##### Table of Contents



---

---

FORM 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


(Mark One)

|           |  |                                                                                     
|---------- |  | ------------------------------------------------------------------------------------
|(CHECKBOX) |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



| |                                            
| | -------------------------------------------
| | For the fiscal year ended December 31, 2001

OR

|           |  |                                                                                         
|---------- |  | ----------------------------------------------------------------------------------------
|(CHECKBOX) |  | 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: the following,
which are registered on the New York Stock Exchange, Inc.:



| |                                                                                
| | -------------------------------------------------------------------------------
| | 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

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  (CHECKBOX)      No  (CHECKBOX)

As of February 28, 2002 there were outstanding 1,000 shares of Common Stock,
$0.01 par value per share, of the registrant, all of which were directly owned
by Hartford Fire Insurance Company, a direct wholly-owned subsidiary of The
Hartford Financial Services Group, Inc.

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.



---

---





---

TABLE OF CONTENTS



|           |                                                                                               |  |  |  |  |  |  | 
|---------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I    
|           | Item 1. BUSINESS OF HARTFORD LIFE                                                            
|           | 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 IV   
|           | Item 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K                   
|           | SIGNATURES                                                                                   
|           | EXHIBITS INDEX                                                                               
|Exhibit 12
|Exhibit 23



---



##### Table of Contents



|       |  |                                                                                                                                                                                                                                                                                                                               
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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, a top provider of individual variable
life insurance and offers the fastest growing non-proprietary family of mutual
funds.

CONTENTS

|         |  |      |    |             |  |                                                                                        |  |      |    | 
|-------- |  | ---- | -- | ----------- |  | -------------------------------------------------------------------------------------- |  | ---- | -- | 
|         |  | ITEM |    | DESCRIPTION |  | PAGE                                                                                  
|         |  |      |    |             |  |                                                                                       
|PART I   |  |      | 1  |             |  | Business of Hartford Life*                                                             |  |      | 3  | 
|        
|        
|        
|        
|         |  |      | 2  |             |  | Properties*                                                                            |  |      | 9  | 
|        
|        
|        
|        
|         |  |      | 3  |             |  | Legal Proceedings                                                                      |  |      | 10 | 
|        
|        
|        
|        
|         |  |      | 4  |             |  | **                                                                                     |  |      |    | 
|        
|        
|        
|        
|PART II  |  |      | 5  |             |  | Market for Hartford Lifes Common Stock and Related Stockholder Matters                |  |      | 10 | 
|        
|        
|        
|        
|         |  |      | 6  |             |  | **                                                                                     |  |      |    | 
|        
|        
|        
|        
|         |  |      | 7  |             |  | Managements Discussion and Analysis of Financial Condition and
Results of Operations* |  |      | 11 | 
|        
|        
|        
|        
|         |  |      | 7A |             |  | Quantitative and Qualitative Disclosures About Market Risk                             |  |      | 33 | 
|        
|        
|        
|        
|         |  |      | 8  |             |  | Financial Statements and Supplementary Data                                            |  |      | 33 | 
|        
|        
|        
|        
|         |  |      | 9  |             |  | Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure   |  |      | 33 | 
|        
|        
|        
|        
|PART III |  |      | 10 |             |  | **                                                                                     |  |      |    | 
|        
|        
|        
|        
|         |  |      | 11 |             |  | **                                                                                     |  |      |    | 
|        
|        
|        
|        
|         |  |      | 12 |             |  | **                                                                                     |  |      |    | 
|        
|        
|        
|        
|         |  |      | 13 |             |  | **                                                                                     |  |      |    | 
|        
|        
|        
|        
|PART IV  |  |      | 14 |             |  | Exhibits, Financial Statements, Schedules and Reports on Form 8-K                      |  |      | 33 | 
|        
|        
|        
|        
|         |  |      |    |             |  | Signatures                                                                             |  | II-1 |   
|        
|        
|        
|        
|         |  |      |    |             |  | Exhibits Index                                                                         |  | II-2 |   



---

|*  |  | Item prepared in accordance with General Instruction I (2) of Form 10-K
|-- |  | -----------------------------------------------------------------------
|  
|  
|  
|  
|** |  | Item omitted in accordance with General Instruction I (2) of Form 10-K 





---



##### Table of Contents






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
income protection and estate planning to approximately 750,000 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 Fund Family, Inc.
reached $12 billion in assets faster than any other retail-oriented mutual fund
family in history, according to Strategic Insight. The Companys strong
position in each of its core businesses provides an opportunity to increase the
sale of The Hartford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, Inc. (Fortis Financial Group or Fortis) on April 2, 2001.
(For additional information, see the Capital Resources and Liquidity section of
the MD&A and Note 5 of Notes to Consolidated Financial Statements).

Hartford Life is among the largest consolidated life insurance groups in the
United States based on statutory assets as of December 31, 2000. In the past
year, the Companys total assets under management, which include $16.8 billion
of third-party assets invested in the Companys mutual funds, increased 9% to
$168.4 billion at December 31, 2001 from $155.1 billion at December 31, 2000.
The Company generated revenues of $6.5 billion, $6.0 billion and $5.5 billion
in 2001, 2000 and 1999, respectively. Additionally, Hartford Life generated net
income of $685, $575 and $467 in 2001, 2000, and 1999, respectively.

Customer Service, Technology and Economies of Scale

The Company maintains advantageous economies of scale and operating
efficiencies due to its continued 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 reduced by nearly half since 1992, declining
from 43 basis points to 22 basis points in 2001. 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 2001
Annuity Service Award by DALBAR, Inc., a recognized independent financial
services research organization, for the sixth consecutive year. Hartford Life
is the only company to receive this prestigious award in every year of the
awards existence. Also, in both 2001 and 2000, The Hartford Mutual Funds,
Inc. were 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 the DALBAR award
for service of life insurance customers in 2001 and was the only life insurance
operation to be recognized with this prestigious award.

Risk Management

The Companys product designs, prudent underwriting standards and risk
management techniques protect it against disintermediation risk and greater
than expected mortality and morbidity experience. As of December 31, 2001, the
Company had limited exposure to disintermediation risk on approximately 97% 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 standards 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

Hartford Life has the following reportable operating segments: Investment
Products, Individual Life, Group Benefits (formerly Employee 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 Latin America and Japan. The
following is a description of each segment, including a discussion of
principal

3



---



##### Table of Contents



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, 1996 to December 31, 2001, this segments assets under
management grew to $120.3 billion from $55.3 billion, a five year compounded
annual growth rate of 17%. Investment Products generated revenues of $2.5
billion, $2.4 billion and $2.0 billion in 2001, 2000 and 1999, respectively, of
which, individual annuities accounted for $1.5 billion in 2001 and 2000, and
$1.4 billion in 1999. Net income in the Investment Products segment was $463,
$424 and $330 in 2001, 2000 and 1999, respectively.

Hartford Life 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
$10.0 billion, $10.7 billion and $10.9 billion in 2001, 2000 and 1999,
respectively. Hartford Life was among the largest sellers of individual
variable annuities in the United States for 2001, 2000 and 1999 with sales of
$9.0 billion, $9.0 billion and $10.3 billion, respectively. In addition, the
Company continues to be among the largest sellers of individual variable
annuities through banks in the United States.

The Companys total account value related to individual annuity products was
$84.2 billion as of December 31, 2001. 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 2000, the
Companys total account values related to individual annuity products was $87.2
billion. Of the total account value $78.2 billion, or 90% related to
individual variable annuity products and $9.0 billion, or 10% related primarily
to fixed MVA annuity products.

In addition to its leading position in individual annuities, the Company
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 corporations pursuant to
Section 401 of the Internal Revenue Code (the Code), as amended (referred to
as 401(k)) and to municipalities pursuant to Section 457 of the Code,
(referred to as Section 457). The Company also provides structured
settlement contracts, terminal funding products and other investment products
such as guaranteed investment contracts (GICs).

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%, and helped solidify the Companys strong position in variable annuities.

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.
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 Companys individual variable annuities are subject to
withdrawal restrictions and surrender charges. Surrender charges range
initially from 5% 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 $74.6 billion as of December 31,
2001, 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 94% and 96% of the
individual variable annuity account values were held in non-guaranteed separate
accounts as of December 31, 2001 and 2000, respectively.

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), Putnam
Financial Services, Inc. (Putnam), American Funds, MFS Investment Management
(MFS), Franklin Templeton Group, AIM Investments (AIM) and Morgan Stanley
Investment Advisors, Inc. All

4



---



##### Table of Contents



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 an industry leader in terms of sales. In addition, The Hartford Leaders,
which is a multi-manager variable annuity that combines the product
manufacturing, wholesaling and service capabilities of Hartford Life with the
investment management expertise of four of the nations most successful
investment management organizations, American Funds, Franklin Templeton Group,
AIM and MFS, has quickly emerged as a strong selling product for the Company.

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 $9.6
billion and $9.0 billion as of December 31, 2001 and 2000, respectively.

Mutual Funds In September 1996, Hartford Life launched a family of retail
mutual funds in 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 21 funds. These funds are managed by
Wellington and Hartford Investment Management Company, a wholly-owned
subsidiary of The Hartford. The Company has entered into agreements with over
750 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 sales were $5.7 billion, $5.2 billion and $3.3 billion
in 2001, 2000 and 1999, 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 fixed and variable annuities, 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, 2001, the Company administered over 3,000
Section 457 plans.

Corporate The Company sells retirement plan products and services to
corporations under Section 401(k) plans targeting the small and medium case
markets since the Company believes these markets are underpenetrated in
comparison to the large case market. As of December 31, 2001, the Company
administered over 2,400 Section 401(k) plans.

Institutional Liabilities 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.

Section 529 Plans The Company is introducing 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. In 1996, Congress
created a tax-advantaged college savings program as part of Section 529 of 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 portfolios 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 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. The Company
believes this is a significant market opportunity and the benefits of investing
in 529 plans will be well received by many Americans saving for college.

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

5



---



##### Table of Contents



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 individual annuities to
customers is consummated).

Hartford Life maintains a distribution network of approximately 1,500
broker-dealers and approximately 500 banks. As of September 30, 2001, the
Company was selling products through 24 of the 25 largest retail banks in the
United States, including proprietary relationships with 10 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 its 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) and single
premium variable life insurance 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 market.

Competition

The Investment Products segment competes with numerous other insurance
companies as well as certain banks, securities brokerage firms, investment
advisors and other financial intermediaries marketing annuities, mutual funds
and other retirement-oriented products. The 1999 Gramm-Leach-Bliley Act (the
Financial Services Modernization Act), which allows affiliations among banks,
insurance companies and securities firms, has not precipitated any significant
changes in bank ownership of insurance companies. (For additional information,
see the Regulatory Matters and Contingencies section of the MD&A.) 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.

Individual Life

The Individual Life segment sells a variety of products including variable
life, universal life, interest sensitive whole life and term life insurance
primarily to the high end estate and business planning markets. The individual
life business acquired from Fortis added significant scale to the Companys
Individual Life segment, contributing to the significant increase in life
insurance in force. As of December 31, 2001, life insurance in force increased
60% to $120.3 billion, from $75.1 billion as of December 31, 2000 and account
values grew 35% to $7.9 billion as of December 31, 2001 from $5.8 billion as of
December 31, 2000. Revenues were $890, $640 and $584 in 2001, 2000 and 1999,
respectively. Net income in the Individual Life segment was $121, $79 and $71
in 2001, 2000 and 1999, respectively.

Principal Products

The trend in the individual life insurance industry has been a shift away from
traditional products towards variable life (including variable universal life)
insurance products, in which the Company has been on the leading edge. In
2001, of the Companys new sales of individual life insurance, 82% was variable
life and 15% was either universal life or interest sensitive whole life. The
Company also sold a small amount of 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, as the case
may be, the death benefit or surrender value of the variable life policy may
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, often to fund estate taxes for a married
couple. Variable life account values were $4.0 billion and $2.9 billion as of
December 31, 2001 and 2000, 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 and $2.1 billion as of
December 31, 2001 and 2000, respectively.

6



---



##### Table of Contents



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 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,
particularly as it pertains to estate and business planning.
These individuals are generally employees of The Hartford who are managed
through a regional sales office system. The Company has grown this
organization rapidly the past few years to over 225 individuals and expects to
continue to increase the number of wholesalers in the future. The acquisition
of the United States individual life insurance business of Fortis has broadened
the Companys reach in the emerging affluent market with the addition of a
retail broker-dealer consisting of approximately 2,300 registered
representatives.

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 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 and supplementary medical coverage
to employers and employer sponsored plans, 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
with one or two year rate guarantees. This allows the Company to make
adjustments to rates or terms of its policies in order to minimize the adverse
effect of various market trends. In the disability market, the Company focuses
on strong underwriting and claims management to derive a competitive advantage.
As of December 31, 2001 and 2000, the Company had group disability reserves of
$2.4 billion and $2.0 billion and group life reserves of $706 and $684,
respectively. The Group Benefits segment generated revenues of $2.5 billion,
$2.2 billion and $2.0 billion in 2001, 2000 and 1999, respectively, of which,
group disability insurance accounted for $1.1 billion, $939 and $860 and group
life insurance accounted for $763, $687 and $654, respectively. Net income in
the Group Benefits segment was $106, $90 and $79 in 2001, 2000 and 1999,
respectively.

Principal Products

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,
reduction of long-term disability claims 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 has concentrated on a managed disability approach, which emphasizes
early claimant intervention in an effort to facilitate a disabled claimants
return to work and, thereby, contain costs. This approach, coupled with an
individualized approach to claim servicing, and an incentive to contain costs,
leads to an overall reduction in the cost of disability coverage for employers.
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 waivers and accidental death and
dismemberment coverage to employee groups.

Other The Company 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
Medicare supplement insurance, travel accident, hospital indemnity and other
coverage (including group life and disability) primarily to individual members
of various associations, as well as employee groups. A significant Medicare
supplement customer of the Company has been the

7



---



##### Table of Contents



members of the Retired Officers
Association, an organization consisting of retired military officers. Congress
recently 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 will
reduce the Companys premium revenue by approximately $131 in 2002.

Marketing and Distribution

Hartford Life 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. The Company intends to
continue to expand the system over the coming years in areas that have the
highest growth potential and will also continue to develop alternative
distribution channels to sell its products,such as sales to employers through
brokers, consultants and third-party administrators as well as to multiple
employer groups through its relationships with trade associations. In keeping
with its strategy of developing multiple distribution channels, the Company
signed an agreement in January 2001 with Wausau Benefits, Inc., to sell its
group life and group disability products.

Competition

Competitive factors primarily affecting Group Benefits are the variety and
quality of products 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, while other
major carriers have exited the market.

Corporate Owned Life Insurance (COLI)

The Company 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 Health Insurance Portability and Accountability Act of 1996 (HIPA
Act of 1996), 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. The HIPA Act of 1996
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 $18.0 billion and $15.9 billion as of
December 31, 2001 and 2000, respectively. Leveraged COLI account values
decreased to $4.3 billion as of December 31, 2001 from $5.0 billion as of
December 31, 2000, primarily due to the continuing effects of the HIPA Act of
1996. COLI generated revenues of $719, $767 and $831 in 2001, 2000 and 1999,
respectively. COLI generated net income of $37, $34 and $30 in 2001, 2000 and
1999 respectively.

Reserves

In accordance with applicable insurance regulations under which Hartford Life
operates, life insurance subsidiaries of Hartford Life establish and carry as
liabilities, actuarially determined reserves which are calculated to meet The
Hartford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.
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 reserves may be found in the Deferred
Acquisition Costs (DAC) and Reserves section of the MD&A.

Regulation and Premium Rates

Insurance companies are 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; 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.

8



---



##### Table of Contents



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.

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, 2001, the maximum amount of life insurance
retained on any one life by any one of the life operations was approximately
$2.5.

Investment Operations

The Companys investment operations are managed by its investment strategy
group which reports directly to senior management of the Company. Hartford
Lifes investments have been separated into specific portfolios which support
specific classes of product liabilities. The investment strategy group 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
investment 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 to
that of policyholder obligations.

For further discussion of Hartford Lifes approach to managing risks, see the
Investments and Capital Markets Risk Management sections of the MD&A, as well
as Notes 2(d), 2(e) and 7 of Notes to Consolidated Financial Statements.

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.

Guaranty Fund

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

NAIC Codification

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 6,700 employees at February 28, 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

9



---



##### Table of Contents



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 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.




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, 2002 the Company had issued and outstanding 1,000 shares of
Common Stock at $0.01 par value per share.

10



---



##### Table of Contents






Item 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollar amounts in millions, except for share data, 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,
2001, compared with December 31, 2000, and its results of operations for the
years ended December 31, 2001, 2000 and 1999. 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 or in Part I of the Companys Form
10-K, other than statements of historical fact, are forward-looking statements.
These statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and include estimates and
assumptions related to economic, competitive and legislative developments.
These forward-looking statements are subject to change and uncertainty, which
are, in many instances, beyond Hartford Lifes control and have been made based
upon managements expectations and beliefs concerning future developments and
their potential effect on 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 certain factors, including the possibility
of general economic and business conditions that are less favorable than
anticipated, legislative developments, changes in interest rates or the stock
markets, stronger than anticipated competitive activity and those 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

|                                              |  |  |    | 
|--------------------------------------------- |  |  | -- | 
|Consolidated Results of Operations            |  |  | 11 | 
|                                             
|                                             
|                                             
|                                             
|Investment Products                           |  |  | 13 | 
|                                             
|                                             
|                                             
|                                             
|Individual Life                               |  |  | 15 | 
|                                             
|                                             
|                                             
|                                             
|Group Benefits                                |  |  | 16 | 
|                                             
|                                             
|                                             
|                                             
|Corporate Owned Life Insurance (COLI)         |  |  | 17 | 
|                                             
|                                             
|                                             
|                                             
|Deferred Acquisition Costs (DAC) and Reserves |  |  | 17 | 
|                                             
|                                             
|                                             
|                                             
|Investments                                   |  |  | 18 | 
|                                             
|                                             
|                                             
|                                             
|Capital Markets Risk Management               |  |  | 20 | 
|                                             
|                                             
|                                             
|                                             
|Capital Resources and Liquidity               |  |  | 28 | 
|                                             
|                                             
|                                             
|                                             
|Regulatory Matters and Contingencies          |  |  | 31 | 
|                                             
|                                             
|                                             
|                                             
|Effect of Inflation                           |  |  | 32 | 
|                                             
|                                             
|                                             
|                                             
|Accounting Standards                          |  |  | 32 | 

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, 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.

11



---



##### Table of Contents



Operating Summary

|                                                                                      |                                        |                                                                              |       |      |       |      |       |      |       |   |       |     |       | 
|------------------------------------------------------------------------------------- | -------------------------------------- | ---------------------------------------------------------------------------- | ----- | ---- | ----- | ---- | ----- | ---- | ----- | - | ----- | --- | ----- | 
|                                                                                      |                                        |                                                                              |       | 2001 |       | 2000 |       | 1999
|                                                                                      |                                        |                                                                              |       |      |       |      |       |     
|Fee income                                                                            |                                        | $                                                                            | 2,633 |      |       | $    | 2,484 |      |       | $ | 2,105 |    
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Earned premiums                                                                       |                                        |                                                                              | 2,142 |      |       |      | 1,886 |      |       |   | 1,764 |    
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Net investment income                                                                 |                                        |                                                                              | 1,779 |      |       |      | 1,592 |      |       |   | 1,562 |    
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Other revenue                                                                         |                                        |                                                                              | 128   |      |       |      | 116   |      |       |   | 110   |    
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Net realized capital losses                                                           |                                        |                                                                              | (133  | )    |       |      | (88   | )    |       |   | (5    | )  
|                                                                                      |                                        |                                                                              |       |      |       |      |       |      |       |   |       |    
|                                                                                      |                                        | Total revenues                                                               |       |      | 6,549 |      |       |      | 5,990 |   |       |     | 5,536 | 
|                                                                                      |                                        |                                                                              |       |      |       |      |       |      |       |   |       |    
|Benefits, claims and claim adjustment expenses                                        |                                        |                                                                              | 3,611 |      |       |      | 3,162 |      |       |   | 3,054 |    
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Insurance operating costs and expenses                                                |                                        |                                                                              | 1,390 |      |       |      | 1,281 |      |       |   | 1,132 |    
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Amortization of deferred policy acquisition costs and present value of
future profits |                                        |                                                                              | 642   |      |       |      | 671   |      |       |   | 568   |    
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Other expenses                                                                        |                                        |                                                                              | 141   |      |       |      | 88    |      |       |   | 96    |    
|                                                                                      |                                        |                                                                              |       |      |       |      |       |      |       |   |       |    
|                                                                                      |                                        | Total benefits, claims and expenses                                          |       |      | 5,784 |      |       |      | 5,202 |   |       |     | 4,850 | 
|                                                                                      |                                        |                                                                              |       |      |       |      |       |      |       |   |       |    
|                                                                                      |                                        | Income before income tax expense and cumulative effect of
accounting changes |       |      | 765   |      |       |      | 788   |   |       |     | 686   | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      |                                        | Income tax expense                                                           |       |      | 54    |      |       |      | 213   |   |       |     | 219   | 
|                                                                                      |                                        |                                                                              |       |      |       |      |       |      |       |   |       |    
|Cumulative effect of accounting changes, net of tax[1]                                |                                        |                                                                              | (26   | )    |       |      |      |      |       |   |      |    
|                                                                                      |                                        |                                                                              |       |      |       |      |       |      |       |   |       |    
|                                                                                      | Net income                             |                                                                              |       | 685  |       |      |       | 575  |       |   |       | 467 |      
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Less: Cumulative effect of accounting changes, net of tax [1]                         |                                        |                                                                              | (26   | )    |       |      |      |      |       |   |      |    
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      | Net realized capital losses, after-tax |                                                                              |       | (89  | )     |      |       | (57  | )     |   |       |    |      
|                                                                                      |                                        |                                                                              |       |      |       |      |       |      |       |   |       |    
|                                                                                      | Operating income [2]                   |                                                                              | $     | 800  |       |      | $     | 632  |       |   | $     | 467 |      
|                                                                                      |                                        |                                                                              |       |      |       |      |       |      |       |   |       |    



| |  | [1] For the year ended December 31, 2001, represents the cumulative
impact of the Companys adoption of EITF Issue 99-20 and SFAS No. 133.                                                                                                                                                            
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
|
|
|
| |  | [2] For the year ended December 31, 2001, includes $130 tax benefit
primarily related to separate account investment activity and $20 of
after-tax losses related to the September 11 terrorist attack. For the
year ended December 31, 2000, includes $32 tax benefit related to
favorable tax items.

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 the
Companys consolidated
results of operations. (For further disclosure, see Note 5).

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.

2001 Compared to 2000Revenues increased $559, or 9%, primarily related to
the growth across each of the Company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 lower than the 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 revenues discussed above.

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
charge associated with the impact of the September 11 terrorist attack.
Additionally, 2000 results include a benefit of $32 also related to favorable
tax items. Excluding these tax items and the impact of the September 11
terrorist attack, 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.

12



---



##### Table of Contents

2000 Compared to 1999Revenues increased $454, or 8%, primarily related to
the growth across each of the Companys primary operating segments,
particularly the Investment Products and Group Benefits segments, where
revenues increased $339, or 17%, and $183, or 9%, respectively. The revenue
growth in the Investment Products segment was primarily due to higher fee
income in the individual annuity and retail mutual fund operations as related
average assets under management in 2000 were higher than 1999. The Group
Benefits segment experienced higher earned premiums due to strong sales and
persistency. The Individual Life segment also contributed to the revenue
increase as a result of strong sales and favorable persistency. Partially
offsetting the growth in revenues was the decrease in COLI revenues primarily
related to the declining block of leveraged COLI business.

Benefits, claims and expenses increased $352, or 7%, primarily related to the
growth in the Companys principal operating segments described above.

Operating income increased $165, or 35%, led by the Investment Products
segment, where net income increased $94, or 28%. Additionally, net income
related to each of the remaining three operating segments increased 10% or
more. As discussed above, Hartford Life also recorded benefits of $32 in 2000
related to favorable tax items. Excluding these tax items, operating income
increased $133, or 28%.

Segment Results

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

|                               |            |   |      |     |      |   |      |     |  |   |     |     | 
|------------------------------ | ---------- | - | ---- | --- | ---- | - | ---- | --- |  | - | --- | --- | 
|                               |            |   | 2001 |     | 2000 |   | 1999
|                               |            |   |      |     |      |   |     
|Investment Products            |            | $ | 463  |     |      | $ | 424  |     |  | $ | 330 |    
|                              
|                              
|                              
|                              
|Individual Life                |            |   | 121  |     |      |   | 79   |     |  |   | 71  |    
|                              
|                              
|                              
|                              
|Group Benefits                 |            |   | 106  |     |      |   | 90   |     |  |   | 79  |    
|                              
|                              
|                              
|                              
|Corporate Owned Life Insurance |            |   | 37   |     |      |   | 34   |     |  |   | 30  |    
|                              
|                              
|                              
|                              
|Other                          |            |   | (42  | )   |      |   | (52  | )   |  |   | (43 | )  
|                               |            |   |      |     |      |   |      |     |  |   |     |    
|                               | Net income |   | $    | 685 |      |   | $    | 575 |  |   | $   | 467 | 
|                               |            |   |      |     |      |   |      |     |  |   |     |    

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 (DAC), Reserves and Investments are discussed in separate sections.

INVESTMENT PRODUCTS

Operating Summary

|                                                                                      |                                                   |                                     |        |         |       |      |        |         |       |   |        |         |       | 
|------------------------------------------------------------------------------------- | ------------------------------------------------- | ----------------------------------- | ------ | ------- | ----- | ---- | ------ | ------- | ----- | - | ------ | ------- | ----- | 
|                                                                                      |                                                   |                                     |        | 2001    |       | 2000 |        | 1999   
|                                                                                      |                                                   |                                     |        |         |       |      |        |        
|Fee income and other                                                                  |                                                   | $                                   | 1,620  |         |       | $    | 1,639  |         |       | $ | 1,333  |        
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Net investment income                                                                 |                                                   |                                     | 886    |         |       |      | 741    |         |       |   | 708    |        
|                                                                                      |                                                   |                                     |        |         |       |      |        |         |       |   |        |        
|                                                                                      |                                                   | Total revenues                      |        |         | 2,506 |      |        |         | 2,380 |   |        |         | 2,041 | 
|                                                                                      |                                                   |                                     |        |         |       |      |        |         |       |   |        |        
|Benefits, claims and claim adjustment expenses                                        |                                                   |                                     | 819    |         |       |      | 700    |         |       |   | 668    |        
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Insurance operating costs and other expenses                                          |                                                   |                                     | 608    |         |       |      | 551    |         |       |   | 440    |        
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Amortization
of deferred policy acquisition costs and present value of future
profits |                                                   |                                     | 461    |         |       |      | 516    |         |       |   | 430    |        
|                                                                                      |                                                   |                                     |        |         |       |      |        |         |       |   |        |        
|                                                                                      |                                                   | Total benefits, claims and expenses |        |         | 1,888 |      |        |         | 1,767 |   |        |         | 1,538 | 
|                                                                                      |                                                   |                                     |        |         |       |      |        |         |       |   |        |        
|                                                                                      |                                                   | Income before income tax expense    |        |         | 618   |      |        |         | 613   |   |        |         | 503   | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Income tax expense                                                                    |                                                   |                                     | 155    |         |       |      | 189    |         |       |   | 173    |        
|                                                                                      |                                                   |                                     |        |         |       |      |        |         |       |   |        |        
|                                                                                      |                                                   | Net income                          |        | $       | 463   |      |        | $       | 424   |   |        | $       | 330   | 
|                                                                                      |                                                   |                                     |        |         |       |      |        |         |       |   |        |        
|Individual variable annuity account values                                            |                                                   | $                                   | 74,581 |         |       | $    | 78,174 |         |       | $ | 80,588 |        
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Other individual annuity account values                                               |                                                   |                                     | 9,572  |         |       |      | 9,059  |         |       |   | 8,383  |        
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Other investment products account values                                              |                                                   |                                     | 19,322 |         |       |      | 17,376 |         |       |   | 16,352 |        
|                                                                                      |                                                   |                                     |        |         |       |      |        |         |       |   |        |        
|                                                                                      | Total account values                              |                                     |        | 103,475 |       |      |        | 104,609 |       |   |        | 105,323 |      
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Mutual fund assets under management                                                   |                                                   |                                     | 16,809 |         |       |      | 11,432 |         |       |   | 6,374  |        
|                                                                                      |                                                   |                                     |        |         |       |      |        |         |       |   |        |        
|                                                                                      | Total Investment Products assets under management |                                     | $      | 120,284 |       |      | $      | 116,041 |       |   | $      | 111,697 |      
|                                                                                      |                                                   |                                     |        |         |       |      |        |         |       |   |        |        

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.

13



---



##### Table of Contents



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
the Company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.
The lower revenues were 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 the amortization of deferred policy acquisition costs resulting from the
lower gross profits associated with the individual annuity business. In
addition, individual annuity income tax expense for the twelve months ended
December 31, 2001 was $118, a $45 or 28% decrease due to lower pre-tax
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.

2000 Compared to 1999Revenues increased $339, or 17%, primarily due to
higher fee income in the individual annuity and retail mutual fund operations.
Fee income generated by individual annuities increased $227, or 20%, while
related average account values grew $8.2 billion, or 10%, to $88.1 billion.
The growth in average account values was due, in part, to strong sales of $10.7
billion in 2000, and the significant equity market performance in 1999,
partially offset by surrenders. Although average individual annuity account
values in 2000 were higher than 1999, account values at December 31, 2000
declined $1.7 billion, or 2%, as compared to December 31, 1999, as strong sales
were not sufficient to offset surrenders and the impact of the retreating
equity markets. In addition, fee income from other investment products
increased $99, or 54%, primarily driven by the Companys retail mutual fund
operation, where related assets under management increased $4.0 billion, or
63%. This substantial increase in the retail mutual fund operation was due to
sales of $5.2 billion in 2000, which was partially offset by redemptions.

Due to the continued growth in this segment, particularly the individual
annuity and retail mutual fund operations, total benefits, claims and expenses
increased $229, or 15%. This increase was driven by the amortization of
deferred policy acquisition costs and operating expenses, which grew $86, or
20%, and $43, or 15%, respectively, primarily related to growth in the
individual annuity operation. Additionally, non-deferred commissions increased
$83, or 59%, principally related to growth in the retail mutual fund operation.

Net income increased $94, or 28%, primarily due to the growth in revenues
discussed above. Additionally, the Investment Products segment continued to
maintain its profit margins related to its primary businesses, thus
contributing to the segments earnings growth. In particular, its individual
annuity operations operating expenses as a percentage of average individual
annuity account values remained consistent with the prior year at 21 basis
points.

Outlook

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 income 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. This trend is not expected to subside,
particularly in light of the Gramm-Leach-Bliley Act of 1999 (the Financial
Services Modernization Act), which permits affiliations among banks,
insurance companies and securities firms.

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, Hartford Life is introducing 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

14



---



##### Table of Contents



which offers an easy way for both the residents of West Virginia, and
out-of-state participants to invest for a college education. SMART 529 will
allow investors to choose from a wide variety of investment portfolios to match
their risk preference to help accumulate savings for college. 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. The Hartford believes this is a significant market
opportunity and the benefits of investing in 529 plans will be well received by
many Americans saving for college.

INDIVIDUAL LIFE

Operating Summary

|                                                  |                                     |   |         |     |      |   |        |     |  |   |        |     | 
|------------------------------------------------- | ----------------------------------- | - | ------- | --- | ---- | - | ------ | --- |  | - | ------ | --- | 
|                                                  |                                     |   | 2001    |     | 2000 |   | 1999  
|                                                  |                                     |   |         |     |      |   |       
|Fee income and other                              |                                     | $ | 647     |     |      | $ | 459    |     |  | $ | 412    |    
|                                                 
|                                                 
|                                                 
|                                                 
|Net investment income                             |                                     |   | 243     |     |      |   | 181    |     |  |   | 172    |    
|                                                  |                                     |   |         |     |      |   |        |     |  |   |        |    
|                                                  | Total revenues                      |   |         | 890 |      |   |        | 640 |  |   |        | 584 | 
|                                                  |                                     |   |         |     |      |   |        |     |  |   |        |    
|Benefits, claims and claim adjustment expenses    |                                     |   | 385     |     |      |   | 274    |     |  |   | 258    |    
|                                                 
|                                                 
|                                                 
|                                                 
|Amortization of deferred policy acquisition costs |                                     |   | 168     |     |      |   | 145    |     |  |   | 129    |    
|                                                 
|                                                 
|                                                 
|                                                 
|Insurance operating costs and other expenses      |                                     |   | 159     |     |      |   | 103    |     |  |   | 88     |    
|                                                  |                                     |   |         |     |      |   |        |     |  |   |        |    
|                                                  | Total benefits, claims and expenses |   |         | 712 |      |   |        | 522 |  |   |        | 475 | 
|                                                  |                                     |   |         |     |      |   |        |     |  |   |        |    
|                                                  | Income before income tax expense    |   |         | 178 |      |   |        | 118 |  |   |        | 109 | 
|                                                 
|                                                 
|                                                 
|                                                 
|Income tax expense                                |                                     |   | 57      |     |      |   | 39     |     |  |   | 38     |    
|                                                  |                                     |   |         |     |      |   |        |     |  |   |        |    
|                                                  | Net income                          |   | $       | 121 |      |   | $      | 79  |  |   | $      | 71  | 
|                                                  |                                     |   |         |     |      |   |        |     |  |   |        |    
|Variable life account values                      |                                     | $ | 3,993   |     |      | $ | 2,947  |     |  |   | 2,595  |    
|                                                 
|                                                 
|                                                 
|                                                 
|Total account values                              |                                     | $ | 7,868   |     |      | $ | 5,849  |     |  |   | 5,419  |    
|                                                  |                                     |   |         |     |      |   |        |     |  |   |        |    
|Variable life insurance in force                  |                                     | $ | 61,617  |     |      | $ | 33,460 |     |  |   | 23,854 |    
|                                                 
|                                                 
|                                                 
|                                                 
|Total life insurance in force                     |                                     | $ | 120,269 |     |      | $ | 75,113 |     |  |   | 66,690 |    
|                                                  |                                     |   |         |     |      |   |        |     |  |   |        |    

The Individual Life segment sells a variety of life insurance products,
including variable life, universal life, interest sensitive whole life and term
life insurance primarily to the high end estate and business planning markets.
Additionally, the Fortis transaction, through the addition of a retail broker
dealer, which has been renamed Woodbury Financial Services, Inc., has allowed
the Individual Life segment to increase its reach in the emerging affluent
market.

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 a year ago. 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 the
September 11 terrorist attack. Excluding this loss, operating income increased
$45, or 57%, primarily due to the growth factors described above.

2000 Compared to 1999Revenues increased $56, or 10%, resulting primarily
from fee income associated with the growing block of variable life insurance.
Fee income increased $59, or 15%, as variable life account values increased
$352, or 14%, and variable life insurance in force increased $9.6 billion, or
40%.

Benefits, claims and expenses increased $47, or 10%, primarily due to a $16, or
6%, increase in benefits, claims and claim adjustment expenses and a $16, or
12%, increase in amortization of deferred policy acquisition costs mostly
associated with the growth in this segments variable business. Additionally,
insurance operating costs and other expenses increased $15, or 17%, directly
associated with the growth in this segment as previously described.

Net income increased $8, or 11%, primarily due to higher fee income as
mortality experience (death claims as a percentage of net amount at risk) was
consistent with prior year.

15



---



##### Table of Contents



Outlook

Management believes that the Companys strong market position will provide
opportunities for growth in this segment as individuals increasingly focus on
estate planning. 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.

GROUP BENEFITS

Operating Summary

|                                               |            |                                     |       |      |       |      |       |      |       |   |       |    |       | 
|---------------------------------------------- | ---------- | ----------------------------------- | ----- | ---- | ----- | ---- | ----- | ---- | ----- | - | ----- | -- | ----- | 
|                                               |            |                                     |       | 2001 |       | 2000 |       | 1999
|                                               |            |                                     |       |      |       |      |       |     
|Earned premiums and other                      |            | $                                   | 2,259 |      |       | $    | 1,981 |      |       | $ | 1,829 |   
|                                              
|                                              
|                                              
|                                              
|Net investment income                          |            |                                     | 248   |      |       |      | 226   |      |       |   | 195   |   
|                                               |            |                                     |       |      |       |      |       |      |       |   |       |   
|                                               |            | Total revenues                      |       |      | 2,507 |      |       |      | 2,207 |   |       |    | 2,024 | 
|                                               |            |                                     |       |      |       |      |       |      |       |   |       |   
|Benefits, claims and claim adjustment expenses |            |                                     | 1,874 |      |       |      | 1,643 |      |       |   | 1,507 |   
|                                              
|                                              
|                                              
|                                              
|Insurance operating costs and other expenses   |            |                                     | 498   |      |       |      | 450   |      |       |   | 415   |   
|                                               |            |                                     |       |      |       |      |       |      |       |   |       |   
|                                               |            | Total benefits, claims and expenses |       |      | 2,372 |      |       |      | 2,093 |   |       |    | 1,922 | 
|                                               |            |                                     |       |      |       |      |       |      |       |   |       |   
|                                               |            | Income before income tax expense    |       |      | 135   |      |       |      | 114   |   |       |    | 102   | 
|                                              
|                                              
|                                              
|                                              
|Income tax expense                             |            |                                     | 29    |      |       |      | 24    |      |       |   | 23    |   
|                                               |            |                                     |       |      |       |      |       |      |       |   |       |   
|                                               | Net income |                                     | $     | 106  |       |      | $     | 90   |       |   | $     | 79 |      
|                                               |            |                                     |       |      |       |      |       |      |       |   |       |   

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 coverage 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.

2001 Compared to 2000Revenues in the Group Benefits segment increased $300,
or 14%, driven primarily by growth in earned 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, $85 or 19% higher
than the prior year. 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, claims and claims adjustment expenses which increased $231, or
14%. These increases are consistent with the growth in the business described
above as the loss ratios (defined as benefits and claims and claim adjustment
expenses as a percentage of premiums and other considerations) have remained
relatively consistent with the comparable prior year periods. 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 the September 11 terrorist
attack; excluding this loss, net income increased $18, or 20%.

2000 Compared to 1999Revenues increased $183, or 9%, driven primarily by
growth in fully insured premiums, excluding buyouts, which increased $182, or
10%, principally due to favorable persistency of the in force block of
business, as well as new sales. Also contributing to the revenue growth was an
increase in net investment income of $31, or 16%.

Total benefits, claims and expenses increased $171, or 9%, primarily due to
higher benefits, claims and claim adjustment expenses which, excluding buyouts,
increased $168, or 12%, directly related to revenue growth in this segment.
The segments combined ratio (ratio of total benefits, claims and expenses as a
percentage of earned premiums and other) was consistent with the prior year.

Net income increased $11, or 14%, primarily driven by the increased revenues
described above.

Outlook

As employers continue to offer benefit plans in order to attract and retain
valued employees, management expects that the need for group life and group
disability insurance will continue to expand and believes that the Company is
well positioned to take advantage of this growth potential.

The Group Benefits segment offered Medicare supplement insurance to members of
several retired military officer associations. Federal legislation effective
in the fourth quarter of 2001, now provides retired military officers age 65
and older with full medical insurance paid for by the government, eliminating
the need for Medicare supplement insurance. This legislation will reduce Group
Benefits premium revenues by approximately $131 in 2002.

16



---



##### Table of Contents



CORPORATE OWNED LIFE INSURANCE (COLI)

Operating Summary

|                                               |                      |                                     |        |        |     |      |        |        |     |   |        |        |     | 
|---------------------------------------------- | -------------------- | ----------------------------------- | ------ | ------ | --- | ---- | ------ | ------ | --- | - | ------ | ------ | --- | 
|                                               |                      |                                     |        | 2001   |     | 2000 |        | 1999  
|                                               |                      |                                     |        |        |     |      |        |       
|Fee income and other                           |                      | $                                   | 367    |        |     | $    | 401    |        |     | $ | 400    |       
|                                              
|                                              
|                                              
|                                              
|Net investment income                          |                      |                                     | 352    |        |     |      | 366    |        |     |   | 431    |       
|                                               |                      |                                     |        |        |     |      |        |        |     |   |        |       
|                                               |                      | Total revenues                      |        |        | 719 |      |        |        | 767 |   |        |        | 831 | 
|                                               |                      |                                     |        |        |     |      |        |        |     |   |        |       
|Benefits, claims and claim adjustment expenses |                      |                                     | 514    |        |     |      | 545    |        |     |   | 621    |       
|                                              
|                                              
|                                              
|                                              
|Insurance operating costs and expenses         |                      |                                     | 84     |        |     |      | 102    |        |     |   | 59     |       
|                                              
|                                              
|                                              
|                                              
|Dividends to policyholders                     |                      |                                     | 66     |        |     |      | 67     |        |     |   | 104    |       
|                                              
|                                              
|                                              
|                                              
|                                               |                      | Total benefits, claims and expenses |        |        | 664 |      |        |        | 714 |   |        |        | 784 | 
|                                               |                      |                                     |        |        |     |      |        |        |     |   |        |       
|                                               |                      | Income before income tax expense    |        |        | 55  |      |        |        | 53  |   |        |        | 47  | 
|                                              
|                                              
|                                              
|                                              
|Income tax expense                             |                      |                                     | 18     |        |     |      | 19     |        |     |   | 17     |       
|                                               |                      |                                     |        |        |     |      |        |        |     |   |        |       
|                                               |                      | Net income                          |        | $      | 37  |      |        | $      | 34  |   |        | $      | 30  | 
|                                               |                      |                                     |        |        |     |      |        |        |     |   |        |       
|Variable COLI account values                   |                      | $                                   | 18,019 |        |     | $    | 15,937 |        |     | $ | 12,386 |       
|                                              
|                                              
|                                              
|                                              
|Leveraged COLI account values                  |                      |                                     | 4,315  |        |     |      | 4,978  |        |     |   | 5,729  |       
|                                               |                      |                                     |        |        |     |      |        |        |     |   |        |       
|                                               | Total account values |                                     | $      | 22,334 |     |      | $      | 20,915 |     |   | $      | 18,115 |    
|                                               |                      |                                     |        |        |     |      |        |        |     |   |        |       

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 charge of $2 related to the
September 11 terrorist attack; excluding this charge, operating income
increased $5, or 15%.

2000 Compared to 1999Revenues in the COLI segment decreased $64, or 8%,
primarily due to a decline in net investment income of $65, or 15%. This
decline was principally due to the leveraged COLI block of business, as related
account values decreased $751, or 13%, as a result of the continued downsizing
caused by the HIPA Act of 1996.

Total benefits, claims and expenses decreased $70, or 9%, consistent with the
decline in revenues described above.

Net income increased $4, or 13%, principally due to the variable COLI business
where related account values increased $3.6 billion, or 29%, as well as
earnings associated with a block of leveraged COLI business recaptured in 1998.

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 Company profitability in recent years and will
continue to contribute to the profitability of the Company in the future,
although the level of profit is expected to decline over the long run. COLI is
subject to a changing legislative and regulatory environment that could have a
material adverse effect on its business.

DEFERRED ACQUISITION COSTS (DAC) AND RESERVES

Management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The most
significant estimates include those used in determining deferred policy
acquisition costs and the liability

17



---



##### Table of Contents



for future policyholder benefits and other
policyholder funds. Although some variability is inherent in these estimates,
management believes the amounts provided are adequate.

Deferred 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.

Deferred policy acquisition costs 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 expected gross profits from
investment, mortality and expense margins and surrender charges. Actual gross
profits can vary from managements estimates, resulting in increases or
decreases in the rate of amortization. Management periodically reviews these
estimates and evaluates the recoverability of the deferred acquisition cost
asset. When appropriate, management revises its assumptions on the estimated
gross profits of these contracts and the cumulative amortization for the books
of business are re-estimated and adjusted by a cumulative charge or credit to
income. The average rate of assumed future investment yield used in estimating
expected gross profits related to variable annuity and variable life business
was 9.0% at December 31, 2001 and for all other products including fixed
annuities and other universal life type contracts, the average assumed
investment yield ranged from 5.0-8.5%.

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

To date, the Companys experience has generally been consistent or favorable to
the assumptions used in determining DAC amortization. However, if the Company
were to experience a material adverse deviation in certain critical
assumptions, including surrender rates, mortality experience, or investment
performance, there could be a negative affect to the Companys reported
earnings and shareholders equity.

Reserves

In accordance with applicable insurance regulations under which Hartford Life
operates, life insurance subsidiaries of the Company establish and carry as
liabilities actuarially determined reserves which are calculated to meet their
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 Hartford Life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 Hartford Lifes policy obligations
at their maturities or in the event of an insureds 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.

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. 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.

The persistency of Hartford Lifes annuity and other interest-sensitive life
insurance reserves is enhanced by policy restrictions on the withdrawal of
funds. Withdrawals in excess of allowable penalty-free amounts are assessed a
surrender charge during a penalty period, which is usually at least seven
years. Such surrender charge is initially a percentage of either the
accumulation value or considerations received, which varies by product, and
generally decreases gradually during the penalty period. Surrender charges are
set at levels to protect Hartford Life from loss on early terminations and to
reduce the likelihood of policyholders terminating their policies during
periods of increasing interest rates, thereby lengthening the effective
duration of policy liabilities and improving the Companys ability to maintain
profitability on such policies.

INVESTMENTS

Hartford Lifes investments 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

18



---



##### Table of Contents

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.

Invested assets in the Companys general account totaled $28.4 billion as of
December 31, 2001 and were comprised of $23.3 billion of fixed maturities, $3.3
billion of policy loans, equity securities of $428 and other investments of
$1.3 billion. As of December 31, 2000, general account invested assets totaled
$22.9 billion and were comprised of $18.2 billion of fixed maturities, $3.6
billion of policy loans, equity securities of $171 and other investments of
$910. The decrease in policy loans was primarily due to the decline in
leveraged COLI business (as discussed in the COLI section). Policy loans are
secured by the cash value of the underlying life policy and do not mature in a
conventional sense, but expire in conjunction with the related policy
liabilities. The increase in other investments primarily reflects an increase
in limited partnership investments.

The following table sets forth by type, the fixed maturity securities held in
the Companys general account as of December 31, 2001 and 2000.

|                                         |                        |            |        |         |      |            |      |         |   |   |       |        |  |  |      |       |  
|---------------------------------------- | ---------------------- | ---------- | ------ | ------- | ---- | ---------- | ---- | ------- | - | - | ----- | ------ |  |  | ---- | ----- | -
|                                         |                        |            | 2001   |         | 2000
|                                         |                        |            |        |         |     
|Fixed Maturities by Type                 |                        | Fair Value |        | Percent |      | Fair Value |      | Percent
|                                         |                        |            |        |         |      |            |      |        
|Corporate                                |                        | $          | 11,419 |         |      |            | 49.0 | %       |   | $ | 7,663 |        |  |  | 42.0 | %    
|                                        
|                                        
|                                        
|                                        
|Asset backed securities                  |                        |            | 3,427  |         |      |            | 14.7 | %       |   |   | 3,070 |        |  |  | 16.8 | %    
|                                        
|                                        
|                                        
|                                        
|Commercial mortgage backed securities    |                        |            | 3,029  |         |      |            | 13.0 | %       |   |   | 2,776 |        |  |  | 15.2 | %    
|                                        
|                                        
|                                        
|                                        
|Municipal  tax-exempt                   |                        |            | 1,565  |         |      |            | 6.7  | %       |   |   | 1,390 |        |  |  | 7.6  | %    
|                                        
|                                        
|                                        
|                                        
|Collateralized mortgage obligations      |                        |            | 767    |         |      |            | 3.3  | %       |   |   | 928   |        |  |  | 5.1  | %    
|                                        
|                                        
|                                        
|                                        
|Mortgage backed securities  agency      |                        |            | 981    |         |      |            | 4.2  | %       |   |   | 602   |        |  |  | 3.3  | %    
|                                        
|                                        
|                                        
|                                        
|Government/Government agencies  Foreign |                        |            | 390    |         |      |            | 1.7  | %       |   |   | 321   |        |  |  | 1.8  | %    
|                                        
|                                        
|                                        
|                                        
|Government/Government agencies  U.S     |                        |            | 374    |         |      |            | 1.6  | %       |   |   | 244   |        |  |  | 1.3  | %    
|                                        
|                                        
|                                        
|                                        
|Municipal  taxable                      |                        |            | 47     |         |      |            | 0.2  | %       |   |   | 83    |        |  |  | 0.5  | %    
|                                        
|                                        
|                                        
|                                        
|Short-term                               |                        |            | 1,245  |         |      |            | 5.3  | %       |   |   | 975   |        |  |  | 5.3  | %    
|                                        
|                                        
|                                        
|                                        
|Redeemable preferred stock               |                        |            | 57     |         |      |            | 0.3  | %       |   |   | 196   |        |  |  | 1.1  | %    
|                                         |                        |            |        |         |      |            |      |         |   |   |       |        |  |  |      |      
|                                         | Total fixed maturities |            | $      | 23,301  |      |            |      | 100.0   | % |   | $     | 18,248 |  |  |      | 100.0 | %
|                                         |                        |            |        |         |      |            |      |         |   |   |       |        |  |  |      |      

During 2001, fixed maturity investments increased by $5.1 billion as a result
of the Fortis acquisition, increased cash flow and an increase in fair value
due to a lower interest rate environment. The securities acquired as part of
the Fortis transaction were principally corporate and asset backed securities.

As of December 31, 2001 and 2000, approximately 21% and 22%, respectively, of
the Companys fixed maturities were invested in private placement securities
(including 12% and 13% of Rule 144A offerings as of December 31, 2001 and
December 31, 2000, 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 table below summarizes Hartford Lifes investment results for the years
ended 2001 and 2000.

|                                                     |  |      |       |      |  |      |       |   |  |   |       |  
|---------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | -
|(Before-tax)                                         |  | 2001 |       | 2000 |  | 1999
|                                                     |  |      |       |      |  |     
|Net investment income  excluding policy loan income |  | $    | 1,472 |      |  | $    | 1,284 |   |  | $ | 1,171 |  
|                                                    
|                                                    
|                                                    
|                                                    
|Policy loan income                                   |  |      | 307   |      |  |      | 308   |   |  |   | 391   |  
|                                                     |  |      |       |      |  |      |       |   |  |   |       |  
|Net investment income  total                        |  | $    | 1,779 |      |  | $    | 1,592 |   |  | $ | 1,562 |  
|                                                     |  |      |       |      |  |      |       |   |  |   |       |  
|Yield on average invested assets (1)                 |  |      | 7.0   | %    |  |      | 7.0   | % |  |   | 6.7   | %
|                                                     |  |      |       |      |  |      |       |   |  |   |       |  
|Net realized capital losses                          |  | $    | (133  | )    |  | $    | (88   | ) |  | $ | (5    | )
|                                                     |  |      |       |      |  |      |       |   |  |   |       |  

19



---



##### Table of Contents





---

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

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 previously discussed
increase in 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 losses were write-downs for other than temporary
impairments on fixed maturities of $95 which includes $37 capital loss related
to securities issued by the Enron Corporation. Also included is a $45
capital loss recognized on the sale of the Companys interest in an Argentine
insurance joint venture, as well as losses associated with the credit
deterioration of certain investments in which the Company has an indirect
economic interest. These losses were partially offset by capital gains from
the sale of fixed maturities.

2000 Compared to 1999  Net investment income,
excluding policy loan income, increased $113, or 10%. The increase
was primarily due to higher yields earned on the investment cash flow
from operations and reinvestment of proceeds from sales and
maturities of fixed maturity securities in a higher interest rate
environment. Policy loan income decreased $83, or 21%, due to the
decrease in leveraged COLI business.

Net realized capital losses increased $83 primarily
as a result of portfolio rebalancing in a higher interest rate
environment.

Separate Account Products

Separate account products are those for which a separate investment and
liability account is maintained on behalf of the policyholder. Separate
accounts reflect two categories of risk assumption: non-guaranteed separate
accounts totaling $104.6 billion and $104.2 billion as of December 31, 2001 and
2000, respectively, wherein the policyholder assumes substantially all the
investment risk and reward, and guaranteed separate accounts totaling $10.1
billion and $9.8 billion as of December 31, 2001 and 2000, respectively,
wherein Hartford Life contractually guarantees either a minimum return or
account value to the policyholder. The primary investment objective of the
Companys guaranteed separate 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.

Investment objectives for non-guaranteed separate accounts vary by fund 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. 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.

CAPITAL MARKETS RISK MANAGEMENT

Hartford Life is exposed to two primary sources of investment risk and
asset/liability management risk: credit risk, relating to the uncertainty
associated with an obligors continued ability to make timely payment of
principal and/or interest, and market risk, relating to the market price and/or
cash flow variability associated with changes in interest rates, security
prices, market indices, yield curves or currency exchange rates. The Company
does not hold any financial instruments purchased for trading purposes. The
following discussion identifies the Companys policies and procedures for
managing these risks and monitoring the results of the Companys risk
management activities.

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 Hartfords Finance Committee.

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 interval.

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.

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

20



---



##### Table of Contents



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.

As of December 31, 2001 and 2000, over 96% and 97%, respectively, of the fixed
maturity portfolio, including guaranteed separate accounts, was invested in
investment grade securities. During 2001, the percentage of BBB
related fixed maturity investments increased primarily due to the
continued active management of the general account portfolios.

|                                    |                        |            |        |         |      |            |      |         |   |   |       |        |  |  |      |       |  
|----------------------------------- | ---------------------- | ---------- | ------ | ------- | ---- | ---------- | ---- | ------- | - | - | ----- | ------ |  |  | ---- | ----- | -
|                                    |                        |            | 2001   |         | 2000
|                                    |                        |            |        |         |     
|Fixed Maturities by Credit Quality  |                        | Fair Value |        | Percent |      | Fair Value |      | Percent
|                                    |                        |            |        |         |      |            |      |        
|U.S. Government/Government agencies |                        | $          | 2,639  |         |      |            | 8.0  | %       |   | $ | 2,329 |        |  |  | 8.4  | %    
|                                   
|                                   
|                                   
|                                   
|AAA                                 |                        |            | 5,070  |         |      |            | 15.3 | %       |   |   | 4,896 |        |  |  | 17.6 | %    
|                                   
|                                   
|                                   
|                                   
|AA                                  |                        |            | 3,644  |         |      |            | 11.0 | %       |   |   | 3,546 |        |  |  | 12.7 | %    
|                                   
|                                   
|                                   
|                                   
|A                                   |                        |            | 11,528 |         |      |            | 34.8 | %       |   |   | 9,675 |        |  |  | 34.7 | %    
|                                   
|                                   
|                                   
|                                   
|BBB                                 |                        |            | 7,644  |         |      |            | 23.1 | %       |   |   | 5,633 |        |  |  | 20.2 | %    
|                                   
|                                   
|                                   
|                                   
|BB & below                          |                        |            | 1,148  |         |      |            | 3.4  | %       |   |   | 708   |        |  |  | 2.5  | %    
|                                   
|                                   
|                                   
|                                   
|Short-term                          |                        |            | 1,470  |         |      |            | 4.4  | %       |   |   | 1,085 |        |  |  | 3.9  | %    
|                                    |                        |            |        |         |      |            |      |         |   |   |       |        |  |  |      |      
|                                    | Total fixed maturities |            | $      | 33,143  |      |            |      | 100.0   | % |   | $     | 27,872 |  |  |      | 100.0 | %
|                                    |                        |            |        |         |      |            |      |         |   |   |       |        |  |  |      |      

Market Risk

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. The Companys fixed maturity portfolios have
material market exposure to interest rate risk. Hartford Life continually
monitors these exposures and makes portfolio adjustments to manage these risks
within established limits.

Downward movement in market interest rates during 2001 resulted in a
significant increase in the unrealized appreciation of the fixed maturity
security portfolio from 2000. However, Hartford Lifes asset allocation and
its exposure to market risk as of December 31, 2001 have not changed materially
from its position at December 31, 2000.

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.

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
three Company approved objectives: to hedge risk arising from interest rate,
price or currency exchange rate volatility; to manage liquidity; or to control
transaction costs. The Company does not make a market or trade derivatives for
the express purpose of earning trading profits.

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 is exchanged at the inception
of the contract and no principal payments are exchanged. 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 upon
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.

21



---



##### Table of Contents



The Company uses derivative instruments in its management of market risk
consistent with four risk management strategies: hedging anticipated
transactions; hedging liability instruments; hedging invested assets and
hedging portfolios of assets and/or liabilities. (For additional information
on these strategies along with tables reflecting outstanding derivative
instruments, see the discussions below.)

Derivative activities are monitored by an internal compliance unit, reviewed
frequently by senior management and reported to The Hartfords 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 for both
general and guaranteed separate accounts at December 31, 2001 and 2000 totaled
$9.9 billion and $8.5 billion, respectively.

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

Interest Rate Risk

Changes in interest rates can potentially impact Hartford Lifes profitability.
Under certain circumstances of interest rate volatility, the Company could be
exposed to disintermediation risk and reduction in net interest rate spread or
profit margins. 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. For non-guaranteed separate accounts, the Companys exposure is
not significant, as the policyholder assumes substantially all the investment
risk.

The Company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 the Company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 a discussion of the
Companys risk management techniques to manage this market risk, see
Asset/Liability Management Strategies Used to Manage Market Risk below.

As described above, the Company holds a significant fixed maturity portfolio,
which includes both fixed and variable rate features. The following table
reflects the principal amounts of the general and guaranteed separate account
fixed and variable rate fixed maturity portfolios, along with the respective
weighted average coupons (WAC) by estimated maturity year as of December 31,
2001. Comparative totals are included for December 31, 2000. Expected
maturities differ from contractual maturities due to call or prepayment
provisions. The weighted average coupon on variable rate securities is based
on spot rates as of December 31, 2001 and 2000, and is primarily based on the
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 are immaterial to the Companys investment portfolio.

22



---



##### Table of Contents



|                                                 |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |   |        |  
|------------------------------------------------ | ------------- | ---------- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | ---------- |  | ----- | ----- | ----- |  | - | ----- | - |  | - | ----- | - |  | ---- | ------ | ---- |  | - | ------ | -
|                                                 |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  | 2001 |        | 2000
|                                                 |               |            |  | 2002 |       | 2003 |  | 2004 |       | 2005 |  | 2006 |       | Thereafter |  | Total |       | Total
|                                                 |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |      
|Bonds-Callable
Fixed Rate                        |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Par value  |  | $    | 17    |      |  | $    | 34    |      |  | $    | 9     |            |  | $     | 52    |       |  | $ | 17    |   |  | $ | 2,795 |   |  | $    | 2,924  |      |  | $ | 1,458  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | WAC        |  |      | 6.5   | %    |  |      | 5.2   | %    |  |      | 6.7   | %          |  |       | 8.2   | %     |  |   | 8.3   | % |  |   | 3.8   | % |  |      | 4.0    | %    |  |   | 5.5    | %
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Fair value |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  | $    | 2,445  |      |  | $ | 1,439  |  
|                                                
|                                                
|                                                
|                                                
|Variable Rate                                    |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Par value  |  | $    | 12    |      |  | $    | 24    |      |  | $    | 3     |            |  | $     | 37    |       |  | $ | 9     |   |  | $ | 980   |   |  | $    | 1,065  |      |  | $ | 1,158  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | WAC        |  |      | 4.0   | %    |  |      | 3.2   | %    |  |      | 3.8   | %          |  |       | 4.1   | %     |  |   | 5.7   | % |  |   | 3.4   | % |  |      | 3.4    | %    |  |   | 7.1    | %
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Fair value |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  | $    | 972    |      |  | $ | 1,075  |  
|                                                 |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |  
|Bonds  Other
Fixed Rate                         |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Par value  |  | $    | 2,531 |      |  | $    | 1,521 |      |  | $    | 1,304 |            |  | $     | 1,680 |       |  | $ | 1,934 |   |  | $ | 9,275 |   |  | $    | 18,245 |      |  | $ | 14,699 |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | WAC        |  |      | 5.8   | %    |  |      | 6.7   | %    |  |      | 6.1   | %          |  |       | 7.4   | %     |  |   | 6.1   | % |  |   | 6.1   | % |  |      | 6.2    | %    |  |   | 6.1    | %
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Fair value |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  | $    | 17,424 |      |  | $ | 13,409 |  
|                                                
|                                                
|                                                
|                                                
|Variable Rate                                    |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Par value  |  | $    | 211   |      |  | $    | 224   |      |  | $    | 70    |            |  | $     | 248   |       |  | $ | 73    |   |  | $ | 221   |   |  | $    | 1,047  |      |  | $ | 1,235  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | WAC        |  |      | 4.6   | %    |  |      | 3.9   | %    |  |      | 5.2   | %          |  |       | 4.2   | %     |  |   | 7.7   | % |  |   | 5.8   | % |  |      | 4.9    | %    |  |   | 7.4    | %
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Fair value |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  | $    | 947    |      |  | $ | 1,108  |  
|                                                 |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |  
|Asset-backed
Securities
Fixed Rate               |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Par value  |  | $    | 462   |      |  | $    | 365   |      |  | $    | 484   |            |  | $     | 264   |       |  | $ | 168   |   |  | $ | 509   |   |  | $    | 2,252  |      |  | $ | 2,343  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | WAC        |  |      | 6.9   | %    |  |      | 6.6   | %    |  |      | 6.3   | %          |  |       | 6.9   | %     |  |   | 6.5   | % |  |   | 7.7   | % |  |      | 6.9    | %    |  |   | 6.9    | %
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Fair value |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  | $    | 2,234  |      |  | $ | 2,342  |  
|                                                
|                                                
|                                                
|                                                
|Variable Rate                                    |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Par value  |  | $    | 276   |      |  | $    | 305   |      |  | $    | 380   |            |  | $     | 343   |       |  | $ | 212   |   |  | $ | 880   |   |  | $    | 2,396  |      |  | $ | 2,124  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | WAC        |  |      | 2.4   | %    |  |      | 2.8   | %    |  |      | 2.8   | %          |  |       | 2.7   | %     |  |   | 2.7   | % |  |   | 2.9   | % |  |      | 2.8    | %    |  |   | 7.3    | %
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Fair value |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  | $    | 2,333  |      |  | $ | 2,099  |  
|                                                 |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |  
|Collateralized Mortgage Obligations
Fixed Rate   |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Par value  |  | $    | 104   |      |  | $    | 116   |      |  | $    | 110   |            |  | $     | 102   |       |  | $ | 95    |   |  | $ | 441   |   |  | $    | 968    |      |  | $ | 1,098  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | WAC        |  |      | 6.7   | %    |  |      | 6.1   | %    |  |      | 6.1   | %          |  |       | 6.1   | %     |  |   | 6.1   | % |  |   | 6.5   | % |  |      | 6.3    | %    |  |   | 6.4    | %
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Fair value |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  | $    | 960    |      |  | $ | 1,087  |  
|                                                
|                                                
|                                                
|                                                
|Variable Rate                                    |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Par value  |  | $    | 4     |      |  | $    | 3     |      |  | $    | 3     |            |  | $     | 2     |       |  | $ | 1     |   |  | $ | 2     |   |  | $    | 15     |      |  | $ | 112    |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | WAC        |  |      | 7.9   | %    |  |      | 6.7   | %    |  |      | 6.6   | %          |  |       | 6.7   | %     |  |   | 6.7   | % |  |   | 6.4   | % |  |      | 6.9    | %    |  |   | 5.3    | %
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Fair value |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  | $    | 16     |      |  | $ | 101    |  
|                                                 |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |  
|Commercial Mortgage-backed
Securities
Fixed Rate |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Par value  |  | $    | 85    |      |  | $    | 69    |      |  | $    | 106   |            |  | $     | 77    |       |  | $ | 198   |   |  | $ | 2,483 |   |  | $    | 3,018  |      |  | $ | 2,606  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | WAC        |  |      | 7.0   | %    |  |      | 6.8   | %    |  |      | 7.1   | %          |  |       | 6.9   | %     |  |   | 7.3   | % |  |   | 7.1   | % |  |      | 7.1    | %    |  |   | 7.3    | %
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Fair value |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  | $    | 3,123  |      |  | $ | 2,674  |  
|                                                
|                                                
|                                                
|                                                
|Variable Rate                                    |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Par value  |  | $    | 274   |      |  | $    | 289   |      |  | $    | 242   |            |  | $     | 137   |       |  | $ | 118   |   |  | $ | 441   |   |  | $    | 1,501  |      |  | $ | 1,730  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | WAC        |  |      | 4.2   | %    |  |      | 4.1   | %    |  |      | 4.0   | %          |  |       | 5.7   | %     |  |   | 7.1   | % |  |   | 7.9   | % |  |      | 5.8    | %    |  |   | 7.9    | %
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Fair value |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  | $    | 1,498  |      |  | $ | 1,738  |  
|                                                 |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |  
|Mortgage-backed Securities
Fixed Rate            |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Par value  |  | $    | 159   |      |  | $    | 175   |      |  | $    | 158   |            |  | $     | 128   |       |  | $ | 104   |   |  | $ | 444   |   |  | $    | 1,168  |      |  | $ | 792    |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | WAC        |  |      | 7.0   | %    |  |      | 6.9   | %    |  |      | 6.8   | %          |  |       | 6.8   | %     |  |   | 6.8   | % |  |   | 6.7   | % |  |      | 6.8    | %    |  |   | 7.2    | %
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Fair value |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  | $    | 1,189  |      |  | $ | 800    |  
|                                                
|                                                
|                                                
|                                                
|                                                 | Variable Rate |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |   |       
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Par value  |  | $    |      |      |  | $    |      |      |  | $    |      |            |  | $     |      |       |  | $ |      |   |  | $ | 2     |   |  | $    | 2      |      |  | $ | 3      |  
|                                                
|                                                
|                                                
|                                                
|                                                 |               | WAC        |  |      |      |      |  |      |      |      |  |      |      |            |  |       |      |       |  |   |      |   |  |   | 5.4   | % |  |      | 5.4    | %    |  |   | 7.0    | %
|                                                
|                                                
|                                                
|                                                
|                                                 |               | Fair value |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  | $    | 2      |      |  | $ | 3      |  
|                                                 |               |            |  |      |       |      |  |      |       |      |  |      |       |            |  |       |       |       |  |   |       |   |  |   |       |   |  |      |        |      |  |  

23



---



##### Table of Contents



The table below provides information as of December 31, 2001 and 2000 on debt
obligations and reflects principal cash flows and related weighted average
effective interest rates by maturity year.

|                |                                          |  |      |   |      |  |      |   |      |  |      |     |            |  |       |   |       |  |   |   |  |  |   |     |   |  |      |       |      |  |   |     |  
|--------------- | ---------------------------------------- |  | ---- | - | ---- |  | ---- | - | ---- |  | ---- | --- | ---------- |  | ----- | - | ----- |  | - | - |  |  | - | --- | - |  | ---- | ----- | ---- |  | - | --- | -
|                |                                          |  |      |   |      |  |      |   |      |  |      |     |            |  |       |   |       |  |   |   |  |  |   |     |   |  | 2001 |       | 2000
|                |                                          |  | 2002 |   | 2003 |  | 2004 |   | 2005 |  | 2006 |     | Thereafter |  | Total |   | Total
|                |                                          |  |      |   |      |  |      |   |      |  |      |     |            |  |       |   |      
|Long -Term Debt |                                          |  |      |   |      |  |      |   |      |  |      |     |            |  |       |   |       |  |   |   |  |  |   |     |   |  |      |       |      |  |   |    
|               
|               
|               
|               
|Fixed Rate      |                                          |  |      |   |      |  |      |   |      |  |      |     |            |  |       |   |       |  |   |   |  |  |   |     |   |  |      |       |      |  |   |    
|               
|               
|               
|               
|                | Amount                                   |  | $    |  |      |  | $    |  |      |  | $    | 200 |            |  | $     |   |       |  | $ |  |  |  | $ | 850 |   |  | $    | 1,050 |      |  | $ | 650 |  
|               
|               
|               
|               
|                | Weighted average effective interest rate |  |      |  |      |  |      |  |      |  |      | 6.9 |            |  |       | % |       |  |   |  |  |  |   | 7.4 | % |  |      | 7.3   | %    |  |   | 7.4 | %
|               
|               
|               
|               
|                | Fair value                               |  |      |   |      |  |      |   |      |  |      |     |            |  |       |   |       |  |   |   |  |  |   |     |   |  | $    | 1,118 |      |  | $ | 658 |  
|               
|               
|               
|               
|TruPS(1)        |                                          |  |      |   |      |  |      |   |      |  |      |     |            |  |       |   |       |  |   |   |  |  |   |     |   |  |      |       |      |  |   |    
|               
|               
|               
|               
|Fixed Rate      |                                          |  |      |   |      |  |      |   |      |  |      |     |            |  |       |   |       |  |   |   |  |  |   |     |   |  |      |       |      |  |   |    
|               
|               
|               
|               
|                | Amount                                   |  | $    |  |      |  | $    |  |      |  | $    |    |            |  | $     |  |       |  | $ |  |  |  | $ | 450 |   |  | $    | 450   |      |  | $ | 250 |  
|               
|               
|               
|               
|                | Weighted average effective interest rate |  |      |  |      |  |      |  |      |  |      |    |            |  |       |  |       |  |   |  |  |  |   | 7.4 | % |  |      | 7.4   | %    |  |   | 7.4 | %
|               
|               
|               
|               
|                | Fair value                               |  |      |   |      |  |      |   |      |  |      |     |            |  |       |   |       |  |   |   |  |  |   |     |   |  | $    | 461   |      |  | $ | 245 |  
|               



---

|(1) |  | Represents company obligated mandatorily redeemable preferred securities
of subsidiary trust holding solely parent junior subordinated debentures.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------

Asset/Liability Management Strategies Used to Manage Market Risk

Hartford Life employs several risk management tools to quantify and manage
market risk arising from their 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
reduction 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. As an end-user of derivatives, 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, 2001, notional amounts pertaining to derivatives
totaled $9.9 billion ($8.2 billion related to insurance investments and $1.7
billion related to life insurance liabilities). Notional amounts pertaining to
derivatives totaled $8.5 billion at December 31, 2000 ($6.5 billion related to
insurance investments and $2.0 billion related to life insurance liabilities).

The economic objectives and strategies for which the Company utilized
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, 2001 and 2000 were $320 and $144 million,
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, 2001 and 2000 were
$1.7 billion and $2.0 billion, respectively.

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, 2001 and 2000, were $6.8 billion and $5.4
billion, respectively.

24



---



##### Table of Contents



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, 2001 and 2000, were $1.1 and $1.0
billion, respectively.

The following tables provide information as of December 31, 2001 with
comparative totals for December 31, 2000 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.

|                                        |                               |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |   |  |   |     |   |  |   |       |   |  |      |       |      |  |   |       |  
|--------------------------------------- | ----------------------------- | ---- | - | ---- | - | ---- | - | ---- | - | ---- | - | ---------- | - | ----- | - | ----- | - |  | - | --- | - |  | - | ----- | - |  | ---- | ----- | ---- |  | - | ----- | -
|                                        |                               |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |   |  |   |     |   |  |   |       |   |  | 2001 |       | 2000
|Interest Rate Swaps                     |                               | 2002 |   | 2003 |   | 2004 |   | 2005 |   | 2006 |   | Thereafter |   | Total |   | Total
|                                        |                               |      |   |      |   |      |   |      |   |      |   |            |   |       |   |      
|Pay Fixed/Receive Variable              |                               |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |   |  |   |     |   |  |   |       |   |  |      |       |      |  |   |      
|                                       
|                                       
|                                       
|                                       
|                                        | National value                |      | $ | 90   |   |      | $ | 198  |   |      | $ | 35         |   |       | $ | 140   |   |  | $ | 50  |   |  | $ | 794   |   |  | $    | 1,307 |      |  | $ | 1,031 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Weighted average pay rate     |      |   | 5.9  | % |      |   | 5.1  | % |      |   | 6.1        | % |       |   | 7.5   | % |  |   | 6.7 | % |  |   | 7.0   | % |  |      | 6.5   | %    |  |   | 6.6   | %
|                                       
|                                       
|                                       
|                                       
|                                        | Weighted average receive rate |      |   | 2.1  | % |      |   | 2.3  | % |      |   | 2.2        | % |       |   | 2.2   | % |  |   | 2.4 | % |  |   | 2.2   | % |  |      | 2.2   | %    |  |   | 6.8   | %
|                                       
|                                       
|                                       
|                                       
|                                        | Fair value                    |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |   |  |   |     |   |  |   |       |   |  | $    | (65   | )    |  | $ | (43   | )
|                                       
|                                       
|                                       
|                                       
|Pay Variable/Receive Fixed              |                               |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |   |  |   |     |   |  |   |       |   |  |      |       |      |  |   |      
|                                       
|                                       
|                                       
|                                       
|                                        | Notional value                |      | $ | 204  |   |      | $ | 518  |   |      | $ | 1,299      |   |       | $ | 935   |   |  | $ | 797 |   |  | $ | 1,327 |   |  | $    | 5,080 |      |  | $ | 4,886 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Weighted average pay rate     |      |   | 2.1  | % |      |   | 2.0  | % |      |   | 2.2        | % |       |   | 2.1   | % |  |   | 2.0 | % |  |   | 2.1   | % |  |      | 2.1   | %    |  |   | 7.0   | %
|                                       
|                                       
|                                       
|                                       
|                                        | Weighted average receive rate |      |   | 5.9  | % |      |   | 5.4  | % |      |   | 5.6        | % |       |   | 6.0   | % |  |   | 5.7 | % |  |   | 6.3   | % |  |      | 5.8   | %    |  |   | 6.6   | %
|                                       
|                                       
|                                       
|                                       
|                                        | Fair value                    |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |   |  |   |     |   |  |   |       |   |  | $    | 194   |      |  | $ | 78    |  
|                                       
|                                       
|                                       
|                                       
|Pay Variable/Receive Different Variable |                               |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |   |  |   |     |   |  |   |       |   |  |      |       |      |  |   |      
|                                       
|                                       
|                                       
|                                       
|                                        | Notional value                |      | $ | 5    |   |      | $ | 2    |   |      | $ | 150        |   |       | $ | 11    |   |  | $ |    |   |  | $ | 251   |   |  | $    | 419   |      |  | $ | 278   |  
|                                       
|                                       
|                                       
|                                       
|                                        | Weighted average pay rate     |      |   | 5.4  | % |      |   | 2.2  | % |      |   | 3.3        | % |       |   | 4.0   | % |  |   |    |   |  |   | 3.1   | % |  |      | 3.2   | %    |  |   | 6.6   | %
|                                       
|                                       
|                                       
|                                       
|                                        | Weighted average receive rate |      |   | 3.0  | % |      |   | 1.9  | % |      |   | 3.0        | % |       |   | 1.2   | % |  |   |    |   |  |   | 5.5   | % |  |      | 4.4   | %    |  |   | 4.9   | %
|                                       
|                                       
|                                       
|                                       
|                                        | Fair value                    |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |   |  |   |     |   |  |   |       |   |  | $    | (48   | )    |  | $ | (1    | )
|                                       

|                                 |                                             |      |   |      |   |      |   |      |   |      |   |            |  |       |   |       |   |  |   |   |  |  |   |     |   |  |      |      |      |  |   |      |  
|-------------------------------- | ------------------------------------------- | ---- | - | ---- | - | ---- | - | ---- | - | ---- | - | ---------- |  | ----- | - | ----- | - |  | - | - |  |  | - | --- | - |  | ---- | ---- | ---- |  | - | ---- | -
|                                 |                                             |      |   |      |   |      |   |      |   |      |   |            |  |       |   |       |   |  |   |   |  |  |   |     |   |  | 2001 |      | 2000
|Interest Rate Caps - LIBOR Based |                                             | 2002 |   | 2003 |   | 2004 |   | 2005 |   | 2006 |   | Thereafter |  | Total |   | Total
|                                 |                                             |      |   |      |   |      |   |      |   |      |   |            |  |       |   |      
|Purchased                        |                                             |      |   |      |   |      |   |      |   |      |   |            |  |       |   |       |   |  |   |   |  |  |   |     |   |  |      |      |      |  |   |     
|                                
|                                
|                                
|                                
|                                 | Notional value                              |      | $ | 10   |   |      | $ | 54   |   |      | $ |           |  |       | $ | 77    |   |  | $ |  |  |  | $ | 30  |   |  | $    | 171  |      |  | $ | 171  |  
|                                
|                                
|                                
|                                
|                                 | Weighted average strike rate (8.0 - 9.9%)   |      |   | 8.9  | % |      |   | 8.5  | % |      |   |           |  |       |   | 8.4   | % |  |   |  |  |  |   | 8.3 | % |  |      | 8.5  | %    |  |   | 8.5  | %
|                                
|                                
|                                
|                                
|                                 | Fair value                                  |      |   |      |   |      |   |      |   |      |   |            |  |       |   |       |   |  |   |   |  |  |   |     |   |  | $    | 1    |      |  | $ | 1    |  
|                                
|                                
|                                
|                                
|                                 | Notional value                              |      | $ | 19   |   |      | $ |     |   |      | $ |           |  |       | $ |      |   |  | $ |  |  |  | $ |    |   |  | $    | 19   |      |  | $ | 19   |  
|                                
|                                
|                                
|                                
|                                 | Weighted average strike rate (10.0 - 11.9%) |      |   | 10.1 | % |      |   |     |   |      |   |           |  |       |   |      |   |  |   |  |  |  |   |    |   |  |      | 10.1 | %    |  |   | 10.1 | %
|                                
|                                
|                                
|                                
|                                 | Fair value                                  |      |   |      |   |      |   |      |   |      |   |            |  |       |   |       |   |  |   |   |  |  |   |     |   |  | $    |     |      |  | $ |     |  
|                                

|                                  |                                           |  |      |   |      |  |      |     |      |  |      |   |            |  |       |     |       |  |   |   |  |  |   |   |  |  |   |      |   |      |   |     |  
|--------------------------------- | ----------------------------------------- |  | ---- | - | ---- |  | ---- | --- | ---- |  | ---- | - | ---------- |  | ----- | --- | ----- |  | - | - |  |  | - | - |  |  | - | ---- | - | ---- | - | --- | -
|                                  |                                           |  |      |   |      |  |      |     |      |  |      |   |            |  |       |     |       |  |   |   |  |  |   |   |  |  |   | 2001 |   | 2000
|Interest
Rate Caps - CMT Based[1] |                                           |  | 2002 |   | 2003 |  | 2004 |     | 2005 |  | 2006 |   | Thereafter |  | Total |     | Total
|                                  |                                           |  |      |   |      |  |      |     |      |  |      |   |            |  |       |     |      
|Purchased                         |                                           |  |      |   |      |  |      |     |      |  |      |   |            |  |       |     |       |  |   |   |  |  |   |   |  |  |   |      |   |      |   |    
|                                 
|                                 
|                                 
|                                 
|                                  | Notional value                            |  | $    |  |      |  | $    | 250 |      |  | $    |  |            |  | $     | 250 |       |  | $ |  |  |  | $ |  |  |  | $ | 500  |   |      | $ | 500 |  
|                                 
|                                 
|                                 
|                                 
|                                  | Weighted average strike rate (8.0 - 9.9%) |  |      |  |      |  |      | 8.7 | %    |  |      |  |            |  |       | 8.7 | %     |  |   |  |  |  |   |  |  |  |   | 8.7  | % |      |   | 8.7 | %
|                                 
|                                 
|                                 
|                                 
|                                  | Fair value                                |  |      |   |      |  |      |     |      |  |      |   |            |  |       |     |       |  |   |   |  |  |   |   |  |  | $ | 3    |   |      | $ |    |  



---

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

25



---



##### Table of Contents



|                                   |                                           |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |   |  |   |   |  |  |   |   |  |  |      |     |      |  |   |     |  
|---------------------------------- | ----------------------------------------- | ---- | - | ---- | - | ---- | - | ---- | - | ---- | - | ---------- | - | ----- | - | ----- | - |  | - | - |  |  | - | - |  |  | ---- | --- | ---- |  | - | --- | -
|                                   |                                           |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |   |  |   |   |  |  |   |   |  |  | 2001 |     | 2000
|Interest Rate Floors - LIBOR Based |                                           | 2002 |   | 2003 |   | 2004 |   | 2005 |   | 2006 |   | Thereafter |   | Total |   | Total
|                                   |                                           |      |   |      |   |      |   |      |   |      |   |            |   |       |   |      
|Purchased                          |                                           |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |   |  |   |   |  |  |   |   |  |  |      |     |      |  |   |    
|                                  
|                                  
|                                  
|                                  
|                                   | Notional value                            |      | $ |     |   |      | $ |     |   |      | $ | 27         |   |       | $ |      |   |  | $ |  |  |  | $ |  |  |  | $    | 27  |      |  | $ | 27  |  
|                                  
|                                  
|                                  
|                                  
|                                   | Weighted average strike rate (6.0 - 7.9%) |      |   |     |   |      |   |     |   |      |   | 7.9        | % |       |   |      |   |  |   |  |  |  |   |  |  |  |      | 7.9 | %    |  |   | 7.9 | %
|                                  
|                                  
|                                  
|                                  
|                                   | Fair value                                |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |   |  |   |   |  |  |   |   |  |  | $    | 3   |      |  | $ | 2   |  
|                                  
|                                  
|                                  
|                                  
|Issued                             |                                           |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |   |  |   |   |  |  |   |   |  |  |      |     |      |  |   |    
|                                  
|                                  
|                                  
|                                  
|                                   | Notional value                            |      | $ | 28   |   |      | $ | 54   |   |      | $ | 34         |   |       | $ | 77    |   |  | $ |  |  |  | $ |  |  |  | $    | 193 |      |  | $ | 193 |  
|                                  
|                                  
|                                  
|                                  
|                                   | Weighted average strike rate (4.0 - 5.9%) |      |   | 5.3  | % |      |   | 5.4  | % |      |   | 5.3        | % |       |   | 5.3   | % |  |   |  |  |  |   |  |  |  |      | 5.3 | %    |  |   | 5.3 | %
|                                  
|                                  
|                                  
|                                  
|                                   | Fair value                                |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |   |  |   |   |  |  |   |   |  |  | $    | (8  | )    |  | $ | (2  | )
|                                  
|                                  
|                                  
|                                  
|                                   | Notional value                            |      | $ |     |   |      | $ |     |   |      | $ | 27         |   |       | $ |      |   |  | $ |  |  |  | $ |  |  |  | $    | 27  |      |  | $ | 27  |  
|                                  
|                                  
|                                  
|                                  
|                                   | Weighted average strike rate (6.0 - 7.9%) |      |   |     |   |      |   |     |   |      |   | 7.8        | % |       |   |      |   |  |   |  |  |  |   |  |  |  |      | 7.8 | %    |  |   | 7.8 | %
|                                  
|                                  
|                                  
|                                  
|                                   | Fair value                                |      |   |      |   |      |   |      |   |      |   |            |   |       |   |       |   |  |   |   |  |  |   |   |  |  | $    | (3  | )    |  | $ | (2  | )
|                                  

|                                 |                                           |      |   |      |  |      |   |      |   |      |   |            |  |       |   |       |  |  |   |   |  |  |   |   |  |  |      |     |      |  |   |     |  
|-------------------------------- | ----------------------------------------- | ---- | - | ---- |  | ---- | - | ---- | - | ---- | - | ---------- |  | ----- | - | ----- |  |  | - | - |  |  | - | - |  |  | ---- | --- | ---- |  | - | --- | -
|                                 |                                           |      |   |      |  |      |   |      |   |      |   |            |  |       |   |       |  |  |   |   |  |  |   |   |  |  | 2001 |     | 2000
|Interest Rate Floors - CMT Based |                                           | 2002 |   | 2003 |  | 2004 |   | 2005 |   | 2006 |   | Thereafter |  | Total |   | Total
|                                 |                                           |      |   |      |  |      |   |      |   |      |   |            |  |       |   |      
|Purchased                        |                                           |      |   |      |  |      |   |      |   |      |   |            |  |       |   |       |  |  |   |   |  |  |   |   |  |  |      |     |      |  |   |    
|                                
|                                
|                                
|                                
|                                 | Notional value                            |      | $ |     |  |      | $ | 150  |   |      | $ |           |  |       | $ |      |  |  | $ |  |  |  | $ |  |  |  | $    | 150 |      |  | $ | 150 |  
|                                
|                                
|                                
|                                
|                                 | Weighted average strike rate (4.0 - 5.9%) |      |   |     |  |      |   | 5.5  | % |      |   |           |  |       |   |      |  |  |   |  |  |  |   |  |  |  |      | 5.5 | %    |  |   | 5.5 | %
|                                
|                                
|                                
|                                
|                                 | Fair value                                |      |   |      |  |      |   |      |   |      |   |            |  |       |   |       |  |  |   |   |  |  |   |   |  |  | $    | 5   |      |  | $ | 3   |  
|                                



---

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

|                      |                                   |      |   |      |  |      |   |      |  |      |   |            |  |       |   |       |  |  |   |   |  |  |   |   |  |  |      |     |      |  |   |     | 
|--------------------- | --------------------------------- | ---- | - | ---- |  | ---- | - | ---- |  | ---- | - | ---------- |  | ----- | - | ----- |  |  | - | - |  |  | - | - |  |  | ---- | --- | ---- |  | - | --- | 
|                      |                                   |      |   |      |  |      |   |      |  |      |   |            |  |       |   |       |  |  |   |   |  |  |   |   |  |  | 2001 |     | 2000
|Interest Rate Futures |                                   | 2002 |   | 2003 |  | 2004 |   | 2005 |  | 2006 |   | Thereafter |  | Total |   | Total
|                      |                                   |      |   |      |  |      |   |      |  |      |   |            |  |       |   |      
|Long                  |                                   |      |   |      |  |      |   |      |  |      |   |            |  |       |   |       |  |  |   |   |  |  |   |   |  |  |      |     |      |  |   |    
|                     
|                     
|                     
|                     
|                      | Contract amount/notional          |      | $ | 266  |  |      | $ |     |  |      | $ |           |  |       | $ |      |  |  | $ |  |  |  | $ |  |  |  | $    | 266 |      |  | $ | 198 | 
|                     
|                     
|                     
|                     
|                      | Weighted average settlement price |      | $ | 105  |  |      | $ |     |  |      | $ |           |  |       | $ |      |  |  | $ |  |  |  | $ |  |  |  | $    | 105 |      |  | $ | 105 | 
|                     
|                     
|                     
|                     
|Short                 |                                   |      |   |      |  |      |   |      |  |      |   |            |  |       |   |       |  |  |   |   |  |  |   |   |  |  |      |     |      |  |   |    
|                     
|                     
|                     
|                     
|                      | Contract amount/notional          |      | $ | 25   |  |      | $ |     |  |      | $ |           |  |       | $ |      |  |  | $ |  |  |  | $ |  |  |  | $    | 25  |      |  | $ | 59  | 
|                     
|                     
|                     
|                     
|                      | Weighted average settlement price |      | $ | 105  |  |      | $ |     |  |      | $ |           |  |       | $ |      |  |  | $ |  |  |  | $ |  |  |  | $    | 105 |      |  | $ | 105 | 
|                     

|                 |            |                          |  |      |    |      |  |      |     |      |  |            |     |       |  |       |     |  |  |   |     |  |  |   |     |  |  |      |       |      |  |   |     |  
|---------------- | ---------- | ------------------------ |  | ---- | -- | ---- |  | ---- | --- | ---- |  | ---------- | --- | ----- |  | ----- | --- |  |  | - | --- |  |  | - | --- |  |  | ---- | ----- | ---- |  | - | --- | -
|                 |            |                          |  |      |    |      |  |      |     |      |  |            |     |       |  |       |     |  |  |   |     |  |  |   |     |  |  | 2001 |       | 2000
|Option Contracts |            | 2002                     |  | 2003 |    | 2004 |  | 2005 |     | 2006 |  | Thereafter |     | Total |  | Total
|                 |            |                          |  |      |    |      |  |      |     |      |  |            |     |       |  |      
|Long             |            |                          |  |      |    |      |  |      |     |      |  |            |     |       |  |       |     |  |  |   |     |  |  |   |     |  |  |      |       |      |  |  
|                
|                
|                
|                
|                 |            | Contract amount/notional |  | $    |   |      |  | $    | 119 |      |  | $          | 107 |       |  | $     | 45  |  |  | $ | 324 |  |  | $ | 128 |  |  | $    | 723   |      |  | $ | 589 |  
|                
|                
|                
|                
|                 | Fair value |                          |  |      |    |      |  |      |     |      |  |            |     |       |  |       |     |  |  |   |     |  |  |   |     |  |  | 28   |       |      |  | 6 |    
|                
|                
|                
|                
|Short            |            |                          |  |      |    |      |  |      |     |      |  |            |     |       |  |       |     |  |  |   |     |  |  |   |     |  |  |      |       |      |  |  
|                
|                
|                
|                
|                 |            | Contract amount/notional |  | $    | 39 |      |  | $    | 178 |      |  | $          | 427 |       |  | $     | 137 |  |  | $ | 245 |  |  | $ | 30  |  |  | $    | 1,056 |      |  | $ | 362 |  
|                
|                
|                
|                
|                 |            | Fair value               |  |      |    |      |  |      |     |      |  |            |     |       |  |       |     |  |  |   |     |  |  |   |     |  |  |      | (61   | )    |  |   | (40 | )
|                

Currency Exchange Risk

As of December 31, 2001, Life had immaterial currency exposures resulting from
its international operations.

Life Insurance Liability Characteristics

Hartford Lifes insurance 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

26



---



##### Table of Contents



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 asset accumulation 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 Company to pay 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 Company 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.

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 the Company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 will 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 the Companys management strategy. The
estimated cash flows of insurance policy liabilities based upon internal
actuarial assumptions as of December 31, 2001 are reflected in the table below
by expected maturity year. Comparative totals are included for December 31,
2000.

|                                              |                                |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |     |   |   |     |     |   |   |      |     |      |   |      |     |  
|--------------------------------------------- | ------------------------------ | ---- | --- | ---- | - | ---- | --- | ---- | - | ---- | --- | ---------- | - | ----- | --- | ----- | - | - | --- | --- | - | - | --- | --- | - | - | ---- | --- | ---- | - | ---- | --- | -
|(Dollars in billions)                         |                                |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |     |   |   |     |     |   |   |      |     |      |   |      |    
|                                              |                                |      |     |      |   |      |     |      |   |      |     |            |   |       |     |       |   |   |     |     |   |   |     |     |   |   | 2001 |     | 2000
|Description(1)                                |                                | 2002 |     | 2003 |   | 2004 |     | 2005 |   | 2006 |     | Thereafter |   | Total |     | Total
|                                              |                                |      |     |      |   |      |     |      |   |      |     |            |   |       |     |      
|Fixed rate asset accumulation vehicles        |                                | $    | 1.0 |      |   | $    | 1.3 |      |   | $    | 2.9 |            |   | $     | 3.0 |       |   | $ | 2.3 |     |   | $ | 5.3 |     |   | $ | 15.8 |     |      | $ | 10.4 |    
|                                             
|                                             
|                                             
|                                             
|                                              | Weighted average credited rate |      |     | 5.3  | % |      |     | 5.5  | % |      |     | 6.5        | % |       |     | 6.1   | % |   |     | 5.7 | % |   |     | 5.8 | % |   |      | 5.9 | %    |   |      | 6.7 | %
|                                             
|                                             
|                                             
|                                             
|Indexed asset accumulation vehicles           |                                | $    | 0.6 |      |   | $    | 0.1 |      |   | $    |    |            |   | $     |    |       |   | $ |    |     |   | $ | 0.1 |     |   | $ | 0.8  |     |      | $ | 0.7  |    
|                                             
|                                             
|                                             
|                                             
|                                              | Weighted average credited rate |      |     | 6.5  | % |      |     | 6.5  | % |      |     |           |   |       |     |      |   |   |     |    |   |   |     | 6.5 | % |   |      | 6.5 | %    |   |      | 6.3 | %
|                                             
|                                             
|                                             
|                                             
|Interest credited asset accumulation vehicles |                                | $    | 4.7 |      |   | $    | 0.5 |      |   | $    | 0.5 |            |   | $     | 0.2 |       |   | $ | 0.2 |     |   | $ | 2.0 |     |   | $ | 8.1  |     |      | $ | 10.1 |    
|                                             
|                                             
|                                             
|                                             
|                                              | Weighted average credited rate |      |     | 6.2  | % |      |     | 4.6  | % |      |     | 4.5        | % |       |     | 5.5   | % |   |     | 5.5 | % |   |     | 5.4 | % |   |      | 5.7 | %    |   |      | 5.9 | %
|                                             
|                                             
|                                             
|                                             
|Long-term pay out liabilities                 |                                | $    | 1.0 |      |   | $    | 0.5 |      |   | $    | 0.7 |            |   | $     | 0.6 |       |   | $ | 0.5 |     |   | $ | 5.3 |     |   | $ | 8.6  |     |      | $ | 6.5  |    
|                                             
|                                             
|                                             
|                                             
|Short-term pay out liabilities                |                                | $    | 0.9 |      |   | $    | 0.1 |      |   | $    |    |            |   | $     |    |       |   | $ |    |     |   | $ |    |     |   | $ | 1.0  |     |      | $ | 0.9  |    
|                                             



---

|(1) |  | As of December 31, 2001 and 2000, the fair value of the Companys
investment contracts, including guaranteed separate accounts, were $26.0
billion and $21.4 billion, respectively.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

27



---



##### Table of Contents



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 the Company, 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 is shown in the table below. These fixed liabilities
represented approximately 61% and 60% of the Companys general and guaranteed
separate account liabilities at December 31, 2001 and 2000, respectively. The
remaining liabilities generally allow the Company 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 annually in compliance with regulatory requirements.

|                           |  |                              |      |       |  |       |       |       |  |   |       |    |  |   |       |   
|-------------------------- |  | ---------------------------- | ---- | ----- |  | ----- | ----- | ----- |  | - | ----- | -- |  | - | ----- | --
|                           |  | Change in Net Economic Value
|                           |  |                             
|                           |  | 2001                         |      | 2000 
|                           |  |                              |      |      
|Basis point shift          |  | - 100                        |      | + 100 |  | - 100 |       | + 100
|                           |  |                              |      |       |  |       |       |      
|Amount                     |  | $                            | 6    |       |  | $     | (31   | )     |  | $ | (15   | )  |  | $ | (27   | ) 
|                          
|                          
|                          
|                          
|Percent of liability value |  |                              | 0.03 | %     |  |       | (0.16 | )%    |  |   | (0.09 | )% |  |   | (0.16 | )%

---

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 and borrow funds at competitive rates to meet operating and
growth needs. The Company maintained cash and short-term investments totaling
$1.4 billion and $1.1 billion as of December 31, 2001 and 2000, respectively.

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

|                                                                                                                                               |            |                            |       |       |       |      |       |     |       | 
|---------------------------------------------------------------------------------------------------------------------------------------------- | ---------- | -------------------------- | ----- | ----- | ----- | ---- | ----- | --- | ----- | 
|                                                                                                                                               |            |                            |       | 2001  |       | 2000
|                                                                                                                                               |            |                            |       |       |       |     
|Long-term debt                                                                                                                                 |            |                            | 1,050 |       |       |      | 650   |    
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Company obligated mandatorily redeemable preferred securities of subsidiary
trust holding solely parent junior subordinated debentures (TruPS) |            |                            | 450   |       |       |      | 250   |    
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                               | Total debt |                            | $     | 1,500 |       |      | $     | 900 |      
|                                                                                                                                               |            |                            |       |       |       |      |       |    
|Equity excluding net unrealized capital gains (losses) on securities, net of tax                                                               |            | $                          | 4,385 |       |       | $    | 3,167 |    
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Net unrealized capital gains (losses) on securities, net of tax                                                                                |            |                            | 225   |       |       |      | 40    |    
|                                                                                                                                               |            |                            |       |       |       |      |       |    
|                                                                                                                                               |            | Total stockholders equity |       | $     | 4,610 |      |       | $   | 3,207 | 
|                                                                                                                                               |            |                            |       |       |       |      |       |    
|                                                                                                                                               |            | Total capitalization(1)    |       | $     | 5,885 |      |       | $   | 4,067 | 
|                                                                                                                                               |            |                            |       |       |       |      |       |    
|Debt to equity (1) (2)                                                                                                                         |            |                            | 34    | %     |       |      | 28    | %  
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|                                                                                                                                              
|Debt to capitalization (1) (2)                                                                                                                 |            |                            | 25    | %     |       |      | 22    | %  
|                                                                                                                                               |            |                            |       |       |       |      |       |    

---



---

|(1) |  | Excludes net unrealized capital gains (losses) on securities, net of tax.                                                                                                    
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Excluding TruPS from debt, the debt to equity ratios were 24% and 21%,
and the debt to capitalization ratios were 18% and 16% as of December 31,
2001 and 2000, respectively.

Capitalization

The Companys total capitalization, excluding net unrealized capital gains
(losses) on securities, net of tax, increased $1,818, or 45%, in 2001. The
increase was primarily the result of net income of $685, a capital contribution
from The Hartford in the amount of $615, additional debt of $400 and TRUPS of
$200 in connection with the acquisition of Fortis Financial Group, partially
offset by dividends declared of $66. As a result, both the debt to equity and
debt to capitalization ratios (both exclude net unrealized capital gains
(losses) on securities, net of tax) increased to 34% and 25% as of December 31,
2001, respectively, from 28% and 22% as of December 31, 2000, respectively.
Net unrealized capital gains (losses) on securities, net of tax, increased $185
as December 31, 2001, as compared to December 31, 2000, primarily due to the
impact of decreased interest rates on the Companys fixed maturity portfolio.

28



---



##### Table of Contents



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

Hartford Life declared $66 in dividends for 2001 to Hartford Fire Insurance
Company. 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 and paid to the Company dividends of $128 in 2001. Statutory net loss
in 2001 was $364 as compared to net income of $399 in 2000. The loss in the
current year was primarily the result of the ceding commission paid on the
Fortis Financial Group acquisition. Statutory capital and surplus as of
December 31, 2001 was $3.0 billion, a 25% increase over December 31, 2000.

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.

29



---



##### Table of Contents



Ratings

The following table summarizes Hartford Lifes significant U.S. member
companies financial ratings from the major independent rating organizations
as of February 28, 2002:

|                  |                                                               |                  |  |           |   |       |     |         |     |                   |    |    |     |  |      |   |     | 
|----------------- | ------------------------------------------------------------- | ---------------- |  | --------- | - | ----- | --- | ------- | --- | ----------------- | -- | -- | --- |  | ---- | - | --- | 
|                  |                                                               |                  |  | 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-1 | 
|                 
|                 
|                 
|                 
|                  | Hartford
Life Capital I and II (1)
Trust preferred securities |                  |  | a        |   |       |     | A       |     |                   |    | A3 |     |  | BBB+

---



---

|(1) |  | A.M. Best ratings were adjusted to reflect the integration of A.M. Bests debt and preferred stock scales.
|--- |  | ----------------------------------------------------------------------------------------------------------

Ratings are an important factor in establishing the competitive position of an
insurance company such as Hartford Life. 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.

As a result of the September 11 terrorist attack and subsequent reviews by
major independent rating agencies, all insurance financial strength and debt
ratings of the Company were reaffirmed. However, negative outlooks were
placed upon the debt ratings of the Company by Moodys. All other ratings
were reaffirmed with stable outlooks.

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 facility. The principal sources of funds are premiums
and investment income as well as maturities and sales of invested assets.
Hartford Life, Inc. 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), as an insurance company domiciled in
Connecticut, are subject to restriction as prescribed in the insurance holding
company laws of Connecticut. HLA adheres to these laws, which require notice
to and approval by the state insurance commissioner for the declaration or
payment of any dividend that, 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 gain from operations 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
total amount of statutory dividends which may be paid by the insurance
subsidiaries of the Company without prior approval in 2002 is estimated to be
$299.

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 limitations on the payment of dividends.

The primary uses of funds are to pay claims, policy benefits, operating
expenses and commissions and to purchase new investments. Hartford Life
carries 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.

30



---



##### Table of Contents



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, 2001, Hartford Life
had more than sufficient capital to meet the NAICs RBC requirements.

|                                                 |  |      |        |      |  |      |        |   |  |   |        |  
|------------------------------------------------ |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|Cash Flow                                        |  |      |        |      |  |      |        |   |  |   |        |  
|                                                 |  | 2001 |        | 2000 |  | 1999
|                                                 |  |      |        |      |  |     
|Cash provided by operating activities            |  | $    | 1,673  |      |  | $    | 1,701  |   |  | $ | 724    |  
|                                                
|                                                
|                                                
|                                                
|Cash (used for) provided by investing activities |  |      | (4,624 | )    |  |      | (564   | ) |  |   | 1,907  |  
|                                                
|                                                
|                                                
|                                                
|Cash provided by (used for) financing activities |  |      | 3,018  |      |  |      | (1,118 | ) |  |   | (2,578 | )
|                                                
|                                                
|                                                
|                                                
|Cash  end of year                               |  |      | 167    |      |  |      | 106    |   |  |   | 89     |  

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) provided by 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.

2000 Compared to 1999 -The increase in cash
provided by operating activities was primarily the result of the
timing of the settlement of receivables, payables and other related
liabilities, as well as increased future policy benefits and net
income associated with growth in the business. The decrease in cash
(used for) provided by investing activities and the decrease in cash
used for financing activities primarily relates to the significant
downsizing of the leveraged COLI block of business during 1999 as
compared to 2000. Operating cash flow in the periods presented have
been more than adequate to meet liquidity requirements.

REGULATORY MATTERS AND CONTINGENCIES

Legislative and Regulatory Initiatives

The business of insurance is primarily regulated by the states and is also
affected by a range of legislative developments at the state and federal
levels. The 1999 Gramm-Leach-Bliley Act (the Financial Services Modernization
Act), which allows affiliations among banks, insurance companies and securities
firms, did not precipitate any significant changes in ownership in 2000. The
provisions of the Act requiring the development of a formal privacy policy by
each financial institution had created a number of administrative issues, but
the enforcement date was delayed until July 1, 2001. Insurance companies are
subject to privacy regulation issued by the federal regulators and by state
regulators who adopted and implemented privacy regulations during 2001.

The enactment of the Financial Services Modernization Act has focused renewed
attention on state regulation of insurance. Life insurers are working with
state insurance regulators to improve and centralize the process for agent
licensing and form filing. Both of these areas of regulation are critical to
the development of new business. In addition, Congress may consider
legislation providing for optional federal regulation of insurance in the
future. These measures, state and federal, may lead to improved regulation and
reduced transaction costs.

Federal measures which have been previously considered by Congress and which,
if adopted, 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,
a number of which could impact the relative desirability of various personal
investment vehicles. Other proposals pertain to medical testing for
insurability, and the use of gender in determining insurance and pension rates
and benefits. It is too early to determine whether any of these proposals will
ultimately be enacted by Congress. Therefore, the potential impact to the
Companys financial condition or results of operations cannot be reasonably
estimated at this time.

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
were no guaranty fund assessment payments (net of refunds) in 2001 and 2000.
The Company paid guaranty fund assessments (net of refunds) of approximately $2
in 1999, of which $1 was estimated to be creditable against future premium
taxes.

31



---



##### Table of Contents



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 one-time statutory
cumulative transition benefit of $74 in statutory surplus for 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 marketing organizations.
The Company periodically negotiates provisions and renewals of these
relationships and there can be no assurance that such terms will remain
acceptable to the Company or such service providers. An interruption in the
Companys continuing relationship with certain of these third parties could
materially affect the Companys ability to market its products. During the
first quarter of 1999, the Company modified its contract with Putnam Mutual
Funds Corp. (Putnam) to eliminate the exclusivity provision, which will allow
both parties to pursue new market opportunities. Putnam is contractually
obligated to support and service the related annuity in force block of business
and to market, support and service new business. However, there can be no
assurance that this contract modification will not adversely impact the
Companys ability to distribute Putnam-related products.

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 fiscal years presented.

ACCOUNTING STANDARDS

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

32



---



##### Table of Contents






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 IV




Item 14. 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 and Schedules elsewhere herein.

3.     Exhibits.See Exhibit Index elsewhere herein.

(b)  Reports on Form 8-K  None.

(c)  Exhibits  See Item 14(a)(3).

(d)  Schedules  See Item 14(a)(2).

33



---



##### Table of Contents



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

|                                                                                                                |  |         |        | 
|--------------------------------------------------------------------------------------------------------------- |  | ------- | ------ | 
|                                                                                                                |  | Page(s)
|Report of Management                                                                                            |  |         | F-1    | 
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Report of Independent Public Accountants                                                                        |  |         | F-2    | 
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Consolidated Statements of Income for the years ended December 31, 2001, 2000 and 1999                          |  |         | F-3    | 
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Consolidated Balance Sheets as of December 31, 2001 and 2000                                                    |  |         | F-4    | 
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Consolidated Statements of Changes in Stockholders Equity for the years ended
December 31, 2001, 2000 and 1999 |  |         | F-5    | 
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2000 and 1999                      |  |         | F-6    | 
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Notes to Consolidated Financial Statements                                                                      |  |         | F-727 | 
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|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 Arthur Andersen LLP, independent public accountants, in order for them
to perform an audit 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 the 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. Also, Arthur
Andersen LLP took into consideration Hartford Lifes system of internal
controls in determining the nature, timing and extent of their audit tests.

Another important element is managements recognition of its responsibility for
fostering a strong, ethical climate, thereby ensuring that Hartford Lifes
affairs are 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



---



##### Table of Contents



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Hartford Life, Inc.:

We have audited the accompanying Consolidated Balance Sheets of Hartford
Life, Inc. (Hartford Life) (a Delaware corporation) and its subsidiaries as
of December 31, 2001 and 2000, 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, 2001. These Consolidated
Financial Statements and the schedules referred to below are the
responsibility of Hartford Lifes management. Our responsibility is to
express an opinion on these financial statements and schedules based on
our audits.

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

In our opinion, the Consolidated Financial Statements referred to above
present fairly, in all material respects, the financial position of
Hartford Life and subsidiaries as of December 31, 2001 and 2000, and the
results of their operations and their cash flows for each of the three
years in the period ended December 31, 2001 in conformity with accounting
principles generally accepted in the United States.

As explained in Note 2(b) to the financial
statements, effective January 1, 2001, the Company changed its
method of accounting for derivatives and hedging activities.
Effective April 1, 2001, the Company changed its method of
accounting for recognition of interest income and impairment on
purchased and retained beneficial interests in securitized financial
assets.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed in the Index
to Consolidated Financial Statements and Schedules are presented for the
purpose of complying with the Securities and Exchange Commissions rules
and are not part of the basic financial statements. These schedules have
been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, fairly state in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.

Arthur Andersen LLP

Hartford, Connecticut
January 28, 2002

F-2



---



##### Table of Contents



HARTFORD LIFE, INC. AND SUBSIDIARIESConsolidated Statements of Income

|                                                                                      |                                                       |      |                                  |       |  |      |       |       |  |   |       |       | 
|------------------------------------------------------------------------------------- | ----------------------------------------------------- | ---- | -------------------------------- | ----- |  | ---- | ----- | ----- |  | - | ----- | ----- | 
|                                                                                      |                                                       |      | For the years ended December 31,
|                                                                                      |                                                       |      |                                 
|(In millions)                                                                         |                                                       | 2001 |                                  | 2000  |  | 1999
|                                                                                      |                                                       |      |                                  |       |  |     
|Revenues                                                                              |                                                       |      |                                  |       |  |      |       |       |  |   |       |      
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Fee income                                                                            |                                                       | $    | 2,633                            |       |  | $    | 2,484 |       |  | $ | 2,105 |      
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Earned premiums and other                                                             |                                                       |      | 2,270                            |       |  |      | 2,002 |       |  |   | 1,874 |      
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Net investment income                                                                 |                                                       |      | 1,779                            |       |  |      | 1,592 |       |  |   | 1,562 |      
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Net realized capital losses                                                           |                                                       |      | (133                             | )     |  |      | (88   | )     |  |   | (5    | )    
|                                                                                      |                                                       |      |                                  |       |  |      |       |       |  |   |       |      
|                                                                                      | Total revenues                                        |      |                                  | 6,549 |  |      |       | 5,990 |  |   |       | 5,536 | 
|                                                                                      |                                                       |      |                                  |       |  |      |       |       |  |   |       |      
|Benefits, claims and expenses                                                         |                                                       |      |                                  |       |  |      |       |       |  |   |       |      
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Benefits, claims and claim adjustment expenses                                        |                                                       |      | 3,611                            |       |  |      | 3,162 |       |  |   | 3,054 |      
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Insurance expenses and other                                                          |                                                       |      | 1,359                            |       |  |      | 1,236 |       |  |   | 1,057 |      
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Amortization of deferred policy acquisition costs and present
value of future profits |                                                       |      | 642                              |       |  |      | 671   |       |  |   | 568   |      
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Dividends to policyholders                                                            |                                                       |      | 68                               |       |  |      | 67    |       |  |   | 104   |      
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Interest expense                                                                      |                                                       |      | 104                              |       |  |      | 66    |       |  |   | 67    |      
|                                                                                      |                                                       |      |                                  |       |  |      |       |       |  |   |       |      
|                                                                                      | Total benefits, claims and expenses                   |      |                                  | 5,784 |  |      |       | 5,202 |  |   |       | 4,850 | 
|                                                                                      |                                                       |      |                                  |       |  |      |       |       |  |   |       |      
|                                                                                      | Income before income tax expense                      |      |                                  |       |  |      |       |       |  |   |       |       | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      | and cumulative effect of                              |      |                                  |       |  |      |       |       |  |   |       |       | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      | accounting changes                                    |      |                                  | 765   |  |      |       | 788   |  |   |       | 686   | 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Income tax expense                                                                    |                                                       |      | 54                               |       |  |      | 213   |       |  |   | 219   |      
|                                                                                      |                                                       |      |                                  |       |  |      |       |       |  |   |       |      
|                                                                                      | Income before cumulative effect of
accounting changes |      |                                  | 711   |  |      |       | 575   |  |   |       | 467   | 
|                                                                                      |                                                       |      |                                  |       |  |      |       |       |  |   |       |      
|Cumulative effect of accounting changes, net of tax                                   |                                                       |      | (26                              | )     |  |      |      |       |  |   |      |      
|                                                                                      |                                                       |      |                                  |       |  |      |       |       |  |   |       |      
|                                                                                      | Net income                                            |      | $                                | 685   |  |      | $     | 575   |  |   | $     | 467   | 
|                                                                                      |                                                       |      |                                  |       |  |      |       |       |  |   |       |      

See Notes to Consolidated Financial Statements.

F-3



---



##### Table of Contents



HARTFORD LIFE, INC. AND SUBSIDIARIESConsolidated Balance Sheets

|                                                                                                                                       |                                                     |                                    |                            |                                            |        |                    |         |    |        |       |         | 
|-------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | ---------------------------------- | -------------------------- | ------------------------------------------ | ------ | ------------------ | ------- | -- | ------ | ----- | ------- | 
|                                                                                                                                       |                                                     |                                    |                            |                                            |        | As of December 31,
|                                                                                                                                       |                                                     |                                    |                            |                                            |        |                   
|(In millions, except for share data)                                                                                                   |                                                     | 2001                               |                            | 2000                                      
|                                                                                                                                       |                                                     |                                    |                            |                                           
|Assets                                                                                                                                 |                                                     |                                    |                            |                                            |        |                    |         |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Investments                                                                                                                            |                                                     |                                    |                            |                                            |        |                    |         |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Fixed maturities, available for sale, at fair value (amortized cost of
$23,010 and $18,171)                                            |                                                     | $                                  | 23,301                     |                                            |        | $                  | 18,248  |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Equity securities, available for sale, at fair value                                                                                   |                                                     |                                    | 428                        |                                            |        |                    | 171     |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Policy loans, at outstanding balance                                                                                                   |                                                     |                                    | 3,317                      |                                            |        |                    | 3,610   |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Other investments                                                                                                                      |                                                     |                                    | 1,331                      |                                            |        |                    | 910     |   
|                                                                                                                                       |                                                     |                                    |                            |                                            |        |                    |         |   
|                                                                                                                                       |                                                     | Total investments                  |                            |                                            | 28,377 |                    |         |    | 22,939 |      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Cash                                                                                                                                   |                                                     |                                    | 167                        |                                            |        |                    | 106     |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Premiums receivable and agents balances                                                                                               |                                                     |                                    | 229                        |                                            |        |                    | 216     |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Reinsurance recoverables                                                                                                               |                                                     |                                    | 648                        |                                            |        |                    | 542     |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Deferred policy acquisition costs and present value of future profits                                                                  |                                                     |                                    | 5,572                      |                                            |        |                    | 4,527   |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Deferred income tax                                                                                                                    |                                                     |                                    | (16                        | )                                          |        |                    | 223     |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Goodwill                                                                                                                               |                                                     |                                    | 799                        |                                            |        |                    | 244     |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Other assets                                                                                                                           |                                                     |                                    | 1,116                      |                                            |        |                    | 830     |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Separate account assets                                                                                                                |                                                     |                                    | 114,720                    |                                            |        |                    | 113,994 |   
|                                                                                                                                       |                                                     |                                    |                            |                                            |        |                    |         |   
|                                                                                                                                       |                                                     |                                    |                            | Total assets                               |        | $                  | 151,612 |    |        | $     | 143,621 | 
|                                                                                                                                       |                                                     |                                    |                            |                                            |        |                    |         |   
|Liabilities                                                                                                                            |                                                     |                                    |                            |                                            |        |                    |         |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Future policy benefits                                                                                                                 |                                                     | $                                  | 8,842                      |                                            |        | $                  | 7,074   |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Other policyholder funds                                                                                                               |                                                     |                                    | 19,357                     |                                            |        |                    | 15,849  |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Long-term debt                                                                                                                         |                                                     |                                    | 1,050                      |                                            |        |                    | 650     |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Company obligated mandatorily redeemable preferred securities of
subsidiary
trust holding solely parent junior subordinated debentures |                                                     |                                    | 450                        |                                            |        |                    | 250     |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Other liabilities                                                                                                                      |                                                     |                                    | 2,583                      |                                            |        |                    | 2,597   |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Separate account liabilities                                                                                                           |                                                     |                                    | 114,720                    |                                            |        |                    | 113,994 |   
|                                                                                                                                       |                                                     |                                    |                            |                                            |        |                    |         |   
|                                                                                                                                       |                                                     |                                    |                            | Total liabilities                          |        |                    | 147,002 |    |        |       | 140,414 | 
|                                                                                                                                       |                                                     |                                    |                            |                                            |        |                    |         |   
|Commitments and Contingent Liabilities, Note 18                                                                                        |                                                     |                                    |                            |                                            |        |                    |         |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Stockholders Equity                                                                                                                   |                                                     |                                    |                            |                                            |        |                    |         |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Common
Stock - 1,000 shares issued and outstanding, par value $0.01                                                                    |                                                     |                                    |                           |                                            |        |                    |        |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Capital surplus                                                                                                                        |                                                     |                                    | 1,895                      |                                            |        |                    | 1,280   |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Accumulated other comprehensive income (loss)                                                                                          |                                                     |                                    |                            |                                            |        |                    |         |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Net unrealized capital gains (losses) on securities, net of tax                                                                        |                                                     |                                    | 225                        |                                            |        |                    | 40      |   
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                       |                                                     | Cumulative translation adjustments |                            |                                            | (29    | )                  |         |    | (13    | )    
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                       | Total accumulated other comprehensive income (loss) |                                    |                            | 196                                        |        |                    |         | 27 |       
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|                                                                                                                                      
|Retained earnings                                                                                                                      |                                                     |                                    | 2,519                      |                                            |        |                    | 1,900   |   
|                                                                                                                                       |                                                     |                                    |                            |                                            |        |                    |         |   
|                                                                                                                                       |                                                     |                                    | Total stockholders equity |                                            |        | 4,610              |         |    |        | 3,207 |        
|                                                                                                                                       |                                                     |                                    |                            |                                            |        |                    |         |   
|                                                                                                                                       |                                                     |                                    |                            | Total liabilities and stockholders equity |        | $                  | 151,612 |    |        | $     | 143,621 | 
|                                                                                                                                       |                                                     |                                    |                            |                                            |        |                    |         |   

See Notes to Consolidated Financial Statements.

F-4



---



##### Table of Contents



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



|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |   |   |     |  
|----------------------------------------------------------- | ---- | ----------------------------------------------------------------- | -------------------------- | ----- | ------- | ------- | ------- | ------- | ------- | - | ------ | - | -------- | ----- | --- | - | - | --- | -
|                                                            |      |                                                                   |                            |       | Class A |         | Class B |         |         |   |        |   | Treasury
|                                                            |      |                                                                   |                            |       | Common  |         | Common  |         | Capital |   | Stock,
|(In millions)                                               |      | Stock                                                             |                            | Stock |         | Surplus |         | at Cost
|                                                            |      |                                                                   |                            |       |         |         |         |        
|                                                            | 2001 |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |   |  
|                                                           
|                                                           
|                                                           
|                                                           
|Balance, December 31, 2000                                  |      | $                                                                 |                           |       |         | $       |        |         |         | $ | 1,280  |   |          | $     |    |  
|                                                           
|                                                           
|                                                           
|                                                           
|Comprehensive income                                        |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                           
|                                                           
|                                                           
|                                                           
|Net income                                                  |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|Other comprehensive income, net of tax (1)                  |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            |      | Cumulative effect of accounting change(2)                        
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            |      | Net change in unrealized capital gains
(losses) on securities (3) |                            |       |         |         |         |         |         |   |        |   |          |       |     |   |   |    
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            |      | Net gain on cash flow hedging instruments                         |                            |       |         |         |         |         |         |   |        |   |          |       |     |   |   |    
|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                            |      | Cumulative translation adjustments                                |                            |       |         |         |         |         |         |   |        |   |          |       |     |   |   |    
|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|Total other comprehensive income                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                            |      | Total comprehensive income                                        |                            |       |         |         |         |         |         |   |        |   |          |       |     |   |   |    
|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|Dividends declared                                          |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                           
|                                                           
|                                                           
|                                                           
|Capital contribution from parent                            |      |                                                                   |                            |       |         |         |         |         |         |   | 615    |   |          |       |     |  
|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                            |      |                                                                   | Balance, December 31, 2001 |       | $       |        |         |         | $       |  |        |   | $        | 1,895 |     |   | $ |    |  
|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                            | 2000 |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |   |  
|                                                           
|                                                           
|                                                           
|                                                           
|Balance, December 31, 1999                                  |      | $                                                                 |                           |       |         | $       | 1       |         |         | $ | 1,282  |   |          | $     | (10 | )
|                                                           
|                                                           
|                                                           
|                                                           
|Comprehensive income                                        |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                           
|                                                           
|                                                           
|                                                           
|Net income                                                  |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|Other comprehensive income, net of tax (1)                  |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            |      | Net change in unrealized capital gains
(losses) on securities (3) |                            |       |         |         |         |         |         |   |        |   |          |       |     |   |   |    
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            |      | Cumulative translation adjustments                                |                            |       |         |         |         |         |         |   |        |   |          |       |     |   |   |    
|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|Total other comprehensive income                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                            |      | Total comprehensive income                                        |                            |       |         |         |         |         |         |   |        |   |          |       |     |   |   |    
|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|Dividends declared                                          |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                           
|                                                           
|                                                           
|                                                           
|Issuance of shares under incentive and
stock purchase plans |      |                                                                   |                            |       |         |         |         |         |         |   | 1      |   |          |       | 8   |  
|                                                           
|                                                           
|                                                           
|                                                           
|Treasury stock acquired                                     |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       | (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 |     |   | $ |    |  
|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                            | 1999 |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |   |  
|                                                           
|                                                           
|                                                           
|                                                           
|Balance, December 31, 1998                                  |      | $                                                                 |                           |       |         | $       | 1       |         |         | $ | 1,281  |   |          | $     | (9  | )
|                                                           
|                                                           
|                                                           
|                                                           
|Comprehensive income (loss)                                 |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                           
|                                                           
|                                                           
|                                                           
|Net income                                                  |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|Other comprehensive income, net of tax (1)                  |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            |      | Net change in unrealized capital gains
(losses) on securities (3) |                            |       |         |         |         |         |         |   |        |   |          |       |     |   |   |    
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            |      | Cumulative translation adjustments                                |                            |       |         |         |         |         |         |   |        |   |          |       |     |   |   |    
|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|Total other comprehensive loss                              |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                            |      | Total comprehensive income (loss)                                 |                            |       |         |         |         |         |         |   |        |   |          |       |     |   |   |    
|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|Dividends declared                                          |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                           
|                                                           
|                                                           
|                                                           
|Issuance of shares under incentive and
stock purchase plans |      |                                                                   |                            |       |         |         |         |         |         |   | 1      |   |          |       | 9   |  
|                                                           
|                                                           
|                                                           
|                                                           
|Treasury stock acquired                                     |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       | (10 | )
|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  
|                                                            |      |                                                                   | Balance, December 31, 1999 |       | $       |        |         |         | $       | 1 |        |   | $        | 1,282 |     |   | $ | (10 | )
|                                                            |      |                                                                   |                            |       |         |         |         |         |         |   |        |   |          |       |     |  

F-5



---



##### Table of Contents



|                                                                                     |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |       |   |      |       | 
|------------------------------------------------------------------------------------ | ---- | ----------------------------------------------------------------- | -------------------------- | ---------- | --------------------------- | ----------- | ------------ | -------- | ----------- | ------ | -------- | - | ------------- | --- | ----- | - | - | ----- | ----- | - | ---- | ----- | 
|                                                                                     |      |                                                                   |                            |            | Accumulated Other           |             |              |          |             |        |          |   |               |     |       |   |  
|                                                                                     |      |                                                                   |                            |            | Comprehensive Income (Loss) |             |              |          |             |        |          |   |               |     |       |   |  
|                                                                                     |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |  
|                                                                                     |      |                                                                   |                            |            | Net Unrealized              |             | Net Gain on  |          |             |        |          |   |               |     |       |   |   |       |      
|                                                                                     |      |                                                                   |                            |            | Capital                     |             | Cash Flow    |          |             |        |          |   |               |     |       |   |   |       |      
|                                                                                     |      |                                                                   |                            |            | Gains (Losses)              |             | Hedging      |          | Cumulative  |        |          |   |               |     | Total
|                                                                                     |      |                                                                   |                            |            | on Securities,              |             | Instruments, |          | Translation |        | Retained |   | Stockholders
|(In millions)                                                                        |      | Net of Tax                                                        |                            | Net of Tax |                             | Adjustments |              | Earnings |             | Equity
|                                                                                     |      |                                                                   |                            |            |                             |             |              |          |             |       
|                                                                                     | 2001 |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |       |   |     
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Balance, December 31, 2000                                                           |      | $                                                                 | 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   |  
|                                                                                     |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |       |  
|                                                                                     |      |                                                                   | Balance, December 31, 2001 |            | $                           | 163         |              |          | $           | 62     |          |   | $             | (29 | )     |   | $ | 2,519 |       |   | $    | 4,610 | 
|                                                                                     |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |       |  
|                                                                                     | 2000 |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |       |   |     
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Balance, December 31, 1999                                                           |      | $                                                                 | (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                          |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       | 9     |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Treasury stock acquired                                                              |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       | (2    | )
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Treasury stock canceled and retired                                                  |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |      |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Class B Common Stock converted to Class A                                            |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |      |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Class A Common Stock canceled and retired                                            |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |      |  
|                                                                                     |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |       |  
|                                                                                     |      |                                                                   | Balance, December 31, 2000 |            | $                           | 40          |              |          | $           |       |          |   | $             | (13 | )     |   | $ | 1,900 |       |   | $    | 3,207 | 
|                                                                                     |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |       |  
|                                                                                     | 1999 |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |       |   |     
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Balance, December 31, 1998                                                           |      | $                                                                 | 263                        |            |                             | $           |             |          |             | $      | (7       | ) |               | $   | 964   |   |   | $     | 2,493 |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Comprehensive income (loss)                                                          |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |       |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Net income                                                                           |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     | 467   |   |   |       | 467   |  
|                                                                                     |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |       |  
|Other comprehensive income, net of tax (1)                                           |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |       |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Net change in unrealized capital gains
(losses) on securities (3)                    |      |                                                                   | (599                       | )          |                             |             |              |          |             |        |          |   |               |     |       |   |   |       | (599  | )
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                     |      | Cumulative translation adjustments                                |                            |            |                             |             |              |          |             |        |          |   | (5            | )   |       |   |   |       |       |   | (5   | )    
|                                                                                     |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |       |  
|Total other comprehensive loss                                                       |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       | (604  | )
|                                                                                     |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |       |  
|                                                                                     |      | Total comprehensive income (loss)                                 |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |       |   | (137 | )    
|                                                                                     |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |       |  
|Dividends declared                                                                   |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     | (50   | ) |   |       | (50   | )
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Issuance of shares under incentive and
stock purchase plans                          |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       | 10    |  
|                                                                                    
|                                                                                    
|                                                                                    
|                                                                                    
|Treasury stock acquired                                                              |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       | (10   | )
|                                                                                     |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |       |  
|                                                                                     |      |                                                                   | Balance, December 31, 1999 |            | $                           | (336        | )            |          | $           |       |          |   | $             | (12 | )     |   | $ | 1,381 |       |   | $    | 2,306 | 
|                                                                                     |      |                                                                   |                            |            |                             |             |              |          |             |        |          |   |               |     |       |   |   |       |       |  



---

|(1) |  | Net change in unrealized capital gain (losses) on securities is reflected net of tax provision
(benefit) of $65, $201 and $(326) for the years ended December 31, 2001,
2000 and 1999, 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 $33 for the
year ended December 31, 2001. 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 ($89) and $(57) for the year ended December 31, 2001
and 2000, respectively. There were no reclassification adjustments for
after-tax gains (losses) realized in net income for the year ended
December 31, 1999.                                                                                                                                                                                 

See Notes to Consolidated Financial Statements.

F-6



---



##### Table of Contents



HARTFORD LIFE, INC. AND SUBSIDIARIESConsolidated Statements of Cash Flows

|                                                                                                                                                                 |                                                      |      |                                  |        |   |      |        |        |   |   |        |        |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------- | ---- | -------------------------------- | ------ | - | ---- | ------ | ------ | - | - | ------ | ------ | -
|                                                                                                                                                                 |                                                      |      | For the years ended December 31,
|                                                                                                                                                                 |                                                      |      |                                 
|(In millions)                                                                                                                                                    |                                                      | 2001 |                                  | 2000   |   | 1999
|                                                                                                                                                                 |                                                      |      |                                  |        |   |     
|Operating Activities                                                                                                                                             |                                                      |      |                                  |        |   |      |        |        |   |   |        |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Net income                                                                                                                                                       |                                                      | $    | 685                              |        |   | $    | 575    |        |   | $ | 467    |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Adjustments to reconcile net income to net cash provided by operating activities                                                                                 |                                                      |      |                                  |        |   |      |        |        |   |   |        |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Net realized capital losses                                                                                                                                      |                                                      |      | 133                              |        |   |      | 88     |        |   |   | 5      |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Cumulative effect of accounting changes, net of tax                                                                                                              |                                                      |      | 26                               |        |   |      |       |        |   |   |       |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Amortization of deferred policy acquisition costs and present value of future
profits                                                                            |                                                      |      | 642                              |        |   |      | 671    |        |   |   | 568    |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Additions to deferred policy acquisition costs and present value of future
profits                                                                               |                                                      |      | (1,083                           | )      |   |      | (988   | )      |   |   | (948   | )     
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Depreciation and amortization                                                                                                                                    |                                                      |      | 27                               |        |   |      | 6      |        |   |   | 7      |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Increase in premiums receivable and agents balances                                                                                                             |                                                      |      | (14                              | )      |   |      | (2     | )      |   |   | (48    | )     
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Increase (decrease) in other liabilities                                                                                                                         |                                                      |      | 17                               |        |   |      | 362    |        |   |   | (297   | )     
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Change in receivables, payables and accruals                                                                                                                     |                                                      |      | (47                              | )      |   |      | 88     |        |   |   | 195    |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Increase (decrease) in accrued tax                                                                                                                               |                                                      |      | 103                              |        |   |      | 12     |        |   |   | (159   | )     
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Decrease (increase) in deferred income tax                                                                                                                       |                                                      |      | (2                               | )      |   |      | 95     |        |   |   | 251    |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Increase in future policy benefits                                                                                                                               |                                                      |      | 1,417                            |        |   |      | 838    |        |   |   | 710    |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|(Increase) decrease in reinsurance recoverables                                                                                                                  |                                                      |      | (127                             | )      |   |      | (62    | )      |   |   | 74     |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Other, net                                                                                                                                                       |                                                      |      | (104                             | )      |   |      | 18     |        |   |   | (101   | )     
|                                                                                                                                                                 |                                                      |      |                                  |        |   |      |        |        |   |   |        |       
|                                                                                                                                                                 | Net cash provided by operating activities            |      |                                  | 1,673  |   |      |        | 1,701  |   |   |        | 724    |  
|                                                                                                                                                                 |                                                      |      |                                  |        |   |      |        |        |   |   |        |       
|Investing Activities                                                                                                                                             |                                                      |      |                                  |        |   |      |        |        |   |   |        |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Purchases of investments                                                                                                                                         |                                                      |      | (12,023                          | )      |   |      | (7,218 | )      |   |   | (7,194 | )     
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Sales of investments                                                                                                                                             |                                                      |      | 6,116                            |        |   |      | 5,073  |        |   |   | 7,267  |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Maturity and principle paydowns of fixed maturity investments                                                                                                    |                                                      |      | 2,470                            |        |   |      | 1,693  |        |   |   | 1,938  |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Acquisition of Fortis Financial Group                                                                                                                            |                                                      |      | (1,078                           | )      |   |      |       |        |   |   |       |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Other                                                                                                                                                            |                                                      |      | (109                             | )      |   |      | (112   | )      |   |   | (104   | )     
|                                                                                                                                                                 |                                                      |      |                                  |        |   |      |        |        |   |   |        |       
|                                                                                                                                                                 | Net cash (used for) provided by investing activities |      |                                  | (4,624 | ) |      |        | (564   | ) |   |        | 1,907  |  
|                                                                                                                                                                 |                                                      |      |                                  |        |   |      |        |        |   |   |        |       
|Financing Activities                                                                                                                                             |                                                      |      |                                  |        |   |      |        |        |   |   |        |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Capital contribution from parent                                                                                                                                 |                                                      |      | 615                              |        |   |      |       |        |   |   |       |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Proceeds from issuance of long-term debt                                                                                                                         |                                                      |      | 400                              |        |   |      |       |        |   |   |       |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Proceeds from issuance of company obligated mandatorily
redeemable preferred securities of subsidiary trust holding solely
parent junior subordinated debentures |                                                      |      | 200                              |        |   |      |       |        |   |   |       |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Dividends paid                                                                                                                                                   |                                                      |      | (64                              | )      |   |      | (55    | )      |   |   | (50    | )     
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Net receipts from (disbursements for) investment and universal lifetype
contracts charged against policyholder accounts                                         |                                                      |      | 1,867                            |        |   |      | (1,069 | )      |   |   | (2,527 | )     
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Proceeds from parent to retire common stock                                                                                                                      |                                                      |      |                                 |        |   |      | 226    |        |   |   |       |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Payments to retire common stock                                                                                                                                  |                                                      |      |                                 |        |   |      | (226   | )      |   |   |       |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Net issuance (purchase) of common stock                                                                                                                          |                                                      |      |                                 |        |   |      | 6      |        |   |   | (1     | )     
|                                                                                                                                                                 |                                                      |      |                                  |        |   |      |        |        |   |   |        |       
|                                                                                                                                                                 | Net cash provided by (used for) financing activities |      |                                  | 3,018  |   |      |        | (1,118 | ) |   |        | (2,578 | )
|                                                                                                                                                                 |                                                      |      |                                  |        |   |      |        |        |   |   |        |       
|Net increase (decrease) in cash                                                                                                                                  |                                                      |      | 67                               |        |   |      | 19     |        |   |   | 53     |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Impact of foreign exchange                                                                                                                                       |                                                      |      | (6                               | )      |   |      | (2     | )      |   |   |       |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Cash  beginning of year                                                                                                                                         |                                                      |      | 106                              |        |   |      | 89     |        |   |   | 36     |       
|                                                                                                                                                                 |                                                      |      |                                  |        |   |      |        |        |   |   |        |       
|                                                                                                                                                                 | Cash  end of year                                   |      | $                                | 167    |   |      | $      | 106    |   |   | $      | 89     |  
|                                                                                                                                                                 |                                                      |      |                                  |        |   |      |        |        |   |   |        |       
|Supplemental Disclosure of Cash Flow Information                                                                                                                 |                                                      |      |                                  |        |   |      |        |        |   |   |        |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Net Cash (Received) Paid During the Year for                                                                                                                     |                                                      |      |                                  |        |   |      |        |        |   |   |        |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Income taxes                                                                                                                                                     |                                                      | $    | (40                              | )      |   | $    | 197    |        |   | $ | 51     |       
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|                                                                                                                                                                
|Interest                                                                                                                                                         |                                                      | $    | 89                               |        |   | $    | 65     |        |   | $ | 65     |       

See Notes to Consolidated Financial Statements.

F-7



---



##### Table of Contents



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

(Dollar amounts in millions, except share data, 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.

2. Summary of Significant 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.

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 deferred
policy acquisition costs, the liability for future policy benefits and other
policyholder funds, and investment values. Although some variability is
inherent in these estimates, management believes the amounts provided are
adequate.

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

(b) Adoption of New Accounting Standards

Effective September 2001, the Company adopted Emerging Issues Task Force
(EITF) Issue 01-10 Accounting for the Impact of the Terrorist Attacks of
September 11, 2001. Under the consensus, costs related to the terrorist acts
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 a discussion of the impact of the September 11 terrorist
attack, see Note 3.)

Effective April 1, 2001, the Company adopted EITF Issue 99-20, Recognition of
Interest Income and Impairment on Purchased and Retained Beneficial Interests
in Securitized Financial Assets. Under the consensus, investors in certain
asset-backed securities are required to record changes in their estimated yield
on a prospective basis and to evaluate these securities for an other than
temporary decline in value. If the fair value of the asset-backed security has
declined below its carrying amount and the decline is determined to be other
than temporary, the security is written down to fair value. Upon adoption of
EITF 99-20, the Company recorded a $3 charge in net income as a net of tax
cumulative effect of accounting change.

Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards (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

F-8



---



##### Table of Contents



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 in net income
as a net of tax cumulative effect of accounting change. The 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 offsetting 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 (OCI)  Unrealized Capital Gain/Loss on Securities
in accordance with SFAS No. 115. 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 Accumulated
OCI  Net Gain on Cash Flow Hedging Instruments from Accumulated OCI 
Unrealized Gain/Loss on Securities. This reclassification reflects the January
1, 2001 net unrealized gain of all derivatives that are designated as cash-flow
hedging instruments. (For further discussion of the Companys
derivative-related accounting policies, see Note 2(e).

In September 2000, the Financial Accounting Standards Board (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 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 financial condition or results of
operations.

Effective January 1, 2000, Hartford Life 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. Adoption of this SOP did not have a material impact on the
Companys financial condition or results of operations.

In December 1999, the staff of the Securities and Exchange Commission
(SEC) issued Staff Accounting Bulletin No. 101, Revenue
Recognition in Financial Statements (SAB 101). SAB 101 provides that if
registrants have not applied the accounting therein,
they should implement the SAB and report a change in accounting principle. SAB
101, as subsequently amended, became effective for the Company in the fourth
quarter of 2000. The adoption of SAB 101 did not have a material impact on the
Companys financial condition or results of operations.

Effective January 1, 1999, the Company adopted SOP No. 98-1, Accounting for
the Costs of Computer Software Developed or Obtained for Internal Use. This
SOP provides guidance on accounting for costs of internal use software and in
determining whether software is for internal use. The SOP defines internal use
software as software that is acquired, internally developed, or modified solely
to meet internal needs and identifies stages of software development and
accounting for the related costs incurred during the stages. Adoption of this
SOP did not have a material impact on the Companys financial condition or
results of operations.

Effective January 1, 1999, the Company adopted SOP No. 97-3, Accounting by
Insurance and Other Enterprises for Insurance-Related Assessments. This SOP
addresses accounting by insurance and other enterprises for assessments related
to insurance activities including recognition, measurement and disclosure of
guaranty fund or other assessments. Adoption of this SOP did not have a
material impact on the Companys financial condition or results of operations.

The Companys cash flows were not impacted by adopting these changes in
accounting principles.

F-9



---



##### Table of Contents



(c) Future Adoption of New Accounting Standards

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 by requiring 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 Statement 144 are effective for financial statements issued for
fiscal years beginning after December 15, 2001. Adoption of SFAS No. 144 will
not have a material impact on the Companys 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. Use
of the pooling-of-interests method of accounting for those transactions is
prohibited. Adoption of SFAS No. 141 will not have a material impact on the
Companys 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 fair value is periodically (at least annually) reviewed and tested for
impairment. Goodwill must be tested for impairment in the year of adoption,
including an initial test performed within six months. If the initial test
indicates a potential impairment, then a more detailed analysis to determine
the extent of impairment must be completed by the end of the year.

SFAS No. 142 requires that useful lives for intangibles other than goodwill be
reassessed and remaining amortization periods be adjusted accordingly. The
reassessment must be completed prior to the end of the first quarter of 2002.

All provisions of SFAS No. 142 will be applied beginning January 1, 2002 to
goodwill and other intangible assets. Goodwill amortization totaled $16,
after-tax, in 2001. Application of the non-amortization provisions of the
statement are expected to result in an increase in net income of $20, after
tax, in 2002. The Company is in the process of assessing the impacts from the
implementation of the other provisions of SFAS No. 142.

(d) 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, Accounting for Certain
Investments in Debt and Equity Securities. Accordingly, these securities are
carried at fair value with the after-tax difference from cost reflected in
stockholders equity as a component of accumulated other comprehensive income.
Policy loans are carried at the outstanding balance, which approximates fair
value. Other invested assets primarily consist of partnership investments,
which are accounted for by the equity method, and mortgage loans, whereby the
carrying value approximates fair value.

Net realized capital gains (losses) on security transactions associated with
the Companys immediate participation guaranteed contracts are recorded and
effectively offset by amounts owed to policyholders and were $(1), $(9) and $2
for the years ended December 31, 2001, 2000 and 1999, respectively. Under the
terms of the contracts, the 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, excluding those related to immediate
participation guaranteed contracts, are reported as a component of revenue and
are determined on a specific identification basis.

In general, the Companys investments are adjusted for other than temporary
impairments when it is determined that the Company is unable to recover its
cost basis in the security. Impairment charges are included in net realized
capital gains (losses). Factors considered in evaluating whether a decline in
value 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, and (c) the intent and ability of the
Company to retain the investment for a period of time sufficient to allow for
any anticipated recovery. In addition, for securities expected to be sold, an
other than temporary impairment charge is recognized if the Company does not
expect the fair value of a security to recover to cost or 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.

F-10



---



##### Table of Contents



(e) Derivative Instruments

Overview

The Company utilizes a variety of derivative instruments, including swaps,
caps, floors, forwards and exchange traded futures and options, in order to
achieve one of three Company approved objectives: to hedge risk arising from
interest rate, price or currency exchange rate volatility; to manage liquidity;
or to control transaction costs. The Company is considered an end-user of
derivative instruments and as such does not make a market or trade in these
instruments for the express purpose of earning trading profits.

Accounting and Financial Statement Presentation of Derivative Instruments and
Hedging Activities

Effective 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 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 OCI 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 OCI,
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 risk management purposes are reported in current period earnings as
realized capital gains or losses. As of December 31, 2001, the Company carried
$135 of derivative assets in other invested assets and $123 of derivative
liabilities in other liabilities.

Hedge Documentation and Effectiveness Testing

At 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 80-120% of the inverse changes in the fair value or
discounted cash flows of the hedged item. High effectiveness is calculated
using a cumulative approach. If it is determined that a derivative is no
longer highly effective as a hedge, the Company discontinues hedge accounting
prospectively, as discussed below under discontinuance of hedge accounting.

Credit Risk

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. 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 and
potential 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 Hartfords Finance Committee. 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.

F-11



---



##### Table of Contents



Embedded Derivatives

The 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
separated from the host contract, carried at fair value, and designated as a
fair-value, cash-flow, or foreign-currency hedge, or as held for other risk
management purposes. However, in cases where (1) the host contract is measured
at fair value, with changes in fair value reported in current earnings or (2)
the Company is unable to reliably identify and measure an embedded derivative
for separation from its host contract, the entire contract is carried on the
balance sheet at fair value and is not designated as a hedging instrument.

Discontinuance of Hedge Accounting

The 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 OCI 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 OCI 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 Activities

Cash-Flow Hedges

General

For the year ended December 31, 2001, the Companys gross gains and losses
representing the total ineffectiveness of all cash-flow hedges essentially
offset, 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.

Gains and losses on derivative contracts that are reclassified from OCI 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, 2001, $2 of
after-tax deferred net gains on derivative instruments accumulated in OCI are
expected to be reclassified to earnings during the next twelve months. 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, 2001, the
Company held $2.5 billion in derivative notional value related to strategies
categorized as cash-flow hedges. There were no reclassifications from OCI to
earnings resulting from the discontinuance of cash-flow hedges during the year
ended December 31, 2001.

Specific Strategies

The 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. Effectiveness
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, 2001, the
Company held $2.0 billion in derivative notional value related to this
strategy. The Company also uses cash-flow hedges, in its anticipated purchase
of fixed maturity investments.

F-12



---



##### Table of Contents



Fair-Value Hedges

General

For the year ended December 31, 2001, the Companys gross gains and losses
representing the total ineffectiveness of all fair-value hedges essentially
offset, 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, 2001, the Company held $399 in
derivative notional value related to strategies categorized as fair-value
hedges.

Specific Strategies

The 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 exactly 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, 2001, the Company
held $200 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 .85 to 1.00. 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, 2001, the Company held $133 in
derivative notional value related to this strategy.

Other Risk Management Activities

General

The Companys other risk management activities relate to strategies used to
meet the following Company-approved objectives: to hedge risk arising from
interest rate, price or currency exchange rate volatility; to manage liquidity;
or to control transaction costs. For the year ended December 31, 2001, the
Company recognized an after-tax net loss of $11 (reported as realized capital
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, 2001, the Company held $3.8 billion in
derivative notional value related to strategies categorized as Other Risk
Management Activities.

Risk Management Strategies

The 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 be at 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

F-13



---



##### Table of Contents



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, 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, 2001, the Company held $2.0 billion
in derivative notional value related to this strategy.

Other

Periodically, the Company enters into swap agreements that have cash flows
based upon the results of a referenced index or asset pool. These arrangements
are entered into to modify portfolio duration or to increase diversification
while controlling transaction costs. At December 31, 2001, the Company held
$230 in derivative notional value related to this strategy.

The Company will issue an option in an asset hedging strategy utilized to
monetize the option embedded in certain of its fixed maturity investments. The
Company will receive a premium for issuing the freestanding option. The
structure is designed such that the fixed maturity investment and freestanding
option have identical expected lives, typically 3-5 years. At December 31,
2001, the Company held $932 in derivative notional value related to this
strategy.

(f) Separate Accounts

Hartford 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.

(g) 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.

Deferred policy acquisition costs 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 expected gross profits from
investment, mortality and expense margins and surrender charges. Actual gross
profits can vary from managements estimates, resulting in increases or
decreases in the rate of amortization. Management periodically reviews these
estimates and evaluates the recoverability of the deferred acquisition cost
asset. When appropriate, management revises its assumptions on the estimated
gross profits of these contracts and the cumulative amortization for the books
of business are re-estimated and adjusted by a cumulative charge or credit to
income. The average rate of assumed future investment yield used in estimating
expected gross profits related to variable annuity and variable life business
was 9.0% at December 31, 2001 and for all other products including fixed
annuities and other universal life type contracts the average assumed
investment yield ranged from 5.0-8.5%.

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

Acquisition costs and their related deferral are included in the Companys
insurance expenses and other as follows:

|                                     |                              |   |        |       |      |   |       |       |  |   |       |       | 
|------------------------------------ | ---------------------------- | - | ------ | ----- | ---- | - | ----- | ----- |  | - | ----- | ----- | 
|                                     |                              |   | 2001   |       | 2000 |   | 1999 
|                                     |                              |   |        |       |      |   |      
|Commissions                          |                              | $ | 1,427  |       |      | $ | 1,301 |       |  | $ | 1,152 |      
|                                    
|                                    
|                                    
|                                    
|Deferred acquisition costs           |                              |   | (1,083 | )     |      |   | (988  | )     |  |   | (948  | )    
|                                    
|                                    
|                                    
|                                    
|General insurance expenses and
other |                              |   | 1,015  |       |      |   | 923   |       |  |   | 853   |      
|                                     |                              |   |        |       |      |   |       |       |  |   |       |      
|                                     | Insurance expenses and other |   | $      | 1,359 |      |   | $     | 1,236 |  |   | $     | 1,057 | 
|                                     |                              |   |        |       |      |   |       |       |  |   |       |      

(h) Future Policy Benefits

F-14



---



##### Table of Contents



Liabilities for future policy benefits are computed by the net level premium
method using interest rate assumptions varying from 3% to 11% and withdrawal
and mortality assumptions appropriate at the time the policies were issued.
Claim reserves, which are the result of sales 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
claim reserves (included in future policy benefits on the Consolidated Balance
Sheets) resulting primarily from group disability products:

|                                 |              |                               |       |                     |       |      |       |       |       |   |       |       |       | 
|-------------------------------- | ------------ | ----------------------------- | ----- | ------------------- | ----- | ---- | ----- | ----- | ----- | - | ----- | ----- | ----- | 
|                                 |              |                               |       | For the years ended
|                                 |              |                               |       | December 31,       
|                                 |              |                               |       |                    
|                                 |              |                               |       | 2001                |       | 2000 |       | 1999 
|                                 |              |                               |       |                     |       |      |       |      
|Beginning claim reserves  gross |              | $                             | 2,384 |                     |       | $    | 2,128 |       |       | $ | 1,938 |      
|                                
|                                
|                                
|                                
|Less: Reinsurance recoverables   |              |                               | 177   |                     |       |      | 125   |       |       |   | 125   |      
|                                 |              |                               |       |                     |       |      |       |       |       |   |       |      
|Beginning claim reserves  net   |              |                               | 2,207 |                     |       |      | 2,003 |       |       |   | 1,813 |      
|                                 |              |                               |       |                     |       |      |       |       |       |   |       |      
|Incurred expenses related to:    |              |                               |       |                     |       |      |       |       |       |   |       |      
|                                
|                                
|                                
|                                
|                                 | Current year |                               |       | 1,272               |       |      |       | 1,093 |       |   |       | 1,013 |      
|                                
|                                
|                                
|                                
|                                 | Prior years  |                               |       | (15                 | )     |      |       | (11   | )     |   |       | (33   | )    
|                                 |              |                               |       |                     |       |      |       |       |       |   |       |      
|                                 |              | Total incurred                |       |                     | 1,257 |      |       |       | 1,082 |   |       |       | 980   | 
|                                 |              |                               |       |                     |       |      |       |       |       |   |       |      
|Paid expenses related to:        |              |                               |       |                     |       |      |       |       |       |   |       |      
|                                
|                                
|                                
|                                
|                                 | Current year |                               |       | 439                 |       |      |       | 410   |       |   |       | 360   |      
|                                
|                                
|                                
|                                
|                                 | Prior years  |                               |       | 525                 |       |      |       | 468   |       |   |       | 430   |      
|                                 |              |                               |       |                     |       |      |       |       |       |   |       |      
|                                 |              | Total paid                    |       |                     | 964   |      |       |       | 878   |   |       |       | 790   | 
|                                 |              |                               |       |                     |       |      |       |       |       |   |       |      
|Ending claim reserves  net      |              |                               | 2,500 |                     |       |      | 2,207 |       |       |   | 2,003 |      
|                                
|                                
|                                
|                                
|Add: Reinsurance recoverables    |              |                               | 264   |                     |       |      | 177   |       |       |   | 125   |      
|                                 |              |                               |       |                     |       |      |       |       |       |   |       |      
|                                 |              | Ending claim reserves  gross |       | $                   | 2,764 |      |       | $     | 2,384 |   |       | $     | 2,128 | 
|                                 |              |                               |       |                     |       |      |       |       |       |   |       |      

(i) Other Policyholder Funds

Other policyholder funds include reserves for investment contracts without life
contingencies, corporate owned life insurance and universal life insurance
contracts. Of the amounts included in other policyholder funds, $18.8 billion
and $15.6 billion for the years ended December 31, 2001 and 2000, respectively,
represent policyholder obligations.

The liability for policy benefits 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.

(j) 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 revenues 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.

(k) Foreign Currency Translation

Foreign currency translation gains and losses are reflected in stockholders
equity as a component of accumulated other comprehensive income. 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. The national currencies of international
operations are generally their functional currencies.

(l) Dividends to Policyholders

F-15



---



##### Table of Contents



Policyholder dividends are accrued using an estimate of the amount to be paid
based on underlying contractual obligations under participating policies and
applicable state laws. If limitations exist on the amount of net income from
participating life insurance contracts that may be distributed to stockholders,
the policyholders share of net income on those contracts that cannot be
distributed is excluded from stockholders equity by a charge to operations and
a credit to a liability.

Participating life insurance in force accounted for 8%, 17% and 20% as of
December 31, 2001, 2000 and 1999, respectively, of total life insurance in
force. Dividends to policyholders were $68, $67 and $104 for the years ended
December 31, 2001, 2000 and 1999, respectively. There were no additional
amounts of income allocated to participating policyholders.

(m) 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
21 mutual funds. The Company charges management 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 or operations of
the Company.

3. September 11 Terrorist Attack

As a result of the September 11 terrorist attack, 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. 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. Fortis Acquisition

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 using the
purchase method 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.

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          |  |   |     | 

F-16



---



##### Table of Contents



|                     |                                                                         |   |       |     | 
|-------------------- | ----------------------------------------------------------------------- | - | ----- | --- | 
|                    
|                    
|                    
|                    
|                     | $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 generally recorded
at estimated fair values as prescribed by applicable purchase accounting rules.
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 year ended December 31, 2001, amortization of PVP amounted to
$66. Goodwill of $553, representing the excess of the purchase price over the
amount of net assets (including PVP) acquired, also has been recorded and was
being amortized on a straight-line basis until January 1, 2002. (See Note
2(c)).

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

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

6. 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.

7. Investments and Derivative Instruments

|                                                                             |                             |   |                                  |       |      |   |       |       |   |   |       |       |  
|---------------------------------------------------------------------------- | --------------------------- | - | -------------------------------- | ----- | ---- | - | ----- | ----- | - | - | ----- | ----- | -
|                                                                             |                             |   | For the years ended December 31,
|                                                                             |                             |   |                                 
|                                                                             |                             |   | 2001                             |       | 2000 |   | 1999 
|                                                                             |                             |   |                                  |       |      |   |      
|(a) Components of Net Investment Income                                      |                             |   |                                  |       |      |   |       |       |   |   |       |      
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Interest income from fixed maturities                                        |                             | $ | 1,364                            |       |      | $ | 1,213 |       |   | $ | 1,121 |      
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Interest income from policy loans                                            |                             |   | 307                              |       |      |   | 308   |       |   |   | 391   |      
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Income from other investments                                                |                             |   | 124                              |       |      |   | 88    |       |   |   | 66    |      
|                                                                             |                             |   |                                  |       |      |   |       |       |   |   |       |      
|Gross investment income                                                      |                             |   | 1,795                            |       |      |   | 1,609 |       |   |   | 1,578 |      
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Less: Investment expenses                                                    |                             |   | 16                               |       |      |   | 17    |       |   |   | 16    |      
|                                                                             |                             |   |                                  |       |      |   |       |       |   |   |       |      
|                                                                             | Net investment income       |   | $                                | 1,779 |      |   | $     | 1,592 |   |   | $     | 1,562 |  
|                                                                             |                             |   |                                  |       |      |   |       |       |   |   |       |      
|(b) Components of Net Realized Capital (Losses) Gains                        |                             |   |                                  |       |      |   |       |       |   |   |       |      
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Fixed maturities                                                             |                             | $ | (49                              | )     |      | $ | (120  | )     |   | $ | (11   | )    
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Equity securities                                                            |                             |   | (11                              | )     |      |   | 23    |       |   |   | 12    |      
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Sale of affiliates and other (1)                                             |                             |   | (74                              | )     |      |   |      |       |   |   | (4    | )    
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Change in liability to policyholders for net realized capital losses (gains) |                             |   | 1                                |       |      |   | 9     |       |   |   | (2    | )    
|                                                                             |                             |   |                                  |       |      |   |       |       |   |   |       |      
|                                                                             | Net realized capital losses |   | $                                | (133  | )    |   | $     | (88   | ) |   | $     | (5    | )
|                                                                             |                             |   |                                  |       |      |   |       |       |   |   |       |      



---

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

F-17



---



##### Table of Contents



|                                                                    |                                                                      |   |                                  |     |      |   |      |     |   |   |      |      |  
|------------------------------------------------------------------- | -------------------------------------------------------------------- | - | -------------------------------- | --- | ---- | - | ---- | --- | - | - | ---- | ---- | -
|                                                                    |                                                                      |   | For the years ended December 31,
|                                                                    |                                                                      |   |                                 
|                                                                    |                                                                      |   | 2001                             |     | 2000 |   | 1999
|c) Change in Unrealized Capital (Losses) Gains on Equity Securities |                                                                      |   |                                  |     |      |   |      |     |   |   |      |     
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Gross unrealized capital gains                                      |                                                                      | $ | 9                                |     |      | $ | 5    |     |   | $ | 25   |     
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Gross unrealized capital losses                                     |                                                                      |   | (29                              | )   |      |   | (15  | )   |   |   | (2   | )   
|                                                                    |                                                                      |   |                                  |     |      |   |      |     |   |   |      |     
|Net unrealized capital (losses) gains                               |                                                                      |   | (20                              | )   |      |   | (10  | )   |   |   | 23   |     
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Deferred income taxes                                               |                                                                      |   | (7                               | )   |      |   | (4   | )   |   |   | 7    |     
|                                                                    |                                                                      |   |                                  |     |      |   |      |     |   |   |      |     
|Net unrealized capital (losses) gains, net of tax                   |                                                                      |   | (13                              | )   |      |   | (6   | )   |   |   | 16   |     
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Balance  beginning of year                                         |                                                                      |   | (6                               | )   |      |   | 16   |     |   |   | 11   |     
|                                                                    |                                                                      |   |                                  |     |      |   |      |     |   |   |      |     
|                                                                    | Net change in unrealized capital (losses) gains on equity securities |   | $                                | (7  | )    |   | $    | (21 | ) |   | $    | 5    |  
|                                                                    |                                                                      |   |                                  |     |      |   |      |     |   |   |      |     
|(d) Change in Unrealized Capital Gains (Losses) on Fixed Maturities |                                                                      |   |                                  |     |      |   |      |     |   |   |      |     
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Gross unrealized capital gains                                      |                                                                      | $ | 626                              |     |      | $ | 384  |     |   | $ | 70   |     
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Gross unrealized capital losses                                     |                                                                      |   | (335                             | )   |      |   | (307 | )   |   |   | (637 | )   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Net unrealized capital gains (losses) credited to policyholders     |                                                                      |   | (21                              | )   |      |   | (10  | )   |   |   | 24   |     
|                                                                    |                                                                      |   |                                  |     |      |   |      |     |   |   |      |     
|Net unrealized gains (losses)                                       |                                                                      |   | 270                              |     |      |   | 67   |     |   |   | (543 | )   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Deferred income taxes                                               |                                                                      |   | (94                              | )   |      |   | 21   |     |   |   | (191 | )   
|                                                                    |                                                                      |   |                                  |     |      |   |      |     |   |   |      |     
|Net unrealized gains (losses), net of tax                           |                                                                      |   | 176                              |     |      |   | 46   |     |   |   | (352 | )   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Balance  beginning of year                                         |                                                                      |   | 46                               |     |      |   | (352 | )   |   |   | 252  |     
|                                                                    |                                                                      |   |                                  |     |      |   |      |     |   |   |      |     
|                                                                    | Change in unrealized capital gains (losses) on fixed maturities      |   | $                                | 130 |      |   | $    | 398 |   |   | $    | (604 | )
|                                                                    |                                                                      |   |                                  |     |      |   |      |     |   |   |      |     

(e) Fixed Maturity Investments

|                                                                                                  |                        |   |                         |        |            |   |            |     |            |   |      |      |   |   |       |        | 
|------------------------------------------------------------------------------------------------- | ---------------------- | - | ----------------------- | ------ | ---------- | - | ---------- | --- | ---------- | - | ---- | ---- | - | - | ----- | ------ | 
|                                                                                                  |                        |   | As of December 31, 2001
|                                                                                                  |                        |   |                        
|                                                                                                  |                        |   |                         |        |            |   | Gross      |     | Gross      |   |      |      |  
|                                                                                                  |                        |   | Amortized               |        | Unrealized |   | Unrealized |     |            |   |     
|                                                                                                  |                        |   | 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                   |        |            |   | 305        |     |            |   | (147 | )    |   |   | 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 |            |   | $          | 626 |            |   | $    | (335 | ) |   | $     | 23,301 | 
|                                                                                                  |                        |   |                         |        |            |   |            |     |            |   |      |      |   |   |       |       

F-18



---



##### Table of Contents



|                                                                                                  |                        |   |                         |        |            |   |            |     |            |   |      |      |   |   |       |        | 
|------------------------------------------------------------------------------------------------- | ---------------------- | - | ----------------------- | ------ | ---------- | - | ---------- | --- | ---------- | - | ---- | ---- | - | - | ----- | ------ | 
|                                                                                                  |                        |   | As of December 31, 2000
|                                                                                                  |                        |   |                        
|                                                                                                  |                        |   |                         |        |            |   | Gross      |     | Gross      |   |      |      |  
|                                                                                                  |                        |   | Amortized               |        | Unrealized |   | Unrealized |     |            |   |     
|                                                                                                  |                        |   | Cost                    |        | Gains      |   | Losses     |     | Fair Value
|                                                                                                  |                        |   |                         |        |            |   |            |     |           
|U.S. Government and Government agencies and authorities
(guaranteed and sponsored)                |                        | $ | 227                     |        |            | $ | 17         |     |            | $ |     |      |   | $ | 244   |       
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|U.S. Government and Government agencies and
authorities
(guaranteed and sponsored)  asset backed |                        |   | 1,209                   |        |            |   | 25         |     |            |   | (9   | )    |   |   | 1,225 |       
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|States, municipalities and political subdivisions                                                 |                        |   | 1,422                   |        |            |   | 73         |     |            |   | (22  | )    |   |   | 1,473 |       
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|International governments                                                                         |                        |   | 319                     |        |            |   | 10         |     |            |   | (8   | )    |   |   | 321   |       
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|Public utilities                                                                                  |                        |   | 645                     |        |            |   | 5          |     |            |   | (10  | )    |   |   | 640   |       
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|All other corporate, including international                                                      |                        |   | 6,648                   |        |            |   | 123        |     |            |   | (195 | )    |   |   | 6,576 |       
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|All other corporate  asset backed                                                                |                        |   | 6,072                   |        |            |   | 125        |     |            |   | (46  | )    |   |   | 6,151 |       
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|Short-term investments                                                                            |                        |   | 975                     |        |            |   |           |     |            |   |     |      |   |   | 975   |       
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|Certificates of deposit                                                                           |                        |   | 458                     |        |            |   | 3          |     |            |   | (14  | )    |   |   | 447   |       
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|Redeemable preferred stock                                                                        |                        |   | 196                     |        |            |   | 3          |     |            |   | (3   | )    |   |   | 196   |       
|                                                                                                  |                        |   |                         |        |            |   |            |     |            |   |      |      |   |   |       |       
|                                                                                                  | Total fixed maturities |   | $                       | 18,171 |            |   | $          | 384 |            |   | $    | (307 | ) |   | $     | 18,248 | 
|                                                                                                  |                        |   |                         |        |            |   |            |     |            |   |      |      |   |   |       |       

The amortized cost and estimated fair value of fixed maturity investments at
December 31, 2001 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.

|                                  |       |                |       |            |  |   |       |        | 
|--------------------------------- | ----- | -------------- | ----- | ---------- |  | - | ----- | ------ | 
|Maturity                          |       | Amortized Cost |       | Fair Value
|One year or less                  |       | $              | 3,001 |            |  | $ | 3,014 |       
|                                 
|                                 
|                                 
|                                 
|Over one year through five years  |       |                | 7,544 |            |  |   | 7,657 |       
|                                 
|                                 
|                                 
|                                 
|Over five years through ten years |       |                | 5,863 |            |  |   | 5,923 |       
|                                 
|                                 
|                                 
|                                 
|Over ten years                    |       |                | 6,602 |            |  |   | 6,707 |       
|                                  |       |                |       |            |  |   |       |       
|                                  | Total |                | $     | 23,010     |  |   | $     | 23,301 | 
|                                  |       |                |       |            |  |   |       |       

(f) Sales of Fixed Maturity and Equity Security Investments

Sales of fixed maturities, excluding short-term fixed maturities, for the years
ended December 31, 2001, 2000 and 1999 resulted in proceeds of $6.0 billion,
$3.8 billion and $3.8 billion, gross realized capital gains of $57, $114 and
$178 and gross realized capital losses of ($105), ($225) and ($191),
respectively. Sales of equity security investments for the years ended
December 31, 2001, 2000 and 1999 resulted in proceeds of $46, $42, and $38 and
gross realized capital gains of $2, $37 and $12, respectively, and gross
realized capital losses of $(13) and $(14) for the years ended December 31,
2001 and 2000, respectively. There were no realized capital losses on sales of
equity securities in 1999.

(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 $6.7 billion at December 31, 2001 and $5.0 billion
at December 31, 2000.

The Company uses derivative instruments in its management of market risk
consistent with four risk management strategies: hedging anticipated
transactions, hedging liability instruments, hedging invested assets and
hedging portfolios of assets and/or liabilities.

F-19



---



##### Table of Contents



A reconciliation between notional amounts as of December 31, 2001 and 2000 by
derivative type and strategy is as follows:

|                   |       |   |                   |       |           |   |              |       |                 |   |                   |       |  |   |       |       | 
|------------------ | ----- | - | ----------------- | ----- | --------- | - | ------------ | ----- | --------------- | - | ----------------- | ----- |  | - | ----- | ----- | 
|                   |       |   | December 31, 2000 |       |           |   |              |       | Maturities/     |   | December 31, 2001
|                   |       |   | Notional Amount   |       | Additions |   | Terminations |       | Notional Amount
|                   |       |   |                   |       |           |   |              |       |                 |   |                  
|By Derivative Type |       |   |                   |       |           |   |              |       |                 |   |                   |       |  |   |       |      
|                  
|                  
|                  
|                  
|Caps               |       | $ | 592               |       |           | $ | 11           |       |                 | $ |                  |       |  | $ | 603   |      
|                  
|                  
|                  
|                  
|Floors             |       |   | 295               |       |           |   | 25           |       |                 |   |                  |       |  |   | 320   |      
|                  
|                  
|                  
|                  
|Swaps/Forwards     |       |   | 3,593             |       |           |   | 1,993        |       |                 |   | 994               |       |  |   | 4,592 |      
|                  
|                  
|                  
|                  
|Futures            |       |   | 144               |       |           |   | 153          |       |                 |   | 220               |       |  |   | 77    |      
|                  
|                  
|                  
|                  
|Options            |       |   | 356               |       |           |   | 1,111        |       |                 |   | 311               |       |  |   | 1,156 |      
|                   |       |   |                   |       |           |   |              |       |                 |   |                   |       |  |   |       |      
|                   | Total |   | $                 | 4,980 |           |   | $            | 3,293 |                 |   | $                 | 1,525 |  |   | $     | 6,748 | 
|                   |       |   |                   |       |           |   |              |       |                 |   |                   |       |  |   |       |      
|By Strategy        |       |   |                   |       |           |   |              |       |                 |   |                   |       |  |   |       |      
|                  
|                  
|                  
|                  
|Liability          |       | $ | 774               |       |           | $ | 82           |       |                 | $ | 43                |       |  | $ | 813   |      
|                  
|                  
|                  
|                  
|Anticipatory       |       |   | 144               |       |           |   | 468          |       |                 |   | 292               |       |  |   | 320   |      
|                  
|                  
|                  
|                  
|Asset              |       |   | 3,163             |       |           |   | 2,743        |       |                 |   | 1,190             |       |  |   | 4,716 |      
|                  
|                  
|                  
|                  
|Portfolio          |       |   | 899               |       |           |   |             |       |                 |   |                  |       |  |   | 899   |      
|                   |       |   |                   |       |           |   |              |       |                 |   |                   |       |  |   |       |      
|                   | Total |   | $                 | 4,980 |           |   | $            | 3,293 |                 |   | $                 | 1,525 |  |   | $     | 6,748 | 
|                   |       |   |                   |       |           |   |              |       |                 |   |                   |       |  |   |       |      



---

| |  | [1] During 2001, 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 and repurchase agreements. As of December 31, 2001 and 2000,
collateral pledged has not been separately reported in the Consolidated Balance
Sheets. The classification and carrying amounts of collateral pledged at
December 31, 2001 and 2000 were as follows:

|                                                                                      |       |      |    |      |  |   |    |    | 
|------------------------------------------------------------------------------------- | ----- | ---- | -- | ---- |  | - | -- | -- | 
|Assets                                                                                |       | 2001 |    | 2000
|                                                                                      |       |      |    |     
|U.S. Govt and Govt agencies and authorities (guaranteed
and sponsored)              |       | $    | 1  |      |  | $ | 3  |   
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|U.S. Govt and Govt agencies and authorities (guaranteed
and sponsored)asset backed |       |      | 53 |      |  |   | 31 |   
|                                                                                      |       |      |    |      |  |   |    |   
|                                                                                      | Total |      | $  | 54   |  |   | $  | 34 | 
|                                                                                      |       |      |    |      |  |   |    |   

At December 31, 2001 and 2000, Hartford Life had accepted collateral consisting
of cash and U.S. Government securities with a fair value of $161 and $252,
respectively. At December 31, 2001 and 2000, only cash collateral of $108 and
$31, respectively, was recorded on the balance sheet in fixed maturities and
other liabilities. While Hartford Life is permitted by contract to sell or
repledge the noncash collateral, none of the collateral has been sold or
repledged at December 31, 2001 and 2000. As of December 31, 2001 and 2000 all
collateral accepted was held in separate custodial accounts.

8. 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 is based on external market valuations from
partnership management.

Derivative instruments are reported at fair value based on internally
established valuations that are consistent with external valuation models.

Other policyholder funds fair value information is determined by estimating
future cash flows, discounted at the current market rate.

F-20



---



##### Table of Contents



Fair value for long-term debt and trust preferred securities is based on
external valuation using discounted future cash flows at current market
interest rates.

The fair value of derivative financial instruments, including swaps, caps,
floors, futures, options and forward commitments, is determined using an
internal pricing model that is similar to external valuation models.
Derivative instruments are reported below as a component of other investments.
The carrying amount and fair values of Hartford Lifes financial instruments as
of December 31, 2001 and 2000 were as follows:

|            |                              |  |                 |        |            |  |                 |        |            |  |   |        |  |  |   |        | 
|----------- | ---------------------------- |  | --------------- | ------ | ---------- |  | --------------- | ------ | ---------- |  | - | ------ |  |  | - | ------ | 
|            |                              |  | 2001            |        | 2000      
|            |                              |  |                 |        |           
|            |                              |  | Carrying Amount |        | Fair Value |  | Carrying Amount |        | Fair Value
|            |                              |  |                 |        |            |  |                 |        |           
|Assets      |                              |  |                 |        |            |  |                 |        |            |  |   |        |  |  |   |       
|           
|           
|           
|           
|            | Fixed maturities             |  | $               | 23,301 |            |  | $               | 23,301 |            |  | $ | 18,248 |  |  | $ | 18,248 | 
|           
|           
|           
|           
|            | Equity securities            |  |                 | 428    |            |  |                 | 428    |            |  |   | 171    |  |  |   | 171    | 
|           
|           
|           
|           
|            | Policy loans                 |  |                 | 3,317  |            |  |                 | 3,317  |            |  |   | 3,610  |  |  |   | 3,610  | 
|           
|           
|           
|           
|            | Limited partnerships         |  |                 | 811    |            |  |                 | 811    |            |  |   | 668    |  |  |   | 670    | 
|           
|           
|           
|           
|            | Other investments            |  |                 | 520    |            |  |                 | 520    |            |  |   | 242    |  |  |   | 243    | 
|            |                              |  |                 |        |            |  |                 |        |            |  |   |        |  |  |   |        | 
|Liabilities |                              |  |                 |        |            |  |                 |        |            |  |   |        |  |  |   |       
|           
|           
|           
|           
|            | Other policyholder funds (1) |  | $               | 16,077 |            |  | $               | 15,939 |            |  | $ | 11,985 |  |  | $ | 11,607 | 
|           
|           
|           
|           
|            | Long-term debt               |  |                 | 1,050  |            |  |                 | 1,118  |            |  |   | 650    |  |  |   | 658    | 
|           
|           
|           
|           
|            | Trust preferred securities   |  |                 | 450    |            |  |                 | 461    |            |  |   | 250    |  |  |   | 245    | 
|            |                              |  |                 |        |            |  |                 |        |            |  |   |        |  |  |   |        | 



---

|(1) |  | Excludes group accident and health and universal life insurance
contracts, including corporate owned life insurance.
|--- |  | --------------------------------------------------------------------------------------------------------------------

9. Separate Accounts

Hartford Life maintained separate account assets and liabilities totaling
$114.7 billion and $114.0 billion as of December 31, 2001 and 2000,
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 $104.6 billion and $104.2
billion as of December 31, 2001 and 2000, respectively, wherein the
policyholder assumes substantially all the investment risks and rewards, and
guaranteed separate accounts totaling $10.1 and $9.8 billion as of December 31,
2001 and 2000, respectively, wherein Hartford Life contractually guarantees
either a minimum return or account value to the policyholder. Included in
non-guaranteed separate account assets were policy loans totaling $575 and $697
as of December 31, 2001 and 2000, 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 were $1.3 billion, $1.4
billion and $1.1 billion in 2001, 2000 and 1999, 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 6.4% and 6.6% as of December 31, 2001 and
2000, respectively. The assets that support these liabilities were comprised of
$9.8 billion and $9.6 billion in fixed maturities as of December 31, 2001 and
2000, respectively, and $243 and $127 of other investments as of December 31,
2001 and 2000, 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 $37 and $3 in net carrying value and $3.2 billion and $3.5 billion in
notional amounts as of December 31, 2001 and 2000, respectively.

F-21



---



##### Table of Contents



10. Debt

|               |                                 |                      |   |        |       |                   |  |                  |     |                   |   |     |     |                  |  |     |     |  
|-------------- | ------------------------------- | -------------------- | - | ------ | ----- | ----------------- |  | ---------------- | --- | ----------------- | - | --- | --- | ---------------- |  | --- | --- | -
|               |                                 |                      |   | 2001   |       | 2000             
|               |                                 |                      |   |        |       |                  
|               |                                 |                      |   |        |       |                   |  | 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              | %   |                   |   | N/A |     |                  |  | N/A |    
|               |                                 |                      |   |        |       |                   |  |                  |     |                   |   |     |     |                  |  |     |    
|               |                                 | Total long-term debt |   | $      | 1,050 |                   |  |                  | 7.4 | %                 |   | $   | 650 |                  |  |     | 7.4 | %
|               |                                 |                      |   |        |       |                   |  |                  |     |                   |   |     |     |                  |  |     |    



---

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

(a) Short-Term Debt

As of December 31, 2001, Hartford Life maintained a $250 five year revolving
credit facility comprised of four participatory banks. This facility, which
expires in 2003, is available for general corporate purposes and to provide
additional support for the Companys commercial paper program.
As of December 31, 2001, there were no outstanding borrowings under the facility or commercial
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, 2001, the Company had no outstanding borrowings under the program.

(b) 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 an omnibus 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, as discussed below.

On March 1, 2001, Hartford Life 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, as discussed below.

On May 15, 2001, the Company filed an omnibus
statement with the SEC a shelf registration statement
for the potential offering and sale of up to $1.0 billion in
debt and equity
securities, including up to $150 of previously registered but unsold
securities, described above. As of December 31, 2001, Hartford Life had $1.0 billion
remaining on its shelf.

Interest expense incurred related to short and long-term debt totaled $73 in
2001, $48 in 2000 and $49 in 1999.

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

(a) Description

F-22



---



##### Table of Contents



On March 6, 2001, Hartford Life Capital II, a Delaware statutory business trust
formed by Hartford Life, issued 8,000,000, 7.625% Trust Preferred Securities,
Series B (Series B Preferred Securities) under its June 1998 shelf
registration. The material terms of the
Series B Preferred Securities are substantially the same as
Hartford Lifes Series
A Preferred Securities described below, 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 Debentures issued
by Hartford Life. As previously discussed in Note 5, the Company used the
proceeds from the offering to partially fund the Fortis acquisition.

The Series B Preferred Securities represent undivided beneficial interests in
Hartford Life Capital IIs assets, which consist solely of the Series B Junior
Subordinated Debentures. Hartford Life owns all of the common securities of
Hartford Life Capital II. Holders of Series B Preferred Securities are
entitled to receive cumulative cash distributions accruing from March 6, 2001,
the date of issuance, and payable quarterly in arrears commencing April 15,
2001 at the annual rate of 7.625% of the stated liquidation amount of $25.00
per Series B Preferred Security. The Series B Preferred Securities are subject
to mandatory redemption upon repayment of the Series B Junior Subordinated
Debentures at maturity or upon earlier redemption. Hartford Life has the right
to redeem the Series B Junior Subordinated Debentures on or after March 6, 2006
or earlier upon the occurrence of certain events. Holders of Series B
Preferred Securities generally have no voting rights.

The Series B Junior Subordinated Debentures
bear interest at the annual rate of 7.625% of the principal amount,
payable quarterly in arrears commencing April 15, 2001, and
mature on February 15, 2050. The Series B Junior
Subordinated Debentures are unsecured and rank junior and subordinate
in right of payment to all present and future senior debt of the
Company and are effectively subordinated to all existing and future
obligations of the Companys Subsidiaries.

The Company has the right at any time and from time
to time, to defer payments of interest on the Series B 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 the Company may not
declare or pay any cash dividends or distributions on, or purchase,
the Companys capital stock nor make any principal, interest or
premium payments on or repurchase any debt securities that rank
equally with or junior to the Series B Junior Subordinated
Debentures. The Company will have the right at any time to dissolve
the Trust and cause the Series B Junior Subordinated Debentures
to be distributed to the holders of the Series B Preferred
Securities. The Company has guaranteed, on a subordinated basis, all
of the Hartford Life Capital II obligations under the Series B
Preferred Securities, including payment of the redemption price and
any accumulated and unpaid distributions to the extent of available
funds and upon dissolution, winding up or liquidation but only to the
extent Hartford Life Capital II has funds available to make such
payments.

On June 29, 1998, Hartford Life Capital I, a special purpose Delaware trust
formed by the Company, 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 HLI. HLI used the proceeds from the offering for the retirement of
its outstanding commercial paper, for acquisitions and for 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. The Company owns all of 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. Holders of
Series A Preferred Securities generally have no voting rights. The Series A
Preferred Securities are subject to mandatory redemption upon repayment of the
Junior Subordinated Debentures at maturity or upon earlier redemption.

The Company 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 only,
upon the occurrence of certain specified events. In either case, the
redemption price equals the 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, the Company
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 20, 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 U.S. 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 commencing 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 the Company and are effectively subordinated to all existing
and future liabilities of its subsidiaries.

The Company 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 the Company may not declare or pay
any cash dividends or distributions on, or purchase, the Company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 Securities. The
Company has guaranteed, on a subordinated basis, all of the Hartford Life
Capital I obligations under the Series A Preferred Securities, including
payment of the redemption price and any accumulated and unpaid distributions to
the extent of available funds and upon dissolution, winding up or liquidation
but only to the extent that Hartford Life Capital I has funds to make such
payments.

F-23



---



##### Table of Contents



(b) Interest expense

Interest expense with respect to the Series A Preferred Securities and Series B
Preferred Securities totaled approximately $31 in 2001 and $18 in both in 2000
and 1999.

12. Stockholders Equity

(a) Preferred Stock

Hartford Life had 50,000,000 shares of preferred stock authorized, none of
which were issued and outstanding as of December 31, 1999. In conjunction with
The Hartford Acquisition, Hartford Life canceled its authorized preferred
stock.

(b) Statutory Results

|                              |  |                                  |       |      |  |      |       |  |  |   |       | 
|----------------------------- |  | -------------------------------- | ----- | ---- |  | ---- | ----- |  |  | - | ----- | 
|                              |  | For the years ended December 31,
|                              |  |                                 
|                              |  | 2001                             |       | 2000 |  | 1999
|                              |  |                                  |       |      |  |     
|Statutory net income (loss)   |  | $                                | (364  | )    |  | $    | 399   |  |  | $ | 220   | 
|                              |  |                                  |       |      |  |      |       |  |  |   |       | 
|Statutory capital and surplus |  | $                                | 2,991 |      |  | $    | 2,407 |  |  | $ | 2,214 | 
|                              |  |                                  |       |      |  |      |       |  |  |   |       | 

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. As of December 31, 2001, the
maximum amount of statutory dividends which may be paid by the insurance
subsidiaries of the Company in 2002, without prior approval, is estimated to be
$299.

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. As of December 31,
2001 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, 2001, 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 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

F-24



---



##### Table of Contents



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.

Under the Hartford Employee Stock Purchase Plan eligible employees may purchase
common stock of the company at a 15% discount from the lower of the market
price at the beginning or end of the quarterly offering period.

The Company applies APB Opinion No. 25 and related interpretation in accounting
for its stock based compensation plans. Accordingly, in the measurement of
compensation expense the Company utilizes the excess of market price over
exercise price, on the first date that both the number of shares and award
price are known. For the years ended December 31, 2001, 2000 and 1999,
compensation expense related to the stock based compensation plans was not
material. Had compensation cost for the Incentive Stock Plan and Employee
Stock Purchase Plan been determined based on the fair value at the grant dates
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:

|                                |               |   |      |     |      |   |      |     |  |   |     |     | 
|------------------------------- | ------------- | - | ---- | --- | ---- | - | ---- | --- |  | - | --- | --- | 
|                                |               |   | 2001 |     | 2000 |   | 1999
|                                |               |   |      |     |      |   |     
|Net
income
         As reported |               | $ | 685  |     |      | $ | 575  |     |  | $ | 467 |    
|                               
|                               
|                               
|                               
|                                | Pro forma (1) |   |      | 669 |      |   |      | 563 |  |   |     | 456 | 
|                                |               |   |      |     |      |   |      |     |  |   |     |    



---

|(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 2001, 2000 and 1999: dividend yield of 1.6% for
2001 and 1.0% for both 2000 and 1999; expected price variability of 29% for
2001 and 36% for 2000 and 1999; risk free interest rates of 5.0% for the 2001
grants, 6.7% for the 2000 grants and 5.3% for the 1999 grants; and expected
lives of six years for 2001 and five years for both 2000 and 1999. The
weighted average fair value of options granted are $24.86, 14.48 and 19.41 as
of 2001, 2000 and 1999, respectively.

14. Postretirement 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
$16, $8 and $10 in 2001, 2000 and 1999, respectively. Postretirement health
care and life insurance benefits expense, allocated by The Hartford, was not
material to the results of operations for 2001, 2000 and 1999.

(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 $8 in both 2001 and 2000 and $6 in 1999.

15. Reinsurance

Hartford Life cedes insurance to other insurers in order to limit its maximum
losses. 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 reduces this risk by evaluating the
financial condition of reinsurers and monitoring for possible concentrations of
credit risk. As of December 31, 2001, Hartford Life had no significant
concentrations of credit risk related to reinsurance greater than 10%
of stockholders equity.

The Company records a receivable for reinsured benefits paid and the portion of
insurance liabilities that are reinsured. 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. Reinsurance recoveries on ceded reinsurance contracts
recognized in the Consolidated Statements of Income were $392, $225 and $168
for the years ended December 31, 2001, 2000 and 1999, respectively. Hartford
Life also assumes reinsurance from other insurers.

The effect of reinsurance on fee income, earned premiums and other is
summarized as follows:

F-25



---



##### Table of Contents



|                                      |                       |      |                                  |       |  |      |       |       |  |   |       |       | 
|------------------------------------- | --------------------- | ---- | -------------------------------- | ----- |  | ---- | ----- | ----- |  | - | ----- | ----- | 
|                                      |                       |      | For the years ended December 31,
|                                      |                       |      |                                 
|Fee income, earned premiums and other |                       | 2001 |                                  | 2000  |  | 1999
|                                      |                       |      |                                  |       |  |     
|Gross premiums                        |                       | $    | 5,069                            |       |  | $    | 4,645 |       |  | $ | 4,068 |      
|                                     
|                                     
|                                     
|                                     
|Reinsurance assumed                   |                       |      | 232                              |       |  |      | 137   |       |  |   | 154   |      
|                                     
|                                     
|                                     
|                                     
|Reinsurance ceded                     |                       |      | (398                             | )     |  |      | (296  | )     |  |   | (243  | )    
|                                      |                       |      |                                  |       |  |      |       |       |  |   |       |      
|                                      | Net retained premiums |      | $                                | 4,903 |  |      | $     | 4,486 |  |   | $     | 3,979 | 
|                                      |                       |      |                                  |       |  |      |       |       |  |   |       |      

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 adjustments, generally will
be determined as though the Company were filing a separate Federal income tax
return.

Beginning in 2000, the Company was included in The Hartfords consolidated
Federal income tax return. The life insurance companies filed a separate
consolidated Federal income tax return for 1999. The Companys effective tax
rate was 7%, 27% and 32% in 2001, 2000 and 1999, respectively.

Income tax expense (benefit) is as follows:

|         |                    |   |                                  |    |      |   |      |     |  |   |     |     | 
|-------- | ------------------ | - | -------------------------------- | -- | ---- | - | ---- | --- |  | - | --- | --- | 
|         |                    |   | For the years ended December 31,
|         |                    |   |                                 
|         |                    |   | 2001                             |    | 2000 |   | 1999
|         |                    |   |                                  |    |      |   |     
|Current  |                    | $ | (230                             | )  |      | $ | 115  |     |  | $ | (41 | )  
|        
|        
|        
|        
|Deferred |                    |   | 284                              |    |      |   | 98   |     |  |   | 260 |    
|         |                    |   |                                  |    |      |   |      |     |  |   |     |    
|         | Income tax expense |   | $                                | 54 |      |   | $    | 213 |  |   | $   | 219 | 
|         |                    |   |                                  |    |      |   |      |     |  |   |     |    

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,
|                                                 |                          |   |                                 
|                                                 |                          |   | 2001                             |    | 2000 |   | 1999
|                                                 |                          |   |                                  |    |      |   |     
|Tax provision at the U.S. federal statutory rate |                          | $ | 268                              |    |      | $ | 276  |     |  | $ | 240 |    
|                                                
|                                                
|                                                
|                                                
|Tax-exempt interest                              |                          |   | (88                              | )  |      |   | (47  | )   |  |   | (17 | )  
|                                                
|                                                
|                                                
|                                                
|IRS audit settlement (see Note 18 (c))           |                          |   |                                 |    |      |   | (24  | )   |  |   |    |    
|                                                
|                                                
|                                                
|                                                
|Tax adjustment (see Note 18 (c))                 |                          |   | (130                             | )  |      |   |     |     |  |   |    |    
|                                                
|                                                
|                                                
|                                                
|Other                                            |                          |   | 4                                |    |      |   | 8    |     |  |   | (4  | )  
|                                                 |                          |   |                                  |    |      |   |      |     |  |   |     |    
|                                                 | Provision for income tax |   | $                                | 54 |      |   | $    | 213 |  |   | $   | 219 | 
|                                                 |                          |   |                                  |    |      |   |      |     |  |   |     |    

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

|                                                                   |                                      |   |      |     |      |   |      |     | 
|------------------------------------------------------------------ | ------------------------------------ | - | ---- | --- | ---- | - | ---- | --- | 
|                                                                   |                                      |   | 2001 |     | 2000
|                                                                   |                                      |   |      |     |     
|Tax basis deferred policy acquisition costs                        |                                      | $ | 777  |     |      | $ | 786  |    
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Financial statement deferred policy acquisition costs and reserves |                                      |   | (596 | )   |      |   | (104 | )  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Employee benefits                                                  |                                      |   | 27   |     |      |   | 27   |    
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Net unrealized capital (gains) losses on securities                |                                      |   | (127 | )   |      |   | (17  | )  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Investments and other                                              |                                      |   | (97  | )   |      |   | (469 | )  
|                                                                   |                                      |   |      |     |      |   |      |    
|                                                                   | Total deferred tax asset (liability) |   | $    | (16 | )    |   | $    | 223 | 
|                                                                   |                                      |   |      |     |      |   |      |    

Hartford Life had current federal income tax receivables of $153 and $105 as of
December 31, 2001 and 2000, respectively.

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
F-26Table of Contents

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, 2001.

17. Related Party Transactions

Transactions of the Company with Hartford Fire 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 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 2001, $84 in 2000 and $72 in 1999. Included in other liabilities are
$24 and $22 due to The Hartford as of December 31, 2001 and 2000, respectively.

18. 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 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.

(b) Leases

The rent paid to Hartford Fire for space occupied by the Company was $25 in
2001 and 2000, and $15 in 1999. Future minimum rental commitments are as
follows:

|           |       |   |    |     | 
|---------- | ----- | - | -- | --- | 
|2002       |       | $ | 25 |    
|          
|          
|          
|          
|2003       |       |   | 23 |    
|          
|          
|          
|          
|2004       |       |   | 23 |    
|          
|          
|          
|          
|2005       |       |   | 23 |    
|          
|          
|          
|          
|2006       |       |   | 22 |    
|          
|          
|          
|          
|Thereafter |       |   | 66 |    
|           |       |   |    |    
|           | Total |   | $  | 182 | 
|           |       |   |    |    

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 $18 in 2001 and 2000 and $16 in 1999.

(c) Tax Matters

Hartford Lifes Federal income tax returns are routinely audited by the
Internal Revenue Service (IRS). In August 2001, the Company recorded a $130
benefit, primarily the result of the favorable treatment of certain tax matters
related to separate account investment activity arising during the 1996-2000
tax years. During 2000, the Company recorded a $24 tax benefit as a result of
a settlement with the IRS with respect to certain similar tax matters for the
1993-1995 tax years.

Management believes that adequate provisions have been made in the financial
statements for any potential assessments that may result from tax examination
and other tax related matters for all open tax years.

(d) Unfunded Commitments

At December 31, 2001, Hartford Life has outstanding commitments to fund limited
partnership investments totaling $206. These capital commitments can be called
by the partnerships during the (on average, 3-6 years) commitment period to
fund working capital

F-27



---



##### Table of Contents



needs or the purchase of new investments. If the
commitment period expires and the commitment has not been fully funded,
Hartford Life is not required to fund the remaining unfunded commitment, but
may elect to do so.

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
fixed and variable 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 Latin America and Japan, 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.

F-28



---



##### Table of Contents



|                                                          |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |         |         | 
|--------------------------------------------------------- | ------------------- | --------------------------------------------------------------- | - | -------------------------------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- | 
|                                                          |                     |                                                                 |   | For the years ended December 31,
|                                                          |                     |                                                                 |   |                                 
|                                                          |                     |                                                                 |   | 2001                             |         | 2000 |   | 1999   
|                                                          |                     |                                                                 |   |                                  |         |      |   |        
|Revenues                                                  |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Investment Products |                                                                 | $ | 2,506                            |         |      | $ | 2,380   |         |  | $ | 2,041   |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Individual Life     |                                                                 |   | 890                              |         |      |   | 640     |         |  |   | 584     |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Group Benefits      |                                                                 |   | 2,507                            |         |      |   | 2,207   |         |  |   | 2,024   |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | COLI                |                                                                 |   | 719                              |         |      |   | 767     |         |  |   | 831     |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Other               |                                                                 |   | (73                              | )       |      |   | (4      | )       |  |   | 56      |        
|                                                          |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |         |        
|                                                          |                     | Total revenues                                                  |   | $                                | 6,549   |      |   | $       | 5,990   |  |   | $       | 5,536   | 
|                                                          |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |         |        
|Net Investment Income                                     |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Investment Products |                                                                 | $ | 886                              |         |      | $ | 741     |         |  | $ | 708     |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Individual Life     |                                                                 |   | 243                              |         |      |   | 181     |         |  |   | 172     |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Group Benefits      |                                                                 |   | 248                              |         |      |   | 226     |         |  |   | 195     |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | COLI                |                                                                 |   | 352                              |         |      |   | 366     |         |  |   | 431     |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Other               |                                                                 |   | 50                               |         |      |   | 78      |         |  |   | 56      |        
|                                                          |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |         |        
|                                                          |                     | Total net investment income                                     |   | $                                | 1,779   |      |   | $       | 1,592   |  |   | $       | 1,562   | 
|                                                          |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |         |        
|Amortization of Deferred Policy Acquisition Costs and PVP |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Investment Products |                                                                 | $ | 461                              |         |      | $ | 516     |         |  | $ | 430     |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Individual Life     |                                                                 |   | 168                              |         |      |   | 145     |         |  |   | 129     |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Group Benefits      |                                                                 |   | 11                               |         |      |   | 10      |         |  |   | 9       |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | COLI                |                                                                 |   |                                 |         |      |   |        |         |  |   |        |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Other               |                                                                 |   | 2                                |         |      |   |        |         |  |   |        |        
|                                                          |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |         |        
|                                                          |                    
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                     | Total amortization of deferred policy
acquisition costs and PVP |   | $                                | 642     |      |   | $       | 671     |  |   | $       | 568     | 
|                                                          |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |         |        
|Income Tax Expense (Benefit)                              |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Investment Products |                                                                 | $ | 155                              |         |      | $ | 189     |         |  | $ | 173     |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Individual Life     |                                                                 |   | 57                               |         |      |   | 39      |         |  |   | 38      |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Group Benefits      |                                                                 |   | 29                               |         |      |   | 24      |         |  |   | 23      |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | COLI                |                                                                 |   | 18                               |         |      |   | 19      |         |  |   | 17      |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Other               |                                                                 |   | (205                             | )       |      |   | (58     | )       |  |   | (32     | )      
|                                                          |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |         |        
|                                                          |                     | Total income tax expense                                        |   | $                                | 54      |      |   | $       | 213     |  |   | $       | 219     | 
|                                                          |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |         |        
|Net Income (Loss)                                         |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Investment Products |                                                                 | $ | 463                              |         |      | $ | 424     |         |  | $ | 330     |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Individual Life     |                                                                 |   | 121                              |         |      |   | 79      |         |  |   | 71      |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Group Benefits      |                                                                 |   | 106                              |         |      |   | 90      |         |  |   | 79      |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | COLI                |                                                                 |   | 37                               |         |      |   | 34      |         |  |   | 30      |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Other               |                                                                 |   | (42                              | )       |      |   | (52     | )       |  |   | (43     | )      
|                                                          |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |         |        
|                                                          |                     | Total net income                                                |   | $                                | 685     |      |   | $       | 575     |  |   | $       | 467     | 
|                                                          |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |         |        
|Assets                                                    |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Investment Products |                                                                 | $ | 103,906                          |         |      | $ | 107,467 |         |  | $ | 107,256 |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Individual Life     |                                                                 |   | 9,157                            |         |      |   | 7,270   |         |  |   | 6,629   |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Group Benefits      |                                                                 |   | 4,686                            |         |      |   | 4,111   |         |  |   | 3,640   |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | COLI                |                                                                 |   | 26,840                           |         |      |   | 23,390  |         |  |   | 20,158  |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Other               |                                                                 |   | 7,023                            |         |      |   | 1,383   |         |  |   | 1,350   |        
|                                                          |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |         |        
|                                                          |                     | Total assets                                                    |   | $                                | 151,612 |      |   | $       | 143,621 |  |   | $       | 139,033 | 
|                                                          |                     |                                                                 |   |                                  |         |      |   |         |         |  |   |         |        

F-29



---



##### Table of Contents



|                    |                      |                           |       |                                  |       |      |       |       |       |  |       |       |       | 
|------------------- | -------------------- | ------------------------- | ----- | -------------------------------- | ----- | ---- | ----- | ----- | ----- |  | ----- | ----- | ----- | 
|                    |                      |                           |       | For the years ended December 31,
|                    |                      |                           |       |                                 
|Revenues by Product |                      | 2001                      |       | 2000                             |       | 1999
|                    |                      |                           |       |                                  |       |     
|Investment Products |                      |                           |       |                                  |       |      |       |       |       |  |       |      
|                   
|                   
|                   
|                   
|                    | Individual Annuities |                           | $     | 1,492                            |       |      | $     | 1,538 |       |  | $     | 1,354 |      
|                   
|                   
|                   
|                   
|                    | Other                |                           |       | 1,014                            |       |      |       | 842   |       |  |       | 687   |      
|                    |                      |                           |       |                                  |       |      |       |       |       |  |       |       |      
|                    |                      | Total Investment Products |       |                                  | 2,506 |      |       |       | 2,380 |  |       |       | 2,041 | 
|                   
|                   
|                   
|                   
|Individual Life     |                      |                           | 890   |                                  |       |      | 640   |       |       |  | 584   |      
|                   
|                   
|                   
|                   
|Group Benefits      |                      |                           | 2,507 |                                  |       |      | 2,207 |       |       |  | 2,024 |      
|                   
|                   
|                   
|                   
|COLI                |                      |                           | 719   |                                  |       |      | 767   |       |       |  | 831   |      
|                    |                      |                           |       |                                  |       |      |       |       |       |  |       |       |      

19. Quarterly Results for 2001 and 2000 (unaudited)

|                              |  |                    |       |          |  |               |       |              |  |      |       |      |  |      |       |      |  |   |       |  |  |   |       |  |  |   |       |  |  |   |       | 
|----------------------------- |  | ------------------ | ----- | -------- |  | ------------- | ----- | ------------ |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | - | ----- |  |  | - | ----- |  |  | - | ----- |  |  | - | ----- | 
|                              |  | Three Months Ended
|                              |  |                   
|                              |  | March 31,          |       | June 30, |  | September 30, |       | December 31,
|                              |  |                    |       |          |  |               |       |             
|                              |  | 2001               |       | 2000     |  | 2001          |       | 2000         |  | 2001 |       | 2000 |  | 2001 |       | 2000
|                              |  |                    |       |          |  |               |       |              |  |      |       |      |  |      |       |     
|Revenues                      |  | $                  | 1,590 |          |  | $             | 1,446 |              |  | $    | 1,695 |      |  | $    | 1,441 |      |  | $ | 1,605 |  |  | $ | 1,587 |  |  | $ | 1,659 |  |  | $ | 1,516 | 
|                             
|                             
|                             
|                             
|Benefits, claims and expenses |  |                    | 1,368 |          |  |               | 1,226 |              |  |      | 1,467 |      |  |      | 1,275 |      |  |   | 1,469 |  |  |   | 1,368 |  |  |   | 1,480 |  |  |   | 1,333 | 
|                             
|                             
|                             
|                             
|Net income                    |  |                    | 138   |          |  |               | 150   |              |  |      | 162   |      |  |      | 146   |      |  |   | 250   |  |  |   | 152   |  |  |   | 135   |  |  |   | 127   | 
|                              |  |                    |       |          |  |               |       |              |  |      |       |      |  |      |       |      |  |   |       |  |  |   |       |  |  |   |       |  |  |   |       | 

F-30



---



##### Table of Contents



HARTFORD LIFE, INC. AND SUBSIDIARIES

SCHEDULE I

SUMMARY OF INVESTMENTS  OTHER THAN INVESTMENTS IN AFFILIATES

|                   |                               |                                                                                                 |                                       |                                              |       |       |        |     |       |   |        |     |       |                  |        | 
|------------------ | ----------------------------- | ----------------------------------------------------------------------------------------------- | ------------------------------------- | -------------------------------------------- | ----- | ----- | ------ | --- | ----- | - | ------ | --- | ----- | ---------------- | ------ | 
|(In millions)      |                               | As of December 31, 2001                                                                        
|                   |                               |                                                                                                
|                   |                               |                                                                                                 |                                       |                                              |       |       |        |     |       |   |        |     |       | 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)              |                                       | $                                            | 361   |       |        | $   | 374   |   |        | $   | 374   |                 
|                  
|                  
|                  
|                  
|                   |                               | U.S. Government and Government agencies and
authorities (guaranteed and sponsored)asset
backed |                                       |                                              | 1,498 |       |        |     | 1,528 |   |        |     | 1,528 |                 
|                  
|                  
|                  
|                  
|                   |                               | States, municipalities and political subdivisions                                               |                                       |                                              | 1,569 |       |        |     | 1,611 |   |        |     | 1,611 |                 
|                  
|                  
|                  
|                  
|                   |                               | International governments                                                                       |                                       |                                              | 371   |       |        |     | 390   |   |        |     | 390   |                 
|                  
|                  
|                  
|                  
|                   |                               | Public utilities                                                                                |                                       |                                              | 1,065 |       |        |     | 1,055 |   |        |     | 1,055 |                 
|                  
|                  
|                  
|                  
|                   |                               | All other corporate, including international                                                    |                                       |                                              | 9,644 |       |        |     | 9,802 |   |        |     | 9,802 |                 
|                  
|                  
|                  
|                  
|                   |                               | All
other corporateasset backed                                                                |                                       |                                              | 6,627 |       |        |     | 6,677 |   |        |     | 6,677 |                 
|                  
|                  
|                  
|                  
|                   |                               | Short-term investments                                                                          |                                       |                                              | 1,245 |       |        |     | 1,245 |   |        |     | 1,245 |                 
|                  
|                  
|                  
|                  
|                   | Certificates of deposit       |                                                                                                 |                                       | 575                                          |       |       |        | 562 |       |   |        | 562 |      
|                  
|                  
|                  
|                  
|                   | Redeemable preferred stock    |                                                                                                 |                                       | 55                                           |       |       |        | 57  |       |   |        | 57  |      
|                   |                               |                                                                                                 |                                       |                                              |       |       |        |     |       |   |        |     |       |                 
|                   |                               |                                                                                                 |                                       | Total fixed maturities                       |       |       | 23,010 |     |       |   | 23,301 |     |       |                  | 23,301 | 
|                   |                               |                                                                                                 |                                       |                                              |       |       |        |     |       |   |        |     |       |                 
|Equity Securities  |                               |                                                                                                 |                                       |                                              |       |       |        |     |       |   |        |    
|                  
|                  
|                  
|                  
|                   | Common Stocks                 |                                                                                                 |                                       |                                              |       |       |        |     |       |   |        |     |      
|                  
|                  
|                  
|                  
|                   |                               |                                                                                                 | Banks, trusts and insurance companies |                                              |       |      |        |     |       |  |        |     |       |                 |       
|                  
|                  
|                  
|                  
|                   |                               | Industrial and miscellaneous                                                                    |                                       |                                              | 448   |       |        |     | 428   |   |        |     | 428   |                 
|                   |                               |                                                                                                 |                                       |                                              |       |       |        |     |       |   |        |     |       |                 
|                   |                               |                                                                                                 |                                       | Total equity securities                      |       |       | 448    |     |       |   | 428    |     |       |                  | 428    | 
|                   |                               |                                                                                                 |                                       |                                              |       |       |        |     |       |   |        |     |       |                 
|                   |                               |                                                                                                 |                                       | Total fixed maturities and equity securities |       |       | 23,458 |     |       |   | 23,729 |     |       |                  | 23,729 | 
|                   |                               |                                                                                                 |                                       |                                              |       |       |        |     |       |   |        |     |       |                 
|Policy Loans       |                               |                                                                                                 | 3,317                                 |                                              |       |       | 3,317  |     |       |   | 3,317  |    
|                  
|                  
|                  
|                  
|Other Investments  |                               |                                                                                                 |                                       |                                              |       |       |        |     |       |   |        |    
|                  
|                  
|                  
|                  
|                   | Mortgage loans on real estate |                                                                                                 |                                       | 330                                          |       |       |        | 330 |       |   |        | 330 |      
|                  
|                  
|                  
|                  
|                   | Investment in partnerships    |                                                                                                 |                                       | 773                                          |       |       |        | 812 |       |   |        | 812 |      
|                  
|                  
|                  
|                  
|                   | Other invested assets         |                                                                                                 |                                       | 104                                          |       |       |        | 189 |       |   |        | 189 |      
|                   |                               |                                                                                                 |                                       |                                              |       |       |        |     |       |   |        |     |       |                 
|                   |                               |                                                                                                 |                                       | Total other investments                      |       |       | 1,207  |     |       |   | 1,331  |     |       |                  | 1,331  | 
|                   |                               |                                                                                                 |                                       |                                              |       |       |        |     |       |   |        |     |       |                 
|                   |                               |                                                                                                 |                                       | Total investments                            |       | $     | 27,982 |     |       | $ | 28,377 |     |       | $                | 28,377 | 
|                   |                               |                                                                                                 |                                       |                                              |       |       |        |     |       |   |        |     |       |                 

S-1



---



##### Table of Contents



HARTFORD LIFE, INC. AND SUBSIDIARIES

SCHEDULE II

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

|                                     |                                                                                                                                        |                                                     |                                            |       |       |       |  |     |       |       |  | 
|------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | ------------------------------------------ | ----- | ----- | ----- |  | --- | ----- | ----- |  | 
|(In millions)                        |                                                                                                                                        | As of December 31,                                 
|                                     |                                                                                                                                        |                                                    
|Condensed Balance Sheets             |                                                                                                                                        | 2001                                                |                                            | 2000 
|                                     |                                                                                                                                        |                                                     |                                            |      
|Assets                               |                                                                                                                                        |                                                     |                                            |       |       |       |  |    
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                                                                                        | Fixed maturities, available for sale, at fair value |                                            |       |       |       |  |     |       |      
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                                                                                        |                                                     | (amortized cost of $16 and $1)             |       | $     | 16    |  |     | $     | 1     | 
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                                                                                        | Investment in subsidiaries                          |                                            |       | 6,077 |       |  |     | 4,110 |      
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                                                                                        | Other assets                                        |                                            |       | 64    |       |  |     | 15    |      
|                                     |                                                                                                                                        |                                                     |                                            |       |       |       |  |     |       |       | 
|                                     |                                                                                                                                        |                                                     | Total assets                               |       |       | 6,157 |  |     |       | 4,126 | 
|                                     |                                                                                                                                        |                                                     |                                            |       |       |       |  |     |       |       | 
|Liabilities and Stockholders Equity |                                                                                                                                        |                                                     |                                            |       |       |       |  |    
|                                    
|                                    
|                                    
|                                    
|                                     | Long-term debt                                                                                                                         |                                                     |                                            | 1,050 |       |       |  | 650 |      
|                                    
|                                    
|                                    
|                                    
|                                     | Company
obligated mandatorily redeemable preferred securities of subsidiary trust holding solely parent junior subordinated debentures |                                                     |                                            | 450   |       |       |  | 250 |      
|                                    
|                                    
|                                    
|                                    
|                                     | Other liabilities                                                                                                                      |                                                     |                                            | 47    |       |       |  | 19  |      
|                                     |                                                                                                                                        |                                                     |                                            |       |       |       |  |     |       |       | 
|                                     |                                                                                                                                        |                                                     | Total liabilities                          |       |       | 1,547 |  |     |       | 919   | 
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                                                                                        |                                                     | Total stockholders equity                 |       |       | 4,610 |  |     |       | 3,207 | 
|                                     |                                                                                                                                        |                                                     |                                            |       |       |       |  |     |       |       | 
|                                     |                                                                                                                                        |                                                     | Total liabilities and stockholders equity |       | $     | 6,157 |  |     | $     | 4,126 | 
|                                     |                                                                                                                                        |                                                     |                                            |       |       |       |  |     |       |       | 

|                               |                                        |                                  |     |      |   |      |     |     |  |   |     |     | 
|------------------------------ | -------------------------------------- | -------------------------------- | --- | ---- | - | ---- | --- | --- |  | - | --- | --- | 
|(In millions)                  |                                        | For the years ended December 31,
|                               |                                        |                                 
|Condensed Statements of Income |                                        | 2001                             |     | 2000 |   | 1999
|                               |                                        |                                  |     |      |   |     
|Earnings of subsidiaries       |                                        | $                                | 869 |      |   | $    | 854 |     |  | $ | 753 |    
|                              
|                              
|                              
|                              
|Interest expense               |                                        |                                  | 104 |      |   |      | 66  |     |  |   | 67  |    
|                              
|                              
|                              
|                              
|                               | Income before income tax expense       |                                  |     | 765  |   |      |     | 788 |  |   |     | 686 | 
|                              
|                              
|                              
|                              
|Income tax expense             |                                        |                                  | 54  |      |   |      | 213 |     |  |   | 219 |    
|                               |                                        |                                  |     |      |   |      |     |     |  |   |     |    
|                               | Cumulative effect of accounting change |                                  |     | (26  | ) |      |     |    |  |   |     |    | 
|                               |                                        |                                  |     |      |   |      |     |     |  |   |     |    
|                               | Net income                             |                                  | $   | 685  |   |      | $   | 575 |  |   | $   | 467 | 
|                               |                                        |                                  |     |      |   |      |     |     |  |   |     |    

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



---



##### Table of Contents



HARTFORD LIFE, INC. AND SUBSIDIARIES

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

|                                                 |                                                                                                                                                                  |                                                  |   |        |        |      |   |      |     |   |   |      |     |  
|------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------ | - | ------ | ------ | ---- | - | ---- | --- | - | - | ---- | --- | -
|(In millions)                                    |                                                                                                                                                                  |                                                  |   |        |        |      |   |      |     |   |   |     
|Condensed Statements of Cash Flows               |                                                                                                                                                                  | For the years ended December 31,                
|                                                 |                                                                                                                                                                  |                                                 
|                                                 |                                                                                                                                                                  |                                                  |   | 2001   |        | 2000 |   | 1999
|                                                 |                                                                                                                                                                  |                                                  |   |        |        |      |   |     
|Operating Activities                             |                                                                                                                                                                  |                                                  |   |        |        |      |   |      |     |   |   |     
|                                                
|                                                
|                                                
|                                                
|                                                 | Net income                                                                                                                                                       |                                                  | $ | 685    |        |      | $ | 575  |     |   | $ | 467  |    
|                                                
|                                                
|                                                
|                                                
|                                                 | Undistributed earnings of subsidiaries                                                                                                                           |                                                  |   | (624   | )      |      |   | (526 | )   |   |   | (420 | )  
|                                                
|                                                
|                                                
|                                                
|                                                 | Change in other assets and liabilities                                                                                                                           |                                                  |   | (20    | )      |      |   |     |     |   |   | 3    |    
|                                                 |                                                                                                                                                                  |                                                  |   |        |        |      |   |      |     |   |   |      |    
|                                                 |                                                                                                                                                                  | Cash provided by operating activities            |   |        | 41     |      |   |      | 49  |   |   |      | 50  |  
|                                                 |                                                                                                                                                                  |                                                  |   |        |        |      |   |      |     |   |   |      |    
|Investing Activities                             |                                                                                                                                                                  |                                                  |   |        |        |      |   |      |     |   |   |     
|                                                
|                                                
|                                                
|                                                
|                                                 | Sales (purchases) of investments                                                                                                                                 |                                                  |   | (15    | )      |      |   |     |     |   |   | 1    |    
|                                                
|                                                
|                                                
|                                                
|                                                 | Capital contribution to subsidiary                                                                                                                               |                                                  |   | (1,177 | )      |      |   |     |     |   |   |     |    
|                                                 |                                                                                                                                                                  |                                                  |   |        |        |      |   |      |     |   |   |      |    
|                                                 |                                                                                                                                                                  | Cash provided by (used for) investing activities |   |        | (1,192 | )    |   |      |    |   |   |      | 1   |  
|                                                 |                                                                                                                                                                  |                                                  |   |        |        |      |   |      |     |   |   |      |    
|Financing Activities                             |                                                                                                                                                                  |                                                  |   |        |        |      |   |      |     |   |   |     
|                                                
|                                                
|                                                
|                                                
|                                                 | Proceeds from long-term debt                                                                                                                                     |                                                  |   | 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                                                                                                                                 |                                                  |   | 615    |        |      |   |     |     |   |   |     |    
|                                                
|                                                
|                                                
|                                                
|                                                 | Dividends paid                                                                                                                                                   |                                                  |   | (64    | )      |      |   | (55  | )   |   |   | (50  | )  
|                                                
|                                                
|                                                
|                                                
|                                                 | Proceeds from parent to retire common stock                                                                                                                      |                                                  |   |       |        |      |   | 226  |     |   |   |     |    
|                                                
|                                                
|                                                
|                                                
|                                                 | Payments to retire common stock                                                                                                                                  |                                                  |   |       |        |      |   | (226 | )   |   |   |     |    
|                                                
|                                                
|                                                
|                                                
|                                                 | Net issuance (purchase) of common stock                                                                                                                          |                                                  |   |       |        |      |   | 6    |     |   |   | (1   | )  
|                                                 |                                                                                                                                                                  |                                                  |   |        |        |      |   |      |     |   |   |      |    
|                                                 |                                                                                                                                                                  | Cash (used for) provided by financing activities |   |        | 1,151  |      |   |      | (49 | ) |   |      | (51 | )
|                                                 |                                                                                                                                                                  |                                                  |   |        |        |      |   |      |     |   |   |      |    
|                                                 | 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                                                                                                                                            |                                                  | $ | 89     |        |      | $ | 65   |     |   | $ | 65   |    
|                                                
|                                                
|                                                
|                                                
|                                                 | Tax refund received                                                                                                                                              |                                                  | $ | 11     |        |      | $ | 20   |     |   | $ | 24   |    

S-3



---



##### Table of Contents



HARTFORD LIFE, INC. AND SUBSIDIARIES

SCHEDULE III

SUPPLEMENTARY INSURANCE INFORMATION
For the years ended December 31, 2001, 2000 and 1999

(In millions)



|                               |                         |       |             |                 |        |       |        |       |         |   |        |        | 
|------------------------------ | ----------------------- | ----- | ----------- | --------------- | ------ | ----- | ------ | ----- | ------- | - | ------ | ------ | 
|                               |                         |       | Deferred    |                 |        |       |        |       | Other  
|                               |                         |       | Policy      |                 |        |       |        |       | Policy-
|                               |                         |       | Acquisition |                 | Future |       | holder
|Segment                        |                         | Costs |             | Policy Benefits |        | Funds
|                               |                         |       |             |                 |        |      
|2001                           |                         |       |             |                 |        |       |        |       |         |   |        |       
|                              
|                              
|                              
|                              
|Investment Products            |                         | $     | 3,683       |                 |        | $     | 4,513  |       |         | $ | 11,211 |       
|                              
|                              
|                              
|                              
|Individual Life                |                         |       | 1,249       |                 |        |       | 558    |       |         |   | 3,496  |       
|                              
|                              
|                              
|                              
|Group Benefits                 |                         |       | 36          |                 |        |       | 3,352  |       |         |   | 289    |       
|                              
|                              
|                              
|                              
|Corporate Owned Life Insurance |                         |       | 8           |                 |        |       | 321    |       |         |   | 4,120  |       
|                              
|                              
|                              
|                              
|Other                          |                         |       | 29          |                 |        |       | 98     |       |         |   | 241    |       
|                               |                         |       |             |                 |        |       |        |       |         |   |        |       
|                               | Consolidated
operations |       | $           | 5,005           |        |       | $      | 8,842 |         |   | $      | 19,357 | 
|                               |                         |       |             |                 |        |       |        |       |         |   |        |       
|2000                           |                         |       |             |                 |        |       |        |       |         |   |        |       
|                              
|                              
|                              
|                              
|Investment Products            |                         | $     | 3,377       |                 |        | $     | 3,486  |       |         | $ | 8,417  |       
|                              
|                              
|                              
|                              
|Individual Life                |                         |       | 1,114       |                 |        |       | 332    |       |         |   | 2,523  |       
|                              
|                              
|                              
|                              
|Group Benefits                 |                         |       | 36          |                 |        |       | 2,969  |       |         |   | 235    |       
|                              
|                              
|                              
|                              
|Corporate Owned Life Insurance |                         |       |            |                 |        |       | 283    |       |         |   | 4,645  |       
|                              
|                              
|                              
|                              
|Other                          |                         |       |            |                 |        |       | 4      |       |         |   | 29     |       
|                               |                         |       |             |                 |        |       |        |       |         |   |        |       
|                               | Consolidated operations |       | $           | 4,527           |        |       | $      | 7,074 |         |   | $      | 15,849 | 
|                               |                         |       |             |                 |        |       |        |       |         |   |        |       
|1999                           |                         |       |             |                 |        |       |        |       |         |   |        |       
|                              
|                              
|                              
|                              
|Investment Products            |                         | $     | 3,165       |                 |        | $     | 2,882  |       |         | $ | 8,987  |       
|                              
|                              
|                              
|                              
|Individual Life                |                         |       | 1,013       |                 |        |       | 331    |       |         |   | 2,415  |       
|                              
|                              
|                              
|                              
|Group Benefits                 |                         |       | 32          |                 |        |       | 2,698  |       |         |   | 207    |       
|                              
|                              
|                              
|                              
|Corporate Owned Life Insurance |                         |       |            |                 |        |       | 321    |       |         |   | 5,244  |       
|                              
|                              
|                              
|                              
|Other                          |                         |       |            |                 |        |       | 4      |       |         |   | 20     |       
|                               |                         |       |             |                 |        |       |        |       |         |   |        |       
|                               | Consolidated operations |       | $           | 4,210           |        |       | $      | 6,236 |         |   | $      | 16,873 | 
|                               |                         |       |             |                 |        |       |        |       |         |   |        |       

|                               |                         |      |        |       |     |        |            |        |         |   |          |       |     |   |      |      |  
|------------------------------ | ----------------------- | ---- | ------ | ----- | --- | ------ | ---------- | ------ | ------- | - | -------- | ----- | --- | - | ---- | ---- | -
|                               |                         |      |        |       |     |        | Earned     |        |         |   |          |       | Net
|                               |                         |      |        |       |     |        | Premiums   |        | Net     |   | Realized
|                               |                         |      | Policy |       | and |        | Investment |        | Capital
|Segment                        |                         | Fees |        | Other |     | Income |            | Losses
|                               |                         |      |        |       |     |        |            |       
|2001                           |                         |      |        |       |     |        |            |        |         |   |          |       |     |   |      |     
|                              
|                              
|                              
|                              
|Investment Products            |                         | $    | 1,622  |       |     | $      | (2         | )      |         | $ | 886      |       |     | $ |     |     
|                              
|                              
|                              
|                              
|Individual Life                |                         |      | 634    |       |     |        | 13         |        |         |   | 243      |       |     |   |     |     
|                              
|                              
|                              
|                              
|Group Benefits                 |                         |      | 17     |       |     |        | 2,242      |        |         |   | 248      |       |     |   |     |     
|                              
|                              
|                              
|                              
|Corporate Owned Life Insurance |                         |      | 355    |       |     |        | 12         |        |         |   | 352      |       |     |   |     |     
|                              
|                              
|                              
|                              
|Other                          |                         |      | 5      |       |     |        | 5          |        |         |   | 50       |       |     |   | (133 | )   
|                               |                         |      |        |       |     |        |            |        |         |   |          |       |     |   |      |     
|                               | Consolidated operations |      | $      | 2,633 |     |        | $          | 2,270  |         |   | $        | 1,779 |     |   | $    | (133 | )
|                               |                         |      |        |       |     |        |            |        |         |   |          |       |     |   |      |     
|2000                           |                         |      |        |       |     |        |            |        |         |   |          |       |     |   |      |     
|                              
|                              
|                              
|                              
|Investment Products            |                         | $    | 1,621  |       |     | $      | 18         |        |         | $ | 741      |       |     | $ |     |     
|                              
|                              
|                              
|                              
|Individual Life                |                         |      | 454    |       |     |        | 5          |        |         |   | 181      |       |     |   |     |     
|                              
|                              
|                              
|                              
|Group Benefits                 |                         |      | 17     |       |     |        | 1,964      |        |         |   | 226      |       |     |   |     |     
|                              
|                              
|                              
|                              
|Corporate Owned Life Insurance |                         |      | 392    |       |     |        | 9          |        |         |   | 366      |       |     |   |     |     
|                              
|                              
|                              
|                              
|Other                          |                         |      |       |       |     |        | 6          |        |         |   | 78       |       |     |   | (88  | )   
|                               |                         |      |        |       |     |        |            |        |         |   |          |       |     |   |      |     
|                               | Consolidated operations |      | $      | 2,484 |     |        | $          | 2,002  |         |   | $        | 1,592 |     |   | $    | (88  | )
|                               |                         |      |        |       |     |        |            |        |         |   |          |       |     |   |      |     
|1999                           |                         |      |        |       |     |        |            |        |         |   |          |       |     |   |      |     
|                              
|                              
|                              
|                              
|Investment Products            |                         | $    | 1,295  |       |     | $      | 38         |        |         | $ | 708      |       |     | $ |     |     
|                              
|                              
|                              
|                              
|Individual Life                |                         |      | 395    |       |     |        | 17         |        |         |   | 172      |       |     |   |     |     
|                              
|                              
|                              
|                              
|Group Benefits                 |                         |      | 15     |       |     |        | 1,814      |        |         |   | 195      |       |     |   |     |     
|                              
|                              
|                              
|                              
|Corporate Owned Life Insurance |                         |      | 400    |       |     |        |           |        |         |   | 431      |       |     |   |     |     
|                              
|                              
|                              
|                              
|Other                          |                         |      |       |       |     |        | 5          |        |         |   | 56       |       |     |   | (5   | )   
|                               |                         |      |        |       |     |        |            |        |         |   |          |       |     |   |      |     
|                               | Consolidated operations |      | $      | 2,105 |     |        | $          | 1,874  |         |   | $        | 1,562 |     |   | $    | (5   | )
|                               |                         |      |        |       |     |        |            |        |         |   |          |       |     |   |      |     

|                               |                         |          |            |           |           |       |             |         |              |         |          |     |  |   |     |     |  |   |     |     | 
|------------------------------ | ----------------------- | -------- | ---------- | --------- | --------- | ----- | ----------- | ------- | ------------ | ------- | -------- | --- |  | - | --- | --- |  | - | --- | --- | 
|                               |                         |          | Benefits,  |           |           |       |             |         | Amortization |         |          |     |  |   |     |     | 
|                               |                         |          | Claims and |           |           |       |             |         | of Deferred  |         |          |     |  |   |     |     | 
|                               |                         |          | Claim      |           | Insurance |       | Policy      |         | Dividends    |         |          |     | 
|                               |                         |          | Adjustment |           | Expenses  |       | Acquisition |         | to Policy-   |         | Interest
|Segment                        |                         | Expenses |            | and other |           | Costs |             | holders |              | Expense
|                               |                         |          |            |           |           |       |             |         |              |        
|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                          |                         |          | 19         |           |           |       | 23          |         |              |         | 2        |     |  |   |    |     |  |   | 104 |    
|                               |                         |          |            |           |           |       |             |         |              |         |          |     |  |   |     |     |  |   |     |    
|                               | Consolidated operations |          | $          | 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                          |                         |          |           |           |           |       | 40          |         |              |         |         |     |  |   |    |     |  |   | 66  |    
|                               |                         |          |            |           |           |       |             |         |              |         |          |     |  |   |     |     |  |   |     |    
|                               | Consolidated operations |          | $          | 3,162     |           |       | $           | 1,236   |              |         | $        | 671 |  |   | $   | 67  |  |   | $   | 66  | 
|                               |                         |          |            |           |           |       |             |         |              |         |          |     |  |   |     |     |  |   |     |    
|1999                           |                         |          |            |           |           |       |             |         |              |         |          |     |  |   |     |     |  |   |     |    
|                              
|                              
|                              
|                              
|Investment Products            |                         | $        | 668        |           |           | $     | 440         |         |              | $       | 430      |     |  | $ |    |     |  | $ |    |    
|                              
|                              
|                              
|                              
|Individual Life                |                         |          | 258        |           |           |       | 88          |         |              |         | 129      |     |  |   |    |     |  |   |    |    
|                              
|                              
|                              
|                              
|Group Benefits                 |                         |          | 1,507      |           |           |       | 406         |         |              |         | 9        |     |  |   |    |     |  |   |    |    
|                              
|                              
|                              
|                              
|Corporate Owned Life Insurance |                         |          | 621        |           |           |       | 59          |         |              |         |         |     |  |   | 104 |     |  |   |    |    
|                              
|                              
|                              
|                              
|Other                          |                         |          |           |           |           |       | 64          |         |              |         |         |     |  |   |    |     |  |   | 67  |    
|                               |                         |          |            |           |           |       |             |         |              |         |          |     |  |   |     |     |  |   |     |    
|                               | Consolidated operations |          | $          | 3,054     |           |       | $           | 1,057   |              |         | $        | 568 |  |   | $   | 104 |  |   | $   | 67  | 
|                               |                         |          |            |           |           |       |             |         |              |         |          |     |  |   |     |     |  |   |     |    

S-4



---



##### Table of Contents



HARTFORD LIFE, INC. AND SUBSIDIARIES

SCHEDULE IV

REINSURANCE

|                                      |                                       |                               |                                             |           |       |           |       |         |          |     |      |        |            |     |   |         |        |       |               |      |      |     |  
|------------------------------------- | ------------------------------------- | ----------------------------- | ------------------------------------------- | --------- | ----- | --------- | ----- | ------- | -------- | --- | ---- | ------ | ---------- | --- | - | ------- | ------ | ----- | ------------- | ---- | ---- | --- | -
|                                      |                                       |                               |                                             |           |       |           |       |         |          |     |      |        | Assumed    |     |   |         |        |       | Percentage of
|                                      |                                       |                               |                                             |           |       |           |       |         | Ceded to |     | From |        |            |     |   |         | Amount
|                                      |                                       |                               |                                             |           | Gross |           | Other |         | Other    |     | Net  |        | Assumed to
|(In millions)                         |                                       | Amount                        |                                             | Companies |       | Companies |       | Amount  |          | Net
|                                      |                                       |                               |                                             |           |       |           |       |         |          |    
|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     |       |           | $     | 282     |          |     | $    | 81     |            |     | $ | 3,460   |        |       |               | 2.3  | %   
|                                     
|                                     
|                                     
|                                     
|                                      |                                       | Accident and health insurance |                                             |           | 1,408 |           |       |         | 116      |     |      |        | 151        |     |   |         | 1,443  |       |               |      | 10.5 | %  
|                                     
|                                     
|                                     
|                                     
|                                      |                                       |                               | 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 | %
|                                      |                                       |                               |                                             |           |       |           |       |         |          |     |      |        |            |     |   |         |        |       |               |      |     
|For the year ended December 31, 1999  |                                       |                               |                                             |           |       |           |       |         |          |     |      |        |            |     |   |         |        |       |               |     
|                                     
|                                     
|                                     
|                                     
|                                      | Life insurance in force               |                               | $                                           | 515,119   |       |           | $     | 126,909 |          |     | $    | 14,903 |            |     | $ | 403,113 |        |       |               | 3.7  | %   
|                                      |                                       |                               |                                             |           |       |           |       |         |          |     |      |        |            |     |   |         |        |       |               |      |     
|                                      | Fee income, earned premiums and other |                               |                                             |           |       |           |       |         |          |     |      |        |            |     |   |         |        |       |               |      |     
|                                     
|                                     
|                                     
|                                     
|                                      |                                       | Life insurance and annuities  |                                             | $         | 2,902 |           |       | $       | 167      |     |      | $      | 54         |     |   | $       | 2,789  |       |               |      | 1.9  | %  
|                                     
|                                     
|                                     
|                                     
|                                      |                                       | Accident and health insurance |                                             |           | 1,166 |           |       |         | 76       |     |      |        | 100        |     |   |         | 1,190  |       |               |      | 8.4  | %  
|                                     
|                                     
|                                     
|                                     
|                                      |                                       |                               | Total fee income, earned
premiums and other |           | $     | 4,068     |       |         | $        | 243 |      |        | $          | 154 |   |         | $      | 3,979 |               |      |      | 3.9 | %
|                                      |                                       |                               |                                             |           |       |           |       |         |          |     |      |        |            |     |   |         |        |       |               |      |     

S-5



---



##### Table of Contents



HARTFORD LIFE, INC. AND SUBSIDIARIES

SCHEDULE V

VALUATION AND QUALIFYING ACCOUNTS

|                                                          |      |            |         |              |       |            |             |                |             |              |         |  |  |   |    |   |  |   |     |  | 
|--------------------------------------------------------- | ---- | ---------- | ------- | ------------ | ----- | ---------- | ----------- | -------------- | ----------- | ------------ | ------- |  |  | - | -- | - |  | - | --- |  | 
|                                                          |      |            |         |              |       |            | Additions   |                | Deductions  |              |         |  | 
|                                                          |      |            |         |              |       |            |             |                |             |              |         |  | 
|                                                          |      |            |         |              |       |            | Charged to  |                |             |              |         |  |  |   |    |   |  |   |    
|                                                          |      |            | Balance |              | Costs |            | Translation |                | Write-offs/ |              | Balance
|(In millions)                                             |      | January 1, |         | and Expenses |       | Adjustment |             | Payments/Other |             | December 31,
|                                                          |      |            |         |              |       |            |             |                |             |             
|                                                          | 2001 |            |         |              |       |            |             |                |             |              |         |  |  |   |    |   |  |   |     |  | 
|                                                         
|                                                         
|                                                         
|                                                         
|Accumulated depreciation of
plant, property and equipment |      | $          | 173     |              |       | $          | 36          |                |             | $            |        |  |  | $ | (6 | ) |  | $ | 203 | 
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | 2000 |            |         |              |       |            |             |                |             |              |         |  |  |   |    |   |  |   |     |  | 
|                                                         
|                                                         
|                                                         
|                                                         
|Accumulated depreciation of
plant, property and equipment |      | $          | 154     |              |       | $          | 27          |                |             | $            |        |  |  | $ | (8 | ) |  | $ | 173 | 
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | 1999 |            |         |              |       |            |             |                |             |              |         |  |  |   |    |   |  |   |     |  | 
|                                                         
|                                                         
|                                                         
|                                                         
|Accumulated depreciation of
plant, property and equipment |      | $          | 137     |              |       | $          | 19          |                |             | $            |        |  |  | $ | (2 | ) |  | $ | 154 | 

S-6



---



##### 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 AccountingOfficer
|                    
|                    
|                    
|                    
|Date: March 28, 2002 |  |                                                                                                   

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

|                                             |  |                                                    |  |               
|-------------------------------------------- |  | -------------------------------------------------- |  | --------------
|Signature                                    |  | Title                                              |  | Date          
|                                             |  |                                                    |  |               
|/s/ Ramani Ayer
Ramani Ayer                  |  | Chairman and Director                              |  | March 28, 2002
|                                            
|                                            
|                                            
|                                            
|                                             |  |                                                    |  |               
|                                            
|                                            
|                                            
|                                            
|/s/ Thomas M. Marra

Thomas M. Marra         |  | President, Chief Operating Officer
and Director    |  | March 28, 2002
|                                            
|                                            
|                                            
|                                            
|                                             |  |                                                    |  |               
|                                            
|                                            
|                                            
|                                            
|/s/ David T. Foy

David T. Foy               |  | Senior Vice President
and Chief Financial Officer  |  | March 28, 2002
|                                            
|                                            
|                                            
|                                            
|                                             |  |                                                    |  |               
|                                            
|                                            
|                                            
|                                            
|/s/ Mary Jane B. Fortin

Mary Jane B. Fortin |  | Senior Vice President
and Chief Accounting Officer |  | March 28, 2002
|                                            
|                                            
|                                            
|                                            
|                                             |  |                                                    |  |               
|                                            
|                                            
|                                            
|                                            
|/s/ David K. Zwiener

David K. Zwiener       |  | Director                                           |  | March 28, 2002

II-1



---



##### Table of Contents






HARTFORD LIFE, INC. AND SUBSIDIARIES
FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
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      |  | Senior 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 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 2038, included as Exhibit A to Exhibit 4.04 filed 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.                                          

II-2



---



##### Table of Contents



|          |  |                                                                                                                                                                                                                                                                                                                                                                                     |  |  |  | 
|--------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|Exhibit # |  |                                                                                                                                                                                                                                                                                                                                                                                     |  |  |  | 
|          |  |                                                                                                                                                                                                                                                                                                                                                                                     |  |  |  | 
|         
|         
|         
|         
|10.01     |  | Master Intercompany Agreement 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 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 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.                                                                                                                            
|         
|         
|         
|         
|          |  |                                                                                                                                                                                                                                                                                                                                                                                    
|         
|         
|         
|         
|10.04     |  | Management Agreement 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 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     |  | Amended and restated Credit Agreement dated as of February 9, 1998
among Hartford Life, Inc., the lenders named therein and Citibank,
N.A. as administrative agent was filed as Exhibit 10.1 to the
Companys Form 10-Q filed for the quarterly period ended March 31,
1998 and is incorporated herein by reference.                                                               
|         
|         
|         
|         
|          |  |                                                                                                                                                                                                                                                                                                                                                                                    
|         
|         
|         
|         
|12        |  | Computation of Ratio of Earnings to Fixed Charges is filed herewith.                                                                                                                                                                                                                                                                                                               
|         
|         
|         
|         
|          |  |                                                                                                                                                                                                                                                                                                                                                                                    
|         
|         
|         
|         
|23        |  | Consent of Arthur Andersen LLP to the incorporation by reference
into the Companys Registration Statements on Form S-8 and Form S-3
of the Report of Arthur Andersen LLP contained in this Form 10-K
regarding the audited financial statements is filed herewith.                                                                                                                

II-3