | %    |  |   | 4.0    | %
|                        | Fair value |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |        |   |  | $    | 3,187  |      |  | $ | 2,445  |  
|Variable Rate           |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |        |   |  |      |        |      |  |   |       
|                        | Par value  |  | $    | 1     |      |  | $    | 6     |      |  | $    | 25    |            |  | $     | 9     |       |  | $ | 6     |   |  | $ | 834    |   |  | $    | 881    |      |  | $ | 1,065  |  
|                        | WAC        |  |      | 3.7   | %    |  |      | 2.5   | %    |  |      | 3.0   | %          |  |       | 3.3   | %     |  |   | 4.0   | % |  |   | 3.0    | % |  |      | 3.0    | %    |  |   | 3.4    | %
|                        | Fair value |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |        |   |  | $    | 804    |      |  | $ | 972    |  
|                        |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |        |   |  |      |        |      |  |   |       
|Bonds  Other           |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |        |   |  |      |        |      |  |   |       
|Fixed Rate              |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |        |   |  |      |        |      |  |   |       
|                        | Par value  |  | $    | 2,691 |      |  | $    | 1,397 |      |  | $    | 1,889 |            |  | $     | 2,026 |       |  | $ | 1,725 |   |  | $ | 10,859 |   |  | $    | 20,587 |      |  | $ | 18,245 |  
|                        | WAC        |  |      | 5.7   | %    |  |      | 6.0   | %    |  |      | 7.2   | %          |  |       | 6.4   | %     |  |   | 6.4   | % |  |   | 6.4    | % |  |      | 6.4    | %    |  |   | 6.2    | %
|                        | Fair value |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |        |   |  | $    | 20,990 |      |  | $ | 17,424 |  
|Variable Rate           |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |        |   |  |      |        |      |  |   |       
|                        | Par value  |  | $    | 273   |      |  | $    | 66    |      |  | $    | 259   |            |  | $     | 113   |       |  | $ | 13    |   |  | $ | 355    |   |  | $    | 1,079  |      |  | $ | 1,047  |  
|                        | WAC        |  |      | 3.1   | %    |  |      | 3.1   | %    |  |      | 4.1   | %          |  |       | 2.1   | %     |  |   | 7.2   | % |  |   | 3.6    | % |  |      | 3.5    | %    |  |   | 4.9    | %
|                        | Fair value |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |        |   |  | $    | 952    |      |  | $ | 947    |  
|                        |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |        |   |  |      |        |      |  |   |       
|Asset-backed Securities |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |        |   |  |      |        |      |  |   |       
|Fixed Rate              |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |        |   |  |      |        |      |  |   |       
|                        | Par value  |  | $    | 371   |      |  | $    | 461   |      |  | $    | 541   |            |  | $     | 255   |       |  | $ | 137   |   |  | $ | 718    |   |  | $    | 2,483  |      |  | $ | 2,252  |  

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|                                    |            |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   |      |       |      |   |    |       |  
|----------------------------------- | ---------- | - | ---- | --- | ---- | - | ---- | --- | ---- | - | ---- | --- | ---------- | - | ----- | --- | ----- | - | - | --- | - | - | -- | ----- | - | - | ---- | ----- | ---- | - | -- | ----- | -
|                                    |            |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   | 2002 |       | 2001
|                                    |            |   | 2003 |     | 2004 |   | 2005 |     | 2006 |   | 2007 |     | Thereafter |   | Total |     | Total
|                                    |            |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |      
|                                    | WAC        |   |      | 6.8 | %    |   |      | 6.3 | %    |   |      | 5.7 | %          |   |       | 6.1 | %     |   |   | 6.2 | % |   |    | 7.1   | % |   |      | 6.4   | %    |   |    | 6.9   | %
|                                    | Fair value |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   | $    | 2,458 |      |   | $  | 2,234 |  
|Variable Rate                       |            |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   |      |       |      |   |    |      
|                                    | Par value  |   | $    | 162 |      |   | $    | 314 |      |   | $    | 369 |            |   | $     | 378 |       |   | $ | 361 |   |   | $  | 1,494 |   |   | $    | 3,078 |      |   | $  | 2,396 |  
|                                    | WAC        |   |      | 2.1 | %    |   |      | 2.2 | %    |   |      | 2.3 | %          |   |       | 2.3 | %     |   |   | 2.4 | % |   |    | 2.4   | % |   |      | 2.3   | %    |   |    | 2.8   | %
|                                    | Fair value |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   | $    | 2,884 |      |   | $  | 2,333 |  
|                                    |            |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   |      |       |      |   |    |      
|Collateralized Mortgage Obligations |            |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   |      |       |      |   |    |      
|Fixed Rate                          |            |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   |      |       |      |   |    |      
|                                    | Par value  |   | $    | 108 |      |   | $    | 95  |      |   | $    | 77  |            |   | $     | 71  |       |   | $ | 63  |   |   | $  | 365   |   |   | $    | 779   |      |   | $  | 968   |  
|                                    | WAC        |   |      | 6.3 | %    |   |      | 6.2 | %    |   |      | 6.2 | %          |   |       | 6.2 | %     |   |   | 6.2 | % |   |    | 6.3   | % |   |      | 6.3   | %    |   |    | 6.3   | %
|                                    | Fair value |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   | $    | 813   |      |   | $  | 960   |  
|Variable Rate
Par value             |            | $ | 10   |     |      | $ | 13   |     |      | $ | 10   |     |            | $ | 7     |     |       | $ | 5 |     |   | $ | 46 |       |   | $ | 91   |       |      | $ | 15 |      
|                                    | WAC        |   |      | 2.4 | %    |   |      | 2.5 | %    |   |      | 2.7 | %          |   |       | 3.0 | %     |   |   | 3.1 | % |   |    | 2.3   | % |   |      | 2.5   | %    |   |    | 6.9   | %
|                                    | Fair value |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   | $    | 90    |      |   | $  | 16    |  
|                                    |            |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   |      |       |      |   |    |      

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|                                      |                         |            |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   |      |       |      |   |   |       |  
|------------------------------------- | ----------------------- | ---------- | - | ---- | --- | ---- | - | ---- | --- | ---- | - | ---- | --- | ---------- | - | ----- | --- | ----- | - | - | --- | - | - | -- | ----- | - | - | ---- | ----- | ---- | - | - | ----- | -
|                                      |                         |            |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   | 2002 |       | 2001
|                                      |                         |            |   | 2003 |     | 2004 |   | 2005 |     | 2006 |   | 2007 |     | Thereafter |   | Total |     | Total
|                                      |                         |            |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |      
|Commercial Mortgage-backed Securities |                         |            |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   |      |       |      |   |  
|Fixed Rate                            |                         |            |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   |      |       |      |   |  
|                                      |                         | Par value  |   | $    | 68  |      |   | $    | 112 |      |   | $    | 114 |            |   | $     | 243 |       |   | $ | 436 |   |   | $  | 3,073 |   |   | $    | 4,046 |      |   | $ | 3,018 |  
|                                      |                         | WAC        |   |      | 6.2 | %    |   |      | 6.6 | %    |   |      | 6.5 | %          |   |       | 7.0 | %     |   |   | 6.9 | % |   |    | 6.7   | % |   |      | 6.7   | %    |   |   | 7.1   | %
|                                      |                         | Fair value |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   | $    | 4,494 |      |   | $ | 3,123 |  
|Variable Rate                         |                         |            |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   |      |       |      |   |  
|                                      |                         | Par value  |   | $    | 179 |      |   | $    | 169 |      |   | $    | 109 |            |   | $     | 84  |       |   | $ | 130 |   |   | $  | 745   |   |   | $    | 1,416 |      |   | $ | 1,501 |  
|                                      |                         | WAC        |   |      | 3.5 | %    |   |      | 3.3 | %    |   |      | 4.2 | %          |   |       | 6.9 | %     |   |   | 5.5 | % |   |    | 7.2   | % |   |      | 5.9   | %    |   |   | 5.8   | %
|                                      |                         | Fair value |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   | $    | 1,494 |      |   | $ | 1,498 |  
|Mortgage-backed Securities            |                         |            |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   |      |       |      |   |  
|Fixed Rate                            |                         |            |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   |      |       |      |   |  
|                                      |                         | Par value  |   | $    | 303 |      |   | $    | 356 |      |   | $    | 289 |            |   | $     | 197 |       |   | $ | 141 |   |   | $  | 867   |   |   | $    | 2,153 |      |   | $ | 1,168 |  
|                                      |                         | WAC        |   |      | 6.7 | %    |   |      | 6.7 | %    |   |      | 6.6 | %          |   |       | 6.6 | %     |   |   | 6.6 | % |   |    | 6.6   | % |   |      | 6.6   | %    |   |   | 6.8   | %
|                                      |                         | Fair value |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   | $    | 2,260 |      |   | $ | 1,189 |  
|                                      | Variable Rate
Par value |            | $ | 2    |     |      | $ | 5    |     |      | $ | 5    |     |            | $ | 5     |     |       | $ | 4 |     |   | $ | 15 |       |   | $ | 36   |       |      | $ | 2 |      
|                                      |                         | WAC        |   |      | 2.5 | %    |   |      | 2.4 | %    |   |      | 2.4 | %          |   |       | 2.4 | %     |   |   | 2.4 | % |   |    | 2.4   | % |   |      | 2.4   | %    |   |   | 5.4   | %
|                                      |                         | Fair value |   |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |   |   |    |       |   |   | $    | 36    |      |   | $ | 2     |  

The table below provides information as of December 31, 2002 on debt
obligations and trust preferred securities and reflects principal cash flows
and related weighted average interest rates by maturity year. Comparative
totals are included as of December 31, 2001.

|                               |                   |                                |   |      |   |      |   |      |     |      |   |      |   |            |   |       |   |       |   |   |     |   |   |     |     |   |   |      |       |      |   |     |       |  
|------------------------------ | ----------------- | ------------------------------ | - | ---- | - | ---- | - | ---- | --- | ---- | - | ---- | - | ---------- | - | ----- | - | ----- | - | - | --- | - | - | --- | --- | - | - | ---- | ----- | ---- | - | --- | ----- | -
|                               |                   |                                |   |      |   |      |   |      |     |      |   |      |   |            |   |       |   |       |   |   |     |   |   |     |     |   |   | 2002 |       | 2001
|                               |                   |                                |   | 2003 |   | 2004 |   | 2005 |     | 2006 |   | 2007 |   | Thereafter |   | Total |   | Total
|                               |                   |                                |   |      |   |      |   |      |     |      |   |      |   |            |   |       |   |      
|Long-term Debt                 |                   |                                |   |      |   |      |   |      |     |      |   |      |   |            |   |       |   |       |   |   |     |   |   |     |     |   |   |      |       |      |   |    
|Fixed Rate                     |                   |                                |   |      |   |      |   |      |     |      |   |      |   |            |   |       |   |       |   |   |     |   |   |     |     |   |   |      |       |      |   |    
|                               |                   | Amount                         |   | $    |  |      |   | $    | 200 |      |   | $    |  |            |   | $     |  |       |   | $ | 200 |   |   | $   | 725 |   |   | $    | 1,125 |      |   | $   | 1,050 |  
|                               |                   | Weighted average interest rate |   |      |  |      |   |      | 6.9 | %    |   |      |  |            |   |       |  |       |   |   | 7.1 | % |   |     | 7.1 | % |   |      | 7.1   | %    |   |     | 7.3   | %
|                               |                   | Fair value                     |   |      |   |      |   |      |     |      |   |      |   |            |   |       |   |       |   |   |     |   |   |     |     |   |   | $    | 1,217 |      |   | $   | 1,118 |  
|Trust Preferred Securities [1] |                   |                                |   |      |   |      |   |      |     |      |   |      |   |            |   |       |   |       |   |   |     |   |   |     |     |   |   |      |       |      |   |    
|                               | Fixed Rate
Amount |                                | $ |     |   |      | $ |     |     |      | $ |     |   |            | $ |      |   |       | $ |  |     |   | $ | 450 |     |   | $ | 450  |       |      | $ | 450 |      
|                               |                   | Weighted average interest rate |   |      |  |      |   |      |    |      |   |      |  |            |   |       |  |       |   |   |    |   |   |     | 7.4 | % |   |      | 7.4   | %    |   |     | 7.4   | %
|                               |                   | Fair value                     |   |      |   |      |   |      |     |      |   |      |   |            |   |       |   |       |   |   |     |   |   |     |     |   |   | $    | 464   |      |   | $   | 461   |  

|    |  |                                                                                                                                             
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------
|[1] |  | Represents Company Obligated Mandatorily Redeemable Preferred Securities
of Subsidiary Trusts Holding Solely Junior Subordinated Debentures.

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Asset and Liability Management Strategies Used to Manage Market Risk

Hartford Life employs several risk management tools to quantify and manage
market risk arising from its investments and interest sensitive liabilities.
For certain portfolios, management monitors the changes in present value
between assets and liabilities resulting from various interest rate scenarios
using integrated asset/liability measurement systems and a proprietary system
that simulates the impacts of parallel and non-parallel yield curve shifts.
Based on this current and prospective information, management implements risk
reducing techniques to improve the match between assets and liabilities.

Derivatives play an important role in facilitating the management of interest
rate risk, creating opportunities to efficiently fund obligations, hedge
against risks that affect the value of certain liabilities and adjust broad
investment risk characteristics as a result of any significant changes in
market risks. Hartford Life uses a variety of derivatives, including swaps,
caps, floors, forwards and exchange-traded financial futures and options, in
order to hedge exposure primarily to interest rate risk on anticipated
investment purchases or existing assets and liabilities. At December 31, 2002,
notional amounts pertaining to derivatives totaled $10.0 billion ($8.3 billion
related to insurance investments and $1.7 billion related to life insurance
liabilities). Notional amounts pertaining to derivatives totaled $9.3 billion
at December 31, 2001 ($7.6 billion related to insurance investments and $1.7
billion related to life insurance liabilities).

The economic objectives and strategies for which the Company utilizes
derivatives are categorized as follows:

Anticipatory Hedging For certain liabilities, the Company commits to the
price of the product prior to receipt of the associated premium or deposit.
Anticipatory hedges are executed to offset the impact of changes in asset
prices arising from interest rate changes pending the receipt of premium or
deposit and the subsequent purchase of an asset. These hedges involve taking a
long position (purchase) in interest rate futures or entering into an interest
rate swap with duration characteristics equivalent to the associated
liabilities or anticipated investments. The notional amounts of anticipatory
hedges as of December 31, 2002 and 2001 were $265 and $320, respectively.

Liability Hedging Several products obligate the Company to credit a return to
the contract holder which is indexed to a market rate. To hedge risks
associated with these products, the Company enters into various derivative
contracts. Interest rate swaps are used to convert the contract rate into a
rate that trades in a more liquid and efficient market. This hedging strategy
enables the Company to customize contract terms and conditions to customer
objectives and satisfies the operations asset/liability matching policy. In
addition, interest rate swaps are used to convert certain variable contract
rates to different variable rates, thereby allowing them to be appropriately
matched against variable rate assets. Finally, interest rate caps and option
contracts are used to hedge against the risk of contract holder
disintermediation in a rising interest rate environment. The notional amounts
of derivatives used for liability hedging as of December 31, 2002 and 2001 were
$1.7 billion.

Asset Hedging To meet the various policyholder obligations and to provide
cost-effective, prudent investment risk diversification, the Company may
combine two or more financial instruments to achieve the investment
characteristics of a fixed maturity security or that match an associated
liability. The use of derivative instruments in this regard effectively
transfers unwanted investment risks or attributes to others. The selection of
the appropriate derivative instruments depends on the investment risk, the
liquidity and efficiency of the market and the asset and liability
characteristics. The notional amounts of asset hedges as of December 31, 2002
and 2001 were $7.2 billion and $6.2 billion, respectively.

Portfolio Hedging The Company periodically compares the duration and
convexity of its portfolios of assets to its corresponding liabilities and
enters into portfolio hedges to reduce any difference to desired levels.
Portfolio hedges reduce the duration and convexity mismatch between assets and
liabilities and offset the potential impact to cash flows caused by changes in
interest rates. The notional amounts of portfolio hedges as of December 31,
2002 and 2001 were $910 and $1.1 billion, respectively.

The following tables provide information as of December 31, 2002 with
comparative totals for December 31, 2001 on derivative instruments used in
accordance with the aforementioned hedging strategies. For interest rate
swaps, caps and floors, the tables present notional amounts with weighted
average pay and receive rates for swaps and weighted average strike rates for
caps and floors by maturity year. For interest rate futures, the table
presents contract amount and weighted average settlement price by expected
maturity year. For option contracts, the table presents contract amount by
expected maturity year.

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|                                        |                                   |  |      |     |      |  |      |       |      |  |      |       |            |  |       |     |       |  |   |     |   |  |   |       |   |  |      |       |      |  |   |       |  
|--------------------------------------- | --------------------------------- |  | ---- | --- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | ---------- |  | ----- | --- | ----- |  | - | --- | - |  | - | ----- | - |  | ---- | ----- | ---- |  | - | ----- | -
|                                        |                                   |  |      |     |      |  |      |       |      |  |      |       |            |  |       |     |       |  |   |     |   |  |   |       |   |  | 2002 |       | 2001
|Interest
Rate Swaps [1]                 |                                   |  | 2003 |     | 2004 |  | 2005 |       | 2006 |  | 2007 |       | Thereafter |  | Total |     | Total
|                                        |                                   |  |      |     |      |  |      |       |      |  |      |       |            |  |       |     |      
|Pay Fixed/Receive Variable              |                                   |  |      |     |      |  |      |       |      |  |      |       |            |  |       |     |       |  |   |     |   |  |   |       |   |  |      |       |      |  |   |      
|                                        | Notional value                    |  | $    | 295 |      |  | $    | 85    |      |  | $    | 126   |            |  | $     | 36  |       |  | $ | 140 |   |  | $ | 491   |   |  | $    | 1,173 |      |  | $ | 937   |  
|                                        | Weighted average pay rate         |  |      | 4.2 | %    |  |      | 3.5   | %    |  |      | 7.5   | %          |  |       | 6.7 | %     |  |   | 5.1 | % |  |   | 6.7   | % |  |      | 5.7   | %    |  |   | 6.5   | %
|                                        | Weighted average receive rate     |  |      | 1.5 | %    |  |      | 1.4   | %    |  |      | 1.5   | %          |  |       | 1.8 | %     |  |   | 1.4 | % |  |   | 1.6   | % |  |      | 1.6   | %    |  |   | 2.2   | %
|                                        | Fair value                        |  |      |     |      |  |      |       |      |  |      |       |            |  |       |     |       |  |   |     |   |  |   |       |   |  | $    | (132  | )    |  | $ | (68   | )
|Pay Variable/Receive Fixed              |                                   |  |      |     |      |  |      |       |      |  |      |       |            |  |       |     |       |  |   |     |   |  |   |       |   |  |      |       |      |  |   |      
|                                        | Notional value                    |  | $    | 473 |      |  | $    | 1,369 |      |  | $    | 1,045 |            |  | $     | 739 |       |  | $ | 664 |   |  | $ | 1,583 |   |  | $    | 5,873 |      |  | $ | 5,045 |  
|                                        | Weighted average pay rate         |  |      | 1.4 | %    |  |      | 1.6   | %    |  |      | 1.5   | %          |  |       | 1.5 | %     |  |   | 1.5 | % |  |   | 1.5   | % |  |      | 1.5   | %    |  |   | 2.1   | %
|                                        | Weighted average receive rate     |  |      | 5.6 | %    |  |      | 5.5   | %    |  |      | 5.7   | %          |  |       | 5.5 | %     |  |   | 5.2 | % |  |   | 5.3   | % |  |      | 5.5   | %    |  |   | 5.8   | %
|                                        | Fair value                        |  |      |     |      |  |      |       |      |  |      |       |            |  |       |     |       |  |   |     |   |  |   |       |   |  | $    | 514   |      |  | $ | 193   |  
|Pay Variable/Receive Different Variable |                                   |  |      |     |      |  |      |       |      |  |      |       |            |  |       |     |       |  |   |     |   |  |   |       |   |  |      |       |      |  |   |      
|                                        | Notional value                    |  | $    | 2   |      |  | $    | 141   |      |  | $    | 11    |            |  | $     |    |       |  | $ | 50  |   |  | $ |      |   |  | $    | 204   |      |  | $ | 159   |  
|                                        | Weighted average pay rate         |  |      | 1.7 | %    |  |      | 2.4   | %    |  |      | 3.7   | %          |  |       |    |       |  |   | 1.4 | % |  |   |      |   |  |      | 2.2   | %    |  |   | 3.2   | %
|                                        | Weighted average receive rate [2] |  |      | 1.4 | %    |  |      | 2.8   | %    |  |      | (11.0 | )%         |  |       |    |       |  |   | 2.6 | % |  |   |      |   |  |      | 2.0   | %    |  |   | 4.4   | %
|                                        | Fair value                        |  |      |     |      |  |      |       |      |  |      |       |            |  |       |     |       |  |   |     |   |  |   |       |   |  | $    | 2     |      |  | $ | 1     |  

|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[1] |  | Swap agreements in which the Company assumes credit exposure from a
single entity, referenced index or asset pool are not included above,
rather they are included in the Credit Risk discussion. At December 31,
2002 and 2001, these swaps had a notional value of $497 and $230,
respectively, and a fair value of $(41) and $(51), respectively. Also,
swap agreements that reduce foreign currency exposure in certain fixed
maturity investments are not included above, rather they are included in
the Foreign Currency Risk Discussion. At December 31, 2002 and 2001,
these swaps had a notional value of $794 and $435, respectively, and a
fair value of $(67) and $6, respectively
|[2] |  | Negative weighted average receive rate in 2005 results when payments
are required on both sides of an index swap                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

|                                 |                                           |      |   |      |   |      |   |      |  |      |   |            |   |       |   |       |  |  |   |     |   |  |   |   |  |  |      |     |      |  |   |      |  
|-------------------------------- | ----------------------------------------- | ---- | - | ---- | - | ---- | - | ---- |  | ---- | - | ---------- | - | ----- | - | ----- |  |  | - | --- | - |  | - | - |  |  | ---- | --- | ---- |  | - | ---- | -
|                                 |                                           |      |   |      |   |      |   |      |  |      |   |            |   |       |   |       |  |  |   |     |   |  |   |   |  |  | 2002 |     | 2001
|Interest
Rate Caps - LIBOR Based |                                           | 2003 |   | 2004 |   | 2005 |   | 2006 |  | 2007 |   | Thereafter |   | Total |   | Total
|                                 |                                           |      |   |      |   |      |   |      |  |      |   |            |   |       |   |      
|Purchased                        |                                           |      |   |      |   |      |   |      |  |      |   |            |   |       |   |       |  |  |   |     |   |  |   |   |  |  |      |     |      |  |   |     
|                                 | Notional value                            |      | $ | 54   |   |      | $ |     |  |      | $ | 77         |   |       | $ |      |  |  | $ | 30  |   |  | $ |  |  |  | $    | 161 |      |  | $ | 171  |  
|                                 | Weighted average strike rate (8.0 - 9.9%) |      |   | 8.5  | % |      |   |     |  |      |   | 8.4        | % |       |   |      |  |  |   | 8.3 | % |  |   |  |  |  |      | 8.4 | %    |  |   | 8.5  | %
|                                 | Fair value                                |      |   |      |   |      |   |      |  |      |   |            |   |       |   |       |  |  |   |     |   |  |   |   |  |  | $    |    |      |  | $ | 1    |  
|                                 | Notional value                            |      | $ |     |   |      | $ |     |  |      | $ |           |   |       | $ |      |  |  | $ |    |   |  | $ |  |  |  | $    |    |      |  | $ | 19   |  
|                                 | Weighted average strike rate (10.1%)      |      |   |     |   |      |   |     |  |      |   |           |   |       |   |      |  |  |   |    |   |  |   |  |  |  |      |    |      |  |   | 10.1 | %
|                                 | Fair value                                |      |   |      |   |      |   |      |  |      |   |            |   |       |   |       |  |  |   |     |   |  |   |   |  |  | $    |    |      |  | $ |     |  

|                                   |                                     |  |      |     |      |  |      |   |      |  |      |     |            |  |       |   |       |  |   |   |  |  |   |   |  |  |      |     |      |  |   |     |  
|---------------------------------- | ----------------------------------- |  | ---- | --- | ---- |  | ---- | - | ---- |  | ---- | --- | ---------- |  | ----- | - | ----- |  | - | - |  |  | - | - |  |  | ---- | --- | ---- |  | - | --- | -
|                                   |                                     |  |      |     |      |  |      |   |      |  |      |     |            |  |       |   |       |  |   |   |  |  |   |   |  |  | 2002 |     | 2001
|Interest
Rate Caps - CMT Based [1] |                                     |  | 2003 |     | 2004 |  | 2005 |   | 2006 |  | 2007 |     | Thereafter |  | Total |   | Total
|                                   |                                     |  |      |     |      |  |      |   |      |  |      |     |            |  |       |   |      
|Purchased                          |                                     |  |      |     |      |  |      |   |      |  |      |     |            |  |       |   |       |  |   |   |  |  |   |   |  |  |      |     |      |  |   |    
|                                   | Notional value                      |  | $    | 250 |      |  | $    |  |      |  |      | 250 |            |  | $     |  |       |  | $ |  |  |  | $ |  |  |  | $    | 500 |      |  | $ | 500 |  
|                                   | Weighted average strike rate (8.7%) |  |      | 8.7 | %    |  |      |  |      |  |      | 8.7 | %          |  |       |  |       |  |   |  |  |  |   |  |  |  |      | 8.7 | %    |  |   | 8.7 | %
|                                   | Fair value                          |  |      |     |      |  |      |   |      |  |      |     |            |  |       |   |       |  |   |   |  |  |   |   |  |  | $    |    |      |  | $ | 3   |  

|    |  |                                                   
|--- |  | --------------------------------------------------
|[1] |  | CMT represents the Constant Maturity Treasury Rate

|                                   |                                           |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |  |  |   |   |  |  |   |   |  |  |      |     |      |  |   |     |  
|---------------------------------- | ----------------------------------------- | ---- | - | ---- | - | ---- | - | ---- | - | ---- | - | ---------- | - | ----- | - | ----- |  |  | - | - |  |  | - | - |  |  | ---- | --- | ---- |  | - | --- | -
|                                   |                                           |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |  |  |   |   |  |  |   |   |  |  | 2002 |     | 2001
|Interest Rate Floors - LIBOR Based |                                           | 2003 |   | 2004 |   | 2005 |   | 2006 |   | 2007 |   | Thereafter |   | Total |   | Total
|                                   |                                           |      |   |      |   |      |   |      |   |      |   |            |   |       |   |      
|Purchased                          |                                           |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |  |  |   |   |  |  |   |   |  |  |      |     |      |  |   |    
|                                   | Notional value                            |      | $ |     |   |      | $ | 27   |   |      | $ |           |   |       | $ |      |  |  | $ |  |  |  | $ |  |  |  | $    | 27  |      |  | $ | 27  |  
|                                   | Weighted average strike rate (7.9%)       |      |   |     |   |      |   | 7.9  | % |      |   |           |   |       |   |      |  |  |   |  |  |  |   |  |  |  |      | 7.9 | %    |  |   | 7.9 | %
|                                   | Fair value                                |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |  |  |   |   |  |  |   |   |  |  | $    | 3   |      |  | $ | 3   |  
|Issued                             |                                           |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |  |  |   |   |  |  |   |   |  |  |      |     |      |  |   |    
|                                   | Notional value                            |      | $ | 54   |   |      | $ | 34   |   |      | $ | 77         |   |       | $ |      |  |  | $ |  |  |  | $ |  |  |  | $    | 165 |      |  | $ | 193 |  
|                                   | Weighted average strike rate (4.0 - 5.9%) |      |   | 5.4  | % |      |   | 5.3  | % |      |   | 5.3        | % |       |   |      |  |  |   |  |  |  |   |  |  |  |      | 5.3 | %    |  |   | 5.3 | %
|                                   | Fair value                                |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |  |  |   |   |  |  |   |   |  |  | $    | (9  | )    |  | $ | (8  | )
|                                   | Notional value                            |      | $ |     |   |      | $ | 27   |   |      | $ |           |   |       | $ |      |  |  | $ |  |  |  | $ |  |  |  | $    | 27  |      |  | $ | 27  |  
|                                   | Weighted average strike rate (7.8%)       |      |   |     |   |      |   | 7.8  | % |      |   |           |   |       |   |      |  |  |   |  |  |  |   |  |  |  |      | 7.8 | %    |  |   | 7.8 | %
|                                   | Fair value                                |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |  |  |   |   |  |  |   |   |  |  | $    | (3  | )    |  | $ | (3  | )

33



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##### Table of Contents



|                                     |                                     |  |      |     |      |  |      |   |      |  |      |   |            |  |       |   |       |  |  |   |   |  |  |   |   |  |      |   |      |   |  |   |    
|------------------------------------ | ----------------------------------- |  | ---- | --- | ---- |  | ---- | - | ---- |  | ---- | - | ---------- |  | ----- | - | ----- |  |  | - | - |  |  | - | - |  | ---- | - | ---- | - |  | - | ---
|                                     |                                     |  |      |     |      |  |      |   |      |  |      |   |            |  |       |   |       |  |  |   |   |  |  |   |   |  | 2002 |   | 2001
|Interest
Rate Floors - CMT Based [1] |                                     |  | 2003 |     | 2004 |  | 2005 |   | 2006 |  | 2007 |   | Thereafter |  | Total |   | Total
|                                     |                                     |  |      |     |      |  |      |   |      |  |      |   |            |  |       |   |      
|Purchased                            |                                     |  |      |     |      |  |      |   |      |  |      |   |            |  |       |   |       |  |  |   |   |  |  |   |   |  |      |   |      |   |  |  
|                                     | Notional value                      |  | $    | 150 |      |  |      | $ |     |  |      | $ |           |  |       | $ |      |  |  | $ |  |  |  | $ |  |  |      | $ | 150  |   |  | $ | 150
|                                     | Weighted average strike rate (5.5%) |  |      | 5.5 | %    |  |      |   |     |  |      |   |           |  |       |   |      |  |  |   |  |  |  |   |  |  |      |   | 5.5  | % |  |   | 5.5
|                                     | Fair value                          |  |      |     |      |  |      |   |      |  |      |   |            |  |       |   |       |  |  |   |   |  |  |   |   |  |      | $ | 1    |   |  | $ | 5  

|    |  |                                                   
|--- |  | --------------------------------------------------
|[1] |  | CMT represents the Constant Maturity Treasury Rate

|                      |                                   |      |   |      |  |      |   |      |  |      |   |            |  |       |   |       |  |  |   |   |  |  |   |   |  |  |      |     |      |  |   |     | 
|--------------------- | --------------------------------- | ---- | - | ---- |  | ---- | - | ---- |  | ---- | - | ---------- |  | ----- | - | ----- |  |  | - | - |  |  | - | - |  |  | ---- | --- | ---- |  | - | --- | 
|                      |                                   |      |   |      |  |      |   |      |  |      |   |            |  |       |   |       |  |  |   |   |  |  |   |   |  |  | 2002 |     | 2001
|Interest Rate Futures |                                   | 2003 |   | 2004 |  | 2005 |   | 2006 |  | 2007 |   | Thereafter |  | Total |   | Total
|                      |                                   |      |   |      |  |      |   |      |  |      |   |            |  |       |   |      
|Long                  |                                   |      |   |      |  |      |   |      |  |      |   |            |  |       |   |       |  |  |   |   |  |  |   |   |  |  |      |     |      |  |   |    
|                      | Contract amount/notional          |      | $ |     |  |      | $ |     |  |      | $ |           |  |       | $ |      |  |  | $ |  |  |  | $ |  |  |  | $    |    |      |  | $ | 266 | 
|                      | Weighted average settlement price |      | $ |     |  |      | $ |     |  |      | $ |           |  |       | $ |      |  |  | $ |  |  |  | $ |  |  |  | $    |    |      |  | $ | 105 | 
|Short                 |                                   |      |   |      |  |      |   |      |  |      |   |            |  |       |   |       |  |  |   |   |  |  |   |   |  |  |      |     |      |  |   |    
|                      | Contract amount/notional          |      | $ | 11   |  |      | $ |     |  |      | $ |           |  |       | $ |      |  |  | $ |  |  |  | $ |  |  |  | $    | 11  |      |  | $ | 25  | 
|                      | Weighted average settlement price |      | $ | 114  |  |      | $ |     |  |      | $ |           |  |       | $ |      |  |  | $ |  |  |  | $ |  |  |  | $    | 114 |      |  | $ | 105 | 

|                 |                          |      |   |      |  |      |   |      |  |      |   |            |  |       |   |       |  |  |   |    |  |  |   |    |  |  |      |       |      |  |   |       |  
|---------------- | ------------------------ | ---- | - | ---- |  | ---- | - | ---- |  | ---- | - | ---------- |  | ----- | - | ----- |  |  | - | -- |  |  | - | -- |  |  | ---- | ----- | ---- |  | - | ----- | -
|                 |                          |      |   |      |  |      |   |      |  |      |   |            |  |       |   |       |  |  |   |    |  |  |   |    |  |  | 2002 |       | 2001
|Option Contracts |                          | 2003 |   | 2004 |  | 2005 |   | 2006 |  | 2007 |   | Thereafter |  | Total |   | Total
|                 |                          |      |   |      |  |      |   |      |  |      |   |            |  |       |   |      
|Long             |                          |      |   |      |  |      |   |      |  |      |   |            |  |       |   |       |  |  |   |    |  |  |   |    |  |  |      |       |      |  |   |      
|                 | Contract amount/notional |      | $ | 83   |  |      | $ | 88   |  |      | $ | 45         |  |       | $ | 324   |  |  | $ | 32 |  |  | $ | 78 |  |  | $    | 650   |      |  | $ | 723   |  
|                 | Fair value               |      |   |      |  |      |   |      |  |      |   |            |  |       |   |       |  |  |   |    |  |  |   |    |  |  | $    | 18    |      |  | $ | 28    |  
|Short            |                          |      |   |      |  |      |   |      |  |      |   |            |  |       |   |       |  |  |   |    |  |  |   |    |  |  |      |       |      |  |   |      
|                 | Contract amount/notional |      | $ | 172  |  |      | $ | 457  |  |      | $ | 189        |  |       | $ | 225   |  |  | $ | 25 |  |  | $ | 30 |  |  | $    | 1,098 |      |  | $ | 1,056 |  
|                 | Fair value               |      |   |      |  |      |   |      |  |      |   |            |  |       |   |       |  |  |   |    |  |  |   |    |  |  | $    | (37   | )    |  | $ | (61   | )

Currency Exchange Risk

Currency exchange risk exists with respect to investments in non-US dollar
denominated securities. The fair value of these fixed maturity securities at
December 31, 2002 and 2001 was $1.2 billion and $494, respectively. In order
to manage a portion of these currency exposures, the Company enters into
foreign currency swaps to hedge the variability in cash flow associated with
certain foreign denominated securities. These foreign currency swap agreements
are structured to match the foreign currency cash flows of the hedged foreign
denominated securities. At December 31, 2002 and 2001, the foreign currency
swaps had a notional value of $794 and $435, respectively and fair value of
$(67) and $6, respectively. In the fourth quarter of 2002, the Company entered
into a costless collar strategy to temporarily mitigate a portion of its
residual currency risk in foreign dominated securities. Accordingly, the
Company purchased foreign put options and wrote foreign call options expiring
in January 2003. At December 31, 2002 the foreign put and call options had a
notional value of $469, and fair value of $(3). The Company had no foreign put
or call options at December 31, 2001.

Hartford Life Product Liability Characteristics

Hartford Lifes product liabilities, other than non-guaranteed separate
accounts, include accumulation vehicles such as fixed and variable annuities,
other investment and universal life-type contracts, and other insurance
products such as long-term disability and term life insurance.

Asset Accumulation Vehicles

While interest rate risk associated with these insurance products has been
reduced through the use of market value adjustment features and surrender
charges, the primary risk associated with these products is that the spread
between investment return and credited rate may not be sufficient to earn
targeted returns.

Fixed Rate Products in this category require the payment of a fixed rate for
a certain period of time. The cash flows are not interest sensitive because
the products are written with a market value adjustment feature and the
liabilities have protection against the early withdrawal of funds through
surrender charges. Product examples include fixed rate annuities with a market
value adjustment and fixed rate guaranteed investment contracts. Contract
duration is dependent on the policyholders choice of guarantee period.

Indexed Products in this category are similar to the fixed rate asset
accumulation vehicles but require the life operations to pay a rate that is
determined by an external index. The amount and/or timing of cash flows will
therefore vary based on the level of the particular index. The primary risks
inherent in these products are similar to the fixed rate asset accumulation
vehicles, with the additional risk that changes in the index may adversely
affect profitability. Product examples include indexed-guaranteed investment
contracts with an estimated duration of up to two years.

34



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##### Table of Contents



Interest Credited Products in this category credit interest to policyholders,
subject to market conditions and minimum guarantees. Policyholders may
surrender at book value but are subject to surrender charges for an initial
period. Product examples include universal life contracts and the general
account portion of Hartford Lifes variable annuity products. Liability
duration is short- to intermediate-term.

Other Insurance Products

Long-term Pay Out Liabilities Products in this category are long-term in
nature and may contain significant actuarial (including mortality and
morbidity) pricing and cash flow risks. The cash flows associated with these
policy liabilities are not interest rate sensitive but do vary based on the
timing and amount of benefit payments. The primary risks associated with these
products are that the benefits will exceed expected actuarial pricing and/or
that the actual timing of the cash flows differ from those anticipated,
resulting in an investment return lower than that assumed in pricing. Product
examples include structured settlement contracts, on-benefit annuities (i.e.,
the annuitant is currently receiving benefits thereon) and long-term disability
contracts. Contract duration is generally five to ten years.

Short-term Pay Out Liabilities These liabilities are short-term in nature
with a duration of less than one year. The primary risks associated with these
products are determined by the non-investment contingencies such as mortality
or morbidity and the variability in the timing of the expected cash flows.
Liquidity is of greater concern than for the long-term pay out liabilities.
Products include individual and group term life insurance contracts and
short-term disability contracts.

Management of the duration of investments with respective policyholder
obligations is an explicit objective of Hartford Lifes management strategy.
The estimated cash flows of insurance policy liabilities based upon internal
actuarial assumptions as of December 31, 2002 are reflected in the table below
by expected maturity year. Comparative totals are included for December 31,
2001.

(Dollars in billions)

|                                              |                                |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |     |   |   |     |     |   |   |      |     |      |   |      |     |  
|--------------------------------------------- | ------------------------------ | ---- | --- | ---- | - | ---- | --- | ---- | - | ---- | --- | ---------- | - | ----- | --- | ----- | - | - | --- | --- | - | - | --- | --- | - | - | ---- | --- | ---- | - | ---- | --- | -
|                                              |                                |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |     |   |   |     |     |   |   | 2002 |     | 2001
|Description
(1)                               |                                | 2003 |     | 2004 |   | 2005 |     | 2006 |   | 2007 |     | Thereafter |   | Total |     | Total
|                                              |                                |      |     |      |   |      |     |      |   |      |     |            |   |       |     |      
|Fixed rate asset accumulation vehicles        |                                | $    | 1.7 |      |   | $    | 3.0 |      |   | $    | 2.6 |            |   | $     | 2.0 |       |   | $ | 1.9 |     |   | $ | 2.4 |     |   | $ | 13.6 |     |      | $ | 15.8 |    
|                                              | Weighted average credited rate |      |     | 6.0  | % |      |     | 6.0  | % |      |     | 5.9        | % |       |     | 5.6   | % |   |     | 5.5 | % |   |     | 5.7 | % |   |      | 5.8 | %    |   |      | 5.9 | %
|Indexed asset accumulation vehicles           |                                | $    | 0.6 |      |   | $    | 0.1 |      |   | $    |    |            |   | $     |    |       |   | $ |    |     |   | $ |    |     |   | $ | 0.7  |     |      | $ | 0.8  |    
|                                              | Weighted average credited rate |      |     | 3.0  | % |      |     | 3.0  | % |      |     |           |   |       |     |      |   |   |     |    |   |   |     |    |   |   |      | 3.0 | %    |   |      | 6.5 | %
|Interest credited asset accumulation vehicles |                                | $    | 3.3 |      |   | $    | 3.3 |      |   | $    | 3.2 |            |   | $     | 0.5 |       |   | $ | 0.5 |     |   | $ | 5.2 |     |   | $ | 16.0 |     |      | $ | 8.1  |    
|                                              | Weighted average credited rate |      |     | 3.9  | % |      |     | 3.9  | % |      |     | 3.8        | % |       |     | 4.8   | % |   |     | 4.8 | % |   |     | 4.8 | % |   |      | 4.2 | %    |   |      | 5.7 | %
|Long-term pay out liabilities                 |                                | $    | 1.0 |      |   | $    | 0.8 |      |   | $    | 0.7 |            |   | $     | 0.5 |       |   | $ | 0.5 |     |   | $ | 5.6 |     |   | $ | 9.1  |     |      | $ | 8.6  |    
|Short-term pay out liabilities                |                                | $    | 0.9 |      |   | $    | 0.1 |      |   | $    |    |            |   | $     |    |       |   | $ |    |     |   | $ |    |     |   | $ | 1.0  |     |      | $ | 1.0  |    



|    |  |                                                                                                                                                                                    
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) |  | As of December 31, 2002 and 2001, the fair value of the Companys
investment contracts, including guaranteed separate accounts, were $32.4
billion and $26.0 billion, respectively.

Sensitivity to Changes in Interest Rates

For liabilities whose cash flows are not substantially affected by changes in
interest rates (fixed liabilities) and where investment experience is
substantially absorbed by Hartford Life, the sensitivity of the net economic
value (discounted present value of asset cash flows less the discounted present
value of liability cash flows) of those portfolios to 100 basis point shifts in
interest rates are shown in the following table.

|                  |                            |  |                              |      |      |  |       |       |    |  |       |      |   |  |       |       |   
|----------------- | -------------------------- |  | ---------------------------- | ---- | ---- |  | ----- | ----- | -- |  | ----- | ---- | - |  | ----- | ----- | --
|                  |                            |  | Change in Net Economic Value |      |      |  |      
|                  |                            |  |                              |      |      |  |      
|                  |                            |  | 2002                         |      | 2001 |  |       |       |   
|                  |                            |  |                              |      |      |  |       |       |   
|Basis point shift |                            |  | -100                         |      |      |  | + 100 |       |    |  | - 100 |      |   |  | + 100 |      
|                  |                            |  |                              |      |      |  |       |       |    |  |       |      |   |  |       |      
|                  | Amount                     |  | $                            | 17   |      |  | $     | (51   | )  |  | $     | 6    |   |  | $     | (31   | ) 
|                  | Percent of liability
value |  |                              | 0.08 | %    |  |       | (0.23 | )% |  |       | 0.03 | % |  |       | (0.16 | )%



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These fixed liabilities represented about 57% and 61% of Hartford Lifes
general and guaranteed separate account liabilities at December 31, 2002 and
2001, respectively. The remaining liabilities generally allow Hartford Life
significant flexibility to adjust credited rates to reflect actual investment
experience and thereby pass through a substantial portion of actual investment
experience to the policyholder. The fixed liability portfolios are managed and
monitored relative to defined objectives and are analyzed regularly by
management for internal risk management purposes using scenario simulation
techniques, and are evaluated on an annual basis, in compliance with regulatory
requirements.

Equity Risk

Hartford Lifes operations are significantly influenced by changes in the
equity markets. The Companys profitability depends largely on the amount of
assets under management, which is primarily driven by the level of sales,
equity market appreciation and depreciation and the persistency of the in-force
block of business. A prolonged and precipitous decline in the equity markets,
as has been experienced of late, can have a significant impact on the Companys
operations, as sales of variable products may decline and surrender activity
may increase, as customer sentiment towards the equity market turns negative.
The lower assets under management will have a negative impact on the Companys
financial results, primarily due to lower fee income related to the Investment
Products and Individual Life segments, where a heavy concentration of equity
linked products are administered and sold. Furthermore, the Company may
experience a reduction in profit margins if a significant portion of the assets
held in the variable annuity separate accounts move to the general account and
the Company is unable to earn an acceptable investment spread, particularly in
light of the low interest rate environment and the presence of contractually
guaranteed minimum interest credited rates, which for the most part are at a 3%
rate.

In addition, prolonged declines in the equity market may also decrease the
Companys expectations of future gross profits, which are utilized to determine
the amount of DAC to be amortized in a given financial statement period. A
significant decrease in the Companys estimated gross profits would require the
Company to accelerate the amount of DAC amortization in a given period,
potentially causing a material adverse deviation in that periods net income.
Although an acceleration of DAC amortization would have a negative impact on
the Companys earnings, it would not affect the Companys cash flow or
liquidity position.

Additionally, the Investment Products segment sells variable annuity contracts
that offer various guaranteed death benefits. For certain guaranteed death
benefits, Hartford Life pays the greater of (1) the account value at death; (2)
the sum of all premium payments less prior withdrawals; or (3) the maximum
anniversary value of the contract, plus any premium payments since the contract
anniversary, minus any withdrawals following the contract anniversary. The
Company currently reinsures a significant portion of these death benefit
guarantees associated with its in-force block of business. The Company
currently records the death benefit costs, net of reinsurance, as they are
incurred. Declines in the equity market may increase the Companys net
exposure to death benefits under these contracts.

The Companys total gross exposure (i.e. before reinsurance) to these
guaranteed death benefits as of December 31, 2002 is $22.4 billion. Due to the
fact that 82% of this amount is reinsured, the Companys net exposure is $4.1
billion. This amount is often referred to as the net amount at risk. However,
the Company will only incur these guaranteed death benefit payments in the
future if the policyholder has an in-the-money guaranteed death benefit at
their time of death. In order to analyze the total costs that the Company may
incur in the future related to these guaranteed death benefits, the Company
performed an actuarial present value analysis. This analysis included
developing a model utilizing 250 stochastically generated investment
performance scenarios and best estimate assumptions related to mortality and
lapse rates. A range of projected costs was developed and discounted back to
the statement date utilizing the Companys cost of capital, which for this
purpose was assumed to be 9.25%. Based on this analysis, the Company estimated
that the present value of the retained death benefit costs to be incurred in
the future fell within a range of $86 to $349. This range was calculated
utilizing a 95% confidence interval. The median of the 250 stochastically
generated scenarios was $159.

Furthermore, the Company is involved in arbitration with one of its primary
reinsurers relating to policies with such death benefit guarantees written from
1994 to 1999. The arbitration involves alleged breaches under the reinsurance
treaties. Although the Company believes that its position in this pending
arbitration is strong, an adverse outcome could result in a decrease to the
Companys statutory surplus and capital and potentially increase the death
benefit costs incurred by the Company in the future. The arbitration hearing
was held during the fourth quarter of 2002, but no decision has been rendered.

CAPITAL RESOURCES AND LIQUIDITY

Capital resources and liquidity represent the overall financial strength of
Hartford Life and its ability to generate strong cash flows from each of the
business segments, borrow funds at competitive rates and raise new capital to
meet operating and growth needs. The Company maintained cash and short-term
investments totaling $1.3 billion and $1.4 billion as of December 31, 2002 and
2001, respectively. The capital structure of Hartford Life as of December 31,
2002, 2001 and 2000 consisted of debt and equity, summarized as follows:

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The capital structure of Hartford Life consists of debt and equity, and is
summarized as follows:

|                                                                                                                                               |                            |   |       |       |      |   |       |       | 
|---------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | - | ----- | ----- | ---- | - | ----- | ----- | 
|                                                                                                                                               |                            |   | 2002  |       | 2001
|                                                                                                                                               |                            |   |       |       |     
|Long-term debt                                                                                                                                 |                            |   | 1,125 |       |      |   | 1,050 |      
|Company obligated mandatorily redeemable preferred securities of subsidiary
trust holding solely parent junior subordinated debentures (TruPS) |                            |   | 450   |       |      |   | 450   |      
|                                                                                                                                               |                            |   |       |       |      |   |       |      
|                                                                                                                                               | Total debt                 |   | $     | 1,575 |      |   | $     | 1,500 | 
|                                                                                                                                               |                            |   |       |       |      |   |       |      
|Equity excluding net unrealized capital gains (losses) on securities, net of tax                                                               |                            | $ | 4,941 |       |      | $ | 4,385 |      
|Net unrealized capital gains (losses) on securities, net of tax                                                                                |                            |   | 747   |       |      |   | 225   |      
|                                                                                                                                               |                            |   |       |       |      |   |       |      
|                                                                                                                                               | Total stockholders equity |   | $     | 5,688 |      |   | $     | 4,610 | 
|                                                                                                                                               |                            |   |       |       |      |   |       |      
|                                                                                                                                               | Total capitalization(1)    |   | $     | 6,516 |      |   | $     | 5,885 | 
|                                                                                                                                               |                            |   |       |       |      |   |       |      
|Debt to equity (1) (2)                                                                                                                         |                            |   | 32    | %     |      |   | 34    | %    
|Debt to capitalization (1) (2)                                                                                                                 |                            |   | 24    | %     |      |   | 25    | %    
|                                                                                                                                               |                            |   |       |       |      |   |       |      

|    |  |                                                                                                                                                                              
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) |  | Excludes net unrealized capital gains (losses) on securities,
net of tax.                                                                                                    
|(2) |  | Excluding TruPS from debt, the debt to equity ratios were 23% and 24%,
and the debt to capitalization ratios were 17% and 18% as of December 31,
2002 and 2001, respectively.

Contractual Obligations and Commitments

The following table identifies the Companys contractual obligations by payment
due period.

|                              |  |      |    |      |  |      |     |      |  |   |    |  |  |      |     |            |  |       |  |  |  |   |     |  |  |   |       |  |  |   |       | 
|----------------------------- |  | ---- | -- | ---- |  | ---- | --- | ---- |  | - | -- |  |  | ---- | --- | ---------- |  | ----- |  |  |  | - | --- |  |  | - | ----- |  |  | - | ----- | 
|                              |  | 2003 |    | 2004 |  | 2005 |     | 2006 |  |   |    |  |  | 2007 |     | Thereafter |  | Total
|                              |  |      |    |      |  |      |     |      |  |   |    |  |  |      |     |            |  |      
|Short-term debt               |  | $    |   |      |  | $    |    |      |  | $ |   |  |  | $    |    |            |  |       |  |  |  | $ |    |  |  | $ |      |  |  | $ |      | 
|Long-term debt                |  |      |   |      |  |      | 200 |      |  |   |   |  |  |      |    |            |  |       |  |  |  |   | 200 |  |  |   | 650   |  |  |   | 1,050 | 
|Related party debt            |  |      |   |      |  |      |    |      |  |   |   |  |  |      | 75  |            |  |       |  |  |  |   |    |  |  |   |      |  |  |   | 75    | 
|                              |  |      |    |      |  |      |     |      |  |   |    |  |  |      |     |            |  |       |  |  |  |   |     |  |  |   |       |  |  |   |       | 
|Trust preferred securities    |  |      |   |      |  |      |    |      |  |   |   |  |  |      |    |            |  |       |  |  |  |   |    |  |  |   | 450   |  |  |   | 450   | 
|                              |  |      |    |      |  |      |     |      |  |   |    |  |  |      |     |            |  |       |  |  |  |   |     |  |  |   |       |  |  |   |       | 
|Total debt                    |  | $    |   |      |  | $    | 200 |      |  | $ |   |  |  | $    | 75  |            |  |       |  |  |  | $ | 200 |  |  | $ | 1,175 |  |  | $ | 1,575 | 
|Operating leases              |  |      | 26 |      |  |      | 26  |      |  |   | 27 |  |  |      | 27  |            |  |       |  |  |  |   | 27  |  |  |   | 54    |  |  |   | 187   | 
|Total contractual obligations |  | $    | 26 |      |  | $    | 226 |      |  | $ | 27 |  |  | $    | 102 |            |  |       |  |  |  | $ | 227 |  |  | $ | 1,229 |  |  | $ | 1,762 | 
|                              |  |      |    |      |  |      |     |      |  |   |    |  |  |      |     |            |  |       |  |  |  |   |     |  |  |   |       |  |  |   |       | 

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In addition to the contractual obligations above, Hartford Life had certain
unfunded commitments at December 31, 2002 to fund limited partnership
investments totaling $218. These capital commitments can be called by the
partnerships during the commitment period (on average, 3-6 years) to fund
working capital needs or the purchase of new investments. If the commitment
period expires and the commitment has not been fully funded, The Hartford is
not required to fund the remaining unfunded commitment but may elect to do so.

Acquisitions

On April 2, 2001, The Hartford acquired Fortis Financial Group for $1.12
billion in cash. The Company effected the acquisition through several
reinsurance agreements with subsidiaries of Fortis, Inc. and the purchase of
100% of the stock of Fortis Advisers, Inc. and Fortis Investors, Inc.,
wholly-owned subsidiaries of Fortis, Inc. The acquisition was recorded as a
purchase transaction.

Purchase consideration for the transaction was as follows:

|                                                                                       |                                                                         |                      |     |     |       | 
|-------------------------------------------------------------------------------------- | ----------------------------------------------------------------------- | -------------------- | --- | --- | ----- | 
|Issuance of:                                                                           |                                                                         |                      |     |    
|Common stock issuance (10 million shares
@ $64.00 per share), net of transaction costs |                                                                         | $                    | 615 |    
|Long-term notes:                                                                       |                                                                         |                      |     |    
|                                                                                       | $400 7.375% notes due March 1, 2031                                     |                      |     | 400 |      
|Trust preferred securities:                                                            |                                                                         |                      |     |    
|                                                                                       | $200 7.625% Trust Preferred Securities
(Series B) due February 15, 2050 |                      |     | 200 |      
|                                                                                       |                                                                         |                      |    
|                                                                                       |                                                                         | Consideration raised |     | $   | 1,215 | 
|                                                                                       |                                                                         |                      |    

For a further discussion of the Fortis Acquisition, see Note 20 of Notes to
Consolidated Financial Statements.

Capitalization

The Companys total capitalization, excluding net unrealized capital gains
(losses) on securities, net of tax, increased $631, or 11%, in 2002. The
increase was primarily the result of net income of $557, a capital contribution
from The Hartford in the amount of $75, additional debt of $75, partially
offset by dividends declared of $66 and the change in currency translation
adjustment of $10. The debt to equity and debt to capitalization ratios (both
exclude net unrealized capital gains (losses) on securities, net of tax)
decreased to 32% and 24% as of December 31, 2002, respectively, from 34% and
25% as of December 31, 2001, respectively. Net unrealized capital gains
(losses) on securities, net of tax, increased $522 as December 31, 2002, as
compared to December 31, 2001, primarily due to the declining interest rate
environment.

Shelf Registration

On May 15, 2001, the Company filed with the SEC a shelf registration statement
for the potential offering and sale of up to $1.0 billion in debt and preferred
securities. The registration statement was declared effective on May 29, 2001.
As of December 31, 2002, HLI had $1.0 billion remaining on its shelf.

For a further discussion of the shelf registration statements, see Note 10 of
Notes to Consolidated Financial Statements.

Common Stock Acquired by The Hartford

On June 27, 2000, The Hartford acquired all of the outstanding shares of Class
A common stock of Hartford Life, which The Hartford did not already own (The
Hartford Acquisition). The Hartford Acquisition was accomplished through an
offer to all Hartford Life shareholders to tender their shares to The Hartford
for cash consideration of $50.50 per share. Subsequent to the tender offer, a
newly formed wholly-owned subsidiary of The Hartford was merged into Hartford
Life, as a result of which, Hartford Life became an indirect wholly-owned
subsidiary of The Hartford. Those shareholders who had not
tendered their shares in the tender offer also received $50.50 in cash in
exchange for their shares in the subsequent merger.

Debt

For a discussion of Debt, see Note 10 of Notes to Consolidated Financial
Statements.

Company Obligated Mandatorily Redeemable Preferred Securities of Subsidiary
Trust Holding Solely Parent Junior Subordinated Debentures

For a discussion of Company Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trust Holding Solely Parent Junior Subordinated
Debentures, see Note 11 of Notes to Consolidated Financial Statements.

Dividends

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Hartford Life declared $33 in dividends to Hartford Fire Insurance Company and
$33 in dividends to Hartford Holdings, Inc. for 2002. Future dividend
decisions will be based on, and affected by, a number of factors, including the
operating results and financial requirements of Hartford Life on a stand-alone
basis and the impact of regulatory restrictions discussed in Liquidity
Requirements below.

As a holding company, Hartford Life, Inc. has no significant business
operations of its own and, therefore, relies mainly on the dividends from its
insurance company subsidiaries, which are primarily domiciled in Connecticut,
as the principal source of cash to meet its obligations (predominantly debt
obligations) and pay stockholder dividends. The Companys direct regulated
life insurance subsidiary, Hartford Life and Accident Insurance Company,
declared to the Company dividends of $132 in 2002 and accrued
dividends of $25 as of December 31, 2002. The statutory net loss in 2002 was
$137 as compared to a net loss of $364 in 2001. The loss in the current year
was primarily the result of realized capital losses recognized in 2002.
Statutory capital and surplus as of December 31, 2002 was $3.0 billion, a 1%
increase over December 31, 2001.

Treasury Stock

During the first six months ended June 30, 2000, to make shares available to
employees pursuant to stock based benefit plans, the Company repurchased 40,000
shares of its Class A Common Stock in the open market at a total cost of $2.
Shares repurchased in the open market were carried at cost and reflected as a
reduction to stockholders equity. Treasury shares reissued were reduced from
treasury stock on a weighted average cost basis.

As a result of The Hartford Acquisition, during the second quarter of 2000, the
Company canceled the remaining 80,152 treasury shares with a cost basis of $4.

Cash Flow

|                                                 |  |      |        |      |  |      |        |   |  |   |        |  
|------------------------------------------------ |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                                 |  | 2002 |        | 2001 |  | 2000
|                                                 |  |      |        |      |  |     
|Cash provided by operating activities            |  | $    | 1,115  |      |  | $    | 1,673  |   |  | $ | 1,701  |  
|Cash used for investing activities               |  |      | (4,682 | )    |  |      | (4,624 | ) |  |   | (564   | )
|Cash provided by (used for) financing activities |  |      | 3,575  |      |  |      | 3,018  |   |  |   | (1,118 | )
|Cash  end of year                               |  |      | 179    |      |  |      | 167    |   |  |   | 106    |  

2002 Compared to 2001The decrease in cash provided by operating activities
was primarily the result of the timing of the settlement of receivables,
payables and other related liabilities. The increase in cash provided by
financing activities primarily relates to the increase in receipts from
investment and universal life-type contracts charged against policyholder
accounts. Operating cash flows in the periods presented have been more than
adequate to meet liquidity requirements.

2001 Compared to 2000The decrease in cash provided by operating activities
was primarily the result of the timing of the settlement of receivables,
payables and other related liabilities. The increase in cash used for
investing activities and the decrease in cash used for financing activities
primarily relates to the purchase of Fortis Financial Group. Operating cash
flows in the periods presented have been more than adequate to meet liquidity
requirements.

Ratings

Ratings are an important factor in establishing the competitive position in the
insurance and financial services marketplace. There can be no assurance that
the Companys ratings will continue for any given period of time or that they
will not be changed. In the event the Companys ratings are downgraded, the
level of revenues or the persistency of the Companys business may be adversely
impacted.

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##### Table of Contents



The following table summarizes Hartford Lifes significant United States
member companies financial ratings from the major independent rating
organizations as of February 28, 2003:

|                  |                                                           |                   |  |           |    |       |    |         |     |                   |     |    |     |  |     |  |      | 
|----------------- | --------------------------------------------------------- | ----------------- |  | --------- | -- | ----- | -- | ------- | --- | ----------------- | --- | -- | --- |  | --- |  | ---- | 
|                  |                                                           |                   |  | A.M. Best |    | Fitch |    | Moody's |     | Standard & Poor's
|                  |                                                           |                   |  |           |    |       |    |         |     |                  
|Insurance Ratings |                                                           |                   |  |           |    |       |    |         |     |                   |     |    |     |  |     | 
|                  | Hartford Life Insurance Company                           |                   |  | A+        |    |       | AA |         | Aa3 |                   | AA-
|                  | Hartford Life and Accident                                |                   |  | A+        |    |       | AA |         | Aa3 |                   | AA-
|                  | Hartford Life and Annuity                                 |                   |  | A+        |    |       | AA |         | Aa3 |                   | AA-
|Other Ratings     |                                                           |                   |  |           |    |       |    |         |     |                   |     |    |     |  |     | 
|                  | Hartford Life, Inc.                                       |                  
|                  |                                                           | Senior debt       |  |           | a+ |       |    |         | A   |                   |     |    | A2  |  |     |  | A-   | 
|                  |                                                           | Commercial paper  |  |           |   |       |    |         | F1  |                   |     |    | P-1 |  |     |  | A-2  | 
|                  | Hartford Life Capital I and II
Trust preferred securities |                   |  | a-        |    |       |    | A-      |     |                   |     | A3 |     |  | BBB
|                  | Hartford Life Insurance Company:                          |                   |  |           |    |       |    |         |     |                   |     |    |     |  |     |  |     
|                  |                                                           | Short Term Rating |  |           |   |       |    |         |    |                   |     |    | P-1 |  |     |  | A-1+ | 

The agencies consider many factors in determining the final rating of an
insurance company. One consideration is the relative level of statutory
surplus necessary to support the business written. Statutory surplus
represents the capital of the insurance company reported in accordance with
accounting practices prescribed by the applicable state insurance department.
The statutory surplus for the Company was $3.0 billion as of December 31, 2002
and 2001.

On November 26, 2002, Standard & Poors removed from CreditWatch its
counterparty credit rating on The Hartford Financial Services Group, Inc. and
related entities and lowered it to A- from A reflecting concerns about
trends in the retirement and savings sector, the consolidated capitalization of
The Hartfords insurance operations, and the increasingly competitive
environment for spread-based and equity-linked retirement and savings products.
At the same time, Standard & Poors lowered to AA- from AA the insurance
financial strength ratings of Hartford Fire Intercompany Pool and the life
insurance subsidiaries of Hartford Life.

On January 28, 2003, Fitch Ratings placed its fixed income ratings for the
Hartford Financial Services Group, Inc. (HFSG) and its insurer financial
strength ratings for the Hartford Fire Intercompany Pool on Rating Watch
Negative. Ratings for HFSGs life insurance subsidiaries and fixed income
ratings at, Hartford Life, Inc., were not impacted by Fitchs rating actions and remain on
stable outlook. Fitchs rating action followed the Companys announcement that
it has initiated a comprehensive review of its current asbestos liabilities.
Fitch anticipates responding to the Rating Watch status upon completion of the
asbestos review or potentially sooner if certain uncertainties are resolved
earlier.

On September 19, 2002, Fitch Ratings lowered the ratings of Hartford Life as
part of a comprehensive industry review of all North American life insurance
company ratings. For Hartford Life, Fitch stated the rating action was driven
primarily by Fitchs opinion that most of the very strong, publicly owned
insurance organizations are more appropriately rated in the AA rating
category. Fitch also changed its view on the variable annuity business and
stated that it believes that the associated risks, mainly variable earnings,
are greater than previously considered.

On January 28, 2003, following The Hartfords announcement that it is
commencing a comprehensive study of its asbestos loss reserves, A.M. Best Co.
placed under review with negative implications the commercial paper and debt
ratings of Hartford Financial Services Group, Inc. and Hartford Life, Inc.
Currently, the financial strength ratings of The Hartfords various life and
property/casualty subsidiaries remain unaffected. On December 16, 2002, all of
The Hartfords financial strength and debt ratings were affirmed.

On September 4, 2002, Moodys revised its outlook on The Hartfords debt
ratings to Stable from Negative citing The Hartfords commitment to maintaining
its capital strength in the event of a significant unforeseen loss or adverse
development that would weaken its capital position.

On January 28, 2003, Moodys Investors Service confirmed the ratings of The
Hartford Financial Services Group, Inc. and its subsidiaries, including the
ratings of Hartford Life, Inc. following The Hartfords announcement of its
intention to conduct a ground up analysis of its asbestos exposures, expected
to be completed during the second quarter 2003. In the same action, Moodys
changed the outlook on the debt ratings for both the parent company and
Hartford Life to negative from stable, and also placed a negative outlook on
the insurance financial strength ratings of members of The Hartfords property
and casualty intercompany pool. The negative outlook reflects the significant
uncertainty surrounding the groups asbestos liabilities. The outlook for the
insurance financial strength ratings (Aa3) for the life insurance companies
remains stable.

Equity Markets

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For a discussion of equity markets impact to capital and liquidity, see the
Capital Markets Risk Management section under Market Risk.

Liquidity Requirements

The liquidity requirements of Hartford Life have been and will continue to be
met by funds from operations as well as the issuance of commercial paper, debt
securities and borrowings from its credit facilities. The principal sources
of operating funds are premiums and investment income as well as maturities
and sales of invested assets. Hartford Life is a holding company which
receives operating cash flow in the form of dividends from its subsidiaries,
enabling it to service its debt, pay dividends on its common stock and support
its other obligations.

Dividends to Hartford Life, Inc. from its direct subsidiary, Hartford Life and
Accident Insurance Company (HLA), are restricted. The payment of dividends by
Connecticut-domiciled insurers is limited under the insurance holding company
laws of Connecticut. Under these laws, the insurance subsidiaries may only
make their dividend payments out of unassigned surplus. These laws require
notice to and approval by the state insurance commissioner for the declaration
or payment of any dividend, which, together with other dividends or
distributions made within the preceding twelve months, exceeds the greater of
(i) 10% of the insurers policyholder surplus as of December 31 of the
preceding year or (ii) net income (or net gain from operations, if such company
is a life insurance company) for the twelve-month period ending on the
thirty-first day of December last preceding, in each case determined under
statutory insurance accounting policies. In addition, if any dividend of a
Connecticut-domiciled insurer exceeds the insurers earned surplus, it requires
the prior approval of the Connecticut Insurance Commissioner.

The insurance holding company laws of the other jurisdictions in which
Hartford Lifes insurance subsidiaries are incorporated (or deemed
commercially domiciled) generally contain similar (although in certain
instances somewhat more restrictive) limitations on the payment of dividends.

As of December 31, 2002, the maximum amount of statutory dividends which may
be paid to Hartford Life from its insurance subsidiaries in 2003, without
prior regulatory approval, is $302.

The primary uses of funds are to pay claims, policy benefits, operating
expenses and commissions, and to purchase new investments. In addition,
Hartford Life has a policy of carrying a significant short-term investment
position and accordingly does not anticipate selling intermediate- and
long-term fixed maturity investments to meet any liquidity needs. (For a
discussion of the Companys investment objectives and strategies, see the
Investments and Capital Markets Risk Management sections.)

Risk-Based Capital

The National Association of Insurance Commissioners (NAIC) has regulations
establishing minimum capitalization requirements based on risk-based capital
(RBC) formulas for both life and property and casualty companies. The
requirements consist of formulas, which identify companies that are
undercapitalized and require specific regulatory actions. The RBC formula for
life companies establishes capital requirements relating to insurance,
business, asset and interest rate risks. As of December 31, 2002, Hartford
Life had more than sufficient capital to meet the NAICs RBC requirements.

Contingencies

Legal Proceedings  Hartford Life is or may become involved in various legal
actions, in the normal course of its business, in which claims for alleged
economic and punitive damages have been or may be asserted, some for
substantial amounts. Some of the pending litigation has been filed as
purported class actions and some actions have been filed in certain
jurisdictions that permit punitive damage awards that are disproportionate to
the actual damages incurred. Although there can be no assurances, at the
present time, the Company does not anticipate that the ultimate liability
arising from potential, pending or threatened legal actions, after
consideration of provisions made for estimated losses and costs of defense,
will have a material adverse effect on the financial condition or operating
results of the Company.

Dependence on Certain Third Party Relationships

Hartford Life distributes its annuity and life insurance products through a
variety of distribution channels, including broker-dealers, banks, wholesalers,
its own internal sales force and other third party organizations. The Company
periodically negotiates provisions and renewals of these relationships and
there can be no assurance that such terms will remain acceptable to the Company
or such third parties. An interruption in the Companys continuing
relationship with certain of these third parties could materially affect the
Companys ability to market its products.

Legislative Initiatives

41



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Federal measures which have been previously considered or enacted by Congress
and which, if revisited, could affect the insurance business include tax law
changes pertaining to the tax treatment of insurance companies and life
insurance products, as well as changes in individual income tax rates and the
estate tax. These changes could have an impact on the relative desirability of
various personal investment vehicles. Legislation to restructure the Social
Security system, expand private pension plans, and create new retirement
savings incentives also may be considered.

The Bush Administrations fiscal year 2004 budget contains several proposals
that could materially affect the Companys business. In particular, there are
proposals that would more fully integrate corporate and individual taxes by
permitting the distribution of nontaxable dividends to shareholders under
certain circumstances. These proposals could have a material effect on sales
of the Companys variable annuities and other retirement savings products, as
well as implications for The Hartfords shareholders, both with respect to the
amount of taxable dividends received, as well as the price of and tax basis in
their holdings of The Hartfords common stock. The dividend exclusion proposal
also would reduce the federal tax benefits currently received by the Company
stemming from the dividends received deduction.

There also are proposals in the 2004 budget that would create new investment
vehicles with larger annual contribution limits for individuals to use for
savings purposes. Some of these proposed vehicles would have significant tax
advantages, and could have material effects on the Companys product portfolio.
There have also been proposals regarding certain deferred compensation
arrangements that could have negative impacts on the Companys product sales.
It is too early in the legislative process to determine the future disposition
of any of these proposals. Therefore, any potential impact to the Companys
financial condition or results of operations cannot be reasonably estimated at
this time.

On November 26, 2002, President Bush signed the Terrorism Risk Insurance Act of
2002 (the Act) into law. The Act established a program that will run through
2005 that provides a backstop for insurance-related losses resulting from any
act of terrorism certified by the Secretary of the Treasury, in concurrence
with the Secretary of State and Attorney General.

The Act created a program under which the federal government will pay 90% of
covered losses after an insurers losses exceed a deductible determined by a
statutorily prescribed formula, up to a combined annual aggregate limit for the
federal government and all insurers of $100 billion. If an act of terrorism or
acts of terrorism result in covered losses exceeding the $100 billion annual
limit, insurers with losses exceeding their deductible will not be responsible
for additional losses.

The statutory formula for determining a companys deductible for each year is
based on the companys direct commercial earned premium for the prior calendar
year multiplied by a specified percentage. The specified percentages are 7%
for 2003, 10% for 2004 and 15% for 2005.

The Act does not currently apply to group life insurance contracts but permits
the Secretary of the Treasury to extend the backstop protection to them.

Guaranty Fund

Under insurance guaranty fund laws in each state, the District of Columbia and
Puerto Rico, insurers licensed to do business can be assessed by state
insurance guaranty associations for certain obligations of insolvent insurance
companies to policyholders and claimants. Part of the assessments paid by the
Companys insurance subsidiaries pursuant to these laws may be used as credits
for a portion of the Companys insurance subsidiaries premium taxes. There
was $2 in guaranty fund assessment refunds in 2002. There were no guaranty
fund assessment payments (net of refunds) in 2001 and 2000.

42



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NAIC Codification

The NAIC adopted the Codification of Statutory Accounting Principles
(Codification) in March 1998. The effective date for the statutory
accounting guidance was January 1, 2001. Each of Hartford Lifes domiciliary
states has adopted Codification, and the Company has made the necessary changes
in its statutory accounting and reporting required for implementation. The
overall impact of applying the new guidance resulted in a benefit of $74 in
statutory surplus.

EFFECT OF INFLATION

The rate of inflation as measured by the change in the average consumer price
index has not had a material effect on the revenues or operating results of
Hartford Life during the three most recent fiscal years.

ACCOUNTING STANDARDS

For a discussion of accounting standards, see Note 2 of Notes to Consolidated
Financial Statements.




Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information called for by Item 7A is set forth in the Capital Markets Risk
Management section of the Managements Discussion and Analysis of Financial
Condition and Results of Operations and is incorporated herein by reference.




Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Index to Consolidated Financial Statements and Schedules elsewhere herein.




Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.




PART III




Item 14. CONTROLS AND PROCEDURES

Evaluation of disclosure

The Companys principal executive officer and its principal financial officer,
based on their evaluation of the Companys disclosure controls and procedures
(as defined in Exchange Act Rule 13a-14(c)) as of a date within 90 days prior
to the filing of this Annual Report on Form 10-K, have concluded that the
Companys disclosure controls and procedures are adequate and effective for the
purposes set forth in the definition thereof in Exchange Act Rule 13a-14(c).

Changes in internal controls

There were no significant changes in the Companys internal controls or in
other factors that could significantly affect the Companys internal controls
subsequent to the date of their evaluation.




PART IV




Item 15. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K



|(a) |  | Documents filed as a part of this report:
|--- |  | -----------------------------------------



| | 1. |  | Consolidated Financial Statements.See Index to Consolidated
Financial Statements and Schedules elsewhere herein.    
| | -- |  | --------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Consolidated Financial Statement Schedules.See Index to Consolidated
Financial Statement Schedules elsewhere herein.
|
| | 3. |  | Exhibits.See Exhibit Index elsewhere herein.                                                                        



|(b) |  | Reports on Form 8-K  None.
|--- |  | ---------------------------

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|(c) |  | Exhibits  See Item 15(a)(3). 
|--- |  | ------------------------------
|   
|(d) |  | Schedules  See Item 15(a)(2).

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

|                                                                                                       |  |         |        | 
|------------------------------------------------------------------------------------------------------ |  | ------- | ------ | 
|                                                                                                       |  | Page(s)
|                                                                                                       |  |        
|Report of Management                                                                                   |  |         | F-1    | 
|Independent Auditors Report                                                                           |  |         | F-2    | 
|Consolidated Statements of Income for the three years ended December 31, 2002                          |  |         | F-3    | 
|Consolidated Balance Sheets as of December 31, 2002 and 2001                                           |  |         | F-4    | 
|Consolidated Statements of Changes in Stockholders Equity for the three years ended
December 31, 2002 |  |         | F-5    | 
|Consolidated Statements of Cash Flows for the three years ended December 31, 2002                      |  |         | F-6    | 
|Notes to Consolidated Financial Statements                                                             |  |         | F-733 | 
|Schedule I  Summary of Investments  Other Than Investments in Affiliates                             |  |         | S-1    | 
|Schedule II  Condensed Financial Information of Hartford Life, Inc.                                   |  |         | S-23  | 
|Schedule III  Supplementary Insurance Information                                                     |  |         | S-4    | 
|Schedule IV  Reinsurance                                                                              |  |         | S-5    | 
|Schedule V  Valuation and Qualifying Accounts                                                         |  |         | S-6    | 

REPORT OF MANAGEMENT

The management of Hartford Life, Inc. (Hartford Life) is responsible for the
preparation and integrity of information contained in the accompanying
consolidated financial statements. The consolidated financial statements are
prepared in accordance with accounting principles generally accepted in the
United States and, where necessary, include amounts that are based on
managements informed judgments and estimates. Management believes these
consolidated statements present fairly, Hartford Lifes financial position and
results of operations.

Management has made available Hartford Lifes financial records and related
data to Deloitte & Touche LLP, independent auditors, in order for them to
perform their audits of Hartford Lifes consolidated financial statements.
Their report appears on page F-2.

An essential element in meeting managements financial responsibilities is
Hartford Lifes system of internal controls. These controls, which include
accounting controls and Hartford Lifes internal auditing program, are designed
to provide reasonable assurance that assets are safeguarded, and transactions
are properly authorized, executed and recorded. The controls, which are
documented and communicated to employees in the form of written codes of
conduct and policies and procedures, provide for careful selection of personnel
and for appropriate division of responsibility. Management continually
monitors for compliance, while Hartford Lifes internal auditors independently
assess the effectiveness of the controls and make recommendations for
improvement.

Another important element is managements recognition and acknowledgement
within the organization of its responsibility for fostering a strong, ethical
climate, thereby firmly establishing an expectation that Hartford Lifes
affairs be transacted according to the highest standards of personal and
professional conduct. Hartford Life has a long-standing reputation of
integrity in business conduct and utilizes communication and education to
create and fortify a strong compliance culture.

The Audit Committee of the Board of Directors of The Hartford Financial
Services Group, Inc. (the Committee), the Companys ultimate parent, composed
of independent directors, meets periodically with the external and internal
auditors to evaluate the effectiveness of work performed by them in discharging
their respective responsibilities and to ensure their independence and free
access to the Committee.

F-1



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INDEPENDENT AUDITORS REPORT

To the Board of Directors and Stockholder of
Hartford Life, Inc.
Hartford, Connecticut

We have audited the accompanying consolidated balance sheets of
Hartford Life, Inc. and its subsidiaries (collectively, the
Company) as of December 31, 2002 and 2001, and the related
consolidated statements of income, changes in stockholders equity
and cash flows for each of the three years in the period ended
December 31, 2002. Our audits also included the financial
statement schedules listed in the Index at Item 15. These
financial statements and financial statement schedules are the
responsibility of the Companys management. Our responsibility is
to express an opinion on these financial statements and financial
statement schedules based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of
Hartford Life, Inc. and its subsidiaries as of December 31, 2002
and 2001, and the results of their operations and their cash flows
for each of the three years in the period ended December 31, 2002,
in conformity with accounting principles generally accepted in the
United States of America. Also, in our opinion, such financial
statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly
in all material respects the information set forth therein.

As discussed in Note 2 (d) of the consolidated financial
statements, the Company changed its method of accounting for
goodwill and indefinite-lived intangible assets in 2002. In
addition, the Company changed its method of accounting for
derivative instruments and hedging activities and its method of
accounting for the recognition of interest income and impairment on
purchased and retained beneficial interests in securitized
financial assets in 2001.

Deloitte & Touche LLP
Hartford, Connecticut
February 19, 2003

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HARTFORD LIFE, INC. AND SUBSIDIARIESConsolidated Statements of Income

|                                                                                      |                                                                              |      |                                  |       |  |      |       |       |  |   |       |       | 
|------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | ---- | -------------------------------- | ----- |  | ---- | ----- | ----- |  | - | ----- | ----- | 
|                                                                                      |                                                                              |      | For the years ended December 31,
|                                                                                      |                                                                              |      |                                 
|(In
millions)                                                                         |                                                                              | 2002 |                                  | 2001  |  | 2000
|                                                                                      |                                                                              |      |                                  |       |  |     
|Revenues                                                                              |                                                                              |      |                                  |       |  |      |       |       |  |   |       |      
|Fee income                                                                            |                                                                              | $    | 2,577                            |       |  | $    | 2,633 |       |  | $ | 2,484 |      
|Earned premiums and other                                                             |                                                                              |      | 2,307                            |       |  |      | 2,270 |       |  |   | 2,002 |      
|Net investment income                                                                 |                                                                              |      | 1,858                            |       |  |      | 1,779 |       |  |   | 1,592 |      
|Net realized capital losses                                                           |                                                                              |      | (317                             | )     |  |      | (133  | )     |  |   | (88   | )    
|                                                                                      |                                                                              |      |                                  |       |  |      |       |       |  |   |       |      
|                                                                                      | Total revenues                                                               |      |                                  | 6,425 |  |      |       | 6,549 |  |   |       | 5,990 | 
|                                                                                      |                                                                              |      |                                  |       |  |      |       |       |  |   |       |      
|Benefits, claims and expenses                                                         |                                                                              |      |                                  |       |  |      |       |       |  |   |       |      
|Benefits, claims and claim adjustment expenses                                        |                                                                              |      | 3,648                            |       |  |      | 3,611 |       |  |   | 3,162 |      
|Insurance expenses and other                                                          |                                                                              |      | 1,405                            |       |  |      | 1,359 |       |  |   | 1,236 |      
|Amortization of deferred policy acquisition costs and present
value of future profits |                                                                              |      | 628                              |       |  |      | 642   |       |  |   | 671   |      
|Dividends to policyholders                                                            |                                                                              |      | 65                               |       |  |      | 68    |       |  |   | 67    |      
|Interest expense                                                                      |                                                                              |      | 112                              |       |  |      | 104   |       |  |   | 66    |      
|                                                                                      |                                                                              |      |                                  |       |  |      |       |       |  |   |       |      
|                                                                                      | Total benefits, claims and expenses                                          |      |                                  | 5,858 |  |      |       | 5,784 |  |   |       | 5,202 | 
|                                                                                      |                                                                              |      |                                  |       |  |      |       |       |  |   |       |      
|                                                                                      | Income before income tax expense
and cumulative effect of
accounting changes |      |                                  | 567   |  |      |       | 765   |  |   |       | 788   | 
|Income tax expense                                                                    |                                                                              |      | 10                               |       |  |      | 54    |       |  |   | 213   |      
|                                                                                      |                                                                              |      |                                  |       |  |      |       |       |  |   |       |      
|                                                                                      | Income before cumulative effect of
accounting changes                        |      |                                  | 557   |  |      |       | 711   |  |   |       | 575   | 
|                                                                                      |                                                                              |      |                                  |       |  |      |       |       |  |   |       |      
|Cumulative effect of accounting changes, net of tax                                   |                                                                              |      |                                 |       |  |      | (26   | )     |  |   |      |      
|                                                                                      |                                                                              |      |                                  |       |  |      |       |       |  |   |       |      
|                                                                                      | Net income                                                                   |      | $                                | 557   |  |      | $     | 685   |  |   | $     | 575   | 
|                                                                                      |                                                                              |      |                                  |       |  |      |       |       |  |   |       |      

See Notes to Consolidated Financial Statements.

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HARTFORD LIFE, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

|                                                                                                                                       |                   |                   |              |        |                    |         |         |        |         |         | 
|-------------------------------------------------------------------------------------------------------------------------------------- | ----------------- | ----------------- | ------------ | ------ | ------------------ | ------- | ------- | ------ | ------- | ------- | 
|                                                                                                                                       |                   |                   |              |        | As of December 31,
|                                                                                                                                       |                   |                   |              |        |                   
|(In
millions, except for share data)                                                                                                   |                   | 2002              |              | 2001  
|                                                                                                                                       |                   |                   |              |       
|Assets                                                                                                                                 |                   |                   |              |        |                    |         |         |       
|Investments                                                                                                                            |                   |                   |              |        |                    |         |         |       
|Fixed maturities, available for sale, at fair value (amortized cost of $27,982
and $23,010)                                            |                   | $                 | 29,377       |        |                    | $       | 23,301  |       
|Equity securities, available for sale, at fair value (cost of $483 and $448)                                                           |                   |                   | 458          |        |                    |         | 428     |       
|Policy loans, at outstanding balance                                                                                                   |                   |                   | 2,934        |        |                    |         | 3,317   |       
|Other investments                                                                                                                      |                   |                   | 1,122        |        |                    |         | 1,331   |       
|                                                                                                                                       |                   |                   |              |        |                    |         |         |       
|                                                                                                                                       | Total investments |                   |              | 33,891 |                    |         |         | 28,377 |        
|Cash                                                                                                                                   |                   |                   | 179          |        |                    |         | 167     |       
|Premiums receivable and agents balances                                                                                               |                   |                   | 208          |        |                    |         | 229     |       
|Reinsurance recoverables                                                                                                               |                   |                   | 796          |        |                    |         | 648     |       
|Deferred policy acquisition costs and present value of future profits                                                                  |                   |                   | 5,758        |        |                    |         | 5,572   |       
|Deferred income taxes                                                                                                                  |                   |                   | (274         | )      |                    |         | (16     | )     
|Goodwill                                                                                                                               |                   |                   | 796          |        |                    |         | 796     |       
|Other assets                                                                                                                           |                   |                   | 1,362        |        |                    |         | 1,116   |       
|Separate account assets                                                                                                                |                   |                   | 107,078      |        |                    |         | 114,720 |       
|                                                                                                                                       |                   |                   |              |        |                    |         |         |       
|                                                                                                                                       |                   |                   | Total assets |        | $                  | 149,794 |         |        | $       | 151,609 | 
|                                                                                                                                       |                   |                   |              |        |                    |         |         |       
|Liabilities                                                                                                                            |                   |                   |              |        |                    |         |         |       
|Reserve for future policy benefits                                                                                                     |                   | $                 | 9,521        |        |                    | $       | 8,842   |       
|Other policyholder funds                                                                                                               |                   |                   | 23,019       |        |                    |         | 19,357  |       
|Long-term debt                                                                                                                         |                   |                   | 1,125        |        |                    |         | 1,050   |       
|Company obligated mandatorily redeemable preferred securities of subsidiary
Trust holding solely parent junior subordinated debentures |                   |                   | 450          |        |                    |         | 450     |       
|Other liabilities                                                                                                                      |                   |                   | 2,913        |        |                    |         | 2,580   |       
|Separate account liabilities                                                                                                           |                   |                   | 107,078      |        |                    |         | 114,720 |       
|                                                                                                                                       |                   |                   |              |        |                    |         |         |       
|                                                                                                                                       |                   | Total liabilities |              |        | 144,106            |         |         |        | 146,999 |        
|                                                                                                                                       |                   |                   |              |        |                    |         |         |       

Commitments and Contingent Liabilities, Note 17

|                                                               |                                                     |                                                                 |         |     |     |   |         |     |     |  
|-------------------------------------------------------------- | --------------------------------------------------- | --------------------------------------------------------------- | ------- | --- | --- | - | ------- | --- | --- | -
|Stockholders Equity                                           |                                                     |                                                                 |         |     |     |   |         |    
|Common Stock - 1,000 shares authorized, issued and outstanding |                                                     |                                                                 |         |     |     |   |         |    
|Par value $0.01                                                |                                                     |                                                                 |        |     |     |   |        |    
|Capital surplus                                                |                                                     |                                                                 | 1,970   |     |     |   | 1,895   |    
|Accumulated other comprehensive income (loss)                  |                                                     |                                                                 |         |     |     |   |         |    
|                                                               |                                                     | Net unrealized capital gains (losses) on securities, net of tax |         |     | 747 |   |         |     | 225 |  
|                                                               |                                                     | Foreign currency translation adjustments                        |         |     | (39 | ) |         |     | (29 | )
|                                                               |                                                     |                                                                 |         |     |     |   |         |    
|                                                               | Total accumulated other comprehensive income (loss) |                                                                 |         | 708 |     |   |         | 196 |    
|                                                               |                                                     |                                                                 |         |     |     |   |         |    
|Retained earnings                                              |                                                     |                                                                 | 3,010   |     |     |   | 2,519   |    
|                                                               |                                                     |                                                                 |         |     |     |   |         |    
|Total stockholders equity                                     |                                                     |                                                                 | 5,688   |     |     |   | 4,610   |    
|                                                               |                                                     |                                                                 |         |     |     |   |         |    
|Total liabilities and stockholders equity                     |                                                     | $                                                               | 149,794 |     |     | $ | 151,609 |    
|                                                               |                                                     |                                                                 |         |     |     |   |         |    

See Notes to Consolidated Financial Statements.

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HARTFORD LIFE, INC. AND SUBSIDIARIESConsolidated Statements of Changes in Stockholders Equity

|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |   |       |       | 
|--------------------------------------------------------------------------------------------------------------------------------------------------- | ---- | ----------------------------------------------------------------- | -------------------------- | ----- | ------- | ------- | ------- | ------- | ------- | ---------- | ------ | ---------- | -------------- | ----------- | -------------- | -------- | ----------- | ------ | -------- | - | -------------------------------------- | --- | ----------- |  | ------- | --- | --- | - | --- | --- | ----- | - | - | ----- | ----- | - | ----- | ----- | 
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   | Accumulated Other Comprehensive Income |     |             |  |         |     |     |   |    
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |    
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   | Net Unrealized                         |     | Net Gain on |  |         |     |     |   |     |     |       |   |   |       |      
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   | Capital                                |     | Cash Flow   |  | Foreign |     |     |   |     |     |       |   |  
|                                                                                                                                                    |      |                                                                   |                            |       | Class A |         | Class B |         |         |            |        |            | Treasury       |             | Gains (Losses) |          | Hedging     |        | Currency |   |                                        |     |             |  | Total  
|                                                                                                                                                    |      |                                                                   |                            |       | Common  |         | Common  |         | Capital |            | Stock, |            | on Securities, |             | Instruments,   |          | Translation |        | Retained |   | Stockholder's                         
|(In millions)                                                                                                                                       |      | Stock                                                             |                            | Stock |         | Surplus |         | at Cost |         | Net of Tax |        | Net of Tax |                | Adjustments |                | Earnings |             | Equity
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |       
|                                                                                                                                                    | 2002 |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |   |      
|Balance, December 31, 2001                                                                                                                          |      | $                                                                 |                           |       |         | $       |        |         |         | $          | 1,895  |            |                | $           |               |          |             | $      | 163      |   |                                        | $   | 62          |  |         |     | (29 | ) |     | $   | 2,519 |   |   | $     | 4,610 |  
|Comprehensive income                                                                                                                                |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|Net income                                                                                                                                          |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     | 557   |   |   |       | 557   |  
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|Other comprehensive income, net of tax (1)
Cumulative effect of accounting change
Net change in unrealized capital gains
(losses) on securities (3) |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        | 458      |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       | 458   |  
|                                                                                                                                                    |      | Net gain on cash flow hedging
instruments                         |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  | 64      |     |     |   |     |     |       |   |   |       |       |   | 64    |      
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|                                                                                                                                                    |      | Cumulative translation adjustments                                |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   | (10 | )   |       |   |   |       |       |   | (10   | )    
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|Total other comprehensive income                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       | 512   |  
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|                                                                                                                                                    |      | Total comprehensive income                                        |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |   | 1,069 |      
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|Dividends declared                                                                                                                                  |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     | (66   | ) |   |       | (66   | )
|Capital contribution from parent                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            | 75     |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       | 75    |  
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|                                                                                                                                                    |      |                                                                   | Balance, December 31, 2002 |       | $       |        |         |         | $       |           |        |            | $              | 1,970       |                |          | $           |       |          |   | $                                      | 621 |             |  | $       | 126 |     |   |     | (39 | )     |   | $ | 3,010 |       |   | $     | 5,688 | 
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|                                                                                                                                                    | 2001 |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |   |      
|Balance, December 31, 2000                                                                                                                          |      | $                                                                 |                           |       |         | $       |        |         |         | $          | 1,280  |            |                | $           |               |          |             | $      | 40       |   |                                        | $   |            |  |         |     | (13 | ) |     | $   | 1,900 |   |   | $     | 3,207 |  
|Comprehensive income                                                                                                                                |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|Net income                                                                                                                                          |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     | 685   |   |   |       | 685   |  
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|Other comprehensive income, net of tax (1)
Cumulative effect of accounting
change(2)                                                                |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        | 3        |   |                                        |     | 20          |  |         |     |     |   |     |     |       |   |   |       | 23    |  
|                                                                                                                                                    |      | Net change in unrealized capital gains
(losses) on securities (3) |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   | 120                                    |     |             |  |         |     |     |   |     |     |       |   |   |       |       |   | 120   |      
|                                                                                                                                                    |      | Net gain on cash flow hedging
instruments                         |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  | 42      |     |     |   |     |     |       |   |   |       |       |   | 42    |      
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|                                                                                                                                                    |      | Cumulative translation adjustments                                |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   | (16 | )   |       |   |   |       |       |   | (16   | )    
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|Total other comprehensive income                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       | 169   |  
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|                                                                                                                                                    |      | Total comprehensive income                                        |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |   | 854   |      
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|Dividends declared                                                                                                                                  |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     | (66   | ) |   |       | (66   | )
|Capital contribution from parent                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            | 615    |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       | 615   |  
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|                                                                                                                                                    |      |                                                                   | Balance, December 31, 2001 |       | $       |        |         |         | $       |           |        |            | $              | 1,895       |                |          | $           |       |          |   | $                                      | 163 |             |  | $       | 62  |     |   |     | (29 | )     |   | $ | 2,519 |       |   | $     | 4,610 | 
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|                                                                                                                                                    | 2000 |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |   |      
|Balance, December 31, 1999                                                                                                                          |      | $                                                                 |                           |       |         | $       | 1       |         |         | $          | 1,282  |            |                | $           | (10            | )        |             | $      | (336     | ) |                                        | $   |            |  |         |     | (12 | ) |     | $   | 1,381 |   |   | $     | 2,306 |  
|Comprehensive income                                                                                                                                |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|Net income                                                                                                                                          |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     | 575   |   |   |       | 575   |  
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|Other comprehensive income, net of tax (1)
Net change in unrealized capital gains
(losses) on securities (3)                                        |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        | 376      |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       | 376   |  
|                                                                                                                                                    |      | Cumulative translation adjustments                                |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   | (1  | )   |       |   |   |       |       |   | (1    | )    
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|Total other comprehensive income                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       | 375   |  
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|                                                                                                                                                    |      | Total comprehensive income                                        |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |   | 950   |      
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|Dividends declared                                                                                                                                  |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     | (56   | ) |   |       | (56   | )
|Issuance of shares under incentive and
stock purchase plans                                                                                         |      |                                                                   |                            |       |         |         |         |         |         |            | 1      |            |                |             | 8              |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       | 9     |  
|Treasury stock acquired                                                                                                                             |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             | (2             | )        |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       | (2    | )
|Treasury stock canceled and retired                                                                                                                 |      |                                                                   |                            |       |         |         |         |         |         |            | (4     | )          |                |             | 4              |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |      |  
|Class B Common Stock converted to Class A                                                                                                           |      |                                                                   | 1                          |       |         |         | (1      | )       |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |      |  
|Class A Common Stock canceled and retired                                                                                                           |      |                                                                   | (1                         | )     |         |         |         |         |         |            | 1      |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |      |  
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  
|                                                                                                                                                    |      |                                                                   | Balance, December 31, 2000 |       | $       |        |         |         | $       |           |        |            | $              | 1,280       |                |          | $           |       |          |   | $                                      | 40  |             |  | $       |    |     |   |     | (13 | )     |   | $ | 1,900 |       |   | $     | 3,207 | 
|                                                                                                                                                    |      |                                                                   |                            |       |         |         |         |         |         |            |        |            |                |             |                |          |             |        |          |   |                                        |     |             |  |         |     |     |   |     |     |       |   |   |       |       |  



---

|(1) |  | Net change in unrealized capital gain (losses) on securities is
reflected net of tax provision (benefit) of $247, $65 and $20 for the
years ended December 31, 2002, 2001 and 2000, respectively. Cumulative
effect of accounting change is net of tax benefit of $12 for the year
ended December 31, 2001. Net gain on cash flow hedging instruments is
net of tax provision of $34 and $33 for the years ended December 31, 2002
and 2001, respectively. There is no tax effect on cumulative translation
adjustments.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Net change in unrealized capital gain (losses) on securities, net of
tax, includes cumulative effect of accounting change of $(23) to net
income and $20 to net gain on cash flow hedging instruments.                                                                                                                                                                                                                                                                                                                  
|   
|(3) |  | There were reclassification
adjustments for after-tax (losses) realized in net income of
$(193), $(75) and $(57) for the years ended December
31, 2002, 2001 and 2001, respectively.                                                                                                                                                                                                                                                                                                                                    

See Notes to Consolidated Financial Statements.

F-5



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##### Table of Contents



HARTFORD LIFE, INC. AND SUBSIDIARIESConsolidated Statements of Cash Flows

|                                                                                                                                                                 |                                                      |      |                                  |        |   |      |         |        |   |   |        |        |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------- | ---- | -------------------------------- | ------ | - | ---- | ------- | ------ | - | - | ------ | ------ | -
|                                                                                                                                                                 |                                                      |      | For the years ended December 31,
|                                                                                                                                                                 |                                                      |      |                                 
|(In
millions)                                                                                                                                                    |                                                      | 2002 |                                  | 2001   |   | 2000
|                                                                                                                                                                 |                                                      |      |                                  |        |   |     
|Operating Activities                                                                                                                                             |                                                      |      |                                  |        |   |      |         |        |   |   |        |       
|Net income                                                                                                                                                       |                                                      | $    | 557                              |        |   | $    | 685     |        |   | $ | 575    |       
|Adjustments to reconcile net income to net cash provided by operating activities                                                                                 |                                                      |      |                                  |        |   |      |         |        |   |   |        |       
|Net realized capital losses                                                                                                                                      |                                                      |      | 317                              |        |   |      | 133     |        |   |   | 88     |       
|Cumulative effect of accounting changes, net of tax                                                                                                              |                                                      |      |                                 |        |   |      | 26      |        |   |   |       |       
|Amortization of deferred policy acquisition costs and present value of future
profits                                                                            |                                                      |      | 628                              |        |   |      | 642     |        |   |   | 671    |       
|Additions to deferred policy acquisition costs and present value of future
profits                                                                               |                                                      |      | (1,163                           | )      |   |      | (1,083  | )      |   |   | (988   | )     
|Depreciation and amortization                                                                                                                                    |                                                      |      | 63                               |        |   |      | 27      |        |   |   | 6      |       
|Increase in premiums receivable and agents balances                                                                                                             |                                                      |      | 21                               |        |   |      | (14     | )      |   |   | (2     | )     
|Increase (decrease) in other liabilities                                                                                                                         |                                                      |      | (177                             | )      |   |      | 17      |        |   |   | 362    |       
|Change in receivables, payables and accruals                                                                                                                     |                                                      |      | 31                               |        |   |      | (47     | )      |   |   | 88     |       
|Increase (decrease) in accrued tax                                                                                                                               |                                                      |      | 192                              |        |   |      | 103     |        |   |   | 12     |       
|Decrease (increase) in deferred income tax                                                                                                                       |                                                      |      | (26                              | )      |   |      | (2      | )      |   |   | 95     |       
|Increase in future policy benefits                                                                                                                               |                                                      |      | 679                              |        |   |      | 1,417   |        |   |   | 838    |       
|(Increase) decrease in reinsurance recoverables                                                                                                                  |                                                      |      | (12                              | )      |   |      | (127    | )      |   |   | (62    | )     
|Other, net                                                                                                                                                       |                                                      |      | 5                                |        |   |      | (104    | )      |   |   | 18     |       
|                                                                                                                                                                 |                                                      |      |                                  |        |   |      |         |        |   |   |        |       
|                                                                                                                                                                 | Net cash provided by operating activities            |      |                                  | 1,115  |   |      |         | 1,673  |   |   |        | 1,701  |  
|                                                                                                                                                                 |                                                      |      |                                  |        |   |      |         |        |   |   |        |       
|Investing Activities                                                                                                                                             |                                                      |      |                                  |        |   |      |         |        |   |   |        |       
|Purchases of investments                                                                                                                                         |                                                      |      | (14,727                          | )      |   |      | (12,023 | )      |   |   | (7,218 | )     
|Sales of investments                                                                                                                                             |                                                      |      | 7,501                            |        |   |      | 6,116   |        |   |   | 5,073  |       
|Maturity and principal paydowns of fixed maturity investments                                                                                                    |                                                      |      | 2,601                            |        |   |      | 2,470   |        |   |   | 1,693  |       
|Acquisition of Fortis Financial Group                                                                                                                            |                                                      |      |                                 |        |   |      | (1,078  | )      |   |   |       |       
|Other                                                                                                                                                            |                                                      |      | (57                              | )      |   |      | (109    | )      |   |   | (112   | )     
|                                                                                                                                                                 |                                                      |      |                                  |        |   |      |         |        |   |   |        |       
|                                                                                                                                                                 | Net cash used for investing activities               |      |                                  | (4,682 | ) |      |         | (4,624 | ) |   |        | (564   | )
|                                                                                                                                                                 |                                                      |      |                                  |        |   |      |         |        |   |   |        |       
|Financing Activities                                                                                                                                             |                                                      |      |                                  |        |   |      |         |        |   |   |        |       
|Capital contribution from parent                                                                                                                                 |                                                      |      | 75                               |        |   |      | 615     |        |   |   |       |       
|Proceeds from issuance of long-term debt                                                                                                                         |                                                      |      | 75                               |        |   |      | 400     |        |   |   |       |       
|Proceeds from issuance of company obligated mandatorily
redeemable preferred securities of subsidiary trust holding solely
parent junior subordinated debentures |                                                      |      |                                 |        |   |      | 200     |        |   |   |       |       
|Dividends paid                                                                                                                                                   |                                                      |      | (66                              | )      |   |      | (64     | )      |   |   | (55    | )     
|Net receipts from (disbursements for) investment and universal life-type
contracts charged against policyholder accounts                                         |                                                      |      | 3,491                            |        |   |      | 1,867   |        |   |   | (1,069 | )     
|Proceeds from parent to retire common stock                                                                                                                      |                                                      |      |                                 |        |   |      |        |        |   |   | 226    |       
|Payments to retire common stock                                                                                                                                  |                                                      |      |                                 |        |   |      |        |        |   |   | (226   | )     
|Net issuance (purchase) of common stock                                                                                                                          |                                                      |      |                                 |        |   |      |        |        |   |   | 6      |       
|                                                                                                                                                                 |                                                      |      |                                  |        |   |      |         |        |   |   |        |       
|                                                                                                                                                                 | Net cash provided by (used for) financing activities |      |                                  | 3,575  |   |      |         | 3,018  |   |   |        | (1,118 | )
|                                                                                                                                                                 |                                                      |      |                                  |        |   |      |         |        |   |   |        |       
|Net increase in cash                                                                                                                                             |                                                      |      | 8                                |        |   |      | 67      |        |   |   | 19     |       
|Impact of foreign exchange                                                                                                                                       |                                                      |      | 4                                |        |   |      | (6      | )      |   |   | (2     | )     
|Cash  beginning of year                                                                                                                                         |                                                      |      | 167                              |        |   |      | 106     |        |   |   | 89     |       
|                                                                                                                                                                 |                                                      |      |                                  |        |   |      |         |        |   |   |        |       
|                                                                                                                                                                 | Cash  end of year                                   |      | $                                | 179    |   |      | $       | 167    |   |   | $      | 106    |  
|                                                                                                                                                                 |                                                      |      |                                  |        |   |      |         |        |   |   |        |       
|Supplemental Disclosure of Cash Flow Information                                                                                                                 |                                                      |      |                                  |        |   |      |         |        |   |   |        |       
|Net Cash (Received) Paid During the Year for                                                                                                                     |                                                      |      |                                  |        |   |      |         |        |   |   |        |       
|Income taxes                                                                                                                                                     |                                                      | $    | 48                               |        |   | $    | (40     | )      |   | $ | 197    |       
|Interest                                                                                                                                                         |                                                      | $    | 110                              |        |   | $    | 89      |        |   | $ | 65     |       

See Notes to Consolidated Financial Statements

F-6



---



##### Table of Contents



HARTFORD LIFE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in millions, unless otherwise stated)

1. Organization and Description of Business

Hartford Life, Inc. (a Delaware corporation), together with its consolidated
subsidiaries (Hartford Life or the Company), is a leading financial
services and insurance organization which provides, primarily in the United
States, investment, retirement, estate planning and group benefits products.
Hartford Life, Inc. was formed on December 13, 1996 and capitalized on December
16, 1996 with the contribution of all the outstanding common stock of Hartford
Life and Accident Insurance Company (HLA), a subsidiary of The Hartford
Financial Services Group, Inc. (The Hartford). Pursuant to an initial public
offering (the IPO) on May 22, 1997, Hartford Life sold to the public 26
million shares of Class A Common Stock at $28.25 per share and received
proceeds, net of offering expenses, of $687. The 26 million shares sold in the
IPO represented approximately 18.6% of the equity ownership in Hartford Life.
On June 27, 2000, The Hartford acquired all of the outstanding common shares of
Hartford Life not already owned by The Hartford (The Hartford Acquisition).
As a result of The Hartford Acquisition, Hartford Life became a direct
subsidiary of Hartford Fire Insurance Company (Hartford Fire), a direct
wholly-owned subsidiary of The Hartford (see Note 4). Hartford Life, Inc. is a
holding company, and as such, has no material business of its own. During the
third quarter of 2002, Hartford Life became a direct subsidiary of Hartford
Holdings, Inc., a direct wholly owned subsidiary of The Hartford.

2. Basis of Presentation and Accounting Policies

(a) Basis of Presentation

The consolidated financial statements have been prepared on the basis of
accounting principles generally accepted in the United States, which differ
materially from the accounting prescribed by various insurance regulatory
authorities. All material intercompany transactions and balances between
Hartford Life, its subsidiaries and affiliates have been eliminated.

(b) Use of Estimates

The preparation of financial statements, in conformity with accounting
principles generally accepted in the United States, requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

The most significant estimates include those used in determining reserves,
deferred policy acquisition costs, valuation of investments and derivative
instruments and contingencies.

(c) Reclassifications

Certain reclassifications have been made to prior year financial information to
conform to the current year classifications.

(d) Adoption of New Accounting Standards

In April 2002, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 145, Rescission of
FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections. Under historical guidance, all gains and losses
resulting from the extinguishment of debt were required to be aggregated and,
if material, classified as an extraordinary item, net of related income tax
effect. SFAS No. 145 rescinds that guidance and requires that gains and losses
from extinguishments of debt be classified as extraordinary items only if they
are both unusual and infrequent in occurrence. SFAS No. 145 also amends SFAS
No. 13, Accounting for Leases for the required accounting treatment of
certain lease modifications that have economic effects similar to
sale-leaseback transactions. SFAS No. 145 requires that those lease
modifications be accounted for in the same manner as sale-leaseback
transactions. The provisions of SFAS No. 145 related to SFAS No. 13 are
effective for transactions occurring after May 15, 2002. Adoption of the
provisions of SFAS No. 145 related to SFAS No. 13 did not have a material
impact on the Companys consolidated financial condition or results of
operations.

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Effective September 2001, the Company adopted Emerging Issues Task Force
(EITF) Issue No. 01-10, Accounting for the Impact of the Terrorist Attacks
of September 11, 2001. Under the consensus, costs related to the terrorist
act should be reported as part of income from continuing operations and not as
an extraordinary item. The Company has recognized and classified all direct
and indirect costs associated with the attack of September 11 in accordance
with the consensus. (For discussion of the impact of the September 11
terrorist attack (September 11), see Note 3.)

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. SFAS No. 144 establishes an accounting model
for long-lived assets to be disposed of by sale that applies to all long-lived
assets, including discontinued operations. SFAS No. 144 requires that those
long-lived assets be measured at the lower of carrying amount or fair value
less cost to sell, whether reported in continuing operations or in discontinued
operations. The provisions of SFAS No. 144 are effective for financial
statements issued for fiscal years beginning after December 15, 2001. Adoption
of SFAS No. 144 did not have a material impact on the Companys consolidated
financial condition or results of operations.

In June 2001, the FASB issued SFAS No. 141, Business Combinations. SFAS No.
141 eliminates the pooling-of-interests method of accounting for business
combinations, requiring all business combinations to be accounted for under the
purchase method. Accordingly, net assets acquired are recorded at fair value
with any excess of cost over net assets assigned to goodwill. SFAS No. 141
also requires that certain intangible assets acquired in a business combination
be recognized apart from goodwill. The provisions of SFAS No. 141 apply to all
business combinations initiated after June 30, 2001. Adoption of SFAS No. 141
did not have a material impact on the Companys consolidated financial
condition or results of operations.

In June 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible
Assets. Under SFAS No. 142, amortization of goodwill is precluded, however,
its recoverability must be periodically (at least annually) reviewed and
tested for impairment. Goodwill must be tested at the reporting unit level for
impairment in the year of adoption, including an initial test performed within
six months of adoption. If the initial test indicates a potential impairment,
then a more detailed analysis to determine the extent of impairment must be
completed within twelve months of adoption.

During the second quarter of 2002, the Company completed the review and
analysis of its goodwill asset in accordance with the provisions of SFAS No.
142. The result of the analysis indicated that each reporting units fair
value exceeded its carrying amount, including goodwill. As a result, goodwill
for each reporting unit was not considered impaired. Adoption of all other
provisions of SFAS No. 142 did not have a material impact on the Companys
consolidated financial condition or results of operations. SFAS No. 142 also
requires that useful lives for intangibles other than goodwill be reassessed
and remaining amortization periods be adjusted accordingly. (For further
discussion of the impact of SFAS No. 142, see Note 8.)

Effective April 1, 2001, the Company adopted EITF Issue No. 99-20, Recognition
of Interest Income and Impairment on Purchased and Retained Beneficial
Interests in Securitized Financial Assets. Under the consensus, investors in
certain securities with contractual cash flows, primarily asset-backed
securities, are required to periodically update their best estimate of cash
flows over the life of the security. If the fair value of the securitized
financial asset is less than its carrying amount and there has been a decrease
in the present value of the estimated cash flows since the last revised
estimate, considering both timing and amount, an other than temporary
impairment charge is recognized. The estimated cash flows are also used to
evaluate whether there have been any changes in the securitized assets
estimated yield. All yield adjustments are accounted for on a prospective
basis. Upon adoption of EITF Issue No. 99-20, the Company recorded an $3
charge as the net of tax cumulative effect of the accounting change.

Effective January 1, 2001, the Company adopted SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities, as amended by SFAS Nos. 137 and
138. The standard requires, among other things, that all derivatives be
carried on the balance sheet at fair value. The standard also specifies hedge
accounting criteria under which a derivative can qualify for special
accounting. In order to receive special accounting, the derivative instrument
must qualify as a hedge of either the fair value or the variability of the cash
flow of a qualified asset or liability, or forecasted transaction. Special
accounting for qualifying hedges provides for matching the timing of gain or
loss recognition on the hedging instrument with the recognition of the
corresponding changes in value of the hedged item. The Companys policy prior
to adopting SFAS No. 133 was to carry its derivative instruments on the balance
sheet in a manner similar to the hedged item(s).

Upon adoption of SFAS No. 133, the Company recorded a $23 charge as the net of
tax cumulative effect of the accounting change. This transition adjustment was
primarily comprised of gains and losses on derivatives that had been previously
deferred and not adjusted to the carrying amount of the hedged item. Also
included in the transition adjustment were gains and losses related to
recognizing at fair value all derivatives that are designated as fair-value
hedging instruments offset by the difference between the book values and fair
values of related hedged items attributable to the hedged risks. The entire
transition amount was previously recorded in Accumulated Other Comprehensive
Income (AOCI)  Unrealized Gain/Loss on Securities in accordance with SFAS
No. 115, Accounting for Certain Investments in Debt and Equity Securities.
Gains and losses on derivatives that were previously deferred as adjustments to
the carrying amount of hedged items were not affected by the implementation of
SFAS No. 133. Upon adoption, the Company also reclassified $20, net of tax, to
AOCI  Gain on Cash-Flow Hedging Instruments from AOCI  Unrealized Gain/Loss
on Securities. This reclassification reflects the January 1, 2001 net
unrealized gain for all derivatives that were designated as cash-flow hedging
instruments. (For further discussion of the Companys derivative-related
accounting policies, see Note 2(h).)

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In September 2000, the FASB issued SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities  a
Replacement of FASB Statement No. 125. SFAS No. 140 revises the accounting
for securitizations, other financial asset transfers and collateral
arrangements. SFAS No. 140 was effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring after March 31,
2001. For recognition and disclosure of collateral and for additional
disclosures related to securitization transactions, SFAS No. 140 was effective
for the Companys December 31, 2000 financial statements. Adoption of SFAS No.
140 did not have a material impact on the Companys financial condition or
results of operations.

In March 2000, the FASB issued Interpretation No. 44, Accounting for Certain
Transactions Involving Stock Compensation  an Interpretation of Accounting
Principles Board (APB) Opinion No. 25 (FIN 44). FIN 44 clarifies the
application of APB Opinion No. 25, Accounting for Stock Issued to Employee,
regarding the definition of employee, the criteria for determining a
non-compensatory plan, the accounting for changes to the terms of a previously
fixed stock option or award, the accounting for an exchange of stock
compensation awards in a business combination and other stock compensation
related issues. FIN 44 became effective July 1, 2000, with respect to new
awards, modifications to outstanding awards and changes in grantee status that
occur on or after that date. The adoption of FIN 44 did not have a material
impact on the Companys consolidated financial condition or results of
operations.

Effective January 1, 2000, The Hartford adopted Statement of Position (SOP)
No. 98-7, Accounting for Insurance and Reinsurance Contracts That Do Not
Transfer Insurance Risk. This SOP provides guidance on the method of
accounting for insurance and reinsurance contracts that do not transfer
insurance risk, defined in the SOP as the deposit method. Adoption of this SOP
did not have a material impact on the Companys consolidated financial
condition or results of operations.

(e) Future Adoption of New Accounting Standards

In January 2003, the FASB issued Interpretation 46, Consolidation of Variable
Interest Entities (FIN 46), which requires an enterprise to assess if
consolidation of an entity is appropriate based upon its variable economic
interests in a variable interest entity (VIE). The initial determination of
whether an entity is a VIE shall be made on the date at which an enterprise
becomes involved with the entity. A VIE is an entity in which the equity
investors do not have the characteristics of a controlling financial interest
or do not have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support from other
parties. An enterprise shall consolidate a VIE if it has a variable interest
that will absorb a majority of the VIEs expected losses if they occur, receive
a majority of the entitys expected residual returns if they occur or both. A
direct or indirect ability to make decisions that significantly affect the
results of the activities of a VIE is a strong indication that an enterprise
has one or both of the characteristics that would require consolidation of the
VIE.

FIN 46 is effective for new VIEs established subsequent to January 31, 2003 and
for existing VIEs as of July 1, 2003. The Hartford invests in a variety of
investment structures that require analysis under this Interpretation,
including asset-backed securities, partnerships and certain trust securities
and is currently assessing the impact of adopting FIN 46. Based upon a
preliminary review, the adoption of FIN 46 is not expected to have a material
impact on the Companys financial condition or results of operations as there
were no material VIEs identified which would require consolidation. FIN 46
further requires the disclosure of certain information related to VIEs in which
the Company holds a significant variable interest. The Company does not
believe that it owns any such interests that require disclosure at this time.

In November 2002, the FASB issued Interpretation No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others (FIN 45). FIN 45 requires certain
guarantees to be recorded at fair value and also requires a guarantor to make
new disclosures, even when the likelihood of making payments under the
guarantee is remote. In general, the Interpretation applies to contracts or
indemnification agreements that contingently require the guarantor to make
payments to the guaranteed party based on changes in an underlying that is
related to an asset, liability, or an equity security of the guaranteed party.
The recognition provisions of FIN 45 are effective on a prospective basis for
guarantees issued or modified after December 31, 2002. The disclosure
requirements are effective for financial statements of interim and annual
periods ending after December 15, 2002. See disclosures in Note 2(h), Other
Investment and Risk Management Activities  Specific Strategies. Adoption of
this statement is not expected to have a material impact on the Companys
consolidated financial condition or results of operations.

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal Activities, which addresses financial accounting and
reporting for costs associated with exit or disposal activities and nullifies
EITF Issue No. 94-3, Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Action (including Certain Costs Incurred in
a Restructuring) (Issue 94-3). The principal difference between SFAS No.
146 and Issue 94-3 is that SFAS No. 146 requires that a liability for a cost
associated with an exit or disposal activity be recognized when the liability
is incurred, rather than at the date of an entitys commitment to an exit plan.
SFAS No. 146 is effective for exit or disposal activities after December 31,
2002. Adoption of SFAS No. 146 will result in a change in the timing of when a
liability is recognized if the Company has restructuring activities after
December 31, 2002.

(f) Expensing Stock Options

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In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure and Amendment to FASB No. 123, which
provides three optional transition methods for entities that decide to
voluntarily adopt the fair value recognition principles of SFAS No. 123,
Accounting for Stock Issued to Employees, and modifies the disclosure
requirements of that Statement. Under the prospective method, stock-based
compensation expense is recognized for awards granted after the beginning of
the fiscal year in which the change is made. The modified prospective method
recognizes stock-based compensation expense related to new and unvested awards
in the year of change equal to that which would have been recognized had SFAS
No. 123 been adopted as of its effective date, fiscal years beginning after
December 15, 1994. The retrospective restatement method recognizes stock
compensation costs for the year of change and restates financial statements for
all prior periods presented as though the fair value recognition provisions of
SFAS No. 123 had been adopted as of its effective date.

Beginning in January 2003, The Hartford adopted the fair value recognition
provisions of accounting for employee stock compensation on a prospective
basis.

Prior to January 2003, the Hartford applied the intrinsic value-based
provisions set forth in APB Opinion No. 25. Under the intrinsic value method,
compensation expense is determined on the measurement date, that is the first
date on which both the number of shares the employee is entitled to receive,
and the exercise price are known. Compensation expense, if any, is measured
based on the awards intrinsic value, which is the excess of the market price
of the stock over the exercise price on the measurement date. For the years
ended December 31, 2002, 2001 and 2000, compensation expense related to The
Hartfords stock based compensation plans, including non-option plans, was $6,
$8 and $23 after-tax, respectively. The expense related to stock-based
employee compensation included in the determination of net income for 2002 is
less than that which would have been recognized if the fair value method had
been applied to all awards since the effective date of SFAS No. 123. (For
further discussion of the Companys stock compensation plans see Note 13.)

(g) Investments

Hartford Lifes investments in both fixed maturities, which include bonds,
redeemable preferred stock and commercial paper, and equity securities, which
include common and non-redeemable preferred stocks, are classified as
available for sale in accordance with SFAS No. 115. Accordingly, these
securities are carried at fair value with the after-tax difference from
amortized cost, as adjusted for the effect of deducting the life and pension
policyholders share related to the Companys immediate participation
guaranteed contracts and the related change in amortization of deferred policy
acquisition costs, reflected in stockholders equity as a component of
accumulated other comprehensive income. Policy loans are carried at
outstanding balance which approximates fair value. Other investments consist
primarily of limited partnership investments which are accounted for by the
equity method. The Companys net income from partnerships is included in net
investment income. Other investments also include mortgage loans carried at
amortized cost and derivatives at fair value.

The fair value of securities is based upon quoted market prices when available
or broker quotation. Where market prices or broker quotations are not
available, management typically estimates the fair value based upon discounted
cash flows, applying current interest rates for similar financial instruments
with comparable terms and credit quality. The estimated fair value of a
financial instrument may differ significantly from the amount that could be
realized if the security were sold immediately. Derivative instruments are
reported at fair value based upon internally established valuations that are
consistent with external valuation models, quotations furnished by dealers in
such instrument or market quotations.

Net realized capital gains and losses on security transactions associated with
the Companys immediate participation guaranteed contracts are recorded and
offset by amounts owed to policyholders and were $(1), $(1) and $(9) for the
years ended December 31, 2002, 2002 and 2001, respectively. Under the terms of
the contracts, the net realized capital gains and losses will be credited to
policyholders in future years as they are entitled to receive them. Net
realized capital gains and losses, after deducting the life and pension
policyholders share and related amortization of deferred policy acquisition
costs for certain products, are reported as a component of revenues and are
determined on a specific identification basis.

The Companys accounting policy requires that a decline in the value of a
security below its amortized cost basis be assessed to determine if the decline
is other than temporary. If so, the security is deemed to be impaired and, a
charge is recorded in net realized capital losses equal to the difference
between the fair value and amortized cost basis of the security. The fair
value of the impaired investment becomes its new cost basis. The Company has a
security monitoring process comprised of a committee of investment and
accounting professionals that identifies securities that, due to certain
characteristics are subjected to an enhanced analysis on a quarterly basis.
Such characteristics include but are not limited to a deterioration of the
financial condition of the issuer, the magnitude and duration of unrealized
losses, credit rating and industry category.

The primary factors considered in evaluating whether a decline in value for
fixed income and equity securities is other than temporary include: (a) the
length of time and the extent to which the fair value has been less than cost,
(b) the financial conditions and near-term prospects of the issuer, (c) whether
the debtor is current on contractually obligated interest and principal
payments, and (d) the intent and ability of the Company to retain the
investment for a period of time sufficient to allow for any anticipated
recovery. Additionally, for certain securitized financial assets with
contractual cash flows (including asset-backed securities), EITF Issue No.
99-20 requires the Company to periodically update its best estimate of cash
flows over the life of the security. If management determines that the fair
F-10Table of Contentsvalue of its securitized financial asset is less than its carrying amount and
there has been a decrease in the present value of the estimated cash flows
since the last revised estimate, considering both timing and amount, then an
other than temporary impairment charge is recognized. Furthermore, for
securities expected to be sold, an other than temporary impairment charge is
recognized if the Company does not expect the fair value of a security to
recover to amortized cost prior to the expected date of sale. Once an
impairment charge has been recorded, the Company then continues to review the
other than temporarily impaired securities for appropriate valuation on an
ongoing basis.(h) Derivative InstrumentsOverviewThe Company utilizes a variety of derivative instruments, including swaps,
caps, floors, forwards and exchange traded futures and options to manage risk
through one of four Company-approved objectives: to hedge risk arising from
interest rate, price or currency exchange rate volatility; to manage liquidity;
to control transaction costs; or to enter into income enhancement and
replication transactions.The Company also periodically enters into swap agreements in which the Company
assumes credit exposure from a single entity, referenced index or asset pool.All of the Companys derivative transactions are permitted uses of derivatives
under the derivatives use plan filed and/or approved, as applicable, by the
State of Connecticut and State of New York insurance departments. The Company
does not make a market or trade in these instruments for the express purpose of
earning short-term trading profits.Accounting and Financial Statement Presentation of Derivative Instruments and
Hedging ActivitiesEffective January 1, 2001, and in accordance with SFAS No. 133, all derivatives
are recognized on the balance sheet at their fair value. On the date the
derivative contract is entered into, the Company designates the derivative as
(1) a hedge of the fair value of a recognized asset or liability (fair-value
hedge), (2) a hedge of a forecasted transaction or of the variability of cash
flows to be received or paid related to a recognized asset or liability
(cash-flow hedge), (3) a foreign-currency, fair-value or cash-flow hedge
(foreign-currency hedge), (4) a hedge of a net investment in a foreign
operation or (5) held for other investment and risk management activities,
which primarily involve managing asset or liability related risks which do not
qualify for hedge accounting under SFAS No. 133. Changes in the fair value of
a derivative that is designated and qualifies as a fair-value hedge, along with
the gain or loss on the hedged asset or liability that is attributable to the
hedged risk, are recorded in current period earnings as realized capital gains
or losses. Changes in the fair value of a derivative that is designated and
qualifies as a cash-flow hedge are recorded in AOCI and are reclassified into
earnings when earnings are impacted by the variability of the cash flow of the
hedged item. Changes in the fair value of derivatives that are designated and
qualify as foreign-currency hedges, are recorded in either current period
earnings or AOCI, depending on whether the hedge transaction is a fair-value
hedge or a cash-flow hedge. If, however, a derivative is used as a hedge of a
net investment in a foreign operation, its changes in fair value, to the extent
effective as a hedge, are recorded in the cumulative translation adjustments
account within stockholders equity. Changes in the fair value of derivative
instruments held for other investment and risk management purposes are reported
in current period earnings as realized capital gains and losses. As of December
31, 2002, the Company carried $257 of derivative assets in other investments
and $162 of derivative liabilities in other liabilities. As of December 31,
2001, the Company carried $135 of derivative assets in other investments and
$123 of derivative liabilities in other liabilities.Hedge Documentation and Effectiveness TestingAt hedge inception, the Company formally documents all relationships between
hedging instruments and hedged items, as well as its risk-management objective
and strategy for undertaking each hedge transaction. In connection with the
implementation of SFAS No. 133, the Company designated anew all existing hedge
relationships. The documentation process includes linking all derivatives that
are designated as fair-value, cash flow or foreign-currency hedges to specific
assets and liabilities on the balance sheet or to specific forecasted
transactions. The Company also formally assesses, both at the hedges
inception and on an ongoing basis, whether the derivatives that are used in
hedging transactions are highly effective in offsetting changes in fair values
or cash flows of hedged items. At inception, and on a quarterly basis, the
change in value of the hedging instrument and the change in value of the hedged
item are measured to assess the validity of maintaining special hedge
accounting. Hedging relationships are considered highly effective if the
changes in the fair value or discounted cash flows of the hedging instrument
are within a ratio of 80-125% of the inverse changes in the fair value or
discounted cash flows of the hedged item. Hedge effectiveness is evaluated
primarily based on regression analysis or the cumulative change in cash flow or
fair value, as appropriate. If it is determined that a derivative is no longer
highly effective as a hedge, the Company discontinues hedge accounting in the
period in which effectiveness was lost and prospectively, as discussed below
under discontinuance of hedge accounting.Credit RiskThe Companys derivatives counterparty exposure policy establishes market-based
credit limits, favors long-term financial stability and creditworthiness, and
typically requires credit enhancement/credit risk reducing agreements. By using
derivative instruments, the Company is exposed to credit risk which is measured
as the amount owed to the Company based on current market conditions andF-11Table of Contentspotential payment obligations between the Company and its counterparties. When
the fair value of a derivative contract is positive, this indicates that the
counterparty owes the Company, and, therefore, exposes the Company to credit
risk. Credit exposures are generally quantified weekly and netted, and
collateral is pledged to and held by, or on behalf of, the Company to the
extent the current value of derivatives exceeds exposure policy thresholds. The
Company also minimizes the credit risk in derivative instruments by entering
into transactions with high quality counterparties that are reviewed
periodically by the Companys internal compliance unit, reviewed frequently by
senior management and reported to The Finance Committee of The Hartfords Board
of Directors. The Company also maintains a policy of requiring that all
derivative contracts be governed by an International Swaps and Derivatives
Association Master Agreement which is structured by legal entity and by
counterparty and permits right of offset.Embedded DerivativesThe Company occasionally purchases or issues financial instruments that contain
a derivative instrument that is embedded in the financial instrument. When it
is determined that (1) the embedded derivative possesses economic
characteristics that are not clearly and closely related to the economic
characteristics of the host contract, and (2) a separate instrument with the
same terms would qualify as a derivative instrument, the embedded derivative is
bifurcated from the host for measurement purposes. The embedded derivative,
which is reported with the host instrument, is carried at fair value with
changes in fair value reported in realized gains and losses.Discontinuance of Hedge AccountingThe Company discontinues hedge accounting prospectively when (1) it is
determined that the derivative is no longer highly effective in offsetting
changes in the fair value or cash flows of a hedged item, (2) the derivative is
dedesignated as a hedge instrument, because it is unlikely that a forecasted
transaction will occur, or (3) the derivative expires or is sold, terminated,
or exercised. When hedge accounting is discontinued because it is determined
that the derivative no longer qualifies as an effective fair-value hedge, the
derivative continues to be carried at fair value on the balance sheet with
changes in its fair value recognized in current period earnings. The changes
in the fair value of the hedged asset or liability are no longer recorded in
earnings. When hedge accounting is discontinued because the Company becomes
aware that it is probable that a forecasted transaction will not occur, the
derivative continues to be carried on the balance sheet at its fair value, and
gains and losses that were accumulated in AOCI are recognized immediately in
earnings. In all other situations in which hedge accounting is discontinued on
a cash-flow hedge, including those where the derivative is sold, terminated or
exercised, amounts previously deferred in AOCI are amortized into earnings when
earnings are impacted by the variability of the cash flow of the hedged item.SFAS No. 133 Categorization of the Companys Hedging ActivitiesCash-Flow HedgesGeneralFor the year ended December 31, 2002 and 2001, the Companys gross gains and
losses representing the total ineffectiveness of all cash-flow hedges were
immaterial, with the net impact reported as net realized capital gains and
losses.Gains and losses on derivative
contracts that are reclassified from AOCI to
current period earnings are included in the line item in the statement of
income in which the hedged item is recorded. As of December 31, 2002 and 2001,
the after-tax deferred net gains on derivative instruments
accumulated in AOCI
that are expected to be reclassified to earnings during the next twelve months
are $7 and $2, respectively. This expectation is based on the anticipated
interest payments on hedged investments in fixed maturity securities that will
occur over the next twelve months, at which time the Company will recognize the
deferred net gains/losses as an adjustment to interest income over the term of
the investment cash flows. The maximum term over which the Company is hedging
its exposure to the variability of future cash flows (for all forecasted
transactions, excluding interest payments on variable-rate debt) is twelve
months. As of December 31, 2002 and 2001, the Company held derivative notional
value related to strategies categorized as cash-flow hedges of $3.1 billion and
$2.5 billion, respectively. For the years ended December 31, 2002 and 2001,
the net reclassifications from AOCI to earnings resulting from the
discontinuance of cash-flow hedges were immaterial.Specific StrategiesThe Companys primary use of cash flow hedging is to use interest-rate swaps as
an asset hedging strategy, in order to convert interest receipts on
floating-rate fixed maturity investments to fixed rates. When multiple assets
are designated in a hedging relationship under SFAS No. 133, a homogeneity test
is performed to ensure that the assets react similarly to changes in market
conditions. To satisfy this requirement, at inception of the hedge, fixed
maturity investments with identical variable rates are grouped together (for
example: 1-month LIBOR or 3-month LIBOR, not both).The Company enters into receive fixed/pay variable interest rate swaps to
hedge the variability in the first LIBOR-based interest payments received on
each pool of eligible variable rate fixed maturity investments.
Ineffectiveness is measured by comparing the present value of the variable rate
pay side of the swaps to the present value of the first anticipated variable
rate interest receipts on the hedged fixed maturity investments. At December
31, 2002 and 2001, the Company held $2.6 billion and $2.0 billion, respectively
in derivative notional value related to this strategy.F-12Table of ContentsThe Company enters into foreign currency swaps to hedge the variability in cash
flow associated with certain foreign dominated fixed maturity investments. The
foreign currency swap agreements are structured to match the foreign currency
cash flows of the foreign dominated fixed maturity investments (i.e.
par/notional value, currency, initial cost, maturity date, and payment dates).
If hedge ineffectiveness exists, it is recorded as net realized capital gain or
loss. Notional value of foreign currency swaps at December 31, 2002 and 2001
totaled $389 and $147, respectively.Fair-Value HedgesGeneralFor the year ended December 31, 2002 and 2001, the Companys gross gains and
losses representing the total ineffectiveness of all fair-value hedges were
immaterial, with the net impact reported as realized capital gains/losses. All
components of each derivatives gain or loss are included in the assessment of
hedge effectiveness. As of December 31, 2002 and 2001, the Company held $300
and $399, respectively, in derivative notional value related to strategies
categorized as fair-value hedges.Specific StrategiesThe Company purchases interest rate caps and sells interest rate floor
contracts in an asset hedging strategy utilized to offset corresponding
interest rate caps and floors that exist in certain of its variable-rate fixed
maturity investments. The standalone interest rate cap and floor contracts are
structured to offset those embedded in the hedged investment. The calculation
of ineffectiveness involves a comparison of the present value of the cumulative
change in the expected future cash flows on the interest rate cap/floor and the
present value of the cumulative change in the expected future interest cash
flows that are hedged on the fixed maturity investment. If hedge
ineffectiveness exists, it is recorded as net realized capital gain or loss.
All hedges involving variable rate bonds with embedded interest rate caps and
floors are perfectly matched with respect to notional values, payment dates,
maturity, index, and the hedge relationship does not contain any other basis
differences. No component of the hedging instruments fair value is excluded
from the determination of effectiveness. At December 31, 2002 and 2001 the
Company held $180 and $200, respectively in derivative notional value related
to this strategy.The Company enters into swaption arrangements in an asset hedging strategy
utilized to offset the change in the fair value of call options embedded in
certain of its investments in municipal fixed maturity investments. The
swaptions give the Company the option to enter into a receive fixed swap.
The swaptions exercise date coincides with the municipal fixed maturitys call
date, and the receive side of the swap closely matches the coupon rate on the
original municipal fixed maturity investment. The purpose of the swaptions are
to ensure a fixed return over the original term to maturity. Should the
municipal fixed maturity investment be called, the swaptions would be either
settled in cash or exercised. The proceeds from the call are used to purchase
a variable rate fixed maturity investment. If the bonds are not called, the
swaptions expire worthless. Each swaption contract hedges multiple fixed
maturity investments containing embedded call options. These fixed maturity
investments are subdivided into portfolio hedges. In accordance with SFAS No.
133, a stress test is performed at the inception of the hedge to prove the
homogeneity of each portfolio (with regard to the risk being hedged) and
thereby qualifies that hedge for special hedge accounting treatment.
Correlation calculations are performed at various interest rate levels
comparing the total change in the aggregate value of the embedded calls in the
hedged portfolio to the change in value of the embedded call in each individual
fixed maturity investment in the portfolio. The correlation statistic for
homogeneity must be within a range of 0.85 to 1.00. Regression calculations are
performed quarterly to validate that the changes in value of the swaption
offset the inverse changes in value of the aggregate embedded bond call option,
within a range of 0.80 to 1.25. The calculation of ineffectiveness involves a
comparison of the cumulative change in fair value of the embedded call option
with the cumulative change in fair value of the swaption. Ineffectiveness is
reported as realized capital gains and losses. No component of the hedging
instruments fair value is excluded from the determination of effectiveness.
At December 31, 2002 and 2001, the Company held $90 and $133, respectively, in
derivative notional value related to this strategy.Other Investment and Risk Management ActivitiesGeneralThe Companys other investment and risk management activities primarily relate
to strategies used to reduce economic risk or enhance income, and do not
receive hedge accounting treatment. Swap agreements, interest rate cap and
floor agreements and option contracts are used to reduce economic risk. Income
enhancement and replication transactions include the use of written covered
call options, which offset embedded equity call options, total return swaps and
synthetic replication of cash market instruments. The change in the value of
all derivatives held for other investment and risk management purposes is
reported in current period earnings as realized capital gains or losses. For
the year ended December 31, 2002 and 2001, the Company recognized after-tax net
losses of $4 and $11, respectively (reported as net realized capital gains and
losses in the statement of income), which represented the total change in value
for other derivative-based strategies which do not qualify for hedge accounting
under SFAS No. 133. As of December 31, 2002 and 2001, the Company held $4.8
billion and $3.8 billion, respectively in derivative notional value related to
strategies categorized as Other Investment and Risk Management Activities.Specific StrategiesF-13Table of ContentsThe Company issues liability contracts in which policyholders have the option
to surrender their policies at book value and that guarantee a minimum credited
rate of interest. Typical products with these features include Whole Life,
Universal Life and Repetitive Premium Variable Annuities. The Company uses
interest rate cap and swaption contracts as an economic hedge, classified for
internal purposes as a liability hedge, thereby mitigating the Companys loss
in a rising interest rate environment. The Company is exposed to the situation
where interest rates rise and the Company is not able to raise its credited
rates to competitive yields. The policyholder can then surrender at book value
while the underlying bond portfolio may experience a loss. The increase in
yield in a rising interest rate environment due to the interest rate cap and
swaption contracts may be used to raise credited rates, increasing the
Companys competitiveness and reducing the policyholders incentive to
surrender. In accordance with Company policy, the amount of notional value
will not exceed the book value of the liabilities being hedged and the term of
the derivative contract will not exceed the average maturity of the
liabilities. As of December 31, 2002 and 2001, the Company held $516 in
derivative notional value related to this strategy.When terminating certain hedging relationships, the Company will enter a
derivative contract with terms and conditions that directly offset the original
contract, thereby offsetting its changes in value from that date forward. The
Company dedesignates the original contract and records the changes in value of
both the original contract and the new offsetting contract through realized
capital gains and losses. At December 31, 2002 and 2001, the Company held $2.5
billion and $2.0 billion in derivative notional value related to this strategy.Periodically, the Company enters into swap agreements in which the Company
assumes credit exposure from a single entity, referenced index or asset pool.
The Company assumes credit exposure to individual entities through credit
default swaps. In assuming this obligation, the Company receives a periodic
fee. These contracts obligate the Company to compensate the derivative
counterparty in the event of bankruptcy, failure to pay or restructuring, and
in return, the company will receive a debt obligation of the referenced entity.
The maximum potential future exposure to the Company is the notional value of
the swap contracts, which was $62 after tax as of December 31, 2002. The
market value of these swaps was immaterial at December 31, 2002. The Company
did not transact in credit default swaps in 2001. The term of the credit
default swaps range from 3-5 years. The Company also assumes exposure to an
asset pool through total return swaps. As of December 31, 2002 and 2001, the
maximum potential future exposure to the Company $93 and $10 after tax,
respectively. The market value of these swaps at December 31, 2002 and 2001
was a loss of $42 and $51, respectively, which was reported on the balance
sheet in Other Liabilities. The term of the total return swaps range from 6
months to 10 years. These arrangements are entered into to modify portfolio
duration or to increase diversification while controlling transaction costs.
At December 31, 2002 and 2001, the Company held $367 and $230, respectively, in
derivative notional value related to this strategy.The Company issues an option in an asset hedging strategy utilized to
monetize the option embedded in certain of its fixed maturity investments. The
Company receives a premium for issuing the freestanding option. The written
option grants the holder the ability to call the bond at a predetermined strike
value. The maximum potential future economic exposure is represented by the
then fair value of the bond in excess of the strike value which is expected to
be entirely offset by the appreciation in the value of the embedded long
option. The structure is designed such that the fixed maturity investment and
freestanding option have identical expected lives, typically 2-5 years. At
December 31, 2002 and 2001, the Company held $436 and $466, respectively, in
derivative notional value related to the written option and held $436 and $466,
respectively, of derivative notional value related to the embedded option.
Periodically, in order to mitigate its foreign currency risk, the Company
enters into a costless collar strategy. Accordingly, the Company purchases
foreign put options and writes foreign call options to hedge the foreign
currency exposures in certain of its foreign fixed maturity investments. At
December 31, 2002, the maximum potential exposure to the Company was $1 after
tax. At December 31, 2002 and 2001, the Company held $275 and $0,
respectively, in derivative notional value related to this strategy. The term
of the options is up to 4 months.(i) Separate AccountsHartford Life maintains separate account assets and liabilities, which are
reported at fair value. Separate account assets are segregated from other
investments and investment income and gains and losses accrue directly to the
policyholder. Separate accounts reflect two categories of risk assumption:
non-guaranteed separate accounts, wherein the policyholder assumes the
investment risk, and guaranteed separate accounts, wherein Hartford Life
contractually guarantees either a minimum return or account value to the
policyholder. The fees earned for administrative and contractholder
maintenance services performed for these separate accounts are included in fee
income.(j) Deferred Policy Acquisition CostsPolicy acquisition costs, which include commissions and certain other expenses
that vary with and are primarily associated with acquiring business, are
deferred and amortized over the estimated lives of the contracts, usually 20
years. The deferred costs are recorded as an asset commonly referred to as
deferred policy acquisition costs (DAC). At December 31, 2002 and 2001, the
carrying value of the Companys DAC was $5.2 billion and $5.0 billion,
respectively.F-14Table of ContentsDAC related to traditional policies are amortized over the premium-paying
period in proportion to the present value of annual expected premium income.
Adjustments are made each year to recognize actual experience as compared to
assumed experience for the current period.DAC related to investment contracts and universal life-type contracts are
deferred and amortized using the retrospective deposit method. Under the
retrospective deposit method, acquisition costs are amortized in proportion to
the present value of estimated gross profits (EGPs) from projected
investment, mortality and expense margins and surrender charges. A portion of
the DAC amortization is allocated to realized gains and losses. The DAC
balance is also adjusted by an amount that represents the change in
amortization of deferred policy acquisition costs that would have been required
as a charge or credit to operations had unrealized amounts been realized.
Actual gross profits can vary from managements estimates, resulting in
increases or decreases in the rate of amortization.The Company regularly evaluates its estimated gross profits to determine if
actual experience or other evidence suggests that earlier estimates should be
revised. Several assumptions considered to be significant in the development
of EGPs include separate account fund performance, surrender and lapse rates,
estimated interest spread and estimated mortality. The separate account fund
performance assumption is critical to the development of the EGPs related to
the Companys variable annuity and variable life insurance businesses. The average long-term rate of assumed separate account
fund performance used in estimating gross profits for the variable annuity and
variable life business was 9% at December 31, 2002 and 2001. For all other
products including fixed annuities and other universal life type contracts the
average assumed investment yield ranged from 5% to 8.5% for the years ended
December 31, 2002 and 2001.Due to the increased volatility and precipitous decline experienced by the U.S.
equity markets in 2002, the Company enhanced its DAC evaluation process during
the course of the year. The Company developed sophisticated modeling
capabilities, which allowed it to run 250 stochastically determined scenarios
of separate account fund performance. These scenarios were then utilized to
calculate a reasonable range of estimates for the present value of future gross
profits. This range is then compared to the present value of future gross
profits currently utilized in the DAC amortization model. As of December 31,
2002, the current estimate falls within the reasonable range, and therefore,
the Company does not believe there is evidence to suggest a revision to the
EGPs is necessary.Additionally, the Company has performed various sensitivity analyses with
respect to separate account fund performance to provide an indication of future
separate account fund performance levels, which could result in the need to
revise future EGPs. The Company has estimated that a revision to the future
EGPs is unlikely in 2003 in the event that the separate account fund
performance meets or exceeds the Companys long-term assumption of 9% and that
a revision is likely if the overall separate account fund performance is
negative for the year. In the event that separate account fund performance
falls between 0% and 9% during 2003, the Company will need to evaluate the
actual gross profits versus the mean EGPs generated by the stochastic DAC
analysis and determine whether or not to make a revision to the future EGPs.
Factors that will influence this determination include the degree of volatility
in separate account fund performance, when during the year performance becomes
negative and shifts in asset allocation within the separate account made by
policyholders. The overall return generated by the separate account 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. The Companys overall separate account fund performance has been
reasonably correlated to the overall performance of the S&P 500 Index, although
no assurance can be provided that this correlation will continue in the future.Should the Company change its assumptions utilized to develop EGPs (commonly
referred to as unlocking) the Company would record a charge (or credit) to
bring its DAC balance to the level it would have been had EGPs been calculated
using the new assumptions from the date of each policy. The Company evaluates
all critical assumptions utilized to develop EGPs (e.g. lapse, mortality) and
will make a revision to future EGPs to the extent that actual experience is
significantly different than expected.The overall recoverability of the DAC asset is dependent on the future
profitability of the business. The Company tests the aggregate recoverability
of the DAC asset by comparing the amounts deferred to total EGPs. In addition,
the Company routinely stress tests its DAC asset for recoverability against
severe declines in its separate account assets, which could occur if the equity
markets experienced another significant sell-off, as the majority of
policyholders money held in the separate accounts is invested in the equity
market.(k)  Reserve for Future Policy BenefitsHartford Life establishes and carries as liabilities actuarially determined
reserves which are calculated to meet the Companys future obligations.
Reserves for life insurance and disability contracts are based on actuarially
recognized methods using prescribed morbidity and mortality tables in general
use in the United States, which are modified to reflect the Companys actual
experience when appropriate. These reserves are computed at amounts that, with
additions from estimated premiums to be received and with interest on such
reserves compounded annually at certain assumed rates, are expected to be
sufficient to meet the Companys policy obligations at their maturities or in
the event of an insureds disability or death. Reserves also include unearned
premiums, premium deposits, claims incurred but not reported and claims
reported but not yet paid. Reserves for assumed reinsurance are computed in a
manner that is comparable to direct insurance reserves.Liabilities for future policy benefits are computed by the net level premium
method using interest assumptions ranging from 3% to 11% and withdrawal and
mortality assumptions appropriate at the time the policies were issued. Claim
reserves, which are the result ofF-15Table of Contentssales of group long-term and short-term
disability, stop loss, and Medicare supplement, are stated at amounts
determined by estimates on individual cases and estimates of unreported claims
based on past experience.The following table displays the development of the claim reserves (included in
reserve for future policy benefits in the Consolidated Balance Sheets)
resulting primarily from group disability products.

|                                 |              |                               |       |       |       |      |       |                                  |       |   |       |       |       | 
|-------------------------------- | ------------ | ----------------------------- | ----- | ----- | ----- | ---- | ----- | -------------------------------- | ----- | - | ----- | ----- | ----- | 
|                                 |              |                               |       |       |       |      |       | For the years ended December 31, |       |   |       |      
|                                 |              |                               |       | 2002  |       | 2001 |       | 2000                            
|                                 |              |                               |       |       |       |      |       |                                 
|Beginning claim reserves  gross |              | $                             | 2,764 |       |       | $    | 2,384 |                                  |       | $ | 2,128 |      
|Less: Reinsurance recoverables   |              |                               | 264   |       |       |      | 177   |                                  |       |   | 125   |      
|                                 |              |                               |       |       |       |      |       |                                  |       |   |       |      
|Beginning claim reserves  net   |              |                               | 2,500 |       |       |      | 2,207 |                                  |       |   | 2,003 |      
|                                 |              |                               |       |       |       |      |       |                                  |       |   |       |      
|Incurred expenses related to:    |              |                               |       |       |       |      |       |                                  |       |   |       |      
|                                 | Current year |                               |       | 1,154 |       |      |       | 1,272                            |       |   |       | 1,093 |      
|                                 | Prior years  |                               |       | 4     |       |      |       | (15                              | )     |   |       | (11   | )    
|                                 |              |                               |       |       |       |      |       |                                  |       |   |       |      
|                                 |              | Total incurred                |       |       | 1,158 |      |       |                                  | 1,257 |   |       |       | 1,082 | 
|                                 |              |                               |       |       |       |      |       |                                  |       |   |       |      
|Paid expenses related to:        |              |                               |       |       |       |      |       |                                  |       |   |       |      
|                                 | Current year |                               |       | 387   |       |      |       | 439                              |       |   |       | 410   |      
|                                 | Prior years  |                               |       | 632   |       |      |       | 525                              |       |   |       | 468   |      
|                                 |              |                               |       |       |       |      |       |                                  |       |   |       |      
|                                 |              | Total paid                    |       |       | 1,019 |      |       |                                  | 964   |   |       |       | 878   | 
|                                 |              |                               |       |       |       |      |       |                                  |       |   |       |      
|Ending claim reserves  net      |              |                               | 2,639 |       |       |      | 2,500 |                                  |       |   | 2,207 |      
|Add: Reinsurance recoverables    |              |                               | 275   |       |       |      | 264   |                                  |       |   | 177   |      
|                                 |              |                               |       |       |       |      |       |                                  |       |   |       |      
|                                 |              | Ending claim reserves  gross |       | $     | 2,914 |      |       | $                                | 2,764 |   |       | $     | 2,384 | 
|                                 |              |                               |       |       |       |      |       |                                  |       |   |       |      

(l)  Other Policyholder Funds

Other policyholder funds and benefits payable include reserves for investment
contracts without life contingencies, corporate owned life insurance and
universal life insurance contracts. Of the amounts included in this item,
$22.2 billion and $18.8 billion, as of December 31, 2002 and 2001,
respectively, represent net policyholder obligations. The liability for
policybenefits for universal life-type contracts is equal to the balance that
accrues to the benefit of policyholders, including credited interest, amounts
that have been assessed to compensate the Company for services to be performed
over future periods, and any amounts previously assessed against policyholders
that are refundable on termination of the contract.

For investment contracts, policyholder liabilities are equal to the accumulated
policy account values, which consist of an accumulation of deposit payments
plus credited interest, less withdrawals and amounts assessed through the end
of the period.

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(m)  Revenue Recognition

For investment and universal life-type contracts, the amounts collected from
policyholders are considered deposits and are not included in revenue. Fee
income for investment and universal life-type contracts consists of policy
charges for policy administration, cost of insurance charges and surrender
charges assessed against policyholders account balances and are recognized in
the period in which services are provided. Traditional life and the majority
of the Companys accident and health products are long duration contracts, and
premiums are recognized as revenue when due from policyholders. Retrospective
and contingent commissions and other related expenses are incurred and recorded
in the same period that the retrospective premiums are recorded or other
contract provisions are met.

(n)  Foreign Currency Translation

Foreign currency translation gains and losses are reflected in stockholders
equity as a component of accumulated other comprehensive income. The Companys
foreign subsidiaries balance sheet accounts are translated at the exchange
rates in effect at each year end and income statement accounts are translated
at the average rates of exchange prevailing during the year. Gains and losses
on foreign currency transactions are reflected in earnings. The national
currencies of the international operations are their functional currencies.

(o)  Dividends to Policyholders

Policyholder dividends are accrued using an estimate of the amount to be paid
based on underlying contractual obligations under policies and applicable state
laws.

Participating life insurance in force accounted for 6%, 8% and 17% as of
December 31, 2002, 2001 and 2000, respectively, of total life insurance in
force. Dividends to policyholders were $65, $68 and $67 for the years ended
December 31, 2002, 2001 and 2000, respectively. There were no additional
amounts of income allocated to participating policyholders. If limitations
exist on the amount of net income from participating life insurance contracts
that may be distributed to stockholders, the policyholders share of net income
on those contracts that cannot be distributed is excluded from stockholders
equity by a charge to operations and a credit to a liability.

(p)  Mutual Funds

The Company maintains a retail mutual fund operation, whereby the Company,
through wholly-owned subsidiaries, provides investment management and
administrative services to The Hartford Mutual Funds, Inc., a family of 33
mutual funds. The Company charges fees to the shareholders of the mutual
funds, which are recorded as revenue by the Company. Investors can purchase
shares in the mutual funds, all of which are registered with the Securities
and Exchange Commission, in accordance with the Investment Company Act of 1940.
The mutual funds are owned by the shareholders of those funds and not by the
Company. As such, the mutual fund assets and liabilities and related
investment returns are not reflected in the Companys consolidated financial
statements since they are not assets, liabilities and operations of the
Company.

(q)  Reinsurance

Written premiums, earned premiums and incurred insurance losses and loss
adjustment expense all reflect the net effects of assumed and ceded reinsurance
transactions. Assumed reinsurance refers to our acceptance of certain
insurance risks that other insurance companies have underwritten. Ceded
reinsurance means other insurance companies have agreed to share certain risks
the Company has underwritten. Reinsurance accounting is followed for assumed
and ceded transactions when the risk transfer provisions of SFAS No. 113,
Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration
Contracts, have been met.

(r)  Income Taxes

The Company recognizes taxes payable or refundable for the current year and
deferred taxes for the future tax consequences of differences between the
financial reporting and tax basis of assets and liabilities. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years the temporary differences are expected to
reverse.

3.     September 11, 2001

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As a result of September 11, the Company recorded an estimated loss amounting
to $20, net of taxes and reinsurance, in the third quarter of 2001. The
Company based the loss estimate upon a review of insured exposures using a
variety of assumptions and actuarial techniques, including estimated amounts
for unknown and unreported policyholder losses and costs incurred in settling
claims. Also included was an estimate of amounts recoverable under the
Companys ceded reinsurance programs. In the first quarter of 2002, the
Company recognized an $8 after-tax benefit related to favorable development of
reserves related to September 11. As a result of the uncertainties involved in
the estimation process, final claims settlement may vary from present
estimates.

4.     Common Stock Acquired by The Hartford

On May 18, 2000, the Board of Directors of Hartford Life approved a cash tender
offer from the Board of Directors of The Hartford for the acquisition of all of
the common shares of Hartford Life not already owned by The Hartford at a price
of $50.50 per share, to be followed by the merger of Hartford Life with a
wholly-owned subsidiary of The Hartford, with Hartford Life to be the surviving
corporation. The cash tender offer expired on June 21, 2000 at 12:00 midnight
(EST) and 21,596,797 shares of Hartford Life Class A Common Stock were acquired
pursuant to the tender offer. The Hartford completed the merger of Hartford
Life effective June 27, 2000. All Hartford Life stockholders who did not
tender their shares (other than The Hartford and its subsidiaries) received the
same $50.50 per share in cash paid in the tender offer.

As a result of the above, all eligible participants of Hartford Lifes stock
based compensation plans have been converted to The Hartfords stock based
compensation plans as described in Note 13.

5.     Sale of Sudamericana Holding S.A.

On September 7, 2001, Hartford Life completed the sale of its ownership
interest in an Argentine subsidiary, Sudamericana Holding S.A. The Company
recognized an after-tax net realized capital loss of $21 related to the sale.

6.     Investments and Derivative Instruments

|                                        |                       |   |                                  |       |      |   |       |       |  |   |       |       | 
|--------------------------------------- | --------------------- | - | -------------------------------- | ----- | ---- | - | ----- | ----- |  | - | ----- | ----- | 
|                                        |                       |   | For the years ended December 31,
|                                        |                       |   |                                 
|                                        |                       |   | 2002                             |       | 2001 |   | 2000 
|                                        |                       |   |                                  |       |      |   |      
|(a) Components of Net Investment Income |                       |   |                                  |       |      |   |       |       |  |   |       |      
|                                        |                       |   |                                  |       |      |   |       |       |  |   |       |      
|Interest income                         |                       | $ | 1,485                            |       |      | $ | 1,364 |       |  | $ | 1,213 |      
|Interest income from policy loans       |                       |   | 254                              |       |      |   | 307   |       |  |   | 308   |      
|Other investment income                 |                       |   | 140                              |       |      |   | 124   |       |  |   | 88    |      
|                                        |                       |   |                                  |       |      |   |       |       |  |   |       |      
|Gross investment income                 |                       |   | 1,879                            |       |      |   | 1,795 |       |  |   | 1,609 |      
|Less: Investment expenses               |                       |   | 21                               |       |      |   | 16    |       |  |   | 17    |      
|                                        |                       |   |                                  |       |      |   |       |       |  |   |       |      
|                                        | Net investment income |   | $                                | 1,858 |      |   | $     | 1,779 |  |   | $     | 1,592 | 
|                                        |                       |   |                                  |       |      |   |       |       |  |   |       |      



(b)  Components of Net Realized Capital Gains (Losses)

|                                                                             |                                     |   |      |      |   |   |     |      |   |   |      |     |  
|---------------------------------------------------------------------------- | ----------------------------------- | - | ---- | ---- | - | - | --- | ---- | - | - | ---- | --- | -
|Fixed maturities                                                             |                                     | $ | (296 | )    |   | $ | (49 | )    |   | $ | (120 | )  
|Equity securities                                                            |                                     |   | (22  | )    |   |   | (11 | )    |   |   | 23   |    
|Sale of affiliates and other (1)                                             |                                     |   |     |      |   |   | (74 | )    |   |   |     |    
|Change in liability to policyholders for net realized capital (gains) losses |                                     |   | 1    |      |   |   | 1   |      |   |   | 9    |    
|                                                                             |                                     |   |      |      |   |   |     |      |   |   |      |    
|                                                                             | Net realized capital gains (losses) |   | $    | (317 | ) |   | $   | (133 | ) |   | $    | (88 | )
|                                                                             |                                     |   |      |      |   |   |     |      |   |   |      |    



---

|(1) |  | 2001 includes before tax losses of $35 related to the sale of international
subsidiaries.
|--- |  | -----------------------------------------------------------------------------------------

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|                                                                    |                                                                      |   |                                  |    |      |   |      |    |   |   |     |     |  
|------------------------------------------------------------------- | -------------------------------------------------------------------- | - | -------------------------------- | -- | ---- | - | ---- | -- | - | - | --- | --- | -
|                                                                    |                                                                      |   | For the years ended December 31,
|                                                                    |                                                                      |   |                                 
|                                                                    |                                                                      |   | 2002                             |    | 2001 |   | 2000
|c) Change in Unrealized Capital (Losses) Gains on Equity Securities |                                                                      |   |                                  |    |      |   |      |    |   |   |     |    
|                                                                    |                                                                      |   |                                  |    |      |   |      |    |   |   |     |    
|Gross unrealized capital gains                                      |                                                                      | $ | 10                               |    |      | $ | 9    |    |   | $ | 5   |    
|Gross unrealized capital losses                                     |                                                                      |   | (35                              | )  |      |   | (29  | )  |   |   | (15 | )  
|                                                                    |                                                                      |   |                                  |    |      |   |      |    |   |   |     |    
|Net unrealized capital (losses) gains                               |                                                                      |   | (25                              | )  |      |   | (20  | )  |   |   | (10 | )  
|Deferred income taxes and other items                               |                                                                      |   | (9                               | )  |      |   | (7   | )  |   |   | (4  | )  
|                                                                    |                                                                      |   |                                  |    |      |   |      |    |   |   |     |    
|Net unrealized capital (losses) gains, net of tax                   |                                                                      |   | (16                              | )  |      |   | (13  | )  |   |   | (6  | )  
|Balance  beginning of year                                         |                                                                      |   | (13                              | )  |      |   | (6   | )  |   |   | 16  |    
|                                                                    |                                                                      |   |                                  |    |      |   |      |    |   |   |     |    
|                                                                    | Net change in unrealized capital (losses) gains on equity securities |   | $                                | (3 | )    |   | $    | (7 | ) |   | $   | (22 | )
|                                                                    |                                                                      |   |                                  |    |      |   |      |    |   |   |     |    

(d)  Change in Unrealized Capital Gains (Losses) on Fixed Maturities

|                                                                |                                                                 |   |       |     |  |   |      |     |  |   |      |     | 
|--------------------------------------------------------------- | --------------------------------------------------------------- | - | ----- | --- |  | - | ---- | --- |  | - | ---- | --- | 
|Gross unrealized capital gains                                  |                                                                 | $ | 1,704 |     |  | $ | 632  |     |  | $ | 384  |    
|Gross unrealized capital losses                                 |                                                                 |   | (309  | )   |  |   | (341 | )   |  |   | (307 | )  
|Net unrealized capital gains (losses) credited to policyholders |                                                                 |   | (58   | )   |  |   | (21  | )   |  |   | (10  | )  
|                                                                |                                                                 |   |       |     |  |   |      |     |  |   |      |    
|Net unrealized gains (losses)                                   |                                                                 |   | 1,337 |     |  |   | 270  |     |  |   | 67   |    
|Deferred income taxes and other items                           |                                                                 |   | (700  | )   |  |   | (94  | )   |  |   | 21   |    
|                                                                |                                                                 |   |       |     |  |   |      |     |  |   |      |    
|Net unrealized gains (losses), net of tax                       |                                                                 |   | 637   |     |  |   | 176  |     |  |   | 46   |    
|Balance  beginning of year                                     |                                                                 |   | 176   |     |  |   | 46   |     |  |   | (352 | )  
|                                                                |                                                                 |   |       |     |  |   |      |     |  |   |      |    
|                                                                | Change in unrealized capital gains (losses) on fixed maturities |   | $     | 461 |  |   | $    | 130 |  |   | $    | 398 | 
|                                                                |                                                                 |   |       |     |  |   |      |     |  |   |      |    

(e)  Fixed Maturity Investments

|                                                                                                  |                        |   |                         |        |       |   |                  |       |                  |   |      |      |   |   |        |        | 
|------------------------------------------------------------------------------------------------- | ---------------------- | - | ----------------------- | ------ | ----- | - | ---------------- | ----- | ---------------- | - | ---- | ---- | - | - | ------ | ------ | 
|                                                                                                  |                        |   | As of December 31, 2002
|                                                                                                  |                        |   |                        
|                                                                                                  |                        |   |                         |        |       |   | Gross Unrealized |       | Gross Unrealized |   |      |      |  
|                                                                                                  |                        |   | Amortized Cost          |        | Gains |   | Losses           |       | Fair Value      
|                                                                                                  |                        |   |                         |        |       |   |                  |       |                 
|U.S. Government and Government agencies and
authorities (guaranteed and sponsored)                |                        | $ | 346                     |        |       | $ | 12               |       |                  | $ |     |      |   | $ | 358    |       
|U.S. Government and Government agencies and
authorities
(guaranteed and sponsored)  asset backed |                        |   | 2,354                   |        |       |   | 76               |       |                  |   | (3   | )    |   |   | 2,427  |       
|States, municipalities and political subdivisions                                                 |                        |   | 1,881                   |        |       |   | 150              |       |                  |   | (1   | )    |   |   | 2,030  |       
|International governments                                                                         |                        |   | 476                     |        |       |   | 52               |       |                  |   | (2   | )    |   |   | 526    |       
|Public utilities                                                                                  |                        |   | 1,236                   |        |       |   | 74               |       |                  |   | (31  | )    |   |   | 1,279  |       
|All other corporate, including international                                                      |                        |   | 11,917                  |        |       |   | 901              |       |                  |   | (134 | )    |   |   | 12,684 |       
|All other corporate  asset backed                                                                |                        |   | 8,013                   |        |       |   | 407              |       |                  |   | (115 | )    |   |   | 8,305  |       
|Short-term investments                                                                            |                        |   | 1,099                   |        |       |   | 1                |       |                  |   |     |      |   |   | 1,100  |       
|Certificates of deposit                                                                           |                        |   | 629                     |        |       |   | 28               |       |                  |   | (23  | )    |   |   | 634    |       
|Redeemable preferred stock                                                                        |                        |   | 31                      |        |       |   | 3                |       |                  |   |     |      |   |   | 34     |       
|                                                                                                  |                        |   |                         |        |       |   |                  |       |                  |   |      |      |   |   |        |       
|                                                                                                  | Total fixed maturities |   | $                       | 27,982 |       |   | $                | 1,704 |                  |   | $    | (309 | ) |   | $      | 29,377 | 
|                                                                                                  |                        |   |                         |        |       |   |                  |       |                  |   |      |      |   |   |        |       

F-19



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##### Table of Contents



|                                                                                                  |                        |   |                         |        |       |   |                  |     |                  |   |      |      |   |   |       |        | 
|------------------------------------------------------------------------------------------------- | ---------------------- | - | ----------------------- | ------ | ----- | - | ---------------- | --- | ---------------- | - | ---- | ---- | - | - | ----- | ------ | 
|                                                                                                  |                        |   | As of December 31, 2001
|                                                                                                  |                        |   |                        
|                                                                                                  |                        |   |                         |        |       |   | Gross Unrealized |     | Gross Unrealized |   |      |      |  
|                                                                                                  |                        |   | Amortized Cost          |        | Gains |   | Losses           |     | Fair Value      
|                                                                                                  |                        |   |                         |        |       |   |                  |     |                 
|U.S. Government and Government agencies and
authorities (guaranteed and sponsored)                |                        | $ | 361                     |        |       | $ | 16               |     |                  | $ | (3   | )    |   | $ | 374   |       
|U.S. Government and Government agencies and
authorities
(guaranteed and sponsored)  asset backed |                        |   | 1,498                   |        |       |   | 33               |     |                  |   | (3   | )    |   |   | 1,528 |       
|States, municipalities and political subdivisions                                                 |                        |   | 1,569                   |        |       |   | 54               |     |                  |   | (12  | )    |   |   | 1,611 |       
|International governments                                                                         |                        |   | 371                     |        |       |   | 22               |     |                  |   | (3   | )    |   |   | 390   |       
|Public utilities                                                                                  |                        |   | 1,065                   |        |       |   | 16               |     |                  |   | (26  | )    |   |   | 1,055 |       
|All other corporate, including international                                                      |                        |   | 9,644                   |        |       |   | 311              |     |                  |   | (153 | )    |   |   | 9,802 |       
|All other corporate  asset backed                                                                |                        |   | 6,627                   |        |       |   | 165              |     |                  |   | (115 | )    |   |   | 6,677 |       
|Short-term investments                                                                            |                        |   | 1,245                   |        |       |   |                 |     |                  |   |     |      |   |   | 1,245 |       
|Certificates of deposit                                                                           |                        |   | 575                     |        |       |   | 13               |     |                  |   | (26  | )    |   |   | 562   |       
|Redeemable preferred stock                                                                        |                        |   | 55                      |        |       |   | 2                |     |                  |   |     |      |   |   | 57    |       
|                                                                                                  |                        |   |                         |        |       |   |                  |     |                  |   |      |      |   |   |       |       
|                                                                                                  | Total fixed maturities |   | $                       | 23,010 |       |   | $                | 632 |                  |   | $    | (341 | ) |   | $     | 23,301 | 
|                                                                                                  |                        |   |                         |        |       |   |                  |     |                  |   |      |      |   |   |       |       

The amortized cost and estimated fair value of fixed maturity investments at
December 31, 2002 by estimated maturity year are shown below. Expected
maturities differ from contractual maturities due to call or prepayment
provisions. Asset backed securities, including mortgage backed securities
and collateralized mortgage obligations, are distributed to maturity year
based on the Companys estimates of the rate of future prepayments of
principal over the remaining lives of the securities. These estimates are
developed using prepayment speeds provided in broker consensus data. Such
estimates are derived from prepayment speeds experienced at the interest
rate levels projected for the applicable underlying collateral. Actual
prepayment experience may vary from these estimates.

|                                  |       |                |        |            |  |   |        |        | 
|--------------------------------- | ----- | -------------- | ------ | ---------- |  | - | ------ | ------ | 
|Estimated Maturities              |       | Amortized Cost |        | Fair Value
|One year or less                  |       | $              | 3,360  |            |  | $ | 3,384  |       
|Over one year through five years  |       |                | 10,101 |            |  |   | 10,461 |       
|Over five years through ten years |       |                | 7,016  |            |  |   | 7,446  |       
|Over ten years                    |       |                | 7,505  |            |  |   | 8,086  |       
|                                  |       |                |        |            |  |   |        |       
|                                  | Total |                | $      | 27,982     |  |   | $      | 29,377 | 
|                                  |       |                |        |            |  |   |        |       

(f)  Sales of Fixed Maturity and Equity Security Investments

Sales of fixed maturities, excluding short-term fixed maturities, for the years
ended December 31, 2002, 2001 and 2000 resulted in proceeds of $6.9 billion,
$6.0 billion and $3.8 billion, gross realized capital gains of $143, $104 and
$114 and gross realized capital losses of $(71), ($52) and ($225),
respectively. Sales of equity security investments resulted in proceeds of
$11, $46 and $42 and gross realized capital gains of less than $1, $2 and $37,
respectively, and gross realized capital losses of $(5), $(13) and $(14) for
the years ended December 31, 2002, 2001 and 2000, respectively.

(g)  Concentration of Credit Risk

The Company is not exposed to any credit concentration of a single issuer
greater than 10% of stockholders equity.

(h)  Derivative Instruments

The notional amounts of derivative contracts represent the basis upon which pay
or receive amounts are calculated and are not reflective of credit risk.
Notional amounts pertaining to derivative instruments (excluding guaranteed
separate accounts) totaled $8.2 billion at December 31, 2002 and $6.7 billion
at December 31, 2001.

A reconciliation between notional amounts as of December 31, 2002 and 2001 by
derivative type and strategy is as follows:

F-20



---



##### Table of Contents



|                   |       |   |                   |       |           |   |                  |       |                 |   |                   |       |  |   |       |       | 
|------------------ | ----- | - | ----------------- | ----- | --------- | - | ---------------- | ----- | --------------- | - | ----------------- | ----- |  | - | ----- | ----- | 
|                   |       |   | December 31, 2001 |       |           |   |                  |       | Maturities/     |   | December 31, 2002
|                   |       |   | Notional Amount   |       | Additions |   | Terminations [1] |       | Notional Amount
|                   |       |   |                   |       |           |   |                  |       |                
|By Derivative Type |       |   |                   |       |           |   |                  |       |                 |   |                   |       |  |   |       |      
|Caps               |       | $ | 603               |       |           | $ |                 |       |                 | $ | 20                |       |  | $ | 583   |      
|Floors             |       |   | 320               |       |           |   |                 |       |                 |   | 20                |       |  |   | 300   |      
|Swaps/Forwards     |       |   | 4,592             |       |           |   | 2,127            |       |                 |   | 688               |       |  |   | 6,031 |      
|Futures            |       |   | 77                |       |           |   | 110              |       |                 |   | 187               |       |  |   |      |      
|Options            |       |   | 1,156             |       |           |   | 438              |       |                 |   | 272               |       |  |   | 1,322 |      
|                   |       |   |                   |       |           |   |                  |       |                 |   |                   |       |  |   |       |      
|                   | Total |   | $                 | 6,748 |           |   | $                | 2,675 |                 |   | $                 | 1,187 |  |   | $     | 8,236 | 
|                   |       |   |                   |       |           |   |                  |       |                 |   |                   |       |  |   |       |      
|                   |       |   |                   |       |           |   |                  |       |                 |   |                   |       |  |   |       |      
|By Strategy        |       |   |                   |       |           |   |                  |       |                 |   |                   |       |  |   |       |      
|Liability          |       | $ | 813               |       |           | $ |                 |       |                 | $ |                  |       |  | $ | 813   |      
|Anticipatory       |       |   | 320               |       |           |   | 300              |       |                 |   | 355               |       |  |   | 265   |      
|Asset              |       |   | 4,716             |       |           |   | 2,375            |       |                 |   | 832               |       |  |   | 6,259 |      
|Portfolio          |       |   | 899               |       |           |   |                 |       |                 |   |                  |       |  |   | 899   |      
|                   |       |   |                   |       |           |   |                  |       |                 |   |                   |       |  |   |       |      
|                   | Total |   | $                 | 6,748 |           |   | $                | 2,675 |                 |   | $                 | 1,187 |  |   | $     | 8,236 | 
|                   |       |   |                   |       |           |   |                  |       |                 |   |                   |       |  |   |       |      



---

| |  | [1] During 2002, the Company had no significant gain or loss on terminations
of hedge positions using derivative financial instruments.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------

(i)  Collateral Arrangements

Hartford Life entered into various collateral arrangements, which require both
the pledging and accepting of collateral in connection with its derivative
instruments. As of December 31, 2002 and 2001, collateral pledged has not been
separately reported in the Consolidated Balance Sheets. The classification and
carrying amounts of collateral pledged at December 31, 2002 and 2001 were as
follows:

|                                                                                       |       |      |    |      |  |   |    |    | 
|-------------------------------------------------------------------------------------- | ----- | ---- | -- | ---- |  | - | -- | -- | 
|Assets                                                                                 |       | 2002 |    | 2001
|                                                                                       |       |      |    |     
|U.S. Govt and Govt agencies and authorities (guaranteed
and sponsored)               |       | $    | 20 |      |  | $ | 1  |   
|U.S. Govt and Govt agencies and authorities (guaranteed
and sponsored) asset backed |       |      | 76 |      |  |   | 53 |   
|                                                                                       |       |      |    |      |  |   |    |   
|                                                                                       | Total |      | $  | 96   |  |   | $  | 54 | 
|                                                                                       |       |      |    |      |  |   |    |   

At December 31, 2002 and 2001, Hartford Life had accepted collateral consisting
of cash, U.S. Government and U.S. Government agency securities with a fair
value of $454 and $167, respectively. At December 31, 2002 and 2001, only cash
collateral of $176 and $108, respectively, was invested and recorded on the
balance sheet in fixed maturities and other liabilities. Hartford Life is
only permitted by contract to sell or repledge the noncash collateral in the
event of default by the counterparty and none of the collateral has been sold
or repledged at December 31, 2002 and 2001. As of December 31, 2002 and 2001
all collateral accepted was held in separate custodial accounts.

7.     Fair Value of Financial Instruments

SFAS No. 107, Disclosure about Fair Value of Financial Instruments, requires
disclosure of fair value information of financial instruments. For certain
financial instruments where quoted market prices are not available, other
independent valuation techniques and assumptions are used. Because
considerable judgment is used, these estimates are not necessarily indicative
of amounts that could be realized in a current market exchange. SFAS No. 107
excludes certain financial instruments from disclosure, including insurance
contracts, other than financial guarantees and investment contracts. Hartford
Life uses the following methods and assumptions in estimating the fair value of
each class of financial instrument.

Fair value for fixed maturities and marketable equity securities approximates
those quotations published by applicable stock exchanges or received from other
reliable sources.

For policy loans, carrying amounts approximate fair value.

Fair value of limited partnerships and trusts is based on external market
valuations from partnership and trust management.

Derivative instruments are reported at fair value based upon internally
established valuations that are consistent with external valuation models,
quotations furnished by dealers in such instrument or market quotations. Other
policyholder funds and benefits payable fair value information is determined by
estimating future cash flows, discounted at the current market rate.

For short-term debt, carrying amounts approximate fair value.

F-21



---



##### Table of Contents



Fair value for long-term debt and trust preferred securities is equal to market
value.

The carrying amounts and fair values of Hartford Lifes financial instruments
at December 31, 2002 and 2001 were as follows:

|            |                                    |  |                 |        |            |  |                 |        |            |  |   |        |  |  |   |        | 
|----------- | ---------------------------------- |  | --------------- | ------ | ---------- |  | --------------- | ------ | ---------- |  | - | ------ |  |  | - | ------ | 
|            |                                    |  | 2002            |        | 2001      
|            |                                    |  |                 |        |           
|            |                                    |  | Carrying Amount |        | Fair Value |  | Carrying Amount |        | Fair Value
|            |                                    |  |                 |        |            |  |                 |        |           
|Assets      |                                    |  |                 |        |            |  |                 |        |            |  |   |        |  |  |   |       
|            | Fixed maturities                   |  | $               | 29,377 |            |  | $               | 29,377 |            |  | $ | 23,301 |  |  | $ | 23,301 | 
|            | Equity securities                  |  |                 | 458    |            |  |                 | 458    |            |  |   | 428    |  |  |   | 428    | 
|            | Policy loans                       |  |                 | 2,934  |            |  |                 | 2,934  |            |  |   | 3,317  |  |  |   | 3,317  | 
|            | Limited partnerships [1]           |  |                 | 519    |            |  |                 | 519    |            |  |   | 811    |  |  |   | 811    | 
|            | Other investments [2]              |  |                 | 603    |            |  |                 | 603    |            |  |   | 520    |  |  |   | 520    | 
|            |                                    |  |                 |        |            |  |                 |        |            |  |   |        |  |  |   |        | 
|Liabilities |                                    |  |                 |        |            |  |                 |        |            |  |   |        |  |  |   |       
|            | Other policyholder funds [3]       |  | $               | 20,744 |            |  | $               | 20,951 |            |  | $ | 16,077 |  |  | $ | 15,939 | 
|            | Long-term debt                     |  |                 | 1,050  |            |  |                 | 1,144  |            |  |   | 1,050  |  |  |   | 1,118  | 
|            | Related Party Debt                 |  |                 | 75     |            |  |                 | 75     |            |  |   |       |  |  |   |       | 
|            | Trust preferred securities         |  |                 | 450    |            |  |                 | 464    |            |  |   | 450    |  |  |   | 461    | 
|            | Derivative related liabilities [4] |  |                 | 162    |            |  |                 | 162    |            |  |   | 123    |  |  |   | 123    | 
|            |                                    |  |                 |        |            |  |                 |        |            |  |   |        |  |  |   |        | 



---

| |  | [1] Included in other investments on the balance sheet.                                                                 
| |  | ------------------------------------------------------------------------------------------------------------------------
|
| |  | [2] 2002 and 2001 include $257 and $135 of derivative related assets, respectively.                                     
|
| |  | [3] Excludes group accident and health and universal life insurance contracts, including corporate owned life insurance.
|
| |  | [4] Included in other liabilities on the balance sheet.                                                                 

8.     Goodwill and Other Intangible Assets

Effective January 1, 2002, the Company adopted SFAS No. 142 and accordingly
ceased all amortization of goodwill.

The following tables show net income for the years ended December 31, 2002,
2001 and 2000, with the 2001 and 2000 periods adjusted for goodwill
amortization recorded.

|                                                               |  |      |     |      |  |      |     |  |  |   |     | 
|-------------------------------------------------------------- |  | ---- | --- | ---- |  | ---- | --- |  |  | - | --- | 
|Net Income                                                     |  | 2002 |     | 2001 |  | 2000
|Income before cumulative effect of accounting changes          |  | $    | 557 |      |  | $    | 711 |  |  | $ | 575 | 
|Goodwill amortization, net of tax                              |  |      |    |      |  |      | 16  |  |  |   | 4   | 
|                                                               |  |      |     |      |  |      |     |  |  |   |     | 
|Adjusted income before cumulative effect of accounting changes |  |      | 557 |      |  |      | 727 |  |  |   | 579 | 
|Cumulative effect of accounting changes, net of tax            |  |      |    |      |  |      | 26  |  |  |   |    | 
|                                                               |  |      |     |      |  |      |     |  |  |   |     | 
|Adjusted net income                                            |  | $    | 557 |      |  | $    | 701 |  |  | $ | 579 | 

The following table shows the Companys acquired intangible assets that
continue to be subject to amortization and aggregate amortization expense.
Except for goodwill, the Company has no intangible assets with indefinite
useful lives.

|                                |  |                 |     |              |  |                 |    |              |  |                 |     |  |  |   |    | 
|------------------------------- |  | --------------- | --- | ------------ |  | --------------- | -- | ------------ |  | --------------- | --- |  |  | - | -- | 
|                                |  | 2002            |     | 2001        
|                                |  |                 |     |             
|                                |  |                 |     |              |  | Accumulated Net |    | Carrying     |  | Accumulated Net
|Amortized Intangible Assets     |  | Carrying Amount |     | Amortization |  | Amount          |    | Amortization
|                                |  |                 |     |              |  |                 |    |             
|Present value of future profits |  | $               | 525 |              |  | $               | 80 |              |  | $               | 568 |  |  | $ | 37 | 
|                                |  |                 |     |              |  |                 |    |              |  |                 |     |  |  |   |    | 
|Total                           |  | $               | 525 |              |  | $               | 80 |              |  | $               | 568 |  |  | $ | 37 | 
|                                |  |                 |     |              |  |                 |    |              |  |                 |     |  |  |   |    | 

Net amortization expense for the years ended December 31, 2002, 2001 and 2000
was $43, $37 and $0, respectively.

F-22



---



##### Table of Contents



8.     Goodwill and Other Intangible Assets (continued)

Estimated future net amortization expense for the succeeding five years is as
follows.

|                                |  |   |    | 
|------------------------------- |  | - | -- | 
|For the year ended December 31, |  |   |    | 
|2003                            |  | $ | 42 | 
|2004                            |  | $ | 39 | 
|2005                            |  | $ | 36 | 
|2006                            |  | $ | 34 | 
|2007                            |  | $ | 31 | 

9.     Separate Accounts

Hartford Life maintained separate account assets and liabilities totaling
$107.1 billion and $114.7 billion at December 31, 2002 and 2001, respectively,
which are reported at fair value. Separate account assets, which are
segregated from other investments, reflect two categories of risk assumption:
non-guaranteed separate accounts totaling $95.6 billion and $104.6 billion at
December 31, 2002 and 2001, respectively, wherein the policyholder assumes the
investment risk, and guaranteed separate accounts totaling $11.5 billion and
$10.1 billion at December 31, 2002 and 2001, respectively, wherein Hartford
Life contractually guarantees either a minimum return or the account value to
the policyholder. Included in the non-guaranteed category were policy loans
totaling $384 and $575 at December 31, 2002 and 2001, respectively. Net
investment income (including net realized capital gains and losses) and
interest credited to policyholders on separate account assets are not reflected
in the Consolidated Statements of Income.

Separate account management fees and other revenues included in fee income were
$1.2 billion, $1.3 billion and $1.4 billion in 2002, 2001 and 2000,
respectively. The guaranteed separate accounts include fixed market value
adjusted (MVA) individual annuities and modified guaranteed life insurance.
The average credited interest rate on these contracts was 6.3% and 6.4% at
December 31, 2002 and 2001, respectively. The assets that support these
liabilities were comprised of $11.1 billion and $9.8 billion in fixed
maturities as of December 31, 2002 and 2001, respectively, and $385 and $234 of
other investments as of December 31, 2002 and 2001, respectively. The
portfolios are segregated from other investments and are managed to minimize
liquidity and interest rate risk. In order to minimize the risk of
disintermediation associated with early withdrawals, fixed MVA annuity and
modified guaranteed life insurance contracts carry a graded surrender charge as
well as a market value adjustment. Additional investment risk is hedged using
a variety of derivatives which totaled $135 and $37 in net carrying value and
$3.6 billion and $3.2 billion in notional amounts as of December 31, 2002 and
2001, respectively.

10.     Debt

|                   |                                 |                          |   |        |       |                   |  |                  |     |                   |   |     |       |                  |  |     |     |  
|------------------ | ------------------------------- | ------------------------ | - | ------ | ----- | ----------------- |  | ---------------- | --- | ----------------- | - | --- | ----- | ---------------- |  | --- | --- | -
|                   |                                 |                          |   | 2002   |       | 2001             
|                   |                                 |                          |   |        |       |                  
|                   |                                 |                          |   |        |       |                   |  | Weighted Average |     |                   |   |     |       | Weighted Average
|                   |                                 |                          |   | Amount |       | Interest Rate (1) |  | Amount           |     | Interest Rate (1)
|                   |                                 |                          |   |        |       |                   |  |                  |     |                  
|Long-Term Debt     |                                 |                          |   |        |       |                   |  |                  |     |                   |   |     |       |                  |  |    
|                   | 6.90% notes, due June 2004      |                          | $ | 200    |       |                   |  | 7.0              | %   |                   | $ | 200 |       |                  |  | 7.0 | %  
|                   | 7.10% notes, due June 2007      |                          |   | 200    |       |                   |  | 7.2              | %   |                   |   | 200 |       |                  |  | 7.2 | %  
|                   | 7.65% debentures, due June 2027 |                          |   | 250    |       |                   |  | 7.8              | %   |                   |   | 250 |       |                  |  | 7.8 | %  
|                   | 7.375% notes, due March 2031    |                          |   | 400    |       |                   |  | 7.5              | %   |                   |   | 400 |       |                  |  | 7.5 | %  
|                   |                                 |                          |   |        |       |                   |  |                  |     |                   |   |     |       |                  |  |     |    
|                   |                                 | Total long-term debt     |   | $      | 1,050 |                   |  |                  | 7.4 | %                 |   |     | 1,050 |                  |  |     | 7.4 | %
|                   |                                 |                          |   |        |       |                   |  |                  |     |                   |   |     |       |                  |  |     |    
|                   |                                 |                          |   |        |       |                   |  |                  |     |                   |   |     |       |                  |  |    
|Related Party Debt |                                 |                          |   |        |       |                   |  |                  |     |                   |   |     |       |                  |  |    
|                   | 4.10% note, due November 2006   |                          | $ | 75     |       |                   |  | 4.1              | %   |                   |   |    |       |                  |  |    |    
|                   |                                 |                          |   |        |       |                   |  |                  |     |                   |   |     |       |                  |  |     |    
|                   |                                 | Total related party debt |   | $      | 75    |                   |  |                  | 4.1 | %                 |   |     |      |                  |  |     |    |  
|                   |                                 |                          |   |        |       |                   |  |                  |     |                   |   |     |       |                  |  |     |    



---

|(1) |  | Represents the effective interest rate at the end of the year.
|--- |  | --------------------------------------------------------------

F-23



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##### Table of Contents



(a)  Shelf Registrations

On May 15, 2001, Hartford Life filed with the Securities and Exchange
Commission (SEC) a shelf registration statement for the potential offering
and sale of up to $1.0 billion in debt and preferred securities. The
registration statement was declared effective on May 29, 2001. As of December
31, 2002, the Company had $1.0 billion remaining on its shelf.

(b)  Short-Term Debt

Effective December 31, 2002, Hartford Life terminated its existing $250 five
year revolving credit facility which was scheduled to expire in 2003. Also
effective December 31, 2002, Hartford Life, in conjunction with its parent
Hartford Financial Services Group, Inc., signed a new $490 three year revolving
credit facility comprised of twelve participatory banks. Hartford Life has
access to up to $250 of this credit facility. This facility, which expires in
2005, is available for general corporate purposes and to provide additional
support for the Companys commericial paper program.

Hartford Life has a commercial paper program, which allows it to borrow up to a
maximum amount of $250 in short-term commercial paper notes. As of December
31, 2002, the Company had no outstanding borrowings under the program.

(c)  Long-Term Debt

Hartford Lifes long-term debt securities are unsecured obligations of Hartford
Life and rank on a parity with all other unsecured and unsubordinated
indebtedness. In February 1997, the Company filed a shelf registration
statement for the issuance and sale of up to $1.0 billion in the aggregate of
senior debt securities, subordinated debt securities and preferred stock. In
June 1997, the Company issued an aggregate principal amount of $650 of
unsecured redeemable long-term debt in the form of notes and debentures,
maturing between 2004 and 2027. Interest on each of the notes and debentures
is payable semi-annually on June 15 and December 15 of each year, which
commenced December 15, 1997.

In June 1998, Hartford Life filed a shelf registration statement with the
Securities and Exchange Commission for the issuance of up to $1.0 billion of
debt and equity securities, including up to $350 of previously registered but
unsold securities, described above. The Company issued $250 of Company
Obligated Mandatorily Redeemable Preferred Securities of Subsidiary Trust
Holding Solely Parent Junior Subordinated Debentures on June 29, 1998,
discussed below.

On March 1, 2001, the Company issued $400 of senior debt securities maturing in
2031 from its existing shelf registration in order to partially finance the
Fortis acquisition. Interest on the debt securities is payable semi-annually
on March 1 and September 1 of each year, which commenced September 1, 2001.

On March 6, 2001, the Company issued $200 of Company Obligated Mandatorily
Redeemable Preferred Securities of Subsidiary Trust Holding Solely Parent
Junior Subordinated Debentures, discussed below.

In May 2001, Hartford Life filed a shelf registration statement with the
Securities and Exchange Commission in May 2001 for the issuance of up to $1.0
billion of debt and equity securities, including up to $150 of previously
registered but unsold securities, described above. As of December 31, 2002,
Hartford Life had $1 billion remaining on this shelf
registration statement.

Interest expense incurred related to short and long-term debt totaled $78 in
2002, $73 in 2001 and $48 in 2000.

(d)  Related Party Debt

Effective December 27, 2002, Hartford Life signed a promissory note for $75
with its parent Hartford Financial Services Group, Inc. The note matures on
November 16, 2006. Interest on the note is payable quarterly on February 16,
May 16, August 16 and November 16, commencing on February 16, 2003. If not
earlier declared due and payable by the lender the entire principal balance of
the note will convert in full into fully paid and non-assessable shares of
Hartford Life common stock of then equivalent value.

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##### Table of Contents



11.     Company Obligated Mandatorily Redeemable Preferred Securities of
Subsidiary Trust Holding Solely Parent Junior Subordinated Debentures

(a)  Description

On June 29, 1998, Hartford Life Capital I, a special purpose Delaware trust
formed by Hartford Life, issued 10,000,000, 7.2% Trust Preferred Securities,
Series A (Series A Preferred Securities). The proceeds from the sale of the
Series A Preferred Securities were used to acquire $250 of 7.2% Series A Junior
Subordinated Deferrable Interest Debentures (Junior Subordinated Debentures)
issued by Hartford Life. Hartford Life used the proceeds from the offering for
the retirement of its outstanding commercial paper, strategic acquisitions and
other general corporate purposes.

The Series A Preferred Securities represent undivided beneficial interests in
Hartford Life Capital Is assets, which consist solely of the Junior
Subordinated Debentures. Hartford Life owns all the beneficial interests
represented by Series A Common Securities of Hartford Life Capital I. Holders
of Series A Preferred Securities are entitled to receive cumulative cash
distributions accruing from June 29, 1998, the date of issuance, and payable
quarterly in arrears commencing July 15, 1998 at the annual rate of 7.2% of the
stated liquidation amount of $25.00 per Series A Preferred Security. The
Series A Preferred Securities are subject to mandatory redemption upon
repayment of the Junior Subordinate Debentures at maturity or upon earlier
redemption. Hartford Life has the right to redeem the Junior Subordinated
Debentures on or after June 30, 2003 or earlier upon the occurrence of certain
events. Holders of Series A Preferred Securities generally have no voting
rights.

Hartford Life has the right to redeem the Junior Subordinated Debentures (i) in
whole or in part on or after June 30, 2003 or (ii) at any time, in whole but
not in part, in certain circumstances upon the occurrence of certain specified
events, in either case at a redemption price equal to accrued and unpaid
interest on the Junior Subordinated Debentures so redeemed to the date fixed
for redemption plus the principal amount thereof. In addition,prior to June
30, 2003, Hartford Life shall have the right to redeem the Junior Subordinated
Debentures at any time, in whole or in part, at a redemption price equal to the
accrued and unpaid interest on the Junior Subordinated Debentures so redeemed
to the date fixed for redemption, plus the greater of (a) the principal amount
thereof or (b) an amount equal to the present value on the redemption date of
the interest payments that would have been paid through June 30, 2003, after
discounting that amount on a quarterly basis from the originally scheduled date
for payment, and the present value on the redemption date of principal, after
discounting that amount on a quarterly basis from June 30, 2003, at a discount
rate tied to the interest rate on Treasury securities maturing on June 30,
2003.

The Junior Subordinated Debentures bear interest at the annual rate of 7.2% of
the principal amount, payable quarterly in arrears, which commenced June 29,
1998, and mature on June 30, 2038. The Junior Subordinated Debentures are
unsecured and rank junior and subordinate in right of payment to all present
and future senior debt of Hartford Life and are effectively subordinated to all
existing and future liabilities of its subsidiaries.

Hartford Life has the right at any time, and from time to time, to defer
payments of interest on the Junior Subordinated Debentures for a period not
exceeding 20 consecutive quarters up to the debentures maturity date. During
any such period, interest will continue to accrue and Hartford Life may not
declare or pay any cash dividends or distributions on, or purchase, Hartford
Lifes capital stock, nor make any principal, interest or premium payments on
or repurchase any debt securities that rank pari passuwith or junior to the
Junior Subordinated Debentures. The Company will have the right at any time to
dissolve the Trust and cause the Junior Subordinated Debentures to be
distributed to the holders of the Series A Preferred Securities and the Series
A Common Stock. Hartford Life has guaranteed, on a subordinated basis, all the
Hartford Life Capital I obligations under the Series A Preferred Securities,
including payment of the redemption price and any accumulated and unpaid
distributions upon dissolution, winding up or liquidation to the extent funds
are available.

On March 6, 2001, Hartford Life Capital II, a special purpose Delaware trust
formed by Hartford Life, issued 8,000,000, 7.625% Trust Preferred Securities,
Series B (Series B Preferred Securities). The material terms of the Series B
Preferred Securities are substantially the same as the Hartford Series A
Preferred Securities described above, except for the rate and the maturity
date. The proceeds from the sale of the Series B Preferred Securities were
used to acquire $200 of 7.625% Series B Junior Subordinated Deferrable Interest
Debentures (Junior Subordinated Debentures) issued by Hartford Life. Hartford
Life used the proceeds from the offering to partially finance the Fortis
acquisition.

(b)  Interest expense

Interest expense incurred with respect to the Series A Preferred Securities and
Series B Preferred Securities totaled approximately $34, $31 and $18 in 2002,
2001 and 2000, respectively.

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##### Table of Contents



12.     Stockholders Equity

(a)  Statutory Results

|                            |  |                                  |       |      |  |      |       |   |  |   |       | 
|--------------------------- |  | -------------------------------- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | 
|                            |  | For the years ended December 31,
|                            |  |                                 
|                            |  | 2002                             |       | 2001 |  | 2000
|                            |  |                                  |       |      |  |     
|Statutory net income (loss) |  | $                                | (137  | )    |  | $    | (364  | ) |  | $ | 399   | 
|                            |  |                                  |       |      |  |      |       |   |  |   |       | 
|Statutory surplus           |  | $                                | 3,019 |      |  | $    | 2,991 |   |  | $ | 2,407 | 
|                            |  |                                  |       |      |  |      |       |   |  |   |       | 

A significant percentage of the consolidated statutory surplus is permanently
reinvested or is subject to various state regulatory restrictions which limit
the payment of dividends without prior approval. The payment of dividends by
Connecticut-domiciled insurers is limited under the insurance holding company
laws of Connecticut. Under these laws, the insurance subsidiaries may only
make their dividend payments out of unassigned surplus. These laws require
notice to and approval by the state insurance commissioner for the declaration
or payment of any dividend, which, together with other dividends or
distributions made within the preceding twelve months, exceeds the greater of
(i) 10% of the insurers policyholder surplus as of December 31 of the
preceding year or (ii) net income (or net gain from operations, if such company
is a life insurance company) for the twelve-month period ending on the
thirty-first day of December last preceding, in each case determined under
statutory insurance accounting policies. In addition, if any dividend of a
Connecticut-domiciled insurer exceeds the insurers earned surplus, it requires
the prior approval of the Connecticut Insurance Commissioner. The insurance
holding company laws of the other jurisdictions in which The Hartfords
insurance subsidiaries are incorporated (or deemed commercially domiciled)
generally contain similar (although in certain instances somewhat more
restrictive) limitations on the payment of dividends. As of December 31, 2002,
the maximum amount of statutory dividends which may be paid to Hartford Life
from its insurance subsidiaries in 2003, without prior approval, is $302.

The domestic insurance subsidiaries of Hartford Life prepare their statutory
financial statements in accordance with accounting practices prescribed by the
applicable insurance department. Prescribed statutory accounting practices
include publications of the National Association of Insurance Commissioners
(NAIC), as well as state laws, regulations and general administrative rules.

The NAIC adopted the Codification of Statutory Accounting Principles
(Codification) in March 1998. The effective date for the statutory
accounting guidance was January 1, 2001. Each of Hartford Lifes domiciliary
states has adopted Codification and the Company has made the necessary changes
in its statutory reporting required for implementation. The impact of applying
the new guidance resulted in a benefit of approximately $74 in statutory
surplus.

13.     Stock Compensation Plans

Hartford Lifes employees are included in The Hartford 2000 Incentive Stock
Plan (the 2000 Plan) and The Hartford Employee Stock Purchase Plan. Prior to
The Hartford Acquisition, eligible employees of Hartford Life were included in
Hartford Lifes stock based compensation plans, the 1997 Hartford Life, Inc.
Incentive Stock Plan and the Hartford Life, Inc. Employee Stock Purchase Plan.
As a result of The Hartford Acquisition, all eligible participants of Hartford
Lifes stock based compensation plans were converted to The Hartfords stock
based compensation plans.

Under the 2000 Plan, awards may be granted in the form of non-qualified or
incentive stock options qualifying under Section 422A of the Internal Revenue
Code, performance shares or restricted stock, or any combination of the
foregoing. In addition, stock appreciation rights may be granted in connection
with all or part of any stock options granted under the 2000 Plan. The
aggregate number of shares of stock which may be awarded is subject to a
maximum limit of 17,211,837 shares applicable to all awards for the ten-year
duration of the 2000 Plan.

All options granted have an exercise price equal to the market price of The
Hartfords common stock on the date of grant, and an options maximum term is
ten years. Certain options become exercisable over a three year period
commencing one year from the date of grant, while certain other options become
exercisable upon the attainment of specified market price appreciation of the
Companys common shares or at seven years after the date of grant. For any
year, no individual employee may receive an award of options for more than
1,000,000 shares. As of December 31, 2002, The Hartford had not issued any
incentive stock options under the 2000 Plan. Performance awards of common
stock granted under the 2000 Plan become payable upon the attainment of
specific performance goals achieved over a period of not less than two nor more
than five years, and the restricted stock granted is subject to a restriction
period. On a cumulative basis, no more than 20% of the aggregate number of
shares which may be awarded under the 2000 Plan are available for performance
shares and restricted stock awards. Also, the maximum award of performance
shares for any individual employee in any year is 200,000 shares.

F-26



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##### Table of Contents



In 1996, The Hartford established The Hartford Employee Stock Purchase Plan
(ESPP). Under this plan, eligible employees of The Hartford may purchase
common stock of The Hartford at a 15% discount from the lower of the market
price at the beginning or end of the quarterly offering period.

Currently the Company applies APB Opinion No. 25 and related interpretations in
accounting for its stock-based compensation plans. (See Note 13 for
discussion of accounting for stock compensation plans beginning January 1,
2003). Had compensation cost for the Incentive Stock Plan and Employee Stock
Purchase Plan been determined based on the fair value at the grant date for
awards under those plans consistent with the method under SFAS No. 123,
Accounting for Stock-Based Compensation, the Companys net income would have
been reduced to the pro forma amounts indicated as follows.

|           |               |  |      |     |      |  |      |     |  |  |   |     | 
|---------- | ------------- |  | ---- | --- | ---- |  | ---- | --- |  |  | - | --- | 
|           |               |  | 2002 |     | 2001 |  | 2000
|           |               |  |      |     |      |  |     
|Net income |               |  |      |     |      |  |      |     |  |  |   |    
|           | As reported   |  | $    | 557 |      |  | $    | 685 |  |  | $ | 575 | 
|           | Pro forma (1) |  |      | 541 |      |  |      | 672 |  |  |   | 563 | 

---

|(1) |  | The pro forma disclosures are not representative of the effects on net
income in future years.
|--- |  | ----------------------------------------------------------------------------------------------

The fair value of each option grant is estimated on the date of the grant using
the Black-Scholes options-pricing model with the following weighted average
assumptions used for grants in 2002, 2001 and 2000: dividend yield of 1.6% for
2002, 1.6% for 2001 and 1.5% for 2000; expected price variability of 40.8% for
2002, 29.1% for 2001 and 35.7% for 2000; risk-free interest rates of 4.27% for
2002 grants, 4.98% for 2001 grants and 6.70% for 2000 grants; and expected
lives of six years for 2002, six years for 2001 and five years for 2000.

14. Pension Plans, Postretirement, Health Care and Life Insurance Benefit and Savings Plans

(a) Pension Plans

Hartford Lifes employees are included in The Hartfords non-contributory
defined benefit pension and postretirement health care and life insurance
benefit plans. Defined benefit pension expense, allocated by The Hartford, was
$18, $16 and $8 in 2002, 2001 and 2000, respectively. Postretirement health
care and life insurance benefits expense, allocated by The Hartford, was not
material to the results of operations for 2002, 2001 and 2000.

(b) Investment and Savings Plan

Substantially all U.S. employees are eligible to participate in The Hartfords
Investment and Savings Plan under which designated contributions may be
invested in common stock of The Hartford or certain other investments. These
contributions are matched, up to 3% of compensation, by the Company. In
addition, the Company allocates 0.5% of base salary to the plan for each
eligible employee. The cost to Hartford Life for this plan was approximately
$9 in 2002 and $8 in both 2001and 2000.

15. Reinsurance

Hartford Life cedes insurance to other insurers in order to limit its maximum
losses and to diversify its exposures. Such transfer does not relieve Hartford
Life of its primary liability and, as such, failure of reinsurers to honor
their obligations could result in losses to Hartford Life. The Company also
assumes reinsurance from other insurers and is a member of and participates in
several reinsurance pools and associations. Hartford Life evaluates the
financial condition of its reinsurers and monitors concentrations of credit
risk. As of December 31, 2002, Hartford Life had no reinsurance recoverables
and related concentrations of credit risk greater than 10% of the Companys
stockholders equity.

In accordance with normal industry practice, Hartford Life is involved in both
the cession and assumption of insurance with other insurance and reinsurance
companies. As of December 31, 2002, the largest amount of life insurance
retained on any one life by any one of the life operations was approximately
$2.5. In addition, the Company reinsures the majority of the minimum death
benefit guarantees and the guaranteed withdrawal benefits offered in connection
with its variable annuity contracts.

F-27



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##### Table of Contents



Insurance net retained premiums were comprised of the following:

|                    |                       |   |                                  |       |      |   |       |       |  |   |       |       | 
|------------------- | --------------------- | - | -------------------------------- | ----- | ---- | - | ----- | ----- |  | - | ----- | ----- | 
|                    |                       |   | For the years ended December 31,
|                    |                       |   |                                 
|                    |                       |   | 2002                             |       | 2001 |   | 2000 
|                    |                       |   |                                  |       |      |   |      
|Gross premiums      |                       | $ | 5,123                            |       |      | $ | 5,069 |       |  | $ | 4,645 |      
|Reinsurance assumed |                       |   | 180                              |       |      |   | 232   |       |  |   | 137   |      
|Reinsurance ceded   |                       |   | (419                             | )     |      |   | (398  | )     |  |   | (296  | )    
|                    |                       |   |                                  |       |      |   |       |       |  |   |       |      
|                    | Net retained premiums |   | $                                | 4,884 |      |   | $     | 4,903 |  |   | $     | 4,486 | 
|                    |                       |   |                                  |       |      |   |       |       |  |   |       |      

Hartford Life reinsures certain of its risks to other reinsurers under yearly
renewable term, coinsurance, and modified coinsurance arrangements. Yearly
renewable term and coinsurance arrangements result in passing a portion of the
risk to the reinsurer. Generally, the reinsurer receives a proportionate amount
of the premiums less an allowance for commissions and expenses and is liable
for a corresponding proportionate amount of all benefit payments. Modified
coinsurance is similar to coinsurance except that the cash and investments that
support the liabilities for contract benefits are not transferred to the
assuming company, and settlements are made on a net basis between the
companies.

Hartford Life also purchases reinsurance covering the death benefit guarantees
on a portion of its variable annuity business. The Company is currently in
arbitration with one of its reinsurers related to this reinsurance (see further
discussion in Note 17(a))

The cost of reinsurance related to long-duration contracts is accounted for
over the life of the underlying reinsured policies using assumptions consistent
with those used to account for the underlying policies. Insurance recoveries
on ceded reinsurance contracts, which reduce death and other benefits were
$484, $392 and $225 for the years ended December 31, 2002, 2001 and 2000,
respectively. Hartford Life also assumes reinsurance from other insurers.

Hartford Life records a receivable for reinsured benefits paid and the portion
of insurance liabilities that are reinsured, net of a valuation allowance, if
necessary. The amounts recoverable from reinsurers are estimated based on
assumptions that are consistent with those used in establishing the reserves
related to the underlying reinsured contracts. Management believes the
recoverables are appropriately established; however, in the event that future
circumstances and information require Hartford Life to change its estimates of
needed loss reserves, the amount of reinsurance recoverables may also require
adjustments.

16. Income Tax

Hartford Life and The Hartford have entered into a tax sharing agreement under
which each member in the consolidated U.S. Federal income tax return will make
payments between them such that, with respect to any period, the amount of
taxes to be paid by the Company, subject to certain tax adjustments, generally
will be determined as though the Company were filing a separate Federal income
tax return with current credit for net losses to the extent the losses provide
a benefit in the consolidated return.

The Company is included in The Hartfords consolidated Federal income tax
return. The Companys effective tax rate was 2%, 7% and 27% in 2002, 2001 and
2000, respectively.

Income tax expense (benefit) is as follows:

|         |                    |   |                                  |    |      |   |      |    |  |   |     |     | 
|-------- | ------------------ | - | -------------------------------- | -- | ---- | - | ---- | -- |  | - | --- | --- | 
|         |                    |   | For the years ended December 31,
|         |                    |   |                                 
|         |                    |   | 2002                             |    | 2001 |   | 2000
|         |                    |   |                                  |    |      |   |     
|Current  |                    | $ | 29                               |    |      | $ | (230 | )  |  | $ | 115 |    
|Deferred |                    |   | (19                              | )  |      |   | 284  |    |  |   | 98  |    
|         |                    |   |                                  |    |      |   |      |    |  |   |     |    
|         | Income tax expense |   | $                                | 10 |      |   | $    | 54 |  |   | $   | 213 | 
|         |                    |   |                                  |    |      |   |      |    |  |   |     |    

F-28



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##### Table of Contents



A reconciliation of the tax provision at the U.S. Federal statutory rate to
the provision (benefit) for income taxes is as follows:

|                                                 |                          |   |                                  |    |      |   |      |    |  |   |     |     | 
|------------------------------------------------ | ------------------------ | - | -------------------------------- | -- | ---- | - | ---- | -- |  | - | --- | --- | 
|                                                 |                          |   | For the years ended December 31,
|                                                 |                          |   |                                 
|                                                 |                          |   | 2002                             |    | 2001 |   | 2000
|                                                 |                          |   |                                  |    |      |   |     
|Tax
provision at the U.S. federal statutory rate |                          | $ | 198                              |    |      | $ | 268  |    |  | $ | 276 |    
|Tax preferred investments                        |                          |   | (93                              | )  |      |   | (88  | )  |  |   | (47 | )  
|IRS audit settlement (see Note 17(c))            |                          |   | (76                              | )  |      |   |     |    |  |   | (24 | )  
|Tax adjustment (see Note 17(c))                  |                          |   |                                 |    |      |   | (130 | )  |  |   |    |    
|Foreign related investments                      |                          |   | (14                              | )  |      |   |     |    |  |   |    |    
|Other                                            |                          |   | (5                               | )  |      |   | 4    |    |  |   | 8   |    
|                                                 |                          |   |                                  |    |      |   |      |    |  |   |     |    
|                                                 | Provision for income tax |   | $                                | 10 |      |   | $    | 54 |  |   | $   | 213 | 
|                                                 |                          |   |                                  |    |      |   |      |    |  |   |     |    

Deferred tax assets (liabilities) include the following as of December 31:

|                                                                   |                                      |   |      |      |      |   |      |     |  
|------------------------------------------------------------------ | ------------------------------------ | - | ---- | ---- | ---- | - | ---- | --- | -
|                                                                   |                                      |   | 2002 |      | 2001
|                                                                   |                                      |   |      |      |     
|Tax basis deferred policy acquisition costs                        |                                      | $ | 739  |      |      | $ | 777  |    
|Financial statement deferred policy acquisition costs and reserves |                                      |   | (775 | )    |      |   | (596 | )  
|Employee benefits                                                  |                                      |   | 22   |      |      |   | 27   |    
|Net unrealized capital (gains) losses on securities                |                                      |   | (528 | )    |      |   | (121 | )  
|Net operating loss carryforward/Minimum tax credits                |                                      |   | 285  |      |      |   | 104  |    
|Investments and other                                              |                                      |   | (17  | )    |      |   | (207 | )  
|                                                                   |                                      |   |      |      |      |   |      |    
|                                                                   | Total deferred tax asset (liability) |   | $    | (274 | )    |   | $    | (16 | )
|                                                                   |                                      |   |      |      |      |   |      |    

Hartford Life had current federal income tax payable of $6 as of December 31,
2002 and a current federal income tax receivable of $153 as of December 31,
2001.

Prior to the Tax Reform Act of 1984, the Life Insurance Company Income Tax Act
of 1959 permitted the deferral from taxation of a portion of statutory income
under certain circumstances. In these situations, the deferred income was
accumulated in a Policyholders Surplus Account and, based on current tax
law, will be taxable in the future only under conditions which management
considers to be remote; therefore, no federal income taxes have been provided
on the balance in this account, which for tax return purposes was $104 as of
December 31, 2002.

17. Commitments and Contingent Liabilities

(a) Litigation

Hartford Life is or may become involved in various legal actions, in the normal
course of its business, in which claims for alleged economic and punitive
damages have been or may be asserted, some for substantial amounts. Some of
the pending litigation has been filed as purported class actions and some
actions have been filed in certain jurisdictions that permit punitive damage
awards that are disproportionate to the actual damages incurred. Although
there can be no assurances, at the present time, the Company does not
anticipate that the ultimate liability arising from potential, pending or
threatened legal actions, after consideration of provisions made for estimated
losses and costs of defense, will have a material adverse effect on the
financial condition or operating results of the Company.

On March 15, 2002, a jury in the U.S. District Court for the Eastern District
of Missouri issued a verdict in Bancorp Services, LLC (Bancorp) v. Hartford
Life Insurance Company (HLIC), et al. in favor of Bancorp in the amount of
$118. The case involved claims of patent infringement, misappropriation of
trade secrets, and breach of contract against HLIC and its affiliate
International Corporate Marketing Group, Inc. (ICMG). The judge dismissed
the patent infringement claim on summary judgment. The jurys award was based
on the last two claims. On August 28, 2002, the Court entered an order
awarding Bancorp prejudgment interest on the breach of contract claim in the
amount of $16.

HLIC and ICMG have appealed the judgment on the trade secret and breach of
contract claims. Bancorp has cross-appealed the pretrial dismissal of its
patent infringement claim. The Companys management, based on the advice of
its legal counsel, believes that there is a substantial likelihood that the
judgment will not survive at its current amount. Based on the advice of legal
counsel regarding the potential outcomes of this litigation, the Company
recorded an $11 after-tax charge in the first quarter of 2002 to increase
litigation reserves associated with this matter. Should HLIC and ICMG not
succeed in eliminating or reducing the judgment, a significant additional
expense would be recorded in the future related to this matter.

The Company is involved in arbitration with one of its primary reinsurers
relating to policies with death benefit guarantees written from 1994 to 1999.
The arbitration involves alleged breaches under the reinsurance treaties.
Although the Company believes that its position in this pending arbitration is
strong, an adverse outcome could result in a decrease to the Companys
statutory surplus and

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capital and potentially increase the death benefit costs incurred by the
Company in the future. The arbitration hearing was held during the fourth
quarter of 2002, but no decision has been rendered.

(b) Leases

The rent paid to Hartford Fire for space occupied by the Company was $25 in
2002, 2001 and 2000. Future minimum rental commitments are as follows:

|           |       |   |    |     | 
|---------- | ----- | - | -- | --- | 
|2003       |       | $ | 26 |    
|2004       |       |   | 26 |    
|2005       |       |   | 27 |    
|2006       |       |   | 27 |    
|2007       |       |   | 27 |    
|Thereafter |       |   | 54 |    
|           |       |   |    |    
|           | Total |   | $  | 187 | 
|           |       |   |    |    

Hartford Lifes principal executive offices are located in Simsbury,
Connecticut. Rental expense is recognized on a level basis for the facility
located in Simsbury, Connecticut, which expires on December 31, 2009, and
amounted to approximately $17 in 2002 and $18 in 2001 and 2000.

(c) Tax Matters

The Companys Federal income tax returns are routinely audited by the Internal
Revenue Service (IRS). Throughout the audit of the 1996-1997 years, the
Company and the IRS have been engaged in an ongoing dispute regarding what
portion of the separate account dividends-received deduction (DRD) is
deductible by the Company. During 2001 the Company continued its discussions
with the IRS. As part of the Companys due diligence with respect to this
issue, the Company closely monitored the activities of the IRS with respect to
other taxpayers on this issue and consulted with outside tax counsel and
advisors on the merits of the Companys separate account DRD. The due
diligence was completed during the third quarter of 2001 and the Company
concluded that it was probable that a greater portion of the separate account
DRD claimed on its filed returns would be realized. Based on the Companys
assessment of the probable outcome, the Company concluded an additional $130
tax benefit was appropriate to record in the third quarter of 2001, relating to
the tax years 1996-2000. Additionally, the Company increased its estimate of
the separate account DRD recognized with respect to tax year 2001 from $44 to
$60. Furthermore, for tax year 2002, this amount was $63. During 2000, the
Company had recorded a $24 tax benefit as a result of a final settlement with
the IRS on different aspects of the Companys share of the dividends-received
deduction for the 1993-1995 tax years.

Earlier in 2002, the Company and its IRS agent requested advice from the
National Office of the IRS with respect to certain aspects of the computation
of the separate account DRD that had been claimed by the Company for the
1996-1997 audit period. During September 2002 the IRS National Office issued a
ruling that confirmed that the Company had properly computed the items in
question in the separate account DRD claimed on its 1996-1997 tax returns.
Additionally, during the third quarter, the Company reached agreement with the
IRS on all other issues with respect to the 1996-1997 tax years. The Company
recorded a benefit of $76 during the third quarter of 2002, primarily relating
to the tax treatment of such issues for the 1996-1997 tax years, as well as
appropriate carryover adjustments to the 1998-2002 years. The Company will
continue to monitor further developments surrounding the computation of the
separate account DRD, as well as other items, and will adjust its estimate of
the probable outcome of these issues as developments warrant. Management
believes that adequate provision has been made in the financial statements for
any potential assessments that may result from tax examinations and other
tax-related matters for all open tax years.

(d) Unfunded Commitments

At December 31, 2002, Hartford Life has outstanding commitments to fund limited
partnership investments totaling $218. These capital commitments can be called
by the partnerships during the commitment period (on average, 3-6 years) to
fund working capital needs or the purchase of new investments. If the
commitment period expires and has not been fully funded, Hartford Life is not
required to fund the remaining unfunded commitment, but may elect to do so.

18. Transactions with Affiliates

Transactions of the Company with Hartford Fire, Hartford Holdings and its
affiliates relate principally to tax settlements, reinsurance, insurance
coverage, rental and service fees, payment of dividends and capital
contributions. In addition, certain affiliated insurance companies purchased
group annuity contracts from the Company to fund pension costs and claim
annuities to settle casualty claims. Substantially all general insurance
expenses related to the Company, including rent and employee benefit plan
expenses, are initially paid by The Hartford. Direct expenses are allocated to
the Company using specific identification, and indirect expenses are allocated

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using other applicable methods. Indirect expenses include those for corporate
areas which, depending on type, are allocated based on either a percentage of
direct expenses or on utilization. Indirect expenses allocated to the Company
by The Hartford were $80 in 2002 and 2001 and $84 in 2000. Included in other
liabilities are $45 and $24 due to The Hartford as of December 31, 2002 and
2001, respectively.

On June 27, 2000, The Hartford acquired all of the outstanding shares of HLI
that it did not already own.

19. Segment Information

Hartford Life is organized into four reportable operating segments: Investment
Products, Individual Life, Group Benefits (formerly Employee Benefits) and
Corporate Owned Life Insurance (COLI). Investment Products offers individual
variable and fixed annuities, mutual funds, retirement plan services and other
investment products. Individual Life sells a variety of life insurance
products, including variable life, universal life, interest sensitive whole
life and term life insurance. Group Benefits sells group insurance products,
including group life and group disability insurance as well as other products,
including stop loss and supplementary medical coverage to employers and
employer sponsored plans, accidental death and dismemberment, travel accident
and other special risk coverages to employers and associations. COLI primarily
offers variable products used by employers to fund non-qualified benefits or
other postemployment benefit obligations as well as leveraged COLI. The
Company includes in an Other category, its international operations, which are
primarily located in Japan and Latin America, as well as corporate items not
directly allocable to any of its reportable operating segments, principally
interest expense.

The accounting policies of the reportable operating segments are the same as
those described in the summary of significant accounting policies in Note 2.
Hartford Life evaluates performance of its segments based on revenues, net
income and the segments return on allocated capital. The Company charges
direct operating expenses to the appropriate segment and allocates the majority
of indirect expenses to the segments based on an intercompany expense
arrangement. Intersegment revenues are not significant and primarily occur
between corporate and the operating segments. These amounts include interest
income on allocated surplus and the allocation of net realized capital gains
and losses through net investment income utilizing the duration of the
segments investment portfolios. The Companys revenues are primarily derived
from customers within the United States. The Companys long-lived assets
primarily consist of deferred policy acquisition costs and deferred tax assets
from within the United States. The following tables present summarized
financial information concerning the Companys segments.

|                      |                     |                             |   |                                  |       |      |   |       |       |  |   |       |       | 
|--------------------- | ------------------- | --------------------------- | - | -------------------------------- | ----- | ---- | - | ----- | ----- |  | - | ----- | ----- | 
|                      |                     |                             |   | For the years ended December 31,
|                      |                     |                             |   |                                 
|                      |                     |                             |   | 2002                             |       | 2001 |   | 2000 
|                      |                     |                             |   |                                  |       |      |   |      
|Revenues              |                     |                             |   |                                  |       |      |   |       |       |  |   |      
|                      | Investment Products |                             | $ | 2,597                            |       |      | $ | 2,506 |       |  | $ | 2,380 |      
|                      | Individual Life     |                             |   | 958                              |       |      |   | 890   |       |  |   | 640   |      
|                      | Group Benefits      |                             |   | 2,582                            |       |      |   | 2,507 |       |  |   | 2,207 |      
|                      | COLI                |                             |   | 592                              |       |      |   | 719   |       |  |   | 767   |      
|                      | Other               |                             |   | (304                             | )     |      |   | (73   | )     |  |   | (4    | )    
|                      |                     |                             |   |                                  |       |      |   |       |       |  |   |       |      
|                      |                     | Total revenues              |   | $                                | 6,425 |      |   | $     | 6,549 |  |   | $     | 5,990 | 
|                      |                     |                             |   |                                  |       |      |   |       |       |  |   |       |      
|Net Investment Income |                     |                             |   |                                  |       |      |   |       |       |  |   |      
|                      | Investment Products |                             | $ | 1,079                            |       |      | $ | 886   |       |  | $ | 741   |      
|                      | Individual Life     |                             |   | 261                              |       |      |   | 243   |       |  |   | 181   |      
|                      | Group Benefits      |                             |   | 255                              |       |      |   | 248   |       |  |   | 226   |      
|                      | COLI                |                             |   | 276                              |       |      |   | 352   |       |  |   | 366   |      
|                      | Other               |                             |   | (13                              | )     |      |   | 50    |       |  |   | 78    |      
|                      |                     |                             |   |                                  |       |      |   |       |       |  |   |       |      
|                      |                     | Total net investment income |   | $                                | 1,858 |      |   | $     | 1,779 |  |   | $     | 1,592 | 
|                      |                     |                             |   |                                  |       |      |   |       |       |  |   |       |      

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|                                                          |                     |                                                                 |   |        |         |  |   |         |         |  |   |         |         | 
|--------------------------------------------------------- | ------------------- | --------------------------------------------------------------- | - | ------ | ------- |  | - | ------- | ------- |  | - | ------- | ------- | 
|Amortization of Deferred Policy Acquisition Costs and PVP |                     |                                                                 |   |        |         |  |   |         |         |  |   |        
|                                                          | Investment Products |                                                                 | $ | 444    |         |  | $ | 461     |         |  | $ | 516     |        
|                                                          | Individual Life     |                                                                 |   | 160    |         |  |   | 168     |         |  |   | 145     |        
|                                                          | Group Benefits      |                                                                 |   | 17     |         |  |   | 11      |         |  |   | 10      |        
|                                                          | COLI                |                                                                 |   |       |         |  |   |        |         |  |   |        |        
|                                                          | Other               |                                                                 |   | 7      |         |  |   | 2       |         |  |   |        |        
|                                                          |                     |                                                                 |   |        |         |  |   |         |         |  |   |         |        
|                                                          |                     | Total amortization of deferred policy acquisition costs
and PVP |   | $      | 628     |  |   | $       | 642     |  |   | $       | 671     | 
|                                                          |                     |                                                                 |   |        |         |  |   |         |         |  |   |         |        
|Income Tax Expense (Benefit)                              |                     |                                                                 |   |        |         |  |   |         |         |  |   |        
|                                                          | Investment Products |                                                                 | $ | 129    |         |  | $ | 155     |         |  | $ | 189     |        
|                                                          | Individual Life     |                                                                 |   | 63     |         |  |   | 57      |         |  |   | 39      |        
|                                                          | Group Benefits      |                                                                 |   | 35     |         |  |   | 29      |         |  |   | 24      |        
|                                                          | COLI                |                                                                 |   | 15     |         |  |   | 18      |         |  |   | 19      |        
|                                                          | Other               |                                                                 |   | (232   | )       |  |   | (205    | )       |  |   | (58     | )      
|                                                          |                     |                                                                 |   |        |         |  |   |         |         |  |   |         |        
|                                                          |                     | Total income tax expense                                        |   | $      | 10      |  |   | $       | 54      |  |   | $       | 213     | 
|                                                          |                     |                                                                 |   |        |         |  |   |         |         |  |   |         |        
|Net Income (Loss)                                         |                     |                                                                 |   |        |         |  |   |         |         |  |   |        
|                                                          | Investment Products |                                                                 | $ | 432    |         |  | $ | 463     |         |  | $ | 424     |        
|                                                          | Individual Life     |                                                                 |   | 133    |         |  |   | 121     |         |  |   | 79      |        
|                                                          | Group Benefits      |                                                                 |   | 128    |         |  |   | 106     |         |  |   | 90      |        
|                                                          | COLI                |                                                                 |   | 32     |         |  |   | 37      |         |  |   | 34      |        
|                                                          | Other               |                                                                 |   | (168   | )       |  |   | (42     | )       |  |   | (52     | )      
|                                                          |                     |                                                                 |   |        |         |  |   |         |         |  |   |         |        
|                                                          |                     | Total net income                                                |   | $      | 557     |  |   | $       | 685     |  |   | $       | 575     | 
|                                                          |                     |                                                                 |   |        |         |  |   |         |         |  |   |         |        
|Assets                                                    |                     |                                                                 |   |        |         |  |   |         |         |  |   |        
|                                                          | Investment Products |                                                                 | $ | 97,591 |         |  | $ | 103,906 |         |  | $ | 107,467 |        
|                                                          | Individual Life     |                                                                 |   | 8,888  |         |  |   | 9,157   |         |  |   | 7,270   |        
|                                                          | Group Benefits      |                                                                 |   | 5,242  |         |  |   | 4,686   |         |  |   | 4,111   |        
|                                                          | COLI                |                                                                 |   | 30,333 |         |  |   | 26,840  |         |  |   | 23,390  |        
|                                                          | Other               |                                                                 |   | 7,740  |         |  |   | 7,020   |         |  |   | 1,383   |        
|                                                          |                     |                                                                 |   |        |         |  |   |         |         |  |   |         |        
|                                                          |                     | Total assets                                                    |   | $      | 149,794 |  |   | $       | 151,609 |  |   | $       | 143,621 | 
|                                                          |                     |                                                                 |   |        |         |  |   |         |         |  |   |         |        

|                    |                      |                           |       |                                  |       |      |       |       |       |  |       |       |       | 
|------------------- | -------------------- | ------------------------- | ----- | -------------------------------- | ----- | ---- | ----- | ----- | ----- |  | ----- | ----- | ----- | 
|                    |                      |                           |       | For the years ended December 31,
|                    |                      |                           |       |                                 
|Revenues by Product |                      | 2002                      |       | 2001                             |       | 2000
|                    |                      |                           |       |                                  |       |     
|Investment Products |                      |                           |       |                                  |       |      |       |       |       |  |       |      
|                    | Individual Annuities |                           | $     | 1,452                            |       |      | $     | 1,492 |       |  | $     | 1,538 |      
|                    | Other                |                           |       | 1,145                            |       |      |       | 1,014 |       |  |       | 842   |      
|                    |                      |                           |       |                                  |       |      |       |       |       |  |       |       |      
|                    |                      | Total Investment Products |       |                                  | 2,597 |      |       |       | 2,506 |  |       |       | 2,380 | 
|Individual Life     |                      |                           | 958   |                                  |       |      | 890   |       |       |  | 640   |      
|Group Benefits      |                      |                           | 2,582 |                                  |       |      | 2,507 |       |       |  | 2,207 |      
|COLI                |                      |                           | 592   |                                  |       |      | 719   |       |       |  | 767   |      

20. Acquisitions

On April 2, 2001, Hartford Life acquired the individual life insurance, annuity
and mutual fund businesses of Fortis, Inc. (Fortis Financial Group or
Fortis) for $1.12 billion in cash. The Company effected the acquisition
through several reinsurance agreements with subsidiaries of Fortis and the
purchase of 100% of the stock of Fortis Advisers, Inc. and Fortis Investors,
Inc., wholly-owned subsidiaries of Fortis, Inc. The acquisition was accounted
for as a purchase transaction and, as such, the revenues and expenses generated
by this business from April 2, 2001 forward are included in the Companys
Consolidated Statements of Income.

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Purchase consideration for the transaction was as follows:

Issuance of:

|                                                                                                   |  |   |       | 
|-------------------------------------------------------------------------------------------------- |  | - | ----- | 
|Capital contribution from parent                                                                   |  | $ | 615   | 
|                                                                                                  
|Long-term notes:                                                                                   |  |   |       | 
|$400 7.375% notes due March 1, 2031                                                                |  |   | 400   | 
|                                                                                                  
|Trust preferred securities
$200 7.625% Trust Preferred Securities
(Series B) due February 15, 2050 |  |   | 200   | 
|                                                                                                   |  |   |       | 
|Consideration raised                                                                               |  | $ | 1,215 | 
|                                                                                                   |  |   |       | 

The assets and liabilities acquired in this transaction were recorded at values
prescribed by applicable purchase accounting rules, which generally estimated
fair value. In addition, an intangible asset representing the present value of
future profits (PVP) of the acquired business was established in the amount
of $605. The PVP is amortized to expense in relation to the estimated gross
profits of the underlying insurance contracts, and interest is accreted on the
unamortized balance. For the years ended December 31, 2002 and 2001,
amortization of PVP amounted to $62 and $66, respectively. Goodwill of $553,
representing the excess of the purchase price over the amount of net assets
(including PVP) acquired, has also been recorded and was amortized on a
straight-line basis until January 1, 2002, when amortization ceased under the
provisions of SFAS No. 142.

The following is detail of the PVP activity as of December 31, 2002 and 2001:

|                      |  |      |     |      |  |   |     |  
|--------------------- |  | ---- | --- | ---- |  | - | --- | -
|                      |  | 2002 |     | 2001
|                      |  |      |     |     
|Beginning PVP balance |  | $    | 568 |      |  | $ |    |  
|                     
|Acquisition costs     |  |      |    |      |  |   | 605 |  
|                     
|Accretion of interest |  |      | 19  |      |  |   | 29  |  
|                     
|Amortization          |  |      | (62 | )    |  |   | (66 | )
|                      |  |      |     |      |  |   |     |  
|Ending PVP balance    |  | $    | 525 |      |  | $ | 568 |  
|                      |  |      |     |      |  |   |     |  

21. Quarterly Results for 2002 and 2001 (unaudited)

|                              |  |                    |       |          |  |               |       |              |  |      |       |      |  |      |       |      |  |   |       |  |  |   |       |  |  |   |       |  |  |   |       | 
|----------------------------- |  | ------------------ | ----- | -------- |  | ------------- | ----- | ------------ |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | - | ----- |  |  | - | ----- |  |  | - | ----- |  |  | - | ----- | 
|                              |  | Three Months Ended
|                              |  |                   
|                              |  | March 31,          |       | June 30, |  | September 30, |       | December 31,
|                              |  |                    |       |          |  |               |       |             
|                              |  | 2002               |       | 2001     |  | 2002          |       | 2001         |  | 2002 |       | 2001 |  | 2002 |       | 2001
|                              |  |                    |       |          |  |               |       |              |  |      |       |      |  |      |       |     
|Revenues                      |  | $                  | 1,676 |          |  | $             | 1,590 |              |  | $    | 1,591 |      |  | $    | 1,695 |      |  | $ | 1,541 |  |  | $ | 1,605 |  |  | $ | 1,617 |  |  | $ | 1,659 | 
|Benefits, claims and expenses |  |                    | 1,454 |          |  |               | 1,368 |              |  |      | 1,482 |      |  |      | 1,467 |      |  |   | 1,458 |  |  |   | 1,469 |  |  |   | 1,464 |  |  |   | 1,480 | 
|Net income                    |  |                    | 170   |          |  |               | 138   |              |  |      | 101   |      |  |      | 162   |      |  |   | 161   |  |  |   | 250   |  |  |   | 125   |  |  |   | 135   | 

---

| |  | [1] Included in the quarter ended September 30, 2001 are after-tax
losses of $20 related to September 11 and $130 of tax benefits
primarily related to the expected favorable treatment of the Companys
separate account DRD arising during the 1996-2000 tax years
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | [2] Included in the quarter ended March 31, 2002 is an after-tax
benefit of $8 related to September 11.                                                                                                                                                             
|
| |  | [3] Included in the quarter ended September 30, 2002 are $76 of tax
benefits primarily related to the expected favorable treatment of the
Companys separate account DRD arising during the 1996-2000 tax years.                                                    

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HARTFORD LIFE, INC. AND SUBSIDIARIES

SCHEDULE I

SUMMARY OF INVESTMENTS  OTHER THAN INVESTMENTS IN AFFILIATES

|                   |                                                                                                    |                              |                                                                                                   |                                              |     |        |        |     |     |        |        |     |     |                  |        | 
|------------------ | -------------------------------------------------------------------------------------------------- | ---------------------------- | ------------------------------------------------------------------------------------------------- | -------------------------------------------- | --- | ------ | ------ | --- | --- | ------ | ------ | --- | --- | ---------------- | ------ | 
|(In millions)      | As of December 31, 2002                                                                           
|                   |                                                                                                   
|                   |                                                                                                    |                              |                                                                                                   |                                              |     |        |        |     |     |        |        |     |     | Amount at which 
|                   |                                                                                                    |                              |                                                                                                   |                                              |     |        |        |     |     |        |        |     |     | shown on Balance
|Type of Investment | Cost                                                                                               | Fair Value                   | Sheet                                                                                            
|                   |                                                                                                    |                              |                                                                                                  
|Fixed Maturities   |                                                                                                    |                              |                                                                                                   |                                              |     |        |        |     |     |        |        |    
|                   | Bonds and Notes
U.S. Government and Government agencies and
authorities (guaranteed and sponsored) |                              | $                                                                                                 | 346                                          |     |        | $      | 358 |     |        | $      | 358 |    
|                   |                                                                                                    |                              | U.S. Government and Government agencies and
authorities (guaranteed and sponsored)  asset
backed |                                              |     | 2,354  |        |     |     | 2,427  |        |     |     | 2,427            |       
|                   |                                                                                                    |                              | States, municipalities and political subdivisions                                                 |                                              |     | 1,881  |        |     |     | 2,030  |        |     |     | 2,030            |       
|                   |                                                                                                    |                              | International governments                                                                         |                                              |     | 476    |        |     |     | 526    |        |     |     | 526              |       
|                   |                                                                                                    |                              | Public utilities                                                                                  |                                              |     | 1,236  |        |     |     | 1,279  |        |     |     | 1,279            |       
|                   |                                                                                                    |                              | All other corporate, including international                                                      |                                              |     | 11,917 |        |     |     | 12,684 |        |     |     | 12,684           |       
|                   |                                                                                                    |                              | All other corporate  asset backed                                                                |                                              |     | 8,013  |        |     |     | 8,305  |        |     |     | 8,305            |       
|                   |                                                                                                    |                              | Short-term investments                                                                            |                                              |     | 1,099  |        |     |     | 1,100  |        |     |     | 1,100            |       
|                   | Certificates of deposit                                                                            |                              |                                                                                                   | 629                                          |     |        |        | 634 |     |        |        | 634 |    
|                   | Redeemable preferred stock                                                                         |                              |                                                                                                   | 31                                           |     |        |        | 34  |     |        |        | 34  |    
|                   |                                                                                                    |                              |                                                                                                   |                                              |     |        |        |     |     |        |        |     |    
|                   |                                                                                                    |                              |                                                                                                   | Total fixed maturities                       |     |        | 27,982 |     |     |        | 29,377 |     |     |                  | 29,377 | 
|                   |                                                                                                    |                              |                                                                                                   |                                              |     |        |        |     |     |        |        |     |    
|Equity Securities  |                                                                                                    |                              |                                                                                                   |                                              |     |        |        |     |     |        |        |    
|                   | Common Stocks                                                                                     
|                   |                                                                                                    | Industrial and miscellaneous |                                                                                                   |                                              | 221 |        |        |     | 195 |        |        |     | 195 |                 
|                   |                                                                                                    | Preferred Stocks             |                                                                                                   |                                              | 262 |        |        |     | 263 |        |        |     | 263 |                 
|                   |                                                                                                    |                              |                                                                                                   |                                              |     |        |        |     |     |        |        |     |    
|                   |                                                                                                    |                              |                                                                                                   | Total equity securities                      |     |        | 483    |     |     |        | 458    |     |     |                  | 458    | 
|                   |                                                                                                    |                              |                                                                                                   |                                              |     |        |        |     |     |        |        |     |    
|                   |                                                                                                    |                              |                                                                                                   | Total fixed maturities and equity securities |     |        | 28,465 |     |     |        | 29,835 |     |     |                  | 29,835 | 
|                   |                                                                                                    |                              |                                                                                                   |                                              |     |        |        |     |     |        |        |     |    
|Policy Loans       |                                                                                                    |                              | 2,934                                                                                             |                                              |     |        | 2,934  |     |     |        | 2,934  |    
|                   |                                                                                                    |                              |                                                                                                   |                                              |     |        |        |     |     |        |        |    
|Other Investments  |                                                                                                    |                              |                                                                                                   |                                              |     |        |        |     |     |        |        |    
|                   | Mortgage loans on real estate                                                                      |                              |                                                                                                   | 334                                          |     |        |        | 334 |     |        |        | 334 |    
|                   | Investment in partnerships                                                                         |                              |                                                                                                   | 527                                          |     |        |        | 519 |     |        |        | 519 |    
|                   | Other invested assets                                                                              |                              |                                                                                                   | 91                                           |     |        |        | 269 |     |        |        | 269 |    
|                   |                                                                                                    |                              |                                                                                                   |                                              |     |        |        |     |     |        |        |     |    
|                   |                                                                                                    |                              |                                                                                                   | Total other investments                      |     |        | 952    |     |     |        | 1,122  |     |     |                  | 1,122  | 
|                   |                                                                                                    |                              |                                                                                                   |                                              |     |        |        |     |     |        |        |     |    
|                   |                                                                                                    |                              |                                                                                                   | Total investments                            |     | $      | 32,351 |     |     | $      | 33,891 |     |     | $                | 33,891 | 
|                   |                                                                                                    |                              |                                                                                                   |                                              |     |        |        |     |     |        |        |     |    

S-1



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##### Table of Contents



HARTFORD LIFE, INC. AND SUBSIDIARIES

SCHEDULE II

CONDENSED FINANCIAL INFORMATION OF HARTFORD LIFE, INC.
(Registrant)

|                                     |                                                                                                                                        |                                                                                    |                                            |       |                    |       |  |       |       |       | 
|------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------- | ------------------------------------------ | ----- | ------------------ | ----- |  | ----- | ----- | ----- | 
|                                     |                                                                                                                                        |                                                                                    |                                            |       | As of December 31,
|(In millions)                        |                                                                                                                                        |                                                                                   
|Condensed Balance Sheets             |                                                                                                                                        | 2002                                                                               |                                            | 2001 
|                                     |                                                                                                                                        |                                                                                    |                                            |      
|Assets                               |                                                                                                                                        |                                                                                    |                                            |       |                    |       |  |      
|                                     |                                                                                                                                        | Fixed maturities, available for sale, at fair value
(amortized cost of $1 and $16) |                                            | $     | 1                  |       |  | $     | 16    |      
|                                     |                                                                                                                                        | Investment in subsidiaries                                                         |                                            |       | 7,297              |       |  |       | 6,077 |      
|                                     |                                                                                                                                        | Other assets                                                                       |                                            |       | 72                 |       |  |       | 64    |      
|                                     |                                                                                                                                        |                                                                                    |                                            |       |                    |       |  |       |       |      
|                                     |                                                                                                                                        |                                                                                    | Total assets                               |       |                    | 7,370 |  |       |       | 6,157 | 
|                                     |                                                                                                                                        |                                                                                    |                                            |       |                    |       |  |      
|Liabilities and Stockholders Equity |                                                                                                                                        |                                                                                    |                                            |       |                    |       |  |      
|                                     | Long-term debt                                                                                                                         |                                                                                    |                                            | 1,125 |                    |       |  | 1,050 |      
|                                     | Company obligated mandatorily redeemable preferred
securities of subsidiary trust holding solely parent
junior subordinated debentures |                                                                                    |                                            | 450   |                    |       |  | 450   |      
|                                     | Other liabilities                                                                                                                      |                                                                                    |                                            | 107   |                    |       |  | 47    |      
|                                     |                                                                                                                                        |                                                                                    |                                            |       |                    |       |  |       |       |      
|                                     |                                                                                                                                        |                                                                                    | Total liabilities                          |       |                    | 1,682 |  |       |       | 1,547 | 
|                                     |                                                                                                                                        |                                                                                    | Total stockholders equity                 |       |                    | 5,688 |  |       |       | 4,610 | 
|                                     |                                                                                                                                        |                                                                                    |                                            |       |                    |       |  |       |       |      
|                                     |                                                                                                                                        |                                                                                    | Total liabilities and stockholders equity |       | $                  | 7,370 |  |       | $     | 6,157 | 
|                                     |                                                                                                                                        |                                                                                    |                                            |       |                    |       |  |       |       |      

|                               |                          |                                        |   |                                  |     |      |   |     |     |   |   |     |     | 
|------------------------------ | ------------------------ | -------------------------------------- | - | -------------------------------- | --- | ---- | - | --- | --- | - | - | --- | --- | 
|                               |                          |                                        |   | For the years ended December 31,
|(In millions)                  |                          |                                       
|Condensed Statements of Income |                          | 2002                                   |   | 2001                             |     | 2000
|                               |                          |                                        |   |                                  |     |     
|                               | Earnings of subsidiaries |                                        | $ | 679                              |     |      | $ | 869 |     |   | $ | 854 |    
|                               | Interest expense         |                                        |   | 112                              |     |      |   | 104 |     |   |   | 66  |    
|                               |                          |                                        |   |                                  |     |      |   |     |     |   |   |    
|                               |                          | Income before income tax expense       |   |                                  | 567 |      |   |     | 765 |   |   |     | 788 | 
|                               | Income tax expense       |                                        |   | 10                               |     |      |   | 54  |     |   |   | 213 |    
|                               |                          |                                        |   |                                  |     |      |   |     |     |   |   |    
|                               |                          | Cumulative effect of accounting change |   |                                  |    |      |   |     | (26 | ) |   |     |    | 
|                               |                          |                                        |   |                                  |     |      |   |     |     |   |   |    
|                               |                          | Net income                             |   | $                                | 557 |      |   | $   | 685 |   |   | $   | 575 | 
|                               |                          |                                        |   |                                  |     |      |   |     |     |   |   |    

The financial information of Hartford Life, Inc. (parent company of Hartford
Life) should be read in conjunction with the Consolidated Financial
Statements and Notes to Consolidated Financial Statements.

S-2



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##### Table of Contents



HARTFORD LIFE, INC. AND SUBSIDIARIES

SCHEDULE II

CONDENSED FINANCIAL INFORMATION OF HARTFORD LIFE, INC. (continued)
(Registrant)

|                                   |                                                                                                                                                                  |                                                  |  |      |  |      |   |      |      |   |   |        |        |   |   |      |     |  
|---------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------ |  | ---- |  | ---- | - | ---- | ---- | - | - | ------ | ------ | - | - | ---- | --- | -
|(In millions)                      |                                                                                                                                                                  |                                                  |  |      |  |      |   |      |      |   |   |        |        |   |   |     
|Condensed Statements of Cash Flows |                                                                                                                                                                  | For the years ended December 31,                
|                                   |                                                                                                                                                                  |                                                 
|                                   |                                                                                                                                                                  |                                                  |  | 2002 |  | 2001 |   | 2000
|                                   |                                                                                                                                                                  |                                                  |  |      |  |      |   |     
|Operating Activities               |                                                                                                                                                                  |                                                  |  |      |  |      |   |      |      |   |   |        |        |   |   |     
|                                   | Net income                                                                                                                                                       |                                                  |  |      |  |      | $ | 557  |      |   | $ | 685    |        |   | $ | 575  |    
|                                   | Undistributed earnings of subsidiaries                                                                                                                           |                                                  |  |      |  |      |   | (483 | )    |   |   | (624   | )      |   |   | (526 | )  
|                                   | Change in other assets and liabilities                                                                                                                           |                                                  |  |      |  |      |   | 52   |      |   |   | (20    | )      |   |   |     |    
|                                   |                                                                                                                                                                  |                                                  |  |      |  |      |   |      |      |   |   |        |        |   |   |     
|                                   |                                                                                                                                                                  | Cash provided by operating activities            |  |      |  |      |   |      | 126  |   |   |        | 41     |   |   |      | 49  |  
|                                   |                                                                                                                                                                  |                                                  |  |      |  |      |   |      |      |   |   |        |        |   |   |     
|Investing Activities               |                                                                                                                                                                  |                                                  |  |      |  |      |   |      |      |   |   |        |        |   |   |     
|                                   | Sales (purchases) of investments                                                                                                                                 |                                                  |  |      |  |      |   | 15   |      |   |   | (15    | )      |   |   |     |    
|                                   | Capital contribution to subsidiary                                                                                                                               |                                                  |  |      |  |      |   | (225 | )    |   |   | (1,177 | )      |   |   |     |    
|                                   |                                                                                                                                                                  |                                                  |  |      |  |      |   |      |      |   |   |        |        |   |   |     
|                                   |                                                                                                                                                                  | Cash used for investing activities               |  |      |  |      |   |      | (210 | ) |   |        | (1,192 | ) |   |      |    |  
|                                   |                                                                                                                                                                  |                                                  |  |      |  |      |   |      |      |   |   |        |        |   |   |     
|Financing Activities               |                                                                                                                                                                  |                                                  |  |      |  |      |   |      |      |   |   |        |        |   |   |     
|                                   | Proceeds from long-term debt                                                                                                                                     |                                                  |  |      |  |      |   | 75   |      |   |   | 400    |        |   |   |     |    
|                                   | Proceeds from issuance of company obligated mandatorily
Redeemable preferred securities of subsidiary trust holding
solely parent junior subordinated debentures |                                                  |  |      |  |      |   |     |      |   |   | 200    |        |   |   |     |    
|                                   | Capital contribution from parent                                                                                                                                 |                                                  |  |      |  |      |   | 75   |      |   |   | 615    |        |   |   |     |    
|                                   | Dividends paid                                                                                                                                                   |                                                  |  |      |  |      |   | (66  | )    |   |   | (64    | )      |   |   | (55  | )  
|                                   | Proceeds from parent to retire common stock                                                                                                                      |                                                  |  |      |  |      |   |     |      |   |   |       |        |   |   | 226  |    
|                                   | Payments to retire common stock                                                                                                                                  |                                                  |  |      |  |      |   |     |      |   |   |       |        |   |   | (226 | )  
|                                   | Net issuance (purchase) of common stock                                                                                                                          |                                                  |  |      |  |      |   |     |      |   |   |       |        |   |   | 6    |    
|                                   |                                                                                                                                                                  |                                                  |  |      |  |      |   |      |      |   |   |        |        |   |   |     
|                                   |                                                                                                                                                                  | Cash (used for) provided by financing activities |  |      |  |      |   |      | 84   |   |   |        | 1,151  |   |   |      | (49 | )
|                                   |                                                                                                                                                                  |                                                  |  |      |  |      |   |      |      |   |   |        |        |   |   |     
|                                   | Net change in cash                                                                                                                                               |                                                  |  |      |  |      |   |     |      |   |   |       |        |   |   |     |    
|                                   | Cash  beginning of year                                                                                                                                         |                                                  |  |      |  |      |   |     |      |   |   |       |        |   |   |     |    
|                                   |                                                                                                                                                                  |                                                  |  |      |  |      |   |      |      |   |   |        |        |   |   |     
|                                   |                                                                                                                                                                  | Cash  end of year                               |  |      |  |      |   | $    |     |   |   | $      |       |   |   | $    |    |  
|                                   |                                                                                                                                                                  |                                                  |  |      |  |      |   |      |      |   |   |        |        |   |   |     

|                                                 |                              |  |   |     |  |  |   |     |   |  |   |     | 
|------------------------------------------------ | ---------------------------- |  | - | --- |  |  | - | --- | - |  | - | --- | 
|Supplemental Disclosure of Cash Flow Information |                              |  |   |     |  |  |   |     |   |  |   |    
|                                                 |                              |  |   |     |  |  |   |     |   |  |   |    
|Net Cash Activity During the Year For:           |                              |  |   |     |  |  |   |     |   |  |   |    
|                                                 | Interest expense paid        |  | $ | 110 |  |  | $ | 89  |   |  | $ | 65  | 
|                                                 | Income taxes paid (received) |  | $ | 48  |  |  | $ | (40 | ) |  | $ | 197 | 

S-3



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##### Table of Contents



HARTFORD LIFE, INC. AND SUBSIDIARIES

SCHEDULE III
SUPPLEMENTARY INSURANCE INFORMATION
For the years ended December 31, 2002, 2001 and 2000



|                               |              |                   |                 |                 |        |       |        |       |        |       |         |                   |     |   |       |       |          |   |       |       |  |   |       |       | 
|------------------------------ | ------------ | ----------------- | --------------- | --------------- | ------ | ----- | ------ | ----- | ------ | ----- | ------- | ----------------- | --- | - | ----- | ----- | -------- | - | ----- | ----- |  | - | ----- | ----- | 
|(In millions)                  |              |                   |                 |                 |        |       |        |       |        |       |         |                   |     |   |       |       |          |   |       |       |  |   |       |      
|                               |              |                   |                 |                 |        |       |        |       |        |       | Other   |                   |     |   |       |       | Earned   |   |       |       | 
|                               |              |                   |                 |                 |        |       |        |       |        |       | Policy- |                   |     |   |       |       | Premiums |   |       |       | 
|                               |              |                   | Deferred Policy |                 | Future |       | holder |       | Policy |       | and     |                   | Net
|Segment                        |              | Acquisition Costs |                 | Policy Benefits |        | Funds |        | Fees  |        | Other |         | Investment Income
|                               |              |                   |                 |                 |        |       |        |       |        |       |         |                  
|2002                           |              |                   |                 |                 |        |       |        |       |        |       |         |                   |     |   |       |       |          |   |       |       |  |   |       |      
|Investment Products            |              | $                 | 3,818           |                 |        | $     | 4,961  |       |        | $     | 15,506  |                   |     | $ | 1,537 |       |          | $ | (19   | )     |  | $ | 1,079 |      
|Individual Life                |              |                   | 1,229           |                 |        |       | 586    |       |        |       | 3,583   |                   |     |   | 695   |       |          |   | 2     |       |  |   | 261   |      
|Group Benefits                 |              |                   | 44              |                 |        |       | 3,571  |       |        |       | 362     |                   |     |   | 19    |       |          |   | 2,308 |       |  |   | 255   |      
|Corporate Owned
Life Insurance |              |                   | 12              |                 |        |       | 316    |       |        |       | 3,334   |                   |     |   | 305   |       |          |   | 11    |       |  |   | 276   |      
|Other                          |              |                   | 130             |                 |        |       | 87     |       |        |       | 234     |                   |     |   | 21    |       |          |   | 5     |       |  |   | (13   | )    
|                               |              |                   |                 |                 |        |       |        |       |        |       |         |                   |     |   |       |       |          |   |       |       |  |   |       |      
|                               | Consolidated |                   | $               | 5,233           |        |       | $      | 9,521 |        |       | $       | 23,019            |     |   | $     | 2,577 |          |   | $     | 2,307 |  |   | $     | 1,858 | 
|                               |              |                   |                 |                 |        |       |        |       |        |       |         |                   |     |   |       |       |          |   |       |       |  |   |       |      
|2001                           |              |                   |                 |                 |        |       |        |       |        |       |         |                   |     |   |       |       |          |   |       |       |  |   |       |      
|Investment Products            |              | $                 | 3,683           |                 |        | $     | 4,513  |       |        | $     | 11,211  |                   |     | $ | 1,622 |       |          | $ | (2    | )     |  | $ | 886   |      
|Individual Life                |              |                   | 1,249           |                 |        |       | 558    |       |        |       | 3,496   |                   |     |   | 634   |       |          |   | 13    |       |  |   | 243   |      
|Group Benefits                 |              |                   | 36              |                 |        |       | 3,352  |       |        |       | 289     |                   |     |   | 17    |       |          |   | 2,242 |       |  |   | 248   |      
|Corporate Owned
Life Insurance |              |                   | 8               |                 |        |       | 321    |       |        |       | 4,120   |                   |     |   | 355   |       |          |   | 12    |       |  |   | 352   |      
|Other                          |              |                   | 28              |                 |        |       | 98     |       |        |       | 241     |                   |     |   | 5     |       |          |   | 5     |       |  |   | 50    |      
|                               |              |                   |                 |                 |        |       |        |       |        |       |         |                   |     |   |       |       |          |   |       |       |  |   |       |      
|                               | Consolidated |                   | $               | 5,004           |        |       | $      | 8,842 |        |       | $       | 19,357            |     |   | $     | 2,633 |          |   | $     | 2,270 |  |   | $     | 1,779 | 
|                               |              |                   |                 |                 |        |       |        |       |        |       |         |                   |     |   |       |       |          |   |       |       |  |   |       |      
|2000                           |              |                   |                 |                 |        |       |        |       |        |       |         |                   |     |   |       |       |          |   |       |       |  |   |       |      
|Investment Products            |              | $                 | 3,377           |                 |        | $     | 3,486  |       |        | $     | 8,417   |                   |     | $ | 1,621 |       |          | $ | 18    |       |  | $ | 741   |      
|Individual Life                |              |                   | 1,114           |                 |        |       | 332    |       |        |       | 2,523   |                   |     |   | 454   |       |          |   | 5     |       |  |   | 181   |      
|Group Benefits                 |              |                   | 36              |                 |        |       | 2,969  |       |        |       | 235     |                   |     |   | 17    |       |          |   | 1,964 |       |  |   | 226   |      
|Corporate Owned
Life Insurance |              |                   |                |                 |        |       | 283    |       |        |       | 4,645   |                   |     |   | 392   |       |          |   | 9     |       |  |   | 366   |      
|Other                          |              |                   |                |                 |        |       | 4      |       |        |       | 29      |                   |     |   |      |       |          |   | 6     |       |  |   | 78    |      
|                               |              |                   |                 |                 |        |       |        |       |        |       |         |                   |     |   |       |       |          |   |       |       |  |   |       |      
|                               | Consolidated |                   | $               | 4,527           |        |       | $      | 7,074 |        |       | $       | 15,849            |     |   | $     | 2,484 |          |   | $     | 2,002 |  |   | $     | 1,592 | 
|                               |              |                   |                 |                 |        |       |        |       |        |       |         |                   |     |   |       |       |          |   |       |       |  |   |       |      

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                               |              |        |          |          |            |           |                    |       |             |         |             |         |              |   |     |     |  |   |    |    |  |   |     |     | 
|------------------------------ | ------------ | ------ | -------- | -------- | ---------- | --------- | ------------------ | ----- | ----------- | ------- | ----------- | ------- | ------------ | - | --- | --- |  | - | -- | -- |  | - | --- | --- | 
|(In millions)                  |              |        |          |          |            |           |                    |       |             |         |             |         |              |   |     |     |  |   |    |    |  |   |     |    
|                               |              |        |          |          |            |           | Benefits,          |       |             |         |             |         | Amortization |   |     |     |  |   |    |    | 
|                               |              |        | Net      |          | Claims and |           |                    |       |             |         | of Deferred |         |              |   |     |     |  |   |   
|                               |              |        | Realized |          | Claim      |           |                    |       |             |         | Policy      |         | Dividends    |   |     |     | 
|                               |              |        | Capital  |          | Adjustment |           | Insurance Expenses |       | Acquisition |         | to Policy-  |         | Interest    
|Segment                        |              | Losses |          | Expenses |            | and other |                    | Costs |             | holders |             | Expense
|                               |              |        |          |          |            |           |                    |       |             |         |             |        
|2002                           |              |        |          |          |            |           |                    |       |             |         |             |         |              |   |     |     |  |   |    |    |  |   |     |    
|Investment Products            |              | $      |         |          |            | $         | 944                |       |             | $       | 648         |         |              | $ | 444 |     |  | $ |   |    |  | $ |    |    
|Individual Life                |              |        |         |          |            |           | 443                |       |             |         | 156         |         |              |   | 160 |     |  |   | 3  |    |  |   |    |    
|Group Benefits                 |              |        |         |          |            |           | 1,878              |       |             |         | 524         |         |              |   | 17  |     |  |   |   |    |  |   |    |    
|Corporate Owned
Life Insurance |              |        |         |          |            |           | 401                |       |             |         | 82          |         |              |   |    |     |  |   | 62 |    |  |   |    |    
|Other                          |              |        | (317     | )        |            |           | (18                | )     |             |         | (5          | )       |              |   | 7   |     |  |   |   |    |  |   | 112 |    
|                               |              |        |          |          |            |           |                    |       |             |         |             |         |              |   |     |     |  |   |    |    |  |   |     |    
|                               | Consolidated |        | $        | (317     | )          |           | $                  | 3,648 |             |         | $           | 1,405   |              |   | $   | 628 |  |   | $  | 65 |  |   | $   | 112 | 
|                               |              |        |          |          |            |           |                    |       |             |         |             |         |              |   |     |     |  |   |    |    |  |   |     |    
|2001                           |              |        |          |          |            |           |                    |       |             |         |             |         |              |   |     |     |  |   |    |    |  |   |     |    
|Investment Products            |              | $      |         |          |            | $         | 819                |       |             | $       | 608         |         |              | $ | 461 |     |  | $ |   |    |  | $ |    |    
|Individual Life                |              |        |         |          |            |           | 385                |       |             |         | 157         |         |              |   | 168 |     |  |   | 2  |    |  |   |    |    
|Group Benefits                 |              |        |         |          |            |           | 1,874              |       |             |         | 487         |         |              |   | 11  |     |  |   |   |    |  |   |    |    
|Corporate Owned
Life Insurance |              |        |         |          |            |           | 514                |       |             |         | 84          |         |              |   |    |     |  |   | 66 |    |  |   |    |    
|Other                          |              |        | (133     | )        |            |           | 19                 |       |             |         | 23          |         |              |   | 2   |     |  |   |   |    |  |   | 104 |    
|                               |              |        |          |          |            |           |                    |       |             |         |             |         |              |   |     |     |  |   |    |    |  |   |     |    
|                               | Consolidated |        | $        | (133     | )          |           | $                  | 3,611 |             |         | $           | 1,359   |              |   | $   | 642 |  |   | $  | 68 |  |   | $   | 104 | 
|                               |              |        |          |          |            |           |                    |       |             |         |             |         |              |   |     |     |  |   |    |    |  |   |     |    
|2000                           |              |        |          |          |            |           |                    |       |             |         |             |         |              |   |     |     |  |   |    |    |  |   |     |    
|Investment Products            |              | $      |         |          |            | $         | 700                |       |             | $       | 551         |         |              | $ | 516 |     |  | $ |   |    |  | $ |    |    
|Individual Life                |              |        |         |          |            |           | 274                |       |             |         | 103         |         |              |   | 145 |     |  |   |   |    |  |   |    |    
|Group Benefits                 |              |        |         |          |            |           | 1,643              |       |             |         | 440         |         |              |   | 10  |     |  |   |   |    |  |   |    |    
|Corporate Owned
Life Insurance |              |        |         |          |            |           | 545                |       |             |         | 102         |         |              |   |    |     |  |   | 67 |    |  |   |    |    
|Other                          |              |        | (88      | )        |            |           |                   |       |             |         | 40          |         |              |   |    |     |  |   |   |    |  |   | 66  |    
|                               |              |        |          |          |            |           |                    |       |             |         |             |         |              |   |     |     |  |   |    |    |  |   |     |    
|                               | Consolidated |        | $        | (88      | )          |           | $                  | 3,162 |             |         | $           | 1,236   |              |   | $   | 671 |  |   | $  | 67 |  |   | $   | 66  | 
|                               |              |        |          |          |            |           |                    |       |             |         |             |         |              |   |     |     |  |   |    |    |  |   |     |    

S-4



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##### Table of Contents



HARTFORD LIFE, INC. AND SUBSIDIARIES

SCHEDULE IV

REINSURANCE

|                                     |                                       |                               |                                             |                 |       |           |   |            |          |     |                    |        |     |     |   |         |                   |       |  |      |               |     |  
|------------------------------------ | ------------------------------------- | ----------------------------- | ------------------------------------------- | --------------- | ----- | --------- | - | ---------- | -------- | --- | ------------------ | ------ | --- | --- | - | ------- | ----------------- | ----- |  | ---- | ------------- | --- | -
|                                     |                                       |                               |                                             |                 |       |           |   |            |          |     |                    |        |     |     |   |         |                   |       |  |      | Percentage of
|                                     |                                       |                               |                                             |                 |       |           |   |            | Ceded to |     | Assumed From Other |        |     |     |   |         | Amount Assumed to
|(In millions)                        |                                       | Gross Amount                  |                                             | Other Companies |       | Companies |   | Net Amount |          | Net
|                                     |                                       |                               |                                             |                 |       |           |   |            |          |    
|For the year ended December 31, 2002 |                                       |                               |                                             |                 |       |           |   |            |          |     |                    |        |     |     |   |         |                   |       |  |     
|                                     | Life insurance in force               |                               | $                                           | 629,028         |       |           | $ | 209,608    |          |     | $                  | 65,590 |     |     | $ | 485,010 |                   |       |  | 13.5 | %            
|                                     |                                       |                               |                                             |                 |       |           |   |            |          |     |                    |        |     |     |   |         |                   |       |  |      |              
|                                     | Fee income, earned premiums and other |                               |                                             |                 |       |           |   |            |          |     |                    |        |     |     |   |         |                   |       |  |      |              
|                                     |                                       | Life insurance and annuities  |                                             | $               | 3,556 |           |   | $          | 278      |     |                    | $      | 84  |     |   | $       | 3,362             |       |  |      | 2.5           | %  
|                                     |                                       | Accident and health insurance |                                             |                 | 1,567 |           |   |            | 141      |     |                    |        | 96  |     |   |         | 1,522             |       |  |      | 6.3           | %  
|                                     |                                       |                               |                                             |                 |       |           |   |            |          |     |                    |        |     |     |   |         |                   |       |  |      |              
|                                     |                                       |                               | Total fee income, earned
premiums and other |                 | $     | 5,123     |   |            | $        | 419 |                    |        | $   | 180 |   |         | $                 | 4,884 |  |      |               | 3.7 | %
|                                     |                                       |                               |                                             |                 |       |           |   |            |          |     |                    |        |     |     |   |         |                   |       |  |      |              
|For the year ended December 31, 2001 |                                       |                               |                                             |                 |       |           |   |            |          |     |                    |        |     |     |   |         |                   |       |  |     
|                                     | Life insurance in force               |                               | $                                           | 534,489         |       |           | $ | 142,352    |          |     | $                  | 50,828 |     |     |   | 442,965 |                   |       |  | 11.5 | %            
|                                     |                                       |                               |                                             |                 |       |           |   |            |          |     |                    |        |     |     |   |         |                   |       |  |      |              
|                                     | Fee income, earned premiums and other |                               |                                             |                 |       |           |   |            |          |     |                    |        |     |     |   |         |                   |       |  |      |              
|                                     |                                       | Life insurance and annuities  |                                             | $               | 3,661 |           |   | $          | 275      |     |                    | $      | 68  |     |   | $       | 3,454             |       |  |      | 2.0           | %  
|                                     |                                       | Accident and health insurance |                                             |                 | 1,408 |           |   |            | 123      |     |                    |        | 164 |     |   |         | 1,449             |       |  |      | 11.3          | %  
|                                     |                                       |                               |                                             |                 |       |           |   |            |          |     |                    |        |     |     |   |         |                   |       |  |      |              
|                                     |                                       |                               | Total fee income, earned
premiums and other |                 | $     | 5,069     |   |            | $        | 398 |                    |        | $   | 232 |   |         | $                 | 4,903 |  |      |               | 4.7 | %
|                                     |                                       |                               |                                             |                 |       |           |   |            |          |     |                    |        |     |     |   |         |                   |       |  |      |              
|For the year ended December 31, 2000 |                                       |                               |                                             |                 |       |           |   |            |          |     |                    |        |     |     |   |         |                   |       |  |     
|                                     | Life insurance in force               |                               | $                                           | 555,963         |       |           | $ | 109,393    |          |     | $                  | 18,364 |     |     | $ | 464,934 |                   |       |  | 3.9  | %            
|                                     |                                       |                               |                                             |                 |       |           |   |            |          |     |                    |        |     |     |   |         |                   |       |  |      |              
|                                     | Fee income, earned premiums and other |                               |                                             |                 |       |           |   |            |          |     |                    |        |     |     |   |         |                   |       |  |      |              
|                                     |                                       | Life insurance and annuities  |                                             | $               | 3,306 |           |   | $          | 190      |     |                    | $      | 64  |     |   | $       | 3,180             |       |  |      | 2.0           | %  
|                                     |                                       | Accident and health insurance |                                             |                 | 1,339 |           |   |            | 106      |     |                    |        | 73  |     |   |         | 1,306             |       |  |      | 5.6           | %  
|                                     |                                       |                               |                                             |                 |       |           |   |            |          |     |                    |        |     |     |   |         |                   |       |  |      |              
|                                     |                                       |                               | Total fee income, earned
premiums and other |                 | $     | 4,645     |   |            | $        | 296 |                    |        | $   | 137 |   |         | $                 | 4,486 |  |      |               | 3.1 | %
|                                     |                                       |                               |                                             |                 |       |           |   |            |          |     |                    |        |     |     |   |         |                   |       |  |      |              

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##### Table of Contents



HARTFORD LIFE, INC. AND SUBSIDIARIES

SCHEDULE V

VALUATION AND QUALIFYING ACCOUNTS

|                                                          |  |                    |     |              |  |                  |    |                |  |                      |   |  |  |   |    |   |  |   |     | 
|--------------------------------------------------------- |  | ------------------ | --- | ------------ |  | ---------------- | -- | -------------- |  | -------------------- | - |  |  | - | -- | - |  | - | --- | 
|                                                          |  |                    |     |              |  | Additions        |    | Deductions     |  |                      |   | 
|                                                          |  |                    |     |              |  |                  |    |                |  |                      |   | 
|                                                          |  |                    |     |              |  | Charged to Costs |    | Translation    |  | Write-offs/          |   |  |  |  
|(In millions)                                             |  | Balance January 1, |     | and Expenses |  | Adjustment       |    | Payments/Other |  | Balance December 31,
|                                                          |  |                    |     |              |  |                  |    |                |  |                     
|2002                                                      |  |                    |     |              |  |                  |    |                |  |                      |   |  |  |   |    |   |  |   |     | 
|Accumulated
depreciation of
plant, property and
equipment |  | $                  | 203 |              |  | $                | 49 |                |  | $                    |  |  |  | $ | (3 | ) |  | $ | 249 | 
|2001                                                      |  |                    |     |              |  |                  |    |                |  |                      |   |  |  |   |    |   |  |   |     | 
|Accumulated
depreciation of
plant, property and
equipment |  | $                  | 173 |              |  | $                | 36 |                |  | $                    |  |  |  | $ | (6 | ) |  | $ | 203 | 
|2000                                                      |  |                    |     |              |  |                  |    |                |  |                      |   |  |  |   |    |   |  |   |     | 
|Accumulated
depreciation of
plant, property and
equipment |  | $                  | 154 |              |  | $                | 27 |                |  | $                    |  |  |  | $ | (8 | ) |  | $ | 173 | 

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##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

| |  |                                                                       
| |  | ----------------------------------------------------------------------
| |  | HARTFORD LIFE, INC.                                                   
| |  |                                                                       
| |  | By:/s/ Mary Jane B. Fortin                                            
| |  |                                                                       
| |  | Mary Jane B. Fortin
Senior Vice President and
Chief Accounting Officer

Date: March 4, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant in
the capacities and on the dates indicated.

|                                           |  |                                                    |  |              
|------------------------------------------ |  | -------------------------------------------------- |  | -------------
|Signature                                  |  | Title                                              |  | Date         
|                                          
|                                           |  |                                                    |  |              
|                                          
|/s/ Ramani AyerRamani Ayer                 |  | Chairman and Director                              |  | March 4, 2003
|                                          
|                                           |  |                                                    |  |              
|                                          
|/s/ Thomas M. MarraThomas M. Marra         |  | President, Chief Operating Officer
and Director    |  | March 4, 2003
|                                          
|                                           |  |                                                    |  |              
|                                          
|/s/ David T. FoyDavid T. Foy               |  | Senior Vice President
and Chief Financial Officer  |  | March 4, 2003
|                                          
|                                           |  |                                                    |  |              
|                                          
|/s/ Mary Jane B. FortinMary Jane B. Fortin |  | Senior Vice President
and Chief Accounting Officer |  | March 4, 2003
|                                          
|                                           |  |                                                    |  |              
|                                          
|/s/ David K. ZwienerDavid K. Zwiener       |  | Director                                           |  | March 4, 2003

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##### Table of Contents



CERTIFICATIONS

I, Thomas M. Marra, certify that:



| | 1. |  | I have reviewed this annual report on Form 10-K of Hartford
Life, Inc.;                                                                                                                                                                                                                                                 
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present
in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this annual report;                   
|
| | 4. |  | The registrants other certifying officers and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the registrant and have:                                                                                                  

|
|
|
|
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|

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|

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|
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|

|
|
|

Date: March 4, 2003

|     |  |  |  |                                                      
|---- |  |  |  | -----------------------------------------------------
|By : |  |  |  | /s/ Thomas M. Marra                                  
|     |  |  |  |                                                      
|     |  |  |  | Thomas M. Marra
President and Chief Operating Officer

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##### Table of Contents



I, David T. Foy, certify that:



| | 1. |  | I have reviewed this annual report on Form 10-K of Hartford
Life, Inc.;                                                                                                                                                                                                                                                 
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present
in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this annual report;                   
|
| | 4. |  | The registrants other certifying officers and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the registrant and have:                                                                                                  

|
|
|
|
|
|
|

|
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|

|
|
|
|
|
|

| | 6. |  | The registrants other certifying officers and I have indicated
in this annual report whether there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: March 4, 2003

|     |  |  |  |                                                               
|---- |  |  |  | --------------------------------------------------------------
|By : |  |  |  | /s/ David T. Foy                                              
|     |  |  |  |                                                               
|     |  |  |  | David T. Foy
Senior Vice President and Chief Financial Officer

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HARTFORD LIFE, INC. AND SUBSIDIARIES
FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
EXHIBITS INDEX

|          |  |                                                                                                                                                                                                                                                                                                                                                                                          |  |  |  | 
|--------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|Exhibit # |  |                                                                                                                                                                                                                                                                                                                                                                                          |  |  |  | 
|          |  |                                                                                                                                                                                                                                                                                                                                                                                          |  |  |  | 
|3.01      |  | Restated Certificate of Incorporation of Hartford Life, Inc.
(Hartford Life or the Company), was filed as Exhibit 3.01 to
the Companys Form 10-Q filed for the second quarter ended June
30, 2000 and is incorporated herein by reference.                                                                                                                                         
|          |  |                                                                                                                                                                                                                                                                                                                                                                                         
|3.02      |  | Amended and Restated By-Laws of the Company, effective June 27,
2000 were filed as Exhibit 3.02 to the Companys Form 10-Q filed
for the second quarter ended June 30, 2000 and is incorporated
herein by reference.                                                                                                                                                                    
|          |  |                                                                                                                                                                                                                                                                                                                                                                                         
|4.01      |  | Amended and Restated Certificate of Incorporation and By-Laws of
the Company (included as Exhibits 3.01 and 3.02, respectively).                                                                                                                                                                                                                                                        
|          |  |                                                                                                                                                                                                                                                                                                                                                                                         
|4.02      |  | Indenture, dated as of May 19, 1997, between the Company and
Citibank, N.A., as Trustee, with respect to the Companys 6.90%
Notes due June 15, 2004, 7.10% Notes due June 15, 2007, and 7.65%
Debentures due June 15, 2027, was filed as Exhibit 4.3 to the
Companys Registration Statement on Form S-3 (Amendment No. 2)
dated May 23, 1997, and is incorporated herein by reference.
|          |  |                                                                                                                                                                                                                                                                                                                                                                                         
|4.03      |  | Subordinated Indenture between Hartford Life and Wilmington Trust
Company, as Trustee, dated as of June 1, 1998, was filed as
Exhibit 4.03 to the Companys Form 10-K for the fiscal year ended
December 31, 1998 and is incorporated herein by reference.                                                                                                                              
|          |  |                                                                                                                                                                                                                                                                                                                                                                                         
|4.04      |  | First Supplemental Indenture, dated as of June 29, 1998 between
Hartford Life, as Issuer, and Wilmington Trust Company, as
Trustee, with respect to 7.2% Junior Subordinated Deferrable
Interest Debentures, due June 30, 2038, was filed as Exhibit 4.04
to the Companys Form 10-K for the fiscal year ended December 31,
1998 and is incorporated herein by reference.               
|          |  |                                                                                                                                                                                                                                                                                                                                                                                         
|4.05      |  | Form of Junior Subordinated Deferrable Interest Debenture, Series
A, due June 30, 2038, included as Exhibit A to Exhibit 4.04 to
the Companys Form 10-K for the fiscal year ended December 31,
1998 and is incorporated herein by reference.                                                                                                                                           
|          |  |                                                                                                                                                                                                                                                                                                                                                                                         
|4.06      |  | Declaration of Trust of Hartford Life Capital I, dated as of June
3, 1998 between the Company, as Sponsor, and Wilmington Trust
Company, as Trustee, was filed as Exhibit 4.06 to the Companys
Form 10-K for the fiscal year ended December 31, 1998 and is
incorporated herein by reference.                                                                                          
|          |  |                                                                                                                                                                                                                                                                                                                                                                                         
|4.07      |  | Amended and Restated Declaration of Trust of Hartford Life
Capital I, dated as of June 29, 1998 between the Trustee and the
Sponsor, relating to the 7.2% Junior Subordinated Deferrable
Interest Debentures, Series A, due 2038, was filed as Exhibit
4.07 to the Companys Form 10-K for the fiscal year ended
December 31, 1998 and is incorporated herein by reference.             
|          |  |                                                                                                                                                                                                                                                                                                                                                                                         
|4.08      |  | Form of Preferred Security Certificate for Hartford Capital I,
included as Exhibit A-1 to Exhibit 4.07 filed herein by
reference.                                                                                                                                                                                                                                                       
|          |  |                                                                                                                                                                                                                                                                                                                                                                                         
|4.09      |  | Preferred Securities Guarantee Agreement, dated as of June 29,
1998 between Hartford Life, as Guarantor, and Wilmington Trust
Company, as Preferred Guarantee Trustee, relating to Hartford
Life Capital I, was filed as Exhibit 4.09 to the Companys Form
10-K for the fiscal year ended December 31, 1998 and is
incorporated herein by reference.                                   

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##### Table of Contents



|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |  |  | 
|--------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|Exhibit # |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |  |  | 
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |  |  | 
|4.10      |  | Second Supplemental Indenture between Hartford Life and Wilmingtion
Trust Company, as Trustee, dated as of March 6, 2001, with respect
to 7.625% Junior Subordinated Deferred Interest Debentures, due
February 15, 2050, was filed as Exhibit 4.02 to the Companys Form
8-A dated March 13, 2001, and is incorporated herein by reference.                                                                                                                                                                                   
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|4.11      |  | Form of 7.625% Junior Subordinated Deferrable Interest Debenture,
Series A, due February 15, 2050, was filed as Exhibit A to Exhibit
4.02 of the Companys Form 8-A dated March 13, 2001, and is
incorporated herein by reference.                                                                                                                                                                                                                                                                                             
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|4.12      |  | Declaration of Trust of Hartford Life Capital II, dated as of June
3, 1998, between Hartford Life, as Sponsor, and Wilmington Trust
Company, as Trustee, was filed as Exhibit 4.13 to the Companys
Registration Statement on Form S-3 (Registration No. 333-56283)
filed with the Securities and Exchange Commission on June 18, 1998
by Hartford Life, Hartford Life Capital I, Hartford Life
Capital II and Hartford Life Capital III, as amended, and is
incorporated herein by reference.                                 
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|4.13      |  | Form of Amended and Restated Declaration of Trust of Hartford Life
Capital II between Hartford Life, as Sponsor, and Wilmington Trust
Company, as Indenture Trustee and Delaware Trustee, was filed as
Exhibit 4.19 to the Companys Registration Statement on Form S-3
(Registration No. 333-56283) filed with the Securities and Exchange
Commission on June 18, 1998 by Hartford Life, Hartford Life
Capital I, Hartford Life Capital II and Hartford Life Capital III,
as amended, and is incorporated herein by reference.
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|4.14      |  | Form of Guarantee Agreement between Hartford Life, as Guarantor,
and Wilmington Trust Company, as Guarantee Trustee, was filed as
Exhibit 4.21 to the Companys Registration Statement on Form S-3
(Registration No. 333-56283) filed with the Securities and Exchange
Commission on June 18, 1998 by Hartford Life, Hartford
Capital I, Hartford Capital II and Hartford Capital III, as
amended, and is incorporated herein by reference.                                                                                    
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|4.15      |  | Form of Preferred Security Certificate for Hartford Life Capital II
was filed as Exhibit 4.20 to the Companys Registration Statement
on Form S-3 (Registration No. 333-56283) filed with the Securities
and Exchange Commission on June 18, 1998 by Hartford Life, Hartford Life Capital I, Hartford Life Capital II and Hartford Life
Capital III, as amended, and is incorporated herein by reference.                                                                                                                      
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|4.16      |  | Form of 7.375% Senior Notes due March 1, 2031 was filed as Exhibit
3 to the Companys Form 8-A dated February 28, 2001, and is
incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                               
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|10.01     |  | Master Intercompany Agreement, dated May 19, 1997, among the
Company, The Hartford Financial Services Group, Inc. (formerly
known as ITT Hartford Group, Inc.) (The Hartford) and with respect
to Articles VI and XII, Hartford Fire Insurance Company, was filed
as Exhibit 10.1 to the Companys Form 10-Q filed for the quarterly
period ended June 30, 1997 and is incorporated herein by reference.                                                                                                                     
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|10.02     |  | Tax Sharing Agreement, dated May 19, 1997, among The Hartford and
its subsidiaries, including the Company, was filed as Exhibit 10.2
to the Companys Form 10-Q filed for the quarterly period ended
June 30, 1997 and is incorporated herein by reference.                                                                                                                                                                                                                                                                    
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|10.03     |  | Management Agreement, dated March 31, 1997, among Hartford Life
Insurance Company and Hartford Investment Management Company, was
filed as Exhibit 10.3 to the Companys Form 10-Q filed for the
quarterly period ended June 30, 1997 and is incorporated herein by
reference.                                                                                                                                                                                                                                                 

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##### Table of Contents



|          |  |                                                                                                                                                                                                                                                                                                                                                                                               |  |  |  | 
|--------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|Exhibit # |  |                                                                                                                                                                                                                                                                                                                                                                                               |  |  |  | 
|          |  |                                                                                                                                                                                                                                                                                                                                                                                               |  |  |  | 
|10.04     |  | Management Agreement, dated March 31, 1997, among certain
subsidiaries of the Company and Hartford Investment Services, Inc.,
was filed as Exhibit 10.4 to the Companys Form 10-Q filed for the
quarterly period ended June 30, 1997 and is incorporated herein by
reference.                                                                                                               
|          |  |                                                                                                                                                                                                                                                                                                                                                                                              
|10.05     |  | Sublease Agreement , dated May 19, 1997, between Hartford Fire
Insurance Company and the Company, was filed as Exhibit 10.5 to the
Companys Form 10-Q filed for the quarterly period ended June 30,
1997 and is incorporated herein by reference.                                                                                                                                           
|          |  |                                                                                                                                                                                                                                                                                                                                                                                              
|10.06     |  | Three Year Competitive Advance and Revolving Credit Facility
Agreement dated as of December 31, 2002 among The Hartford, Hartford
Life, and the Lenders named therein and JPMorgan Chase Bank and
Citibank, N.A. as Co-Administrative Agents, was filed as Exhibit
10.28 to The Hartford Form 10-K filed for the fiscal year ended
December 31, 2002 and is incorporated herein by reference.
|          |  |                                                                                                                                                                                                                                                                                                                                                                                              
|12        |  | Computation of Ratio of Earnings to Fixed Charges is filed herewith.                                                                                                                                                                                                                                                                                                                         
|          |  |                                                                                                                                                                                                                                                                                                                                                                                              
|23        |  | Consent of Deloitte & Touche LLP to the incorporation by reference
into the Companys Registration Statements on Form S-8 and Form S-3
of the Report of Deloitte & Touche LLP contained in this Form 10-K
regarding the audited financial statements is filed herewith.                                                                                                                      

II-6