<Page>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 22, 2013
FILE NO. 333-82866
811-07329
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-6
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PRE-EFFECTIVE AMENDMENT NO. / /
POST-EFFECTIVE AMENDMENT NO. 24 /X/
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 169 /X/
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
SEPARATE ACCOUNT VL I
(Exact Name of Registrant)
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
(Name of Depositor)
P.O. BOX 2999
HARTFORD, CT 06104-2999
(Address of Depositor's Principal Offices)
(860) 843-8335
(Depositor's Telephone Number, Including Area Code)
SUN-JIN MOON
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
751 BROAD STREET
NEWARK, NJ 07102
(Name and Address of Agent for Service)
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INDIVIDUAL VARIABLE LIFE CONTRACTS -- THE REGISTRANT HAS
REGISTERED AN INDEFINITE AMOUNT OF SECURITIES PURSUANT TO
RULE 24F-2 OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED.
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It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b) of Rule 485
/X/ on May 1, 2013 pursuant to paragraph (b) of Rule 485
/ / 60 days after filing pursuant to paragraph (a)(1) of Rule 485
/ / on pursuant to paragraph (a)(1) of Rule 485
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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<Page>
NOTICE TO EXISTING POLICY OWNERS
Prospectuses for policies often undergo certain changes in their terms from year
to year to reflect any changes in the policies. The changes include such things
as the liberalization of benefits, the exercise of rights reserved under the
policy, the alteration of administrative procedures and changes in the
investment options available. Any such change may OR MAY NOT apply to policies
issued prior to the effective date of the change. This product prospectus
reflects the status of the product as of May 1, 2013. Therefore, this prospectus
may contain information that is inapplicable to your policy. You should consult
your policy to verify whether any particular provision applies to you and which
investment options you may elect. In the event of any conflict between this
prospectus and your policy, the terms of your policy will control.
<Page>
PART A
<Page>
STAG WALL STREET VARIABLE UNIVERSAL LIFE
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
ADMINISTERED BY:
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
751 BROAD STREET
NEWARK, NJ 07102
TELEPHONE: (800) 231-5453
PROSPECTUS DATED: MAY 1, 2013
[THE HARTFORD LOGO]
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This prospectus describes information about Series II of the Stag Wall Street
Variable Universal Life insurance Policy (Policy). Policy owners should note
that the options, features and charges of the Policy may have varied over time.
For more information about the particular options, features and charges
applicable to you, please contact your financial professional and/or refer to
your Policy. Some Policy features may not be available in some states.
Stag Wall Street Variable Universal Life is a contract between you and Hartford
Life and Annuity Insurance Company. You agree to make sufficient premium
payments to us, and we agree to pay a death benefit to your beneficiary. The
Policy is a flexible premium variable universal life insurance Policy. It is:
X Flexible premium, generally, you may decide when to make premium payments and
in what amounts.
X Variable, because the value of your life insurance Policy will fluctuate with
the performance of the Sub-Accounts you select and the Fixed Account.
You must allocate your Premium Payment to "Sub-Accounts." The Sub-Accounts then
purchase shares of mutual funds set up exclusively for variable annuity or
variable life insurance products and certain other non-public investors
("Funds"). These are not the same mutual funds that you buy through your
stockbroker or through a retail mutual fund even though they may have similar
investment strategies and the same portfolio managers as retail mutual funds.
This Policy offers you Funds with investment strategies ranging from
conservative to aggressive and you may pick those Funds that meet your
investment goals and risk tolerance. The Funds are part of the following
portfolio companies: AllianceBernstein Variable Products Series Fund, Inc.,
American Funds Insurance Series, Fidelity Variable Insurance Products, Franklin
Templeton Variable Insurance Products Trust, Hartford Series Fund, Inc.,
Hartford HLS Series Fund II, Inc., Invesco Variable Insurance Funds, Lord Abbett
Series Fund, Inc., MFS Variable Insurance Trust, Oppenheimer Variable Account
Funds, Putnam Variable Trust, and The Universal Institutional Funds, Inc. The
Funds are described in greater detail in "The Funds" section of this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if the
information in this Prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
New policies are no longer offered for sale. This prospectus does not constitute
an offering in any jurisdiction in which such offering may not be lawfully made.
No person is authorized to make any representations in connection with this
offering other than those contained in this prospectus. Replacing any existing
life insurance Policy with this Policy may not be to your advantage.
This Prospectus can also be obtained from the Securities and Exchange
Commission's website (http://www.sec.gov). Prospectuses for the Underlying Funds
can be obtained from your financial professional or by logging on to
www.hartfordinvestor.com. The prospectuses contain detailed information,
including risks, charges and fees, so please read it carefully before you invest
or send money.
This life insurance Policy IS NOT:
- a bank deposit or obligation;
- federally insured; or
- endorsed by any bank or governmental agency.
<Page>
2 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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TABLE OF CONTENTS
<Table>
<Caption>
PAGE
<S> <C>
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SUMMARY OF BENEFITS AND RISKS 3
FEE TABLES 5
ABOUT US 8
Hartford Life and Annuity Insurance Company 8
Separate Account VL I 8
The Funds 8
The Fixed Account 15
CHARGES AND DEDUCTIONS 15
YOUR POLICY 16
PREMIUMS 27
DEATH BENEFITS AND POLICY VALUES 29
MAKING WITHDRAWALS FROM YOUR POLICY 31
LOANS 31
LAPSE AND REINSTATEMENT 32
FEDERAL TAX CONSIDERATIONS 33
LEGAL PROCEEDINGS 39
RESTRICTIONS ON FINANCIAL TRANSACTIONS 39
FINANCIAL INFORMATION 39
GLOSSARY OF SPECIAL TERMS 40
WHERE YOU CAN FIND MORE INFORMATION 42
</Table>
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 3
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SUMMARY OF BENEFITS AND RISKS
This section contains a summary of the benefits available under the Policy and
the principal risks of purchasing the Policy. It is only a summary and you
should read the entire prospectus.
BENEFITS OF YOUR POLICY
POLICY SUMMARY -- We will pay the Death Benefit to the named Beneficiaries upon
the death of the Insured. You, as the Policy Owner, pay the Premiums for the
Policy and name the Beneficiary. The Insured is the person whose life is insured
under the Policy. You allocate Premiums to the Underlying Funds and can
accumulate Account Value on a tax-deferred basis. We deduct Policy fees and
charges from the Premiums and the Account Value. You may access the Account
Value through loans and withdrawals.
FLEXIBILITY -- The Policy is designed to be flexible to meet your specific life
insurance needs. You have the flexibility to choose death benefit options,
investment options, and premiums you pay.
DEATH BENEFIT -- While the Policy is in force and when the insured dies, we pay
a death benefit to your beneficiary. However, your death benefit will never be
less than the Minimum Death Benefit. See Death Benefits and Policy Values. At
issue, you select one of two death benefit options:
- LEVEL OPTION: The death benefit equals the current Face Amount.
- RETURN OF ACCOUNT VALUE OPTION: The death benefit is the current Face Amount
plus the Account Value of your Policy.
The death benefit is reduced by any money you owe us, such as outstanding loans,
loan interest, or unpaid charges. You may change your death benefit option under
certain circumstances. You may increase or decrease the Face Amount on your
Policy under certain circumstances.
INVESTMENT CHOICES -- You may invest in up to 20 different investment choices
within your Policy, from the available investment options and a Fixed Account.
You may transfer money among your investment choices, subject to restrictions.
PREMIUM PAYMENTS -- You have the flexibility to choose how you pay premiums. You
can choose a planned premium when you purchase the Policy. You may change your
planned premium, subject to certain limitations.
RIGHT TO EXAMINE YOUR POLICY -- You have a limited right to return the Policy
for cancellation after purchase. See "Your Policy and Contract Rights -- Right
to Examine a Policy."
SURRENDER -- You may surrender your Policy at any time for its Cash Surrender
Value. (See "Risks of Your Policy," below). Surrenders may also be subject to a
Surrender Charge.
LOANS -- You may use this Policy as collateral to obtain a loan from Us.
NO-LAPSE GUARANTEE -- Generally, your death benefit coverage will last as long
as there is enough value in your Policy to pay for the monthly charges we
deduct. Since this is a variable life Policy, values of your Policy will
fluctuate based on the performance of the underlying investment options you have
chosen. Without the No-Lapse Guarantee, your Policy will lapse if the value of
your Policy is insufficient to pay your monthly charges. If the No-Lapse
Guarantee is available and your Policy Value is insufficient to pay your monthly
charges, we will waive any portion of the monthly charges that could not be
collected. Therefore, when the No-Lapse Guarantee feature is available, the
Policy will not lapse, regardless of the investment performance of the
underlying Funds. If you take a loan on your Policy, the No-Lapse Guarantee will
not protect the Policy from lapsing if there is Policy Indebtedness. Therefore,
you should carefully consider the impact of taking Policy loans during the
No-Lapse Guarantee Period. (See "Lapse and Reinstatement" for more information).
SETTLEMENT OPTIONS -- You or your beneficiary may choose to receive the proceeds
of the Policy over a period of time by using one of several settlement options.
OPTIONAL COVERAGE -- You may add other coverages to your Policy. See "Your
Policy -- Other Benefits."
TAX BENEFITS -- In most cases, you are not taxed on earnings until you take
earnings out of the Policy (commonly known as "tax-deferral"). The death benefit
may be subject to Federal and state estate taxes but your beneficiary will
generally not be subject to income tax on the death benefit.
RIDERS -- You may add additional benefits to your Policy by selecting from a
variety of Riders. Additional charges may apply for some Riders and may be
subject to underwriting approval.
RISKS OF YOUR POLICY
This is a brief description of the principal risks of the Policy.
INVESTMENT PERFORMANCE -- The value of your Policy will fluctuate with the
performance of the investment options you choose. Your investment options may
decline in value, or they may not perform to your expectations. Your Policy
values in the Sub-Accounts are not guaranteed. Charges and fees may have a
significant impact on Policy Account Value and the investment performance of the
Sub-Accounts (particularly with policies with lower Account Value). A
comprehensive discussion of the risks of the underlying Funds held by each
Sub-Account may be found in the underlying Fund's prospectus. You should read
the prospectus of each Fund before investing.
UNSUITABLE FOR SHORT-TERM SAVINGS -- The Policy is designed for long term
financial planning. You should not purchase the Policy if you will need the
premium payment in a short time period.
RISK OF LAPSE -- Your Policy could terminate if the value of the Policy becomes
too low to support the policy's monthly charges. If this occurs, we will notify
you in writing. You will then have a 61-day grace period to pay additional
amounts to prevent the Policy from terminating.
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4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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WITHDRAWAL LIMITATIONS -- One partial withdrawal is allowed each month. The
minimum allowed is $500, and the maximum allowed is the Cash Surrender Value
minus $1,000. Withdrawals will reduce your Policy's death benefit, may increase
the risk of Policy lapse, may result in a partial surrender charge and may be
subject to a withdrawal charge.
TRANSFER LIMITATIONS -- We reserve the right to limit the size of transfers and
remaining balances, and to limit the number and frequency of transfers among
your investment options and the Fixed Account.
LOANS -- Using your Policy as collateral to obtain a loan from Us may increase
the risk that your Policy will lapse, will have a permanent effect on the
policy's Account Value, and will reduce the death proceeds. The No-Lapse
Guarantee will not protect the Policy from lapsing if there is Policy
Indebtedness. Therefore, you should carefully consider the impact of taking
Policy loans during the No-Lapse Guarantee Period.
ADVERSE TAX CONSEQUENCES -- You may be subject to income tax if you receive any
loans, withdrawals or other amounts from the Policy, and you may be subject to a
10% penalty tax. See "Federal Tax Considerations." There could be significant
adverse tax consequences if the Policy should lapse or be surrendered when there
are loans outstanding.
TAX LAW CHANGES -- Tax laws, regulations, and interpretations are subject to
change. Such changes my impact the expected benefits of purchasing this Policy.
CREDIT RISK -- Any Death Benefit guarantee provided by the Policy or any rider
and the Fixed Account obligations depend on the Company's financial ability to
fulfill its obligations. You should review the Company's financial statements
which are available upon request and are attached to the Statement of Additional
Information (SAI).
INCREASE IN CURRENT FEES AND EXPENSES -- Certain Policy fees and expenses may be
currently charged at less than their maximum amounts. We may increase these
current fees and expenses up to the guaranteed maximum levels.
<Page>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 5
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FEE TABLES
The following tables describe the fees and expenses that you will pay when
buying, owning, and surrendering the Policy. The first table describes the
maximum fees and expenses that you will pay at the time that you buy the Policy,
surrender the Policy, take a withdrawal or transfer cash value between
investment options. Your specific fees and charges are described on the
specification page of your Policy.
TRANSACTION FEES
<Table>
<Caption>
CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED
<S> <C> <C>
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Front-end Sales Load When you pay premium. 2.50% of each premium payment in all Policy years.
Surrender Charge (1) When you surrender your Policy during Minimum Charge
the first fourteen Policy years. $9.00 per $1,000 of the initial Face Amount for a 20-year-old.
When you make certain Face Amount Maximum Charge
decreases during the first fourteen $40.00 per $1,000 of the initial Face Amount for an 85-year-old.
Policy years. Charge for a representative insured
When you take certain withdrawals during $9.00 per $1,000 of the initial Face Amount for a 27-year-old female
the first fourteen Policy years. preferred non-nicotine.
Transfer Fees When you make a transfer after the first Maximum Charge: $25 per transfer.*
transfer in any month.
Withdrawal Charge When you take a withdrawal. Maximum Charge: $10 per withdrawal.
</Table>
* Not currently being assessed.
The next table describes the fees and expenses that you will pay periodically
during the time that you own the Policy, not including Fund fees and expenses.
ANNUAL CHARGES OTHER THAN FUND OPERATING EXPENSES
<Table>
<Caption>
CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED
<S> <C> <C>
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Cost of Insurance Monthly. Minimum Charge
Charges (1) $0.0566667 per $1,000 of the net amount at risk for an issue age
10-year-old standard non-nicotine female in the first Policy year.
Maximum Charge
$14.953333 per $1,000 of the net amount at risk for an issue age
85-year-old male standard nicotine in the first Policy year.
Charge for a representative insured
$0.085 per $1,000 of the net amount at risk for an issue age
27-year-old female preferred non-nicotine in the first Policy year.
Mortality and Monthly. Maximum Charge: 1.2% per year of Sub-Account Value (deducted on a
Expense Risk Charge monthly basis at a rate of 1/12 of 1.2%).
Administrative Monthly. Maximum Charge: $10
Charge
Loan Interest Rate Monthly if you have take a loan on your Maximum Charge: 5.0% annually
(2) Policy
</Table>
(1) This charge varies based on individual characteristics. The charge shown in
the table may not be representative of the charge that you will pay. You
may obtain more information about the charge that would apply to you by
contacting your financial representative for a personalized illustration.
(2) For Non-Preferred Indebtedness, the Loan Interest Rate is 5.0% during
Policy years 1-10 and 4.0% during Policy years 11 and later. For Preferred
Indebtedness, the Loan Interest Rate is 3.0% during all Policy years. Any
Account Value in the Loan Account will be credited with interest at an
annual rate of 3.0%.
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6 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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<Table>
<Caption>
RIDER CHARGES WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED
<S> <C> <C>
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Waiver of Specified Monthly. Minimum Charge
Amount Disability $0.04 per $1 of specified amount for a 20-year-old male in the first
Benefit Rider Policy year.
(available for Maximum Charge
policies issued on $0.199 per $1 of specified amount for a 59-year-old female in the
or before March 12, first Policy year.
2007) (1) Charge for a representative insured
$.043 per $1 of specified amount for a 27-year-old female in the
first Policy year.
Waiver of Specified Monthly. Minimum Charge
Amount Disability $0.04 per $1 of specified amount for a 20-year-old male in Policy
Benefit Rider year 1.
(available for Maximum Charge
policies issued $0.107 per $1 of specified amount for a 59-year-old female in Policy
after March 12, year 1.
2007) Charge for a representative insured
$.042 per $1 of specified amount for a 27-year-old female in Policy
year 1.
Term Insurance Monthly. Minimum Charge
Rider (1) $0.0566667 per $1,000 of the net amount at risk for a 10-year-old
standard non-nicotine female in the first Policy year.
Maximum Charge
$14.953333 per $1,000 of the net amount at risk for an 85-year-old
male standard nicotine in the first Policy year.
Charge for a representative insured
$0.085 per $1,000 of the net amount at risk for a 27-year-old female
preferred non-nicotine in the first Policy year.
Accidental Death Monthly. Minimum Charge
Benefit Rider (1) $0.083 per $1,000 of the net amount at risk for a 10-year-old in the
first Policy year.
Maximum Charge
$0.18 per $1,000 of the net amount at risk for a 60-year-old in the
first Policy year.
Charge for a representative insured
$.085 per $1,000 of the net amount at risk for a 27-year-old in the
first Policy year.
Deduction Amount Monthly. Minimum Charge
Waiver Rider (1) 6.9% of the monthly deduction amount for a 20-year-old male in the
first Policy year.
Maximum Charge
34.5% of the monthly deduction amount for a 56-year-old female in
the first Policy year.
Charge for a representative insured
13.8% of the monthly deduction amount for a 27-year old female in
the first Policy year.
Death Benefit Monthly. Minimum Charge
Guarantee Rider (1) $0.01 per $1,000 of Face Amount for a 1-year-old.
Maximum Charge
$0.06 per $1,000 of Face Amount for an 80-year old.
Charge for a representative insured
$0.01 per $1,000 of Face Amount for a 27-year old.
Child Insurance Monthly. The fee is $0.50 per $1,000 of coverage for all children.
Rider
Accelerated Death When you exercise the benefit Maximum Charge: $300
Benefit Rider for
Terminal Illness (2)
</Table>
(1) This charge varies based on individual characteristics. The charge shown in
the table may not be representative of the charge that you will pay. You
may obtain more information about the charge that would apply to you by
contacting your financial representative for a personalized illustration.
See the Term Insurance Rider description in the "Other Benefits" section
for information you should consider when evaluating the use of the Term
Insurance Rider.
(2) There is a one time charge for this rider when you exercise the benefit.
<Page>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 7
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ANNUAL FUND OPERATING EXPENSES
Each Subaccount purchases shares of the corresponding Underlying Fund at net
asset value. The net asset value of an Underlying Fund reflects the investment
advisory fees and other expenses of the Underlying Fund that are deducted from
the assets in that Underlying Fund. These Underlying Fund expenses may vary from
year to year and are more fully described in each underlying Fund's prospectus.
The first table shows the minimum and maximum total operating expenses charged
by the underlying Funds expressed as a percentage of average daily net assets,
for the year ended December 31, 2012.
<Table>
<Caption>
MINIMUM MAXIMUM
<S> <C> <C> <C> <C> <C> <C>
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TOTAL ANNUAL FUND OPERATING EXPENSES 0.33% 1.41%
[expenses that are deducted from Underlying Fund assets,
including management fees, distribution,
and/or service (12b-1) fees and other expenses.]
</Table>
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8 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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ABOUT US
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
We are a stock life insurance company engaged in the business of writing life
insurance and annuities, both individual and group, in all states of the United
States, the District of Columbia and Puerto Rico, except New York. On January 1,
1998, Hartford's name changed from ITT Hartford Life and Annuity Insurance
Company to Hartford Life and Annuity Insurance Company. We were originally
incorporated under the laws of Wisconsin on January 9, 1956, and subsequently
redomiciled to Connecticut. Our offices are located in Simsbury, Connecticut;
however, our mailing address is P.O. Box 2999, Hartford, CT 06104-2999. We are
ultimately controlled by The Hartford Financial Services Group, Inc., one of the
largest financial service providers in the United States.
On January 2, 2013, Hartford Life Insurance Company and Hartford Life and
Annuity Insurance Company (collectively, "Hartford") entered into agreements
with The Prudential Insurance Company of America ("Prudential") under which
Prudential will reinsure the obligations of Hartford under the variable life
insurance policies and provide administration for the policies. Prudential is a
New Jersey domiciled life insurance company with offices located in Newark, New
Jersey. Prudential's mailing address is 213 Washington Street, Newark, NJ 07102.
Prudential is ultimately controlled by Prudential Financial, Inc.
SEPARATE ACCOUNT VL I
The Sub-Accounts are subdivisions of our separate account, called Separate
Account VL I. Income, gains and losses credited to, or charged against, the
Separate Account reflect the Separate Account's own investment experience and
not the investment experience of the Company's other assets. The Company is
obligated to pay all amounts promised to policy owners under the Policy. Your
assets in the Separate Account are held exclusively for your benefit and may not
be used for any other liability of Hartford.
Income, gains and losses credited to, or charged against, the Separate Account
reflect the Separate Account's own investment experience and not the investment
experience of the Company's other assets. The assets of the Separate Account may
not be used to pay any liabilities of the Company other than those arising from
the Policies. The Company is obligated to pay all amounts promised to Contract
Owners in accordance with the terms of the Policy.
THE FUNDS
The Sub-Accounts of the Separate Account purchase shares of mutual funds set up
exclusively for variable annuity and variable life insurance products. These
funds are not the same mutual funds that you buy through your stockbroker or
through a retail mutual fund, but they may have similar investment strategies
and the same portfolio managers as retail mutual funds. You choose the
Sub-Accounts that meet your investment style.
We do not guarantee the investment results of any of the underlying Funds. Since
each Underlying Fund has different investment objectives, each is subject to
different risks.
The Underlying Funds may not be available in all states.
You may also allocate some or all of your premium payments to the "Fixed
Account," which pays a declared interest rate. See "The Fixed Account."
Below is a table that lists the underlying Funds in which the Sub-accounts
invest, each Fund's investment adviser and sub-adviser, if applicable, and each
Fund's investment objective. More detailed information concerning a Fund's
investment objective, investment strategies, risks and expenses is contained in
each Fund's prospectus.
<Table>
<Caption>
FUNDING OPTION INVESTMENT OBJECTIVE SUMMARY INVESTMENT ADVISER/SUB-ADVISER
<S> <C> <C>
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AIM VARIABLE INSURANCE FUNDS
Invesco V.I. American Franchise Fund Seeks capital growth Invesco Advisers, Inc.
-- Series I (1)
Invesco V.I. American Value Fund -- Above-average total return over a market Invesco Advisers, Inc.
Series II (2) cycle of three to five years by investing
in common stocks and other equity
securities
Invesco V.I. Balanced Risk Allocation Total return with a low to moderate Invesco Advisers, Inc.
Fund -- Series I correlation to traditional financial market
indices
Invesco V.I. Comstock Fund -- Series Seeks capital growth and income through Invesco Advisers, Inc.
II (3) investments in equity securities, including
common stocks, preferred stocks and
securities convertible into common and
preferred stocks
</Table>
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 9
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<Table>
<Caption>
FUNDING OPTION INVESTMENT OBJECTIVE SUMMARY INVESTMENT ADVISER/SUB-ADVISER
<S> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
Invesco V.I. Core Equity Fund -- Seeks long-term growth of capital Invesco Advisers, Inc.
Series I
Invesco V.I. International Growth Fund Seeks long-term growth of capital Invesco Advisers, Inc.
-- Series I
Invesco V.I. Mid Cap Core Equity Fund Seeks long-term growth of capital Invesco Advisers, Inc.
-- Series I
Invesco V.I. Mid Cap Growth Fund -- Seeks Capital Growth Invesco Advisers, Inc.
Series I (4)
Invesco V.I. Small Cap Equity Fund -- Seeks long-term growth of capital Invesco Advisers, Inc.
Series I
ALLIANCEBERNSTEIN VARIABLE PRODUCTS
SERIES FUND, INC.
AllianceBernstein VPS International Seeks long-term growth of capital AllianceBernstein, L.P.
Growth Portfolio -- Class B
AllianceBernstein VPS International Seeks long-term growth of capital AllianceBernstein, L.P.
Value Portfolio -- Class B
AllianceBernstein VPS Small/Mid Cap Seeks long-term growth of capital AllianceBernstein, L.P.
Value Portfolio -- Class B
AMERICAN FUNDS INSURANCE SERIES
American Funds Asset Allocation Fund Seeks high total return, including income Capital Research and Management Company
-- Class 2 and capital gains, consistent with the
preservation of capital over the long term.
American Funds Blue Chip Income and Seeks to produce income exceeding the Capital Research and Management Company
Growth Fund -- Class 2 average yield on U.S. stocks generally and
to provide an opportunity for growth of
principal consistent with sound common
stock investing.
American Funds Bond Fund -- Class 2 Seeks a high level of current income as is Capital Research and Management Company
consistent with preservation of capital.
American Funds Global Growth Fund -- Seeks long-term growth of capital Capital Research and Management Company
Class 2
American Funds Global Small Seeks growth of capital over time by Capital Research and Management Company
Capitalization Fund -- Class 2 investing primarily in stocks of smaller
companies located around the world.
American Funds Growth Fund -- Class 2 Seeks to provide growth of capital Capital Research and Management Company
American Funds Growth-Income Fund -- Seeks long-term growth of capital and Capital Research and Management Company
Class 2 income
American Funds International Fund -- Seeks long-term growth of capital Capital Research and Management Company
Class 2
American Funds New World Fund -- Class Seeks long-term capital appreciation Capital Research and Management Company
2
FIDELITY VARIABLE INSURANCE PRODUCTS
FUNDS
Fidelity(R) VIP Contrafund(R) Seeks long-term capital appreciation Fidelity Management & Research Company
Portfolio -- Service Class 2 Sub-advised by FMR Co., Inc. and other
Fidelity affiliates
</Table>
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10 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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<Table>
<Caption>
FUNDING OPTION INVESTMENT OBJECTIVE SUMMARY INVESTMENT ADVISER/SUB-ADVISER
<S> <C> <C>
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Fidelity(R) VIP Equity-Income Seeks reasonable income. Fund will also Fidelity Management & Research Company
Portfolio -- Initial Class consider potential for capital appreciation Sub-advised by FMR Co., Inc. and other
Fidelity affiliates
Fidelity(R) VIP Equity-Income Seeks reasonable income. Fund will also Fidelity Management & Research Company
Portfolio -- Service Class 2 consider potential for capital appreciation Sub-advised by FMR Co., Inc. and other
Fidelity affiliates
Fidelity(R) VIP Freedom 2010 Portfolio Seeks high total return with a secondary Strategic Advisers, Inc.
-- Service Class 2 objective of principal preservation as the
fund approaches its target date and beyond
Fidelity(R) VIP Freedom 2020 Portfolio Seeks high total return with a secondary Strategic Advisers, Inc.
-- Service Class 2 objective of principal preservation as the
fund approaches its target date and beyond
Fidelity(R) VIP Freedom 2030 Portfolio Seeks high total return with a secondary Strategic Advisers, Inc.
-- Service Class 2 objective of principal preservation as the
fund approaches its target date and beyond
Fidelity(R) VIP Mid Cap Portfolio -- Seeks long-term growth of capital Fidelity Management & Research Company
Service Class 2 Sub-advised by FMR Co., Inc. and other
Fidelity affiliates
FRANKLIN TEMPLETON VARIABLE INSURANCE
PRODUCTS TRUST
Franklin Income Securities Fund -- Seeks to maximize income while maintaining Franklin Advisers, Inc.
Class 2 prospects for capital appreciation Sub-advised by Templeton Investment
Counsel, LLC
Franklin Small Cap Value Securities Seeks long-term total return Franklin Advisory Services, LLC
Fund -- Class 2
Franklin Strategic Income Securities Seeks a high level of current income, with Franklin Advisers, Inc.
Fund -- Class 1 capital appreciation over the long term as
a secondary goal
Mutual Global Discovery Securities Seeks capital appreciation Franklin Mutual Advisers, LLC
Fund -- Class 2 Sub-advised by Franklin Templeton
Investment Management Limited
Mutual Shares Securities Fund -- Class Seeks capital appreciation, with income as Franklin Mutual Advisers, LLC
2 a secondary goal
Templeton Foreign Securities Fund -- Seeks long-term capital growth Templeton Investment Counsel, LLC
Class 2
Templeton Global Bond Securities Fund Seeks high current income, consistent with Franklin Advisers, Inc.
-- Class 2 preservation of capital, with capital
appreciation as a secondary consideration
Templeton Growth Securities Fund -- Seeks long-term capital growth Templeton Global Advisors Limited
Class 2
HARTFORD HLS SERIES FUND II, INC.
Hartford Growth Opportunities HLS Fund Seeks capital appreciation Hartford Funds Management Company, LLC
-- Class IA Sub-advised by Wellington Management
Company, LLP
</Table>
<Page>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 11
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<Table>
<Caption>
FUNDING OPTION INVESTMENT OBJECTIVE SUMMARY INVESTMENT ADVISER/SUB-ADVISER
<S> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
Hartford U.S. Government Securities Seeks to maximize total return while Hartford Funds Management Company, LLC
HLS Fund -- Class IA providing shareholders with a high level of Sub-advised by Wellington Management
current income consistent with prudent Company, LLP
investment risk
HARTFORD SERIES FUND, INC.
Hartford Balanced HLS Fund -- Class IA Seeks long-term total return Hartford Funds Management Company, LLC
(5) Sub-advised by Wellington Management
Company, LLP
Hartford Capital Appreciation HLS Fund Seeks growth of capital Hartford Funds Management Company, LLC
-- Class IA Sub-advised by Wellington Management
Company, LLP
Hartford Disciplined Equity HLS Fund Seeks growth of capital Hartford Funds Management Company, LLC
-- Class IA Sub-advised by Wellington Management
Company, LLP
Hartford Dividend and Growth HLS Fund Seeks a high level of current income Hartford Funds Management Company, LLC
-- Class IA consistent with growth of capital Sub-advised by Wellington Management
Company, LLP
Hartford Global Growth HLS Fund -- Seeks growth of capital Hartford Funds Management Company, LLC
Class IA Sub-advised by Wellington Management
Company, LLP
Hartford Global Research HLS Fund -- Seeks long-term capital appreciation Hartford Funds Management Company, LLC
Class IA Sub-advised by Wellington Management
Company, LLP
Hartford High Yield HLS Fund -- Class Seeks to provide high current income, and Hartford Funds Management Company, LLC
IA long-term total return Sub-advised by Wellington Management
Company, LLP
Hartford Index HLS Fund -- Class IA Seeks to provide investment results which Hartford Funds Management Company, LLC
approximate the price and yield performance Sub-advised by Hartford Investment
of publicly traded common stocks in the Management Company
aggregate.
Hartford International Opportunities Seeks long-term growth of capital Hartford Funds Management Company, LLC
HLS Fund -- Class IA Sub-advised by Wellington Management
Company, LLP
Hartford MidCap HLS Fund -- Class IA+ Seeks long-term growth of capital Hartford Funds Management Company, LLC
Sub-advised by Wellington Management
Company, LLP
Hartford MidCap Value HLS Fund -- Seeks long-term capital appreciation Hartford Funds Management Company, LLC
Class IA+ Sub-advised by Wellington Management
Company, LLP
Hartford Money Market HLS Fund -- Seeks maximum current income consistent Hartford Funds Management Company, LLC
Class IA* with liquidity and preservation of capital Sub-advised by Hartford Investment
Management Company
</Table>
<Page>
12 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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<Table>
<Caption>
FUNDING OPTION INVESTMENT OBJECTIVE SUMMARY INVESTMENT ADVISER/SUB-ADVISER
<S> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
Hartford Small Company HLS Fund -- Seeks growth of capital Hartford Funds Management Company, LLC
Class IA Sub-advised by Wellington Management
Company, LLP
Hartford Stock HLS Fund -- Class IA Seeks long-term growth of capital Hartford Funds Management Company, LLC
Sub-advised by Wellington Management
Company, LLP
Hartford Total Return Bond HLS Fund -- Seeks a competitive total return, with Hartford Funds Management Company, LLC
Class IA income as a secondary objective Sub-advised by Wellington Management
Company, LLP
Hartford Value HLS Fund -- Class IA Seeks long-term total return Hartford Funds Management Company, LLC
Sub-advised by Wellington Management
Company, LLP
LORD ABBETT SERIES FUND, INC.
Lord Abbett Bond-Debenture Portfolio Seeks high current income and the Lord, Abbett & Co. LLC
-- Class VC opportunity for capital appreciation to
produce a high total return
Lord Abbett Calibrated Dividend Growth Seeks current income and capital Lord, Abbett & Co. LLC
Portfolio -- Class VC (6) appreciation
Lord Abbett Growth and Income Seeks long-term growth of capital and Lord, Abbett & Co. LLC
Portfolio -- Class VC income without excessive fluctuations in
market value
MFS(R) VARIABLE INSURANCE TRUST
MFS(R) Investors Trust Series -- Seeks capital appreciation MFS Investment Management
Initial Class
MFS(R) New Discovery Series -- Initial Seeks capital appreciation MFS Investment Management
Class
MFS(R) Research Bond Series -- Initial Seeks total return with an emphasis on MFS Investment Management
Class current income, but also considering
capital appreciation
MFS(R) Total Return Series -- Initial Seeks total return MFS Investment Management
Class
MFS(R) Value Series -- Initial Class Seeks capital appreciation MFS Investment Management
OPPENHEIMER VARIABLE ACCOUNT FUNDS
Oppenheimer Capital Appreciation Seeks capital appreciation OFI Global Asset Management, Inc.
Fund/VA -- Service Shares OppenheimerFunds, Inc.
Oppenheimer Global Fund/VA -- Service Seeks capital appreciation OFI Global Asset Management, Inc.
Shares (7) OppenheimerFunds, Inc.
Oppenheimer Main Street Fund(R)/VA -- Seeks capital appreciation OFI Global Asset Management, Inc.
Service Shares OppenheimerFunds, Inc.
Oppenheimer Main Street Small Cap Seeks capital appreciation OFI Global Asset Management, Inc.
Fund/VA (8) OppenheimerFunds, Inc.
PUTNAM VARIABLE TRUST
Putnam VT Capital Opportunities Fund Long term growth of capital Putnam Investment Management, LLC
-- Class IB
</Table>
<Page>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 13
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<Table>
<Caption>
FUNDING OPTION INVESTMENT OBJECTIVE SUMMARY INVESTMENT ADVISER/SUB-ADVISER
<S> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
Putnam VT Diversified Income Fund -- As high a level of current income as Putnam Putnam Investment Management, LLC
Class IB Management believes is consistent with
preservation of capital
Putnam VT Equity Income Fund -- Class Capital growth and current income Putnam Investment Management, LLC
IB
Putnam VT Global Equity Fund -- Class Capital appreciation Putnam Investment Management, LLC
IB (a) Putnam Advisory Company, LLC
Putnam VT Growth and Income Fund -- Capital growth and current income Putnam Investment Management, LLC
Class IB
Putnam VT High Yield Fund -- Class IB High current income. Capital growth is a Putnam Investment Management, LLC
secondary goal when consistent with
achieving high current income
Putnam VT Income Fund -- Class IB High current income consistent with what Putnam Investment Management, LLC
Putnam Management believes to be prudent
risk
Putnam VT International Equity Fund -- Capital appreciation Putnam Investment Management, LLC
Class IB Putnam Advisory Company, LLC
Putnam VT Multi-Cap Growth Fund -- Long-term capital appreciation Putnam Investment Management, LLC
Class IB
Putnam VT Small Cap Value Fund -- Capital appreciation Putnam Investment Management, LLC
Class IB
Putnam VT Voyager Fund -- Class IB Capital appreciation Putnam Investment Management, LLC
THE UNIVERSAL INSTITUTIONAL FUNDS, INC.
UIF Mid Cap Growth Portfolio -- Class Seeks long-term capital growth by investing Morgan Stanley Investment Management Inc.
II primarily in common stocks and other equity
securities
</Table>
+ Closed to new and subsequent Premium Payments and transfers of Contract
Value.
* In a low interest rate environment, yields for money market funds, after
deduction of Contract charges may be negative even though the fund's
yield, before deducting for such charges, is positive. If you allocate a
portion of your Contract Value to a money market Sub-Account or
participate in an Asset Allocation Program where Contract Value is
allocated to a money market Sub-Account, that portion of your Contract
Value may decrease in value.
(a) Closed to all premium payments and transfers of account value for all
policies issued on or after 5/1/2006.
NOTES
(1) Formerly Invesco Van Kampen V.I. American Franchise Fund -- Series I
(2) Formerly Invesco Van Kampen V.I. American Value Fund -- Series II
(3) Formerly Invesco Van Kampen V.I. Comstock Fund -- Series II
(4) Formerly Invesco Van Kampen V.I. Mid Cap Growth Fund -- Series I
(5) Formerly Hartford Advisers HLS Fund -- Class IA
(6) Formerly Lord Abbett Capital Structure Portfolio -- Class VC
(7) Formerly Oppenheimer Global Securities Fund/VA -- Service Shares
(8) Formerly Oppenheimer Main Street Small- & Mid- Cap Fund(R)/VA -- Service
Shares
MIXED AND SHARED FUNDING -- Shares of the Funds may be sold to our other
separate accounts and our insurance company affiliates or other unaffiliated
insurance companies to serve as the underlying investment for both variable
annuity contracts and variable life insurance Policies, a practice known as
"mixed and shared funding." As a result, there is a possibility that a material
conflict may arise between the interests of policy owners, and of owners of
other contracts whose contract values are allocated to one or more of these
other separate accounts investing in any one of the Funds. In the event of any
such material conflicts, we will consider what action may be appropriate,
including removing the Fund from the Separate Account or replacing the Fund with
another Underlying Fund. There are certain risks associated with mixed and
shared
<Page>
14 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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funding. These risks are disclosed in the Funds' prospectuses accompanying this
prospectus.
VOTING RIGHTS -- We currently vote shares of the underlying Funds owned by the
Separate Account according to the instructions of policy owners. However, if the
1940 Act or any related regulations or interpretations should change and we
decide that we are permitted to vote the shares of the underlying Funds in our
own right, we may decide to do so. For Sub-Accounts in which you have invested
as of the record date, we will notify you of shareholder's meetings of the Funds
purchased by those Sub-Accounts. We will send you proxy materials and
instructions for you to provide voting instruction. We will arrange for the
handling and tallying of proxies received from you or other policy owners. If
you give no instructions, we will vote those shares in the same proportion as
shares for which we received instructions. As a result of proportional voting,
the vote of a small number of policy owners could determine the outcome of a
proposal subject to shareholder vote. We determine the number of Fund shares
that you may instruct us to vote by applying a conversion factor to each policy
owner's unit balance. The conversion factor is calculated by dividing the total
number of shares attributed to each Sub-Account by the total number of units in
each Sub-Account. Fractional votes will be counted. We determine the number of
shares as to which the Policy Owner may give instructions as of the record date
for a Fund's shareholder meeting.
SUBSTITUTIONS, ADDITIONS, OR DELETIONS OF FUNDS -- Subject to any applicable
law, we may make certain changes to the Underlying Funds offered under your
Policy. We may, in our sole discretion, establish new Funds. New Funds may be
made available to existing policy owners as we deem appropriate. We may also
close one or more Funds to additional Premium Payments or transfers from
existing Funds. We may liquidate one or more Sub-Accounts if the board of
directors of any Fund determines that such actions are prudent. Unless otherwise
directed, investment instructions will be automatically updated to reflect the
Fund surviving after any merger or liquidation.
We may eliminate the shares of any of the funds from the Policy for any reason
and we may substitute shares of another registered investment company for shares
of any Fund already purchased or to be purchased in the future by the Separate
Account. To the extent required by the 1940 Act, substitutions of shares
attributable to your interest in a Fund will not be made until we have the
approval of the SEC and we have notified you of the change.
In the event of any substitution or change, we may, by appropriate endorsement,
make any changes in the Policy necessary or appropriate to reflect the
substitution or change. If we decide that it is in the best interest of the
Policy Owner, the Separate Account may be operated as a management company under
the 1940 Act or any other form permitted by law, may be de-registered under the
1940 Act in the event such registration is no longer required, or may be
combined with one or more other Separate Accounts.
FEES AND PAYMENTS WE RECEIVE FROM FUNDS AND RELATED PARTIES -- We receive
substantial fees and payments with respect to the Funds that are offered through
your Contract (sometimes referred to as "revenue sharing" payments). We consider
these fees and payments, among a number of facts, when deciding to include a
Fund that we offer through the Contract. All of the Funds on the overall menu
make payments to Hartford or an affiliate. We receive these payments and fees
under agreements between us and a Fund's principal underwriter transfer agent,
investment adviser and/or other entities related to the Funds in amounts up to
0.55% of assets invested in a Fund. These fees and payments may include
asset-based sales compensation and service fees under distribution and/or
servicing plans adopted by Funds pursuant to Rule 12b-1 under the Investment
Company Act of 1940. These fees and payments may also include administrative
service fees and additional payments, expense reimbursements and other
compensation. Hartford expects to make a profit on the amount of the fees and
payments that exceed Hartford's own expenses, including our expenses of payment
compensation to broker-dealers, financial institutions and other persons for
selling the Contracts.
The availability of these types of arrangements creates an incentive for us to
seek and offer Funds (and classes of shares of such Funds) that pay us revenue
sharing. Other funds (or available classes of shares) may have lower fees and
better overall investment performance.
As of December 31, 2012, we have entered into arrangements to receive
administrative service payments and/or Rule 12b-1 fees from each of the
following Fund complexes (or affiliated entities): AllianceBernstein Variable
Products Series Funds & Alliance Bernstein Investments, American Variable
Insurance Series & Capital Research and Management Company, Fidelity
Distributors Corporation, Franklin Templeton Services, LLC, HL Investment
Advisors, LLC, Invesco Advisors Inc., Lord Abbett Series Fund & Lord Abbett
Distributor, LLC, MFS Fund Distributors, Inc. & Massachusetts Financial Services
Company, Morgan Stanley Distribution, Inc. & Morgan Stanley Investment
Management & The Universal Institutional Funds, Oppenheimer Variable Account
Funds & Oppenheimer Funds Distributor, Inc., and Putnam Retail Management
Limited Partnership.
We are affiliated with Hartford Series Fund, Inc. and Hartford HLS Series Fund
II, Inc. (collectively, the "HLS Funds") based on our affiliation with their
investment advisers HL Investment Advisors, LLC and Hartford Investment
Management Company. In addition to investment advisory fees, we, or our other
insurance company affiliates, receive fees to provide, among other things,
administrative, processing, accounting and shareholder services for the HLS
Funds.
Not all Fund complexes pay the same amount of fees and compensation to us and
not all Funds pay according to the same formula. Because of this, the amount of
fees and payments received by Hartford varies by Fund and Hartford may receive
greater or less fees and payments depending on the Funds you select. Revenue
sharing payments and Rule 12b-1 fees did not
<Page>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 15
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exceed 0.50% and 0.25%, respectively, in 2012, and are not expected to exceed
0.50% and 0.25%, respectively, of the annual percentage of the average daily net
assets (for instance, assuming that you invested in a Fund that paid us the
maximum fees and you maintained a hypothetical average balance of $10,000, we
would collect a total of $85 from that Fund). For the fiscal year ended December
31, 2012, revenue sharing payments and Rule 12b-1 fees did not collectively
exceed approximately $10.7 million. These fees do not take into consideration
indirect benefits received by offering HLS Funds as investment options.
THE FIXED ACCOUNT
The portion of the prospectus relating to the Fixed Account is not registered
under the 1933 Act and the Fixed Account is not registered as an investment
company under the 1940 Act. The Fixed Account is not subject to the provisions
or restrictions of the 1933 Act or the 1940 Act and the staff of the SEC has not
reviewed the disclosure regarding the Fixed Account. The following disclosure
about the Fixed Account may be subject to certain generally applicable
provisions of the federal securities laws regarding the accuracy and
completeness of disclosure.
The Fixed Account credits at least 3.0% per year. We are not obligated to, but
may, credit more than 3.0% per year. If we do, such rates are determined at our
sole discretion. Hartford does not guarantee that any crediting rate above the
guarantee rate will remain for any guaranteed period of time. You assume the
risk that, at any time, the Fixed Account may credit no more than 3.0%.
CHARGES AND DEDUCTIONS
DEDUCTIONS FROM PREMIUM
Before your premium is allocated to the Sub-Accounts and/or the Fixed Account,
we deduct a percentage from your premium for a sales load and a tax charge. The
amount allocated after the deductions is called your Net Premium.
FRONT-END SALES LOAD -- We deduct a front-end sales load from each premium you
pay. The current sales load is 0.00%. The front-end sales load may by used to
cover expenses related to the sale and distribution of the policies. The maximum
sales load is 2.50%.
TAX CHARGE -- We deduct a premium tax charge from each premium you pay. The
premium tax charge covers taxes assessed against us by a state and/or other
governmental entities. The range of such charge generally is between 0% and 4%.
DEDUCTIONS FROM ACCOUNT VALUE
MONTHLY DEDUCTION AMOUNTS -- Each month we will deduct an amount from your
Account Value to pay for the benefits provided by your Policy. This amount is
called the Monthly Deduction Amount and equals the sum of:
- the charge for the cost of insurance;
- the monthly administrative charge;
- the mortality and expense risk charge;
- the charges for additional benefits provided by rider, if any.
We will deduct the Monthly Deduction Amount on a pro rata basis from each
available Sub-Account and the Fixed Account unless you choose the Allocation of
Charges Option.
ALLOCATION OF CHARGES OPTION -- You may provide us with written instructions to
re-direct the deduction of your policy's Monthly Deduction Amount charges that
are assessed on a monthly basis to specified Sub-Account(s) and/or the Fixed
Account. If you do not provide us with written instructions, or if the assets in
any of the specified Sub-Accounts or the Fixed Account are insufficient to pay
the charge as requested, the Monthly Deduction Amount will then be deducted on a
pro rata basis from each available Sub-Account and the Fixed Account.
COST OF INSURANCE CHARGE -- The "cost of insurance" charge compensates the
Company for providing insurance protection. It is deducted each month as part of
the Monthly Deduction Amount and is designed to compensate the Company for the
costs of paying death benefits. The charge for the cost of insurance equals:
- the cost of insurance rate per $1,000, multiplied by
- the amount at risk, divided by
- $1,000.
On any Monthly Activity Date, the amount at risk equals the Death Benefit less
the Account Value on that date, prior to assessing the Monthly Deduction Amount.
Cost of insurance rates will be determined on each Policy anniversary based on
our future expectations of such factors as mortality, expenses, interest,
persistency and taxes. The cost of insurance rates will not exceed those based
on the 1980 Commissioners' Standard Ordinary Mortality Table (ALB), Male or
Female, Unismoke Table, age last birthday (unisex rates may be required in some
states). A table of guaranteed cost of insurance rates per $1,000 will be
included in your Policy. The maximum rates that can be charged are on the Policy
specification pages of the contract. Substandard risks will be charged higher
cost of insurance rates that will not exceed rates based on a multiple of 1980
Commissioners' Standard Ordinary Mortality Table (ALB), Male or Female, Unismoke
Table, age last birthday (unisex rates may be required in some states and
markets) plus any flat extra amount assessed. The multiple will be based on the
insured's substandard rating.
Any changes in the cost of insurance rates will be made uniformly for all
insureds of the same issue ages, sexes, risk classes and whose coverage has been
in-force for the same length of time. No change in insurance class or cost will
occur on account of deterioration of the insured's health.
<Page>
16 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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Because your Account Value and Death Benefit may vary from month to month, the
cost of insurance may also vary on each Monthly Activity Date. The cost of
insurance depends on your policy's amount at risk. Items which may affect the
amount at risk include the amount and timing of premium payments, investment
performance, fees and charges assessed, rider charges, Policy loans and death
benefit changes to the Face Amount.
MONTHLY ADMINISTRATIVE CHARGE -- We deduct a monthly administrative charge from
your Account Value to compensate us for issue and administrative costs of the
Policy. For policies with initial face amounts less than $100,000, the current
and maximum monthly administrative charge is $10.00. For policies with initial
face amounts of at least $100,000, the current monthly administrative charge is
$8.50, the maximum charge is $10.00.
MORTALITY AND EXPENSE RISK CHARGE -- We deduct a mortality and expense risk
charge each month from your Account Value. The charge is assessed according to
your Account Value attributable to the Sub-Accounts. The mortality and expense
risk charge each month is equal to:
- 1/12 of the annual mortality and expense risk rate; multiplied by
- the sum of your accumulated values in the Sub-Accounts on the Monthly
Activity Date, prior to assessing the Monthly Deduction Amount.
CURRENT ANNUAL MORTALITY & EXPENSE RISK RATE
<Table>
<Caption>
SEPARATE ACCOUNT VALUES
LESS THAN OR GREATER THAN
DURING POLICY YEARS EQUAL TO $25,000 $25,000
<S> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------
1-10 1.10% .90%
11-20 .70% .40%
21+ .50% .30%
</Table>
The maximum mortality and expense risk rate is 1/12 of 1.20% per month. The
maximum annual mortality and expense risk charge is 1.20%.
The mortality and expense risk charge compensates us for mortality and expense
risks assumed under the policies. The mortality risk assumed is that the cost of
insurance charges are insufficient to meet actual claims. The expense risk
assumed is that the expense incurred in issuing, distributing and administering
the policies exceed the administrative charges and sales loads collected.
Hartford may keep any difference between the cost it incurs and the charges it
collects.
RIDER CHARGE -- If your Policy includes riders, a charge applicable to the
riders is made from the Account Value each month. The charge applicable to these
riders is to compensate Hartford for the anticipated cost of providing these
benefits and is specified on the applicable rider. The maximum charge for any
rider chosen is shown on the Policy specification pages of the contract. For a
description of the riders available, see "Your Policy -- Optional Supplemental
Benefits."
SURRENDER CHARGE -- During the first 14 Policy years, surrender charges will be
deducted from your Account Value if:
- you surrender your Policy;
- you decrease the Face Amount by a cumulative amount of more than $500,000;
or
- you take a withdrawal that causes the Face Amount to decrease by a
cumulative amount of more than $500,000.
The amount of surrender charge is individualized based on the Insured's age,
Death Benefit Option, sex, and insurance class on the date of issue. The
surrender charges by Policy year are on the Policy specification pages of the
contract. The charge compensates us for expenses incurred in issuing the Policy
and the recovery of acquisition costs. Hartford may keep any difference between
the cost it incurs and the charges it collects. For partial surrender charges
applicable to a decrease in the Face Amount or withdrawal, see "Unscheduled
Increases and Decreases in the Face Amount."
CHARGES FOR THE FUNDS
The investment performance of each Fund reflects the management fee that the
Fund pays to its investment manager as well as other operating expenses that the
Fund incurs. Investment management fees are generally daily fees computed as a
percentage of a Fund's average daily net assets as an annual rate. Please read
the prospectus for each Fund for complete details.
YOUR POLICY
CONTRACT RIGHTS
POLICY OWNER, OR "YOU" -- As long as your Policy is in force, you may exercise
all rights under the Policy while the insured is alive and no beneficiary has
been irrevocably named.
BENEFICIARY -- The beneficiary is the person you name in the application to
receive any death benefit. You may change the beneficiary (unless irrevocably
named) while the insured is alive by notifying us in writing. If no beneficiary
is living when the insured dies, the death benefit will be paid to you, if
living; otherwise, it will be paid to your estate.
INSURED -- The insured is the person on whose life the Policy is issued. You
name the insured in the application of the Policy. The Policy Owner must have an
insurable interest on the life of the insured in order for the Policy to be
valid under state law and for the Policy to be considered life insurance for
federal income tax purposes. An insurable interest generally exists when there
is a demonstrable interest in something covered by an insurance Policy, the loss
of which would cause deprivation or financial loss. There must be a valid
insurable interest at the time the Policy is issued. If there is not a valid
insurable interest, the Policy will not provide the intended benefits. Through
our
<Page>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 17
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underwriting process, we will determine whether the insured is insurable.
You may request to change the Insured's risk class to a more favorable class if
the health of the Insured has improved or if the Insured no longer uses
nicotine. Upon providing us satisfactory evidence, we will review the risk
classification. If we grant a change in risk classification, only future cost of
insurance rates will be based on the more favorable class and all other contract
terms and provisions will remain as established at issue. We will not change a
risk class on account of deterioration of your health.
ASSIGNMENT -- You may assign your Policy. Until you notify us in writing, no
assignment will be effective against your Policy. We are not responsible for the
validity of any assignment.
STATEMENTS -- We will send you a statement at least once each year, showing:
- the current Account Value, Cash Surrender Value and Face Amount;
- the premiums paid, monthly deduction amounts and any loans since your last
statement;
- the amount of any Indebtedness;
- any notifications required by the provisions of your Policy; and
- any other information required by the Insurance Department of the state
where your Policy was delivered.
CHANGE OF ADDRESS -- It is important that you notify us if you change your
address. If your mail is returned to us, we are likely to suspend future
mailings until an updated address is obtained. In addition, we may rely on third
party, including the US Postal Service, to update your current address. Unless
preempted by ERISA, failure to give us a current address may result in payments
due and payable on your life Policy being considered abandoned property under
state law, and remitted to the applicable state.
RIGHT TO EXAMINE A POLICY -- Your free look period begins on the day You receive
Your Policy and ends ten days after You receive it (or longer in some states).
If you properly exercise your free look, the Contract will be rescinded and We
will pay you an amount equal to the greater of (a) the total premiums paid for
the Policy less any Indebtedness; or (b) the sum of: i) the Account Value less
any Indebtedness, on the date the returned Policy is received by Us or the agent
from whom it was purchased; and, (ii) any deductions under the Policy or charges
associated with the Separate Account, less applicable federal and state income
tax withholding. The state in which the Policy is issued determines the free
look period. You should refer to your Policy for information.
REPLACEMENTS
A "replacement" occurs when a new Policy is purchased and, in connection with
the sale, an existing Policy is surrendered, lapsed, forfeited, assigned to
another insurer, otherwise terminated or used in a financial purchase. A
"financial purchase" occurs when the purchase of a new life insurance Policy or
annuity contract involves the use of money obtained from the values of an
existing life insurance Policy or annuity contract through withdrawal, surrender
or loan.
There are some circumstances where replacing your existing life insurance Policy
can benefit you. However, there are many circumstances where a replacement will
not be in your best interest. You should carefully review the costs, benefits
and features of your existing life insurance Policy against a proposed Policy to
determine whether a replacement is in your best interest.
OTHER POLICY PROVISIONS
INCONTESTABILITY -- We cannot contest the Policy after it has been in force,
during the Insured's lifetime, for two years from its Date of Issue, except for
non-payment of premium.
Any increase in the Face Amount for which evidence of insurability was obtained,
will be incontestable only after the increase has been in force, during the
Insured's lifetime, for two years from the effective date of the increase.
The Policy may not be contested for more than two years after the reinstatement
date. Any contest We make after the Policy is reinstated will be limited to
material misrepresentations in the evidence of insurability provided to Us in
the request for reinstatement. However, the provision will not affect Our right
to contest any statement in the original application or a different
reinstatement request which was made during the Insured's lifetime from the Date
of Issue of the Policy or a subsequent reinstatement date.
SUICIDE EXCLUSION -- If, within two years from the Date of Issue, the Insured
dies by suicide, while sane or insane, Our liability will be limited to the
premiums paid less Indebtness and less any withdrawals.
If, within two years from the effective date of any increase in the Face Amount
for which evidence of insurability was obtained, the Insured dies by suicide,
while sane or insane, Our liability with respect to such increase, will be
limited to the Cost of Insurance for the increase.
POLICY LIMITATIONS
ALLOCATIONS TO SUB-ACCOUNTS AND THE FIXED ACCOUNT -- You may allocate amounts to
a maximum of twenty (20) investment choices including the Sub-Accounts and Fixed
Account.
TRANSFERS OF ACCOUNT VALUE -- You may transfer amounts among the Fixed Account
and the Sub-Accounts subject to a charge described below. You may request
transfers in writing or by calling us at 1-800-231-5453. Transfers by telephone
may also be made by your authorized agent of record or other authorized
representative. Telephone transfers may not be permitted in some states. We will
not be responsible for losses that result from acting upon telephone requests
reasonably believed to be genuine. We will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine. The procedures
we follow for transactions initiated by
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telephone include requiring callers to provide certain identifying information.
All transfer instructions communicated to us by telephone are tape recorded.
CAN YOU TRANSFER FROM ONE SUB-ACCOUNT TO ANOTHER?
You may make transfers between Sub-Accounts according to the following policies
and procedures, as they may be amended from time to time.
WHAT IS A SUB-ACCOUNT TRANSFER?
A Sub-Account transfer is a transaction requested by you that involves
reallocating part or all of your Account Value among the underlying Funds
available in your Policy. Your transfer request will be processed as of the end
of the Valuation Day that it is received in good order at our Designated
Address. Otherwise, your request will be processed on the following Valuation
Day. We will send you a confirmation when we process your transfer. You are
responsible for verifying transfer confirmations and promptly advising us of any
errors within 30 days of receiving the confirmation.
WHAT HAPPENS WHEN YOU REQUEST A SUB-ACCOUNT TRANSFER?
Many Policy Owners request Sub-Account transfers. Some request transfers into
(purchases) a particular Sub-Account, and others request transfers out of
(redemptions) a particular Sub-Account. In addition, some Policy Owners allocate
Premium Payments to Sub-Accounts, and others request Surrenders. We combine all
the daily requests to transfer out of a Sub-Account along with all Surrenders
from that Sub-Account and determine how many shares of that Underlying Fund we
would need to sell to satisfy all Policy Owners' "transfer-out" requests. At the
same time, we also combine all the daily requests to transfer into a particular
Sub-Account or Premium Payments allocated to that Sub-Account and determine how
many shares of that Underlying Fund we would need to buy to satisfy all Policy
Owners' "transfer-in" requests.
In addition, many of the underlying Funds that are available as investment
options in our variable life policies are also available as investment options
in variable annuity contracts, retirement plans, funding agreements and other
products offered by us or our affiliates. Each day, investors and Policy Owners
in these other products engage in similar transfer transactions.
We take advantage of our size and available technology to combine sales of a
particular Underlying Fund for many of the variable annuities, variable life
insurance policies, retirement plans, funding agreements or other products
offered by us or our affiliates. We also combine many of the purchases of that
particular Underlying Fund for many of the products we offer. We then "net"
these trades by offsetting purchases against redemptions. Netting trades has no
impact on the price you pay for or receive upon the purchase or sale of an
investment option. This means that we sometimes reallocate shares of an
Underlying Fund rather than buy new shares or sell shares of the Underlying
Fund.
For example, if we combine all transfer-out (redemption) requests and Surrenders
of a stock Fund Sub-Account with all other sales of that Underlying Fund from
all our other products, we may have to sell $1 million dollars of that Fund on
any particular day. However, if other Policy Owners and the owners of other
products offered by us, want to transfer-in (purchase) an amount equal to
$300,000 of that same Underlying Fund, then we would send a sell order to the
Fund for $700,000 (a $1 million sell order minus the purchase order of $300,000)
rather than making two or more transactions.
ARE THERE ANY CHARGES FOR TRANSFERS AMONG SUB-ACCOUNTS?
Under the Policy, we have the right to assess an Administrative Transfer Fee of
up to $25 per transfer after the first transfer you make in any month. We are
currently not assessing Administrative Transfer Fees.
WHAT RESTRICTIONS ARE THERE ON YOUR ABILITY TO MAKE A SUB-ACCOUNT TRANSFER?
FIRST, YOU MAY MAKE ONLY ONE SUB-ACCOUNT TRANSFER REQUEST EACH DAY. We limit
each Policy Owner to one Sub-Account transfer request each Valuation Day. We
count all Sub-Account transfer activity that occurs on any one Valuation Day as
one "Sub-Account transfer", however, you cannot transfer the same Account Value
more than once a Valuation Day.
For Example:
- If the only transfer you make on a day is a transfer of $10,000 from one
Sub-Account into another Sub-Account, it would count as one Sub-Account
transfer.
- If, however, on a single day you transfer $10,000 out of one Sub-Account
into five other Sub-Accounts (dividing the $10,000 among the five other
Sub-Accounts however you chose), that day's transfer activity would count as
one Sub-Account transfer.
- Likewise, if on a single day you transferred $10,000 out of one Sub-Account
into ten other Sub-Accounts (dividing the $10,000 among the ten other
Sub-Account however you chose), that day's transfer activity would count as
one Sub-Account transfer.
- Conversely, if you have $10,000 in Account Value distribution among 10
different Sub-Accounts and you request to transfer the Account Value in all
those Sub-Accounts into one Sub-Account, that would also count as one
Sub-Account transfer.
- However, you cannot transfer the same Account Value more than once in one
day. That means if you have $10,000 in a Money Market Fund Sub-Account and
you transfer all $10,000 into a Stock Fund Sub-Account, on that same day you
could not then transfer the $10,000 out of the Stock Fund Sub-Account into
another Sub-Account.
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SECOND, YOU ARE ALLOWED TO SUBMIT A TOTAL OF 20 SUB-ACCOUNT TRANSFERS EACH
POLICY YEAR (THE "TRANSFER RULE") BY U.S. MAIL, VOICE RESPONSE UNIT, INTERNET,
TELEPHONE, SAME DAY MAIL OR COURIER SERVICE. Once you have reached the maximum
number of Sub-Account transfers, you may only submit any additional Sub-Account
transfer requests (and any trade cancellation requests) in writing through U.S.
Mail or overnight delivery service. In other words, Voice Response Unit,
Internet, same day mail service or telephone transfer requests will not be
honored. We may, but are not obligated to, notify you when you are in jeopardy
of approaching these limits. For example, we may send you a letter after your
10th Sub-Account transfer to remind you about the Transfer Rule. After your 20th
transfer request, our computer system will not allow you to do another
Sub-Account transfer by telephone, Voice Response Unit or via the Internet. You
will then be instructed to send your Sub-Account transfer request by U.S. Mail
or overnight delivery service.
We reserve the right to aggregate your Contracts (whether currently existing or
those recently surrendered) for the purposes of enforcing these restrictions.
The Transfer Rule does not apply to Sub-Account transfers that occur
automatically as part of a Company sponsored asset allocation or Dollar Cost
Averaging program. Reallocations made based on an Underlying Fund merger,
substitution or liquidation also do not count toward this transfer limit.
Restrictions may vary based on state law.
We make no assurances that the Transfer Rule is or will be effective in
detecting or preventing market timing.
THIRD, POLICIES HAVE BEEN DESIGNED TO RESTRICT EXCESSIVE SUB-ACCOUNT
TRANSFERS. You should not purchase this Policy if you want to make frequent
Sub-Account transfers for any reason. In particular, don't purchase this Policy
if you plan to engage in "market timing," which includes frequent transfer
activity into and out of the same Underlying Fund, or frequent Sub-Account
transfers in order to exploit any inefficiencies in the pricing of an Underlying
Fund. Even if you do not engage in market timing, certain restrictions may be
imposed on you, as discussed below:
UNDERLYING FUND TRADING POLICIES
Generally, you are subject to Underlying Fund trading policies, if any. We are
obligated to provide, at the underlying Fund's request, tax identification
numbers and other shareholder identifying information contained in our records
to assist underlying Funds in identifying any pattern or frequency of
Sub-Account transfers that may violate their trading Policy. In certain
instances, we have agreed to assist an Underlying Fund, to help monitor
compliance with that Fund's trading Policy.
We are obligated to follow each underlying Fund's instructions regarding
enforcement of their trading Policy. Penalties for violating these policies may
include, among other things, temporarily or permanently limiting or banning you
from making Sub-Account transfers into an Underlying Fund or other funds within
that fund complex. We are not authorized to grant exceptions to an underlying
Fund's trading Policy. Please refer to each underlying Fund's prospectus for
more information. Transactions that cannot be processed because of Fund trading
policies will be considered not in good order.
In certain circumstances, Underlying Fund trading policies do not apply or may
be limited. For instance:
- Certain types of financial intermediaries may not be required to provide us
with shareholder information.
- "Excepted funds" such as money market funds and any Underlying Fund that
affirmatively permits short-term trading of its securities may opt not to
adopt this type of Policy. This type of Policy may not apply to any
financial intermediary that an Underlying Fund treats as a single investor.
- A Fund can decide to exempt categories of Policy Owners whose policies are
subject to inconsistent trading restrictions or none at all.
- Non-shareholder initiated purchases or redemptions may not always be
monitored. These include Sub-Account transfers that are executed: (i)
automatically pursuant to a company sponsored contractual or systematic
program such as transfers of assets as a result of "dollar cost averaging"
programs, asset allocation programs, automatic rebalancing programs, loans,
or systematic withdrawal programs; (ii) as a result of the payment of a
Death Benefit; (iii) as a result of any deduction of charges or fees under a
Policy; or (iv) as a result of payments such as loan repayments, scheduled
Premium Payments, scheduled withdrawals or surrenders, retirement plan
Premium Payments.
POSSIBILITY OF UNDETECTED ABUSIVE TRADING OR MARKET TIMING. We may not be able
to detect or prevent all abusive trading activities. For instance,
- Since we net all the purchases and redemptions for a particular Underlying
Fund for this and many of our other products, transfers by any specific
market timer could be inadvertently overlooked.
- Certain forms of variable annuities and types of underlying Funds may be
attractive to market timers. We can not provide assurances that we will be
capable of addressing possible abuses in a timely manner.
- Our policies apply only to individuals and entities that own or are Policy
Owners under this Policy. However, the underlying Funds that make up the
Sub-Accounts of this Policy are available for use with many different
variable life insurance policies, variable annuity products and funding
agreements, and they are offered directly to certain qualified retirement
plans. Some of these products and plans may have less restrictive transfer
rules or no transfer restrictions at all.
- In some cases, we are unable to count the number of Sub-Account transfers
requested by group annuity participants co-investing in the same Funds
("Participants") or enforce the Transfer Rule because we do not keep
Participants' account records for a Contract. In those cases, the
Participant
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account records and Participant Sub-Account transfer information are kept by
such owners or its third party service provider. These owners and third party
service providers may provide us with limited information or no information at
all regarding Participant Sub-Account transfers.
HOW ARE YOU AFFECTED BY FREQUENT SUB-ACCOUNT TRANSFERS?
We are not responsible for losses or lost investment opportunities associated
with the effectuation of these policies. Frequent Sub-Account transfers may
result in the dilution of the value of the outstanding securities issued by an
Underlying Fund as a result of increased transaction costs and lost investment
opportunities typically associated with maintaining greater cash positions. This
can adversely impact Underlying Fund performance and, as a result, the
performance of your Policy. This may also lower the Death Benefit paid to your
Beneficiary.
Separate Account investors could be prevented from purchasing Underlying Fund
shares if we reach an impasse on the execution of an underlying Fund's trading
instructions. In other words, an Underlying Fund complex could refuse to allow
new purchases of shares by all our variable product investors if the Fund and
The Hartford can not reach a mutually acceptable agreement on how to treat an
investor who, in a Fund's opinion, has violated the Fund's trading Policy.
In some cases, we do not have the tax identification number or other identifying
information requested by a Fund in our records. In those cases, we rely on the
Policy Owner to provide the information. If the Policy Owner does not provide
the information, we may be directed by the Fund to restrict the Policy Owner
from further purchases of Fund shares. In those cases, all participants under a
plan funded by the Policy will also be precluded from further purchases of Fund
shares.
LIMITATIONS ON TRANSFERS FROM THE FIXED ACCOUNT -- Except for transfers made
under the Dollar Cost Averaging Program, any transfers from the Fixed Account
must occur during the 30-day period following each Policy anniversary, and, the
maximum amount transferred in any Policy Year will be the greater of $1,000 or
25% of the Accumulated Value in the Fixed Account on the date of the transfer.
As a result of these restrictions, it can take several years to transfer amounts
from the Fixed Account to the Sub-Accounts."
DEFERRAL OF PAYMENTS -- State law allows us to defer payment of any Cash
Surrender Values, withdrawals and loan amounts which are not attributable to the
Sub-Accounts for up to six months from the date of the request. These laws were
enacted many years ago to help insurance companies in the event of a liquidity
crisis. If we defer payment for more than 30 days, we will pay you interest.
CHANGES TO CONTRACT OR SEPARATE ACCOUNT
MODIFICATION OF POLICY -- The only way the Policy may be modified is by a
written agreement signed by our President, or one of our Vice Presidents,
Secretaries, or Assistant Secretaries.
SUBSTITUTION OF FUNDS -- We reserve the right to substitute the shares of any
other registered investment company for the shares of any Fund already purchased
or to be purchased in the future by the Separate Account provided that the
substitution has been approved by the Securities and Exchange Commission.
CHANGE IN OPERATION OF THE SEPARATE ACCOUNT -- The operation of the Separate
Account may be modified to the extent permitted by law, including deregistration
under the securities laws.
SEPARATE ACCOUNT TAXES -- Currently, no charge is made to the Separate Account
for federal, state and local taxes that may be allocable to the Separate
Account. A change in the applicable federal, state or local tax laws which
impose tax on Hartford and/or the Separate Account may result in a charge
against the Policy in the future. Charges for other taxes, if any, allocable to
the Separate Account may also be made.
OTHER BENEFITS
DOLLAR COST AVERAGING PROGRAM -- You may elect to allocate your Net Premiums
among the Sub-Accounts and the Fixed Account pursuant to the Dollar Cost
Averaging (DCA) program. The DCA program allows you to regularly transfer an
amount you select from the Fixed Account or any Sub-Account into a different
Sub-Account. Amounts will be transferred monthly to the other investment options
in accordance with your allocation instructions. The dollar amount will be
allocated to the investment options that you specify, in the proportions that
you specify. If, on any transfer date, your Account Value allocated to the
Dollar Cost Averaging program is less than the amount you have elected to
transfer, your DCA program will terminate.
You may cancel your DCA election by notice in writing or by calling us at
1-800-231-5453. We reserve the right to change or discontinue the DCA program.
The main objective of a DCA program is to minimize the impact of short-term
price fluctuations. The DCA program allows you to take advantage of market
fluctuations. Since the same dollar amount is transferred to your selected
investment options at set intervals, the DCA program allows you to purchase more
accumulation units when prices are low and fewer accumulation units when prices
are high. Therefore, a lower average cost per accumulation unit may be achieved
over the long term. However, it is important to understand that the DCA program
does not assure a profit or protect against investment loss.
STATIC ASSET ALLOCATION MODELS
This feature allows you to select your portfolio of Funds based on your risk
tolerance, time horizon and investment objectives. Based on these factors, you
can select one of several asset allocation models, with each specifying
percentage allocations among various Funds available under your Policy ("model
portfolios"). These model portfolios are based on generally accepted investment
theories that take into account the historic returns of different asset classes
(e.g., equities, bonds or cash)
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 21
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over different time periods. We make available educational information and
materials (e.g., pie charts, graphs, or case studies) that can help you select a
model portfolio, but we do not recommend models or otherwise provide advice as
to what model portfolio may be appropriate for you.
You choose how much of your Account Value you want to invest in this program.
You can also combine this program with the Dollar Cost Averaging Program
(subject to restrictions). Your investments under the program will be rebalanced
at the specified frequency (quarterly, semi-annual or annual) you choose to
reflect the model portfolio's original percentages, thereby eliminating
imbalances resulting from market movements and/or partial Surrenders. We have no
discretionary authority or control over your investment decisions. These model
portfolios are based on then available Funds and do not include the Fixed
Account. You may participate in only one model portfolio at a time.
You will not be provided with information regarding periodic updates to the
Funds and allocation percentages in the model portfolios, and we will not
reallocate your Account Value based on those updates. Information on updated
model portfolios may be obtained by contacting your Financial Professional.
Investment alternatives other than these model portfolios are available that may
enable you to invest you Account Value with similar risk and return
characteristics. When considering a model portfolio for your individual
situation, you should consider your other assets, income and investments in
addition to this Policy.
ASSET REBALANCING -- Asset Rebalancing is another type of asset allocation
program in which you customize your Sub-Accounts to meet your investment needs.
You select the Sub-Accounts and the percentages you want allocated to each
Sub-Account. Based on the frequency you select, your model will automatically
rebalance to the original percentages chosen. You can only participate in one
model at a time.
IMPACT OF FUND CHANGES ON DCA PROGRAM, ASSET ALLOCATION PROGRAM AND ASSET
REBALANCING PROGRAM -- Certain Fund changes may impact these programs. If a Fund
(merging Fund) contained in one of these programs merges into another Fund
(surviving Fund) and we do not receive alternative instructions from you, we
will automatically replace the merging fund with the surviving fund for each of
the programs. If a Fund contained in one of these programs is liquidated, unless
other instructions are received, we will automatically move the Policy value of
the liquidated fund to the current money market fund for each of these programs.
OPTIONAL SUPPLEMENTAL BENEFITS -- The optional supplemental benefits discussed
below are among the options that may be included in a Policy by rider, subject
to the restrictions and limitations set forth in the rider. The cost for any
optional rider you select depends on the issue age, sex, and risk class of the
person insured under the Policy and the amount of benefit provided by the rider.
The maximum cost for the rider will be stated in your Policy on the Policy
specifications pages.
- WAIVER OF SPECIFIED AMOUNT DISABILITY BENEFIT RIDER (AVAILABLE FOR POLICIES
ISSUED ON OR BEFORE MARCH 12, 2007) -- In the event the person insured by
the Policy becomes totally disabled, we will credit the Policy with an
amount equal to the benefit defined in your Policy for as long as the
insured remains totally disabled. The charge for this rider will continue to
be deducted from the Account Value during the total disability of the person
insured by the Policy until the rider terminates.
- WAIVER OF SPECIFIED AMOUNT DISABILITY BENEFIT RIDER (AVAILABLE FOR POLICIES
ISSUED AFTER MARCH 12, 2007) -- If the Insured becomes totally disabled you
may have a difficult time paying the life insurance premiums. Under this
rider, we will credit the Policy with an amount specified in your Policy
until the Insured attains age 65, or at least two years, if longer. The
rider is only available at Policy issuance and there is a charge for this
rider.
- TERM INSURANCE RIDER -- You may purchase a Term Insurance Rider on yourself
as a base insured or on your family members. Under this Rider, we will pay
the term life insurance benefit when the covered insured dies, according to
the terms of your Policy and the Rider. You may elect this Rider when you
purchase your Policy or on any Policy Anniversary. Hartford may require
proof of insurability before we issue this Rider. If your Policy offers a No
Lapse Guarantee, the face amount of the Term Insurance Rider is generally
not covered by the No Lapse Guarantee.
In deciding whether to use the Term Insurance Rider as part of the total
coverage under the Policy on the base insured, you should consider the
following factors regarding your policy's costs and benefits. If you choose to
combine flexible permanent insurance coverage with a Term Insurance Rider on
the life of the base insured, the Rider provides additional temporary coverage
at a cost that may be lower than if you purchased this term life insurance
through a separate term life Policy and the policy's cash surrender value
available to you may be higher because there are no surrender charges
associated with the Rider. Some Policy monthly charges do not apply to the
face amount of the Term Insurance Rider, therefore, using Term Insurance Rider
coverage on the base insured may reduce the total amount of premium needed to
sustain the total death benefit over the life of the Policy. Under some
funding scenarios where the minimum death benefit insurance is increased to
meet the definition of life insurance, the use of the Term Insurance Rider may
have the effect of increasing the total amount of premium needed to sustain
the total death benefit over the life of the Policy.
The compensation paid to your representative may be lower when the Term
Insurance Rider is included as part of your total coverage than when your
total coverage does not include the Term Insurance Rider.
You may wish to ask your representative for additional customized sales
illustrations to review the impact of using Term Insurance Rider coverage in
various combinations for your insurance protection needs.
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- ACCIDENTAL DEATH BENEFIT RIDER -- This rider provides additional insurance
coverage in the event of the accidental death of the insured. The rider
terminates following the insured's 70th birthday.
- DEDUCTION AMOUNT WAIVER RIDER -- We will waive the Monthly Deduction Amount
if the insured becomes totally disabled. This will help keep your Policy in
force. Rider benefits are not available if insured becomes disabled after
age 65. Rider benefits may vary for individuals between the ages of 60 and
65. See Policy rider for more details.
- COST OF LIVING ADJUSTMENT RIDER -- We will increase your Face Amount without
evidence of insurability on every second anniversary of this rider. Face
Amount increases are based on increases in the consumer price index, subject
to certain limitations. If you do not accept an increase, this rider is
terminated and no future increases will occur. There is no charge for this
rider.
- ACCELERATED DEATH BENEFIT RIDER FOR TERMINAL ILLNESS -- In the event an
insured's life expectancy is 12 months (24 months in some states) or less,
we will pay a lump sum accelerated death benefit at your request subject to
certain limitations and proof of eligibility. The benefit percentage is set
at issue. The maximum charge for this rider is $300 (one time charge when
benefit exercised).
- DEATH BENEFIT GUARANTEE RIDER -- You may elect a guarantee period to age 65
up to the lifetime of the Policy. We will guarantee your death benefit
remains in effect as long as you pay at least the required Death Benefit
Guarantee Premium on a cumulative basis for the guarantee period elected. In
addition to the required premium there is a per $1,000 charge for this
rider.
- CHILD INSURANCE RIDER -- This rider provides term life insurance coverage on
all the eligible children of the insured under the Policy. We will pay the
term life insurance death benefit amount you elect under this rider upon
receipt of due proof of death of an insured child. To receive a death
benefit, an insured child must be more than 16 days old but not yet 25 years
old. Requirements to become an insured child are described in the rider.
There is a per $1,000 charge for this rider that covers all the children.
This rider may not be available in all policies.
Riders may not be available in all states.
POLICY SETTLEMENT OPTIONS
Proceeds from your Policy may be paid in a lump sum or may be applied to one of
the available settlement options listed in your Policy. At the time proceeds are
payable, the Beneficiary can select the method of payment.
SAFE HAVEN PROGRAM OPTION -- If the Death Benefit payment is $10,000 or greater,
the Beneficiary may elect to have their death proceeds paid through our Safe
Haven Program ("Safe Haven Program"). Under the Safe Haven Program, the proceeds
remain in Our General Account and the Beneficiary will receive a draft book.
Proceeds are guaranteed by the claims paying ability of the Company; however, it
is not a bank account and is not insured by Federal Deposit Insurance
Corporation (FDIC). The Beneficiary can write one draft for the total amount of
the payment, or keep the money in the General Account and write drafts as
needed. We will credit interest at a rate determined by us. For federal income
tax purposes, the Beneficiary will be deemed to have received the lump sum
payment on transfer of the Death Benefit Proceeds to the General Account. Any
interest paid to the Beneficiary (Accountholder) will be taxable to the
Beneficiary (Accountholder) in the tax year that it is credited. We may not
offer the Safe Haven Account in all states and we reserve the right to
discontinue offering it at any time. Although there are no direct charges for
the Safe Haven Program, Hartford earns investment income from the proceeds under
the program. The investment income earned is likely more than the amount of
interest we credit to the Beneficiary (Accountholder) and Hartford may make a
profit from the difference.
The minimum amount that may be placed under the following settlement options is
$5,000, subject to our then-current rules. Once payments under the Second Option
or the Third Option begin, no surrender may be made for a lump sum settlement in
lieu of the life insurance payments. The following payment options are available
to you or your beneficiary. Your beneficiary may choose a settlement option.
FIRST OPTION -- INTEREST INCOME
Payments of interest at the rate we declare (but not less than 2% per year) on
the amount applied under this option. You may request these payments to be made
monthly, quarterly, semi-annually or annually. At any time you may request to
receive the lump sum of the money that we are holding.
SECOND OPTION -- INCOME OF FIXED AMOUNT
Equal payments of the amount chosen until the amount applied under this option
(with interest of not less than 2% per year) is exhausted. You may request these
payments to be made monthly, quarterly, semi-annually or annually. The final
payment will be for the balance remaining.
THIRD OPTION -- PAYMENTS FOR A FIXED PERIOD
An amount payable monthly for the number of years selected, which may be from
one to 30 years.
The Policy provides for guaranteed dollar amounts of monthly payments for each
$1,000 applied under the three payment options.
The tables in your Policy for the First, Second and Third Options are based on a
net investment rate of 2% per annum. We may, however, from time to time, at our
discretion if mortality appears more favorable and interest rates justify, apply
other tables which will result in higher monthly payments for each $1,000
applied under one or more of the three payment options.
Other arrangements for income payments may be agreed upon.
CLASS OF PURCHASERS
REDUCED CHARGES -- The Policy is available for purchase by individuals,
corporations and other entities. We may reduce or waive certain charges
described above where the size or nature
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of such sales results in savings to us with respect to sales, underwriting,
administrative or other costs. Eligibility for these reductions will be
determined by factors that We believe are relevant to the expected reduction of
our expenses. Some of these reductions may be guaranteed and others may be
subject to modification. We may modify, from time to time on a uniform basis,
both the amounts of reductions and the criteria for qualification. Reductions in
these charges will not be unfairly discriminatory against any person, including
the affected policy owners invested in the Separate Account.
HOW POLICIES ARE SOLD
We have entered into a distribution agreement with our affiliate, Hartford
Equity Sales Company, Inc., ("HESCO"), under which HESCO serves as principal
underwriter for the policies which are offered on a continuous basis. HESCO is
registered with the Securities and Exchange Commission under the 1934 Act as a
broker-dealer and is a member of the FINRA. The principal business address of
HESCO is the same as ours.
HESCO has entered into selling agreements with affiliated and unaffiliated
broker-dealers, and financial institutions ("Financial Intermediaries") for the
sale of the policies. We pay compensation to HESCO for sales of the policies by
Financial Intermediaries. Polices will be sold by individuals who have been
appointed by us as insurance agents and who are financial professional of
Financial Intermediaries ("Financial Professional").
We list below types of arrangements that help to incentivize sales people to
sell our products. These types of arrangements could be viewed as creating
conflicts of interest.
Financial Intermediaries receive commissions as described below. Certain
selected Financial Intermediaries also receive additional compensation
(described below under "Additional Payments"). All or a portion of the payments
we make to Financial Intermediaries may be passed on to Financial Professional
according to a Financial Intermediaries' internal compensation practices.
Affiliated broker-dealers also employ individuals called "wholesalers" in the
sales process. Wholesalers typically receive compensation that is based on the
type of Policy or optional benefits sold.
We pay commissions that vary with the selling agreements and are based on
"Target Premiums" that we determine. "Target premium" is a hypothetical premium
that is used only to calculate commissions. It varies with the death benefit
option you choose and the issue age, gender and underwriting class of the
insured. During the first Policy Year, the maximum commission we pay is 120.5%
of the premium up to the Target Premium. The maximum commission for the amount
in excess of the Target Premium in the first Policy Year is 4.97%. In Policy
Years 2 and later, the maximum commission we pay is 4% of Target Premium and 3%
on premiums above the Target Premium.
Your Financial Professional typically receives a portion of the compensation
paid to his or her Financial Intermediary in connection with the Policy,
depending on the particular arrangements between your Financial Professional and
their Financial Intermediary. We are not involved in determining your Financial
Professional's compensation. A Financial Professional may be required to return
all or a portion of the commissions paid if the Policy terminates prior to the
policy's thirteenth month-a-versary.
Check with your Financial Professional to verify whether your account is a
brokerage account or an advisory account. Your interests may differ from ours
and your Financial Professional (or the Financial Intermediary with which they
are associated). Please ask questions to make sure you understand your rights
and any potential conflicts of interest. If you are an advisory client, your
Financial Professional (or the Financial Intermediary with which they are
associated) can be paid by both you and by us based on what you buy. Therefore,
profits, and your Financial Professional's (or their Financial Intermediary's)
compensation, may vary by product and over time. Contact an appropriate person
at your Financial Intermediary with whom you can discuss these differences.
- ADDITIONAL PAYMENTS. Subject to FINRA and Financial Intermediary rules, we
(or our affiliates) also pay the following types of additional payments to
among other things encourage the sale of this Policy. These additional
payments could create an incentive for your Financial Professional, and the
Financial Intermediary with which they are associated, to recommend products
that pay them more than others.
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24 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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<Table>
<S> <C>
ADDITIONAL WHAT PAYMENT IS USED FOR
PAYMENT TYPE
ASSET-BASED WE PAY CERTAIN FINANCIAL INTERMEDIARIES AND WHOLESALERS BASED ON THE ACHIEVEMENT OF CERTAIN SALES OR
COMMISSIONS ASSETS UNDER MANAGEMENT TARGETS.
MARKETING EXPENSE WE PAY MARKETING ALLOWANCES TO FINANCIAL INTERMEDIARIES TO HELP PAY OR REIMBURSE SALES MARKETING AND
ALLOWANCES OPERATIONAL EXPENSES ASSOCIATED WITH THE POLICIES.
GIFTS AND WE (OR OUR AFFILIATES) PROVIDE ANY OR ALL OF THE FOLLOWING: (1) OCCASIONAL MEALS AND ENTERTAINMENT; (2)
ENTERTAINMENT OCCASIONAL TICKETS TO SPORTING EVENTS; AND (3) NOMINAL GIFTS (NOT TO EXCEED $100 ANNUALLY).
PROMOTIONAL PAYMENTS WE (OR OUR AFFILIATES) MAY PAY FOR: (A) ACCESS: SUCH AS ONE-ON-ONE WHOLESALER VISITS; (B) SUPPORT: SUCH
AS HARDWARE AND SOFTWARE, OPERATIONAL AND SYSTEMS INTEGRATION, SALES AND SERVICE DESK TRAINING, JOINT
MARKETING CAMPAIGNS, CLIENT OR PROSPECT SEMINAR SPONSORSHIPS, BROKER-DEALER EVENT
ADVERTISING/PARTICIPATION, SPONSORSHIP OF SALES CONTESTS AND/OR PROMOTIONS IN WHICH PARTICIPANTS RECEIVE
PRIZES SUCH AS TRAVEL AWARDS, MERCHANDISE AND RECOGNITION; AND/OR SPONSORSHIP OF DUE DILIGENCE MEETINGS;
EDUCATIONAL, SALES OR TRAINING SEMINARS, CONFERENCES AND PROGRAMS; AND, (C) MISCELLANEOUS: SUCH AS
EXPENSE ALLOWANCES AND REIMBURSEMENTS; OVERRIDE PAYMENTS AND BONUSES; AND/OR MARKETING SUPPORT FEES (OR
ALLOWANCES) FOR PROVIDING ASSISTANCE IN PROMOTING THE SALE OF OUR VARIABLE PRODUCTS.
MARKETING EFFORTS WE PAY FOR SPECIAL MARKETING AND DISTRIBUTION BENEFITS SUCH AS: INCLUSION OF OUR PRODUCTS ON FINANCIAL
INTERMEDIARY'S "PREFERRED LIST"; PARTICIPATION IN OR VISIBILITY AT NATIONAL AND REGIONAL CONFERENCES;
ACCESS TO FINANCIAL PROFESSIONALS; LINKS TO OUR WEBSITE FROM THE FINANCIAL INTERMEDIARY WEBSITES; AND
ARTICLES IN FINANCIAL INTERMEDIARY PUBLICATIONS HIGHLIGHTING OUR PRODUCTS AND SERVICES.
</Table>
For the year ended December 31, 2012, Hartford and its affiliates paid
approximately $3,700,000 in Additional Payments to Financial Intermediaries in
conjunction with the promotion and support of individual life policies.
In addition, for the year ended December 31, 2012, Hartford, HESCO and their
affiliate, Hartford Life and Annuity Insurance Company, paid $5,400,000 in
Additional Payments to an affiliated Financial Intermediary, Woodbury Financial
Services, Inc. (an indirect wholly-owned subsidiary of Hartford).
As of December 31, 2012, we have entered into arrangements to make Additional
Payments to the following Financial Intermediaries: 1st Global Capital
Corporation, A F Crissie & Co. Ltd, AIA Insurance Agents Inc., A-Advantage
Insurance Service Inc., AIA Insurance Agency Ltd, AIM Insurance, AXA Network
LLC, Accurate Insurance Inc., Adirondack Trading Group LLC, Adkins Insurance
Solutions LLC, Adler Belmont Dye Insurance Services Inc., Advance Insurance
Agency, Advanced Advisor Group LLC, Advanced Insurance Resources, Agency Two
Insurance Marketing Group, All American Insurance Inc., All Nebraska Insurance,
AllPro Insurance Agency LLC, Allabout Insurance, Allegheny Investments Ltd,
Allen Financial Advisors, Alliance Insurance Services Inc., Allstate Financial
Services LLC, American Business & Professional Program, American Financial &
Auto Service, American Health Insurance Inc., American Portfolios Financial
Services, Americu Services, Ameriprise Financial Services Inc., Ameritas
Investment Corp., Amtmann & Associates, Anderson Insurance Associates LLC,
Anderson and Green Insurance, Andrew Garrett Inc., Armada Advisors Inc., Arvest
Asset Management, Associated Insurance Brokers Inc., Associated Services
Insurance Inc., Associates of Clifton Park, Association & Society, Atchison
Insurance Agency Inc., Auerbach & Gussin Insurance, Austin Reilley & Doud
Insurance Services, Axa Advisors LLC, Axios Advisory Group Ltd, B & K Associates
Inc., B & M Financial Systems Inc., BC Ziegler and Company, BB&T Insurance
Services Inc., BBVA Compass Insurance Agency Inc., BC Insurance LLC, BK
Insurance Group LLC, BPU Investment Group Inc., Bamboo Financial LLC, Bancwest
Investment Services Inc., Bank Of America, Battles Insurance Agency Inc.,
Beaconsfield Financial Services, Bearence Management Group LLC, Beaumont & Stork
Inc., Beckett Taylor Insurance LLC, BenTrust Financial, Beneficial Services
Inc., Benefits By Design Inc., Benefits Plus Inc., Benjamin F Edwards & Co.
Inc., Berkfield & Co. Ltd, Berthel Fisher & Co Financial Services, Best
Insurance Brokerage LLC, Betty Davis Insurance Agency LLC, Blake Barnes
Insurance Services, Blakeslee & Blakeslee, Boca Benefits Consulting Group, Boda
Financial Group Inc., Bomford Couch & Wilson, Bosc Inc., Brase Insurance Agency
Inc., Brasher Insurance Group, BrokersXpress LLC, Brown & Brown of Florida Inc.,
Brown Brown & Gomberg, Brown-Hiller-Clark & Associates, Brownlie Braden Parrish
& Rei, Bryanmark Financial Group Inc., Burgess Demarco & Flick Insurance,
Burnley Wilson Associates, Burns Brooks & Mcneil, Burt Moss & Assoc Inc.,
Business Financial Group LLC, Byron Udell & Associates Inc., CT Lowndes &
Company, CBIZ Insurance Services Inc., CCO Investment Services Corp., CES
Insurance Agency Inc., CFP Inc., CIA Insurance Agency Inc., CIG Securities Inc.,
CLA USA Inc., CMS National Services LLC, CP Smith Enterprises Inc., CPS
Insurance Services, CSC Insurance Professionals Inc., CT Solutions Ltd, Cadaret
Grant & Co. Inc., Calderwood Financial Strategies, Cambridge Financial Services
Inc., Caminiti Insurance Group LLC, Cantella & Co Inc., Capital Advisors,
Capital Analysts Inc., Capital Financial Services Inc., Capital Guardian LLC,
Capital Investment Group Inc. Capital One Agency LLC, Capital One Investment
Services Corp., Capital Strategies Group Inc., Capital Synergy Partners,
Carlisle Fields & Co LLC, Carter Terry & Company Inc., Cary Street Partners LLC,
Cassedy Insurance Agency Inc., Cbiz Special Risk Insurance Services Inc.,
Centaurus Financial Inc.,
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 25
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Center Street Securities Inc., Central FL Wealth Mgmt Inc., Central Ridge
Insurers LLC, Central Trust Co., Central Washington Insurance, Century
Securities Assoc Inc., Certus NW Inc., CFPLLC LLC, Chap Arnold Insurance Agency
Inc., Charles James Cayias Insurance, Charles L Crane Agency, Chase Investment
Services, Citigroup Global Markets Inc., Citizens Bank & Trust, Clarity Wealth
Development, Clarke & Sampson Inc., Clay Paul Insurance Agency Inc., Coaching
Financial Concepts Inc., Coburn & Meredith Inc., Coda Insurance Group LLC,
Colonial Insurance Agency Inc., Comerica Securities Inc., Commerce Brokerage
Services Inc., Commercial Insurance Brokers LLC, Commonwealth Financial Network,
Community Brokers Insurance Group, Community Insurance Agency, Comp Consulting
Companies LLC, Compass Financial & Insurance Services Inc., Comprehensive Asset
Management Services, Consolidated Life Producers, Consumer Insurance Advocates
Inc., Contessa Insurance, Copeland Agency LLC, Cornerstone Financial Group,
Costanza Agency Inc., Costello Insurance Agency Inc., Crest Insurance Group LLC,
Cross Limited Partnership, Crown Capital Securities, Crump Life Insurance
Services Inc., Cuna Brokerage Service, Cuso Financial Services, Cynsam Inc., DL
Downs Inc., D Lasman Insurance Services Inc., DML Jr. Inc., DA Davidson & Co
Inc., DH Hill Securities LLP, DMA Insurance Services Inc., DSA Risk Management
LLC, Daniel & Henry CO, Daniel Inc., David Insurance Agency Inc., David Lerner
Associates Inc., Davis Insurance Agency Inc., Davis Life Insurance Agency, Delta
Trust Investments Inc., Dennis J Gilbert Inc., Dewitt Insurance Agency, Dinser
Financial Group, Disbennett Financial Services LLC, Dobbs & Brinkman Inc.,
Domler Fletcher Insurance Agency LLC, Donahue Thomas P & Associates LLC, Donna
Frazier LLC, Donnelly Steen & Co., Dorsey & Company Inc., EJ Berriz & Assoc
Insurance Service Inc., EDI Financial, Inc., ELS & Associates Inc., Eamon Walsh
Inc., Earl G Chesson Inc., Eastern Financial of WV, Eckenrode Financial Group,
Edelman Wealth Management Group, Edward D Jones & Co., Edward Watkins &
Associates, Ehlert Financial Group Inc., Eichlitz Dennis Wray & Westheimer
Agency, Elite One Insurance Services, Employers Benefit Group LLC, Equity
Services Inc., Essex National Securities Inc., Etoms Inc., Exclusive Marketing
Org. Inc., Executive Insurance Agecy of OH, F & I Insurance Service, FSC
Securities Corp., Falconsure Inc., Farris Insurance, Fenstra Insurance, Fiducia
Financial & Insurance Services Inc., Fifth Third Securities Inc., Financial
Architects, Financial Independence Group Inc., Financial Network Investment
Corp., Financial Planning Consultants, Finns JM & J Insurance Agency, Fintegra
LLC, First Allied Securities, First American Insurance, First Brokerage America
LLC, First Choice Insurance Services Inc., First Dakota Inc., First Financial
Group Inc., First Heartland Capital Inc., First Heartland Corp., First Investors
Corporation, First South Financial Services, First Southeast Investment
Services, First Tennessee Brokerage, First Western Securities Inc., Fitts Agency
Inc., Forest Financial Group Inc., Foresters Equity Services Inc., Forney
Financial Solutions LLC, Fortune Insurance Group LLC, Founders Financial
Securities, LLC, Fowler Insurance Agency Inc., Freeman Financial Services Inc.,
Freundt & Associates Insurance Services, Frost Brokerage Services Inc., Fulcrum
Securities Inc., Futurecare Financial Group Inc., GBS Insurance and Financial
Services, GFS Inc., GSTLG Advisors LLC, Gallagher Benefit Services Inc., Geneos
Wealth Management, Inc., Genworth Financial Securities Corp., Gerald S
Jamgochian LLC, Gibson Insurance, LLC, Gilroy Kernan & Gilroy, Girard Securities
Inc., Glenn Harris & Associates, Global Insurance Agency Inc., Golden Circle
Insurance Agency, Great Nation Investment Corp., Gruber & Assoc Ltd, H & H
Insurance Agency Inc., H Beck Inc., H C & C Inc., HD Vest Investment Services.,
HSBC Securities USA Inc., Hadel Financial Advisors Inc., Halo Group LLC, Hanasab
Insurance Services Inc., Hancock Insurance Agency, Harrison Insurance &
Financials Ltd, Harvest Capital LLC, Hawkins Insurance Services Inc., Hazlett
Burt & Watson, Healthplan Services Inc., Hecht & Hecht L&H Insurance Agency
Inc., Hendrickson Insurance Services Inc., Hester Heitel & Associates, High and
Associates Inc., Hightower Securities, LLC, Hoffman Insurance Agency Inc.,
Hoover & Assoc Financial Services Inc., Hornor Townsend Kent Inc., Howard W
Phillips & Co., Hub Int'l Midwest Limited, Huntington Investment Co., IBN
Financial Services Inc., IFA Benefits LLC, ILG First Meridian LLC, ING Financial
Partners Inc., INS Group, IWC Benefit Insurance Services Corporation, Idaho
Financial Group Inc., Independent Agents Inc., Infinex Investments Inc.,
Innovative Wealth Strategies, Ins. Benefits Network LLC, Ins Center Inc., Ins
Guys Insurance Services Inc., Ins Smith Agency LLC, Insurance Land Insurance
Service, Insurance Pro Agencies, Insurance Shop LLC, Integrated Insurance
Solutions, Intervest International Equities Corp., Invest Financial Corp.,
Investment Centers Of America, Investment Planners Inc., Investment
Professionals Inc., Investors Capital Corp., J J B Hilliard W L Lyons LLC, J M
Barry & Assoc LLC, J W Cole Financial Inc., J.P. Perry Insurance, JMJ Consulting
Inc., Jackson Dieken and Associates Agency Inc., Jackson Financial, James E
Campbell Jr. Inc., James F Hurley Insurance Agency Corp., Jamieson Capital LLC,
Jesan Financial Group, Jesse Trevino Insurance Agency, Jim Morrison Financial
Services Inc., John C Eichler & Associates, Johnson & Strachan & Corp., Jonathan
Hind Financial Group, Joshua Holdings Agency Corp., KPLL Private Wealth Inc.,
Kansas City Insurance Agency, Keister & Keister Agency Inc., Kerxton Insurance
Agency Inc., Key Investment Services LLC, Keybanc Capital Markets Inc., Keycorp
Insurance Agency USA Inc., Kiefer Financial Group, Kirnco Insurance Group,
Koefod Insurance Agency, Kollas Inc., Kovack Securities Inc., LDS Wealth
Advisors LTD, LM Kohn & Company, LPL Financial Corporation, Laginess Insurance
Agency Inc., Lambent Risk Management Services Inc., Landolt Securities Inc.,
Landwehr Insurance Services Inc., Laredo Insurance Agency Inc., Larry Gustafson
& Assoc LLC, Larry Murphy Insurance Agency, Lasalle St. Securities LLC, Lecain
Family Insurance & Financial, Lee & Associates, Inc., Legacy Insurance Group
LLC, Legend Equities Corp., Leigh Baldwin & Co. LLC, Lesko Securities Inc.,
Liberty Bank, Liberty Benefits Group LLC, Liberty Partners Financial Services
Inc., Life & Legacy Group LLC, Life Brokerage Network LLC, Lifemark Securities
Corp., Ligouri & Associates, Lincoln Financial Advisors, Lindsey Financial &
Insurance Services, Linsco Private Ledger Insurance, Linton and
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26 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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Associates LLC, Lockton Companies LLC, Loesel Schaaf Insurance Agency, Louis
Blosch Agency LLC, Luhn Mccain Insurance Agency, M & M Insurance Group Inc., M &
T Securities Inc., M D Sutton Insurance Agency Inc., M Holdings Securities,
Inc., M&T Bank National Association, MML Investors Services Inc., MRM Assurance
Services Inc., MSF Insurance Group Inc., MWA Financial Services Inc., Madison
Insurance of Virginia LLC, Maguire Financial Advisors LLC, Mariner Insurance
Resources LLC, Mark J Napolin & Associates, Inc., Martin Insurance Group LLC,
Masterplan Consulting, Mavco Insurance Agency Inc., McLeod Insurance Inc.,
McNair & Associates, Mcgee Financial Solutions LLC, Mcgregor Insurance Group
LLC, Mclaughlin Ryder Investments, Melcher & Prescott Agency, MerCap Securities
LLC, Merrill Lynch & Co., Metlife Securities Inc., Michigan Securities, Inc.,
Mid Atlantic Securities Inc., Middendorf Insurance Association Inc., Midland
Insurance Services Inc., Mobile Assurance Services LLC, Monaghan Tilghman &
Hoyle, Monarch Insurance Services Inc., Money Concepts Capital Corp., Monroe &
Monroe Insurance, Moors & Cabot Inc., Moreton Insurance of Idaho Inc., Morgan
Keegan & Co Inc., MorganStanley SmithBarney LLC, Mound Agency Of Ohio Inc.,
Multi-Financial Securities Corporation, Multiple Financial Services Inc., Murray
& Murray Insurance Agency Inc., Mutual Insurance Assoc Inc., Mutual of Omaha
Investor Services Inc., Mutual Trust Company, NBC Securities Inc., NFP
Securities Inc., NIA Securities LLC, NWM Financial Services Inc., NY Long Term
Care Brokers Ltd, National Insurance Brokerage, National Planning Corp.,
National Securities Corp., New England Financial Services Inc., New West
Insurance LLC, New World Financial & Insurance Services, New York Life Insurance
Co. Inc., Newton Consulting LLC, Next Financial Group Inc., Northrup
Corporation, Northwest Financial Exchange Inc., Northwestern Mutual Investment
Services, Nuttall & Assoc. Insurance Agency Inc., Ollis & Co Inc., Omega
Financial Group Ltd, One Resource Group Corp., Oneamerica Securities Inc.,
Oppenheimer & Co., Inc., P & C Insurance Services Inc., PFG Holding Inc., PJ
Robb Variable Corp., PKA Financial Group Inc., PSI Insurance Agency LLC, Pachki
Inc., Pacific West Securities Inc., Pack Insurance Consultants Inc., Packerland
Brokerage Services Inc., Paradise Valley Wealth Management Inc., Park Avenue
Securities, LLC, Partners Insurance Agency Inc., Partners Wealth Management
Inc., Payne Financial Group, Inc., Pegasus Financial Group Inc., Peoples
Securities Inc., Perfetto Chester Agency Inc., Philip R Warne Insurance Agency
Inc., Pine Avenue Partners LLC, Pino Insurance Agency LLC, Planning Corp of
America, Platinum Wealth Management Group, Pond Insurance Agency LTD, Power
Group Company LLC, Pratt Kutzke Associates LLP, Premier Brokerage Services Inc.,
Prime Capital Services Inc., Primevest Financial Services Inc., Princor
Financial Services Corp., Prior Lake State Agency, Proequities Inc., Prospera
Financial Services, Pruco Securities LLC, Purshe Kaplan Sterling Investments,
Pyramid Insurance Centre Ltd, Questar Capital Corp., R & R Group Insurance
Services, RC Knox & Company Inc., R D Marketing Group Inc., R S Krizek, R
Seelaus & Co. Inc., R&M Smith Financial Partners Inc., RBC Capital Markets
Corp., RMIN Holding Corp. Inc., RSC Financial Products LLC, Rackley Insurance
Agency Inc., Rampart Financial Services Inc., Raymond James Financial Services,
Redel Insurance Agency Inc., Renaissance Benefit Advisors, Retirement Planners &
Tax Consultants, Retirement Advisory Group, Richard B Ryon Insurance, Richards
Seeley Agency, Ridgeway & Conger, Inc., River Falls Insurance Center, River
Valley Insurance Group, RiverStone Insurance Agency, Riverstone Wealth
Management Inc., Robert Hensley & Associates LLC, Robert L Bubb & Co. Inc.,
Robert W Baird & Co. Inc., Roy H Reeve Agency Inc., Royal Alliance Associates,
Royal Securities Co., S & T Insurance Group LLC, SWS Financial Services, SAL
Financial Services, SBS Insurance Agency of FL Inc. (AK), SII Investments Inc.,
SWBC Insurance Services Inc., Sagepoint Financial Inc., Salem Advisory Group
LLC, Sargent Inc., Sbhu Life Agency Inc., Schneider Agency Inc., Schroeder
Insurance, Securian Financial Services Inc., Securities America Inc., Shana
Insurance Services Corp., Shepard and Walton Life Insurance Agency Inc.,
Sheridan Road Insurance LLC, Sierra Insurance Marketing LLC, Sigma Financial
Corp., Signator Investors Inc., Signature Securities Group, Sims & Renner
Insurance LLC, Ska-Life Agency Inc., Small Business Insurance Agency Insurance,
Smith Brothers Insurance, Song Hong & Assoc Agency, South Valley Wealth
Management, Southwest Securities, Inc., Spengler Stewart Agency, Spire
Securities, LLC, Steamboat Insurance Group, Steck Cooper & Co., Stephens Inc.,
Sterling Benefits Group, LLC, Sterne Agee & Leach, Stifel Nicolaus & Co. Inc.,
Strand Atkinson Williams & York Inc., Strategic Benefits, Stuckey Insurance
Agency, Summit Financial Group, SunTrust Investment Services, Sunset Financial
Services Inc., Swan Financial Services, Symetra Investment Services, TA Cummings
Jr. Co. Inc., THG Insurance Agency Inc., The Annuity Depot Agency Ltd, The
Chesson Company Inc., The Friedman Company, The Investment Center Inc., The
Leaders Group Inc., The Mahoney Group, The Nash Agency, Inc., The ON Equity
Sales Company, The Orthon Group Inc., The Reilly Co. LLC, The Robinson Group
Inc., The Wadsworth Group, The Weisman Group, Third Financial Inc., Thomas Brady
& Associates Insurance, Thomas Fierst Insurance Agency, Thorbahn & Associates
Insurance Agency, Tim Johnson & Associates Inc., TimeCapital Securities Corp.,
Tis Insurance Services Inc., Total Coverage Insurance Services LLC, Total
Insurance Services, Tower Square Securities Inc., Transamerica Financial
Advisors Inc., Transworld Financial Group Inc., Treiber Agency Group LLC,
Tremblay Financial, Triad Advisors Inc., Tricor Financial Services, Trustfirst,
Trustmont Financial Group Inc., Twfg Insurance Services Inc., US Bancorp
Insurance Services, USA Financial Services Inc., USCA Securities LLC, Ulster
Insurance Services Inc., UnionBanc Investment Services, United Equity Insurance
LLC, United Planners Financial Services, United Security Agency Inc., United
Valley Insurance Services Inc., Universal Lines Insurance Services, University
Agency Inc., Uvest Financial Services Group Inc., VSR Financial Service
Investment, Valmark Securities Inc., Vaughan Insurance Group Inc., Viable
Ventures Inc., Vincent L Braband Insurance Inc., WD Barry LP, WS Insurance
Services LLC, Wachovia Insurance Agency Inc., Waddell & Reed Inc., Wagner
Financial Services, Walker Bros Insurance Inc., Walker Financial LLC,
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 27
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Wall Street Financial Group, Wallace Insurance Services Inc., Walnut Street
Securities Inc., Ward Brokerage Assoc LLC, WatchTower Insurance Agency,
Waterford Investor Services Inc., Wayne Hummer Investments LLC, Wealth
Innovations LLC, Wealthvest Marketing Inc., Weaver Bros Insurance Associates,
Wedbush Morgan Securities Inc., Weekes & Callaway Inc., Wells Fargo Insurance
Inc., Wesbanco Securities Inc., Western Inter Securities Inc., Western Rivers
Corp., Westmark Financial Services Inc., Wheeler Insurance Agency LLC,
White-Hill Insurance Services Inc., Wholehan Marketing Assoc., Inc., Wickline
Insurance Associates, Widener Insurance Agency Inc., Wiklund & Bond Financial
Services Inc., Wilcox Jones & McGrath Inc., Wilde Wealth Management Inc.,
William Knight Insurance Agency Inc., Windsor Insurance Associates, Inc.,
Winslow Evans & Crocker Inc., Wiseman & Assoc. Financial Services Ltd, Woodbury
Financial Services Inc., Woodlands Securities Corp., World Choice Securities
Inc., World Equity Group Inc., Wunderlich Securities Inc., Yoder Insurance
Agency & Financial, Zinn & Mahoney Insurance Group Inc., Zweidinger & Assoc Ltd.
PREMIUMS
APPLICATION FOR A POLICY -- To purchase a Policy you must submit an application
to us. Within limits, you may choose the initial Face Amount. policies generally
will be issued only on the lives of insureds age 85 and under who supply
evidence of insurability satisfactory to us. Acceptance is subject to our
underwriting rules and we reserve the right to reject an application for any
reason. No change in the terms or conditions of a Policy will be made without
your consent. The minimum initial premium is the amount required to keep the
Policy in force for one month, but not less than $50, $25 if paying by automatic
draft from your checking account.
Your Policy will be effective on the Policy date only after we receive all
outstanding delivery requirements and the initial premium payment. The Policy
date is the date used to determine all future cyclical transactions on the
Policy, such as Monthly Activity Date and Policy years.
PREMIUM PAYMENT FLEXIBILITY -- You have flexibility as to when and in what
amounts you pay premiums. Prior to Policy issue, you can choose a planned
premium, within a range we determined, based on the Face Amount and the
insured's sex (except where unisex rates apply), issue age and risk
classification. We will send you premium notices for planned premium. Such
notices may be sent on an annual, semi-annual or quarterly basis. You may also
have premium payments automatically deducted monthly from your checking account.
When we receive scheduled or regular premium payments from you through
pre-authorized transactions such as, checking deduction (ACH), payroll deduction
or through a government allocation arrangement, a summary of these transactions
will appear on your annual statement and you will not receive a confirmation
statement after each transaction. The planned premium and payment mode you
select are shown on your policy's specifications page. You may change the
planned premium at any time, subject to our minimum amount rules then in effect.
After the first premium has been paid, your subsequent premium payments are
flexible. The actual amount and frequency of payment will affect the Account
Value and could affect the amount and duration of insurance provided by the
Policy. Your Policy may lapse if the value of your Policy becomes insufficient
to cover the Monthly Deduction Amounts. In such case you may be required to pay
additional premiums in order to prevent the Policy from terminating. For details
see, "Lapse and Reinstatement."
You may pay additional premiums at any time prior to the scheduled maturity
date, subject to the following limitations:
- The minimum premium that we will accept is $50 or the amount required to
keep the Policy in force.
- We reserve the right to require evidence of insurability for any premium
payment that results in an increase in the death benefit greater than the
amount of the premium.
- Any premium payment in excess of $1,000,000 is subject to our approval.
In some cases, applying a subsequent premium payment in a Policy year could
result in your Policy becoming a modified endowment contract (MEC) (See Federal
Tax Considerations section for additional information on MEC policies). If we
receive a subsequent premium payment that would cause the Policy to become a
MEC, we will follow these procedures:
- If the premium is received more than 20 calendar days prior to the Policy
Anniversary Date or if it is greater than your planned premium, we will
apply the premium to the Policy. We will notify you in writing that your
Policy has become a MEC and provide you with the opportunity to correct the
MEC status as specified in the notice. You have 2 weeks from the date of the
notice to respond.
- If we receive the premium within 20 calendar days prior to the Policy
anniversary date and it is less than or equal to the planned premium, the
premium payment will be considered not in good order. We will hold the
payment without interest and credit it to the Policy on the Policy
anniversary date. If the Policy anniversary date is not a Valuation Date,
the payment will then be credited on the next Valuation Date following the
Policy anniversary. The owner will be notified of our action after the
premium payment has been credited.
These procedures may not apply if there has been a material change to your
Policy that impacts the 7-pay limit or 7-pay period because the start of the
7-pay year may no longer coincide with your Policy anniversary.
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28 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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In some cases, applying a subsequent premium payment in a Policy year could
cause your Policy to fail the definition of life insurance. If we receive a
subsequent premium payment that would cause the Policy to fail the definition of
life insurance, the premium payment will be considered not in good order and we
will follow these procedures:
- If the premium is received more than 20 calendar days prior to the Policy
Anniversary Date or if it is greater than your planned premium, we will
return the excess premium payment to you and await further instructions.
- If we receive the premium within 20 calendar days prior to the Policy
anniversary date and it is less than or equal to the planned premium, we
will hold the payment without interest and credit the premium payment on the
Policy anniversary date. If the Policy anniversary date is not a Valuation
Date, the payment will then be credited on the next Valuation Date following
the Policy. The owner will be notified of our action after the premium
payment has been credited.
ALLOCATION OF PREMIUM PAYMENTS
Any Premiums we receive prior to the issuance of the Policy will be held in a
non-interest bearing suspense account during the underwriting process. With
respect to any initial premium payment received before the contract date and any
premium payment that is not in good order, we may temporarily hold the Premium
in a suspense account and we may earn interest on such amount. You will not be
credited interest during that period. The monies held in the suspense account
may be subject to claims of our general creditors. The premium payment will not
be reduced nor increased due to market fluctuations during that period. After
the Policy is issued, premium payments are not applied to the Policy until they
are received in good order at the addresses below or received by us via wire.
INITIAL NET PREMIUM -- During the application process, you choose how you want
to allocate your initial Net Premium among the Sub-Accounts and the Fixed
Account on the premium allocation form. Any Net Premium received by us in good
order prior to the end of the Right to Examine Period, will be allocated to the
Hartford Money Market HLS Fund Sub-Account based on the next computed value of
the Hartford Money Market HLS Fund Sub-Account. Upon the expiration of the Right
to Examine Period, we will automatically allocate the value in the Hartford
Money Market HLS Fund to the Fixed Account (if applicable) and the Sub-Accounts
according to your premium allocation instructions. (For policies issued by
Hartford Life Insurance Company, if your Policy was issued as a result of a
replacement, we will automatically move the money from the Hartford Money Market
HLS Fund Sub-Account to the Sub-Accounts and the Fixed Account based on the
instructions in the application 10 days after the Policy was issued, not at the
end of the Free Look period.)
SUBSEQUENT NET PREMIUMS -- For subsequent Net Premium Payments, you may send
allocation instructions to the addresses shown below in accordance with our then
current procedures. If you make a subsequent premium payment and do not provide
us with allocation instructions, we will allocate the premium payment among the
Sub-Accounts and the Fixed Account in accordance with your most recent
allocation instructions. Any allocation instructions will be effective upon
receipt by us in good order and will apply only to premium payments received on
or after that date. Subsequent premium payments received by us in good order
will be credited to your Policy based on the next computed value of a
Sub-Account following receipt of your premium payment. Net Premiums allocated to
the Fixed Account will be credited to your Policy on the day business day they
are received.
You may not exceed twenty (20) investment choices at any given time and the
percentage you allocate to each Sub-Account and/or the Fixed Account must be in
whole percentages.
HOW TO SEND PREMIUM PAYMENTS:
MAIL
You should send premium payments to the following lockbox address:
The Prudential Insurance Company of America,
as administrator for The Hartford
PO Boxes 64270, 64272 and 64275
St. Paul, MN 55164
or
To our Individual Life Operations Center at:
The Prudential Insurance Company of America,
as administrator for The Hartford
500 Bielenberg Drive
Woodbury, MN 55125
WIRE
You may also arrange to pay your premium payments by wire. To wire payments call
1-800-231-5453 or email LifeService@Hartfordlife.com.
Mailed premium payments not sent to either of the addresses stated above will be
considered not in good order. We will reroute the payment and apply it on the
Valuation Date when it is received at the correct location and is determined to
be in good order.
You will receive several different types of notifications as to what your
current premium allocation is. Each transaction confirmation received after we
receive a premium payment will show how a Net Premium has been allocated.
Additionally, each quarterly statement summarizes the current premium allocation
in effect for such Policy.
If your most recent premium allocation instructions include a Fund (merging
Fund) that has been merged into another Fund (surviving Fund) and we do not
receive alternative instructions, we will allocate the premium among the
Sub-Accounts and the Fixed Account based on your most recent allocation
instructions, except that we will apply the premium that would have been
allocated to the merging Fund to the surviving Fund. If your most recent premium
allocation instructions include a Fund that has been liquidated, generally,
unless we receive alternative instructions, we will automatically amend your
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 29
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allocation instructions to replace the liquidated fund with the Money Market
Fund.
ACCUMULATION UNITS -- Net Premiums allocated to the Sub-Accounts are used to
credit accumulation units to such Sub-Accounts.
The number of accumulation units in each Sub-Account to be credited to a Policy
(including the initial allocation to the Hartford Money Market HLS Fund
Sub-Account) and the amount to be credited to the Fixed Account will be
determined, first, by multiplying the Net Premium by the appropriate allocation
percentage in order to determine the portion of Net Premiums or transferred
Account Value to be invested in the Fixed Account or the Sub-Account. Each
portion of the Net Premium or transferred Account Value to be invested in a
Sub-Account is then divided by the accumulation unit value in a particular
Sub-Account next computed following its receipt. The resulting figure is the
number of accumulation units to be credited to each Sub-Account.
ACCUMULATION UNIT VALUES -- The accumulation unit value for each Sub-Account
will vary to reflect the investment experience of the applicable Fund and will
be determined on each Valuation Day by multiplying the accumulation unit value
of the particular Sub-Account on the preceding Valuation Day by the net
investment factor for that Sub-Account for the Valuation Period then ended. The
net investment factor for each of the Sub-Accounts is equal to the net asset
value per share of the corresponding Fund at the end of the Valuation Period
(plus the per share amount of any dividend or capital gain distributions by that
Fund in the Valuation Period then ended) divided by the net asset value per
share of the corresponding Fund at the beginning of the Valuation Period.
All valuations in connection with a Policy, (i.e., with respect to determining
Account Value, in connection with Policy loans, or in calculation of death
benefits, or with respect to determining the number of accumulation units to be
credited to a Policy with each premium payment other than the initial premium
payment) will be made on the date the request or payment is received by us in
good order at the Individual Life Operations, provided such date is a Valuation
Day; otherwise such determination will be made on the next succeeding date which
is a Valuation Day. Requests for Sub-Account transfers or premium payments
received on any Valuation Day in good order after the close of the NYSE or a
non-Valuation Day will be invested on the next Valuation Day.
ACCOUNT VALUES -- Each Policy will have an Account Value. There is no minimum
guaranteed Account Value.
The Account Value of a Policy changes on a daily basis and will be computed on
each Valuation Day. The Account Value will vary to reflect the investment
experience of the Sub-Accounts, the interest credited to the Fixed Account and
the Loan Account, and the Monthly Deduction Amounts, Net Premiums paid, and any
withdrawals taken.
A policy's Account Value is related to the net asset value of the Funds
associated with the Sub-Accounts, if any, to which Net Premiums on the Policy
have been allocated. The Account Value in the Sub-Accounts on any Valuation Day
is calculated by, first, multiplying the number of accumulation units in each
Sub-Account as of the Valuation Day by the then current value of the
accumulation units in that Sub-Account and then totaling the result for all of
the Sub-Accounts. A policy's Account Value equals the policy's value in all of
the Sub-Accounts, the Fixed Account, and the Loan Account. A policy's Cash Value
is equal to the Account Value less any applicable surrender charges. A policy's
Cash Surrender Value, which is the net amount available upon surrender of the
Policy, is the Cash Value less any Indebtedness. See "Accumulation Unit Values,"
above.
We will pay death proceeds, Cash Surrender Values, partial withdrawals, and loan
amounts allocable to the Sub-Accounts within seven calendar days after we
receive all the information needed to process the payment, unless the New York
Stock Exchange is closed for other than a regular holiday or weekend, trading is
restricted by the Commission, Commission declares that an emergency exists or
the Commission by order permits the postponement of payment to protect Policy
Owners.
DEATH BENEFITS AND POLICY VALUES
DEATH BENEFIT -- Your Policy provides for the payment of the death proceeds to
the named beneficiary upon receipt of due proof of the death of the insured.
Your Policy will be effective on the Policy date only after we receive all
outstanding delivery requirements and the initial premium payment. You must
notify us in writing as soon as possible after the death of the insured. The
death proceeds payable to the beneficiary equal the death benefit less any
Indebtedness and less any due and unpaid Monthly Deduction Amount occurring
during a grace period. The death benefit depends on the death benefit option you
select.
DEATH BENEFIT OPTIONS -- There are two death benefit options available at issue:
the Level Death Benefit Option and the Return of Account Value Death Benefit
Option. Subject to the minimum death benefit described below, the death benefit
under each option is as follows:
- Under the Level Death Benefit Option, the current Face Amount.
- Under the Return of Account Value Option, the current Face Amount plus the
Account Value.
OPTION CHANGE -- You may change your death benefit option by notifying us in
writing. Any change will become effective on the Monthly Activity Date following
the date we receive your request. If you elect to change to the Level Death
Benefit Option, the Face Amount will become that amount available as a death
benefit immediately prior to such option change. If this change results in a
Face Amount that exceeds our guidelines and limitations that may be in effect,
you must provide evidence
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30 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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of insurability satisfactory to Us. If you elect to change to the Return of
Account Value Option, the Face Amount will become the amount available as a
death benefit immediately prior to such option change, minus the then-current
Account Value. You may change from the Return of Account Value Option to a third
option called the Decreasing Death Benefit Option. The Decreasing Death Benefit
Option is the current Face Amount, plus the lesser of: (a) the Account Value on
the date We receive due proof of the insured's death; or (b) the Account Value
on the date the death benefit option was changed from the Return of Account
Value Option to the Decreasing Death Benefit Option. Changing your death benefit
option may result in a Surrender Charge. You should consult a tax adviser
regarding the possible adverse tax consequences resulting from a change in your
death benefit option.
MINIMUM DEATH BENEFIT -- The Policy must satisfy a death benefit compliance test
to qualify as life insurance under section 7702 of the Internal Revenue Code.
The test effectively requires that the death benefit always be equal to or
greater than the Account Value multiplied by a certain percentage. Your Policy
has a minimum death benefit. We will automatically increase the death benefit so
that it will never be less than the Account Value multiplied by the minimum
death benefit percentage for the then current year. This percentage varies
according to the Policy year and insured's issue age, sex (where unisex rates
are not used) and insurance class. This percentage will never be less than 100%
or greater than 1400%. The specified percentage applicable to you is listed on
the specifications page of your Policy.
EXAMPLES OF MINIMUM DEATH BENEFIT
<Table>
<Caption>
A B
<S> <C> <C>
--------------------------------------------------------------------------------
Face Amount $100,000 $100,000
Account Value 46,500 34,000
Specified Percentage 250% 250%
Death Benefit Option Level Level
</Table>
In Example A, the death benefit equals $116,250, i.e., the greater of $100,000
(the Face Amount) or $116,250 (the Account Value at the date of death of
$46,500, multiplied by the specified percentage of 250%). This amount, less any
outstanding Indebtedness, constitutes the death proceeds payable to the
beneficiary.
In Example B, the death benefit is $100,000, i.e., the greater of $100,000 (the
Face Amount) or $85,000 (the Account Value of $34,000, multiplied by the
specified percentage of 250%).
VALID DEATH CLAIMS -- The Company will pay the death proceeds (death benefit
less indebtedness) to the beneficiary normally within seven days after proof of
death of the insured is received by us, at the Individual Life Operations
Center, and the Company has: 1) verified the validity of the claim; 2) received
all required beneficiary forms and information; 3) completed all investigations
of the claim; and 4) determined all other information has been received and is
in good order.
UNSCHEDULED INCREASES AND DECREASES IN FACE AMOUNT -- At any time after the
first Policy year, you may request in writing to change the Face Amount. The
minimum amount by which the Face Amount can be increased or decreased is based
on our rules then in effect.
We reserve the right to limit the number of increases or decreases made under a
Policy to no more than one in any 12 month period.
All requests to increase the Face Amount must be applied for on a new
application and accompanied by your Policy. All requests will be subject to
evidence of insurability satisfactory to us. Any increase approved by us will be
effective on the Monthly Activity Date shown on the new Policy specifications
page, provided that the Monthly Deduction Amount for the first month after the
effective date of the increase is made. If you elect to increase your Face
Amount, the increase will result in an overall increase of charges because the
amount of insurance coverage has increased.
A decrease in the Face Amount will be effective on the Monthly Activity Date
following the date we receive your request in writing. The remaining Face Amount
must not be less than that specified in our minimum rules then in effect. If
during the surrender charge period, your Accumulated Face Amount decrease
exceeds $500,000, a partial surrender charge will be assessed.
The surrender charge assessed will be a percentage of the Policy level surrender
charge. This percentage will be calculated as follows:
For a decrease that results in total Face Amount decreases to exceed $500,000,
the percentage equals (a) divided by (b) where;
(a) is the sum of all Face Amount decreases to date, and
(b) is the sum of the initial Face Amount and all increases in Face Amount.
For any subsequent decrease, the percentage equals the amount of the current
Face Amount decrease divided by the current Face Amount immediately prior to the
decrease.
The surrender charge assessed will be deducted from your Account Value on the
Monthly Activity Date on which the decrease becomes effective. We will also
reduce the surrender charges applicable to future Policy years and provide you a
revised schedule of surrender charges. You will never be charged more than the
maximum charge indicated in the fee table.
CHARGES AND POLICY VALUES -- Your Policy values decrease due to the deduction of
Policy charges. Policy values may increase or decrease depending on investment
performance. Investment expenses and fees reduce the investment performance of
the Sub-Accounts. Fluctuations in your account value may have an effect on your
death benefit. If your Policy lapses, the Policy terminates and no death benefit
will be paid.
<Page>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 31
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MAKING WITHDRAWALS FROM YOUR POLICY
SURRENDER -- Provided your Policy has a Cash Surrender Value, you may surrender
your Policy to us. We will pay you the Cash Surrender Value. Our liability under
the Policy will cease as of the date of we receive your request in writing at
our Designated Address or the date you request your surrender, (our current
administration rules allow a Policy Owner to designate a future surrender date,
no more than ten calendar days from the date we receive the request), whichever
is later.
WITHDRAWALS -- One withdrawal is allowed per calendar month. Withdrawals may be
subject to a surrender charge, see "Surrender Charge." You may request a
withdrawal in writing. The minimum withdrawal allowed is $250. The maximum
partial withdrawal is the Cash Surrender Value, minus $1,000. If the death
benefit option then in effect is the Level Death Benefit Option, the Face Amount
will be reduced by the amount of any partial withdrawal. Unless specified, the
withdrawal will be deducted on a pro rata basis from the Fixed Account and the
Sub-Accounts. If You request a withdrawal to be taken from specified investment
choices and there is insufficient value in a choice to satisfy your request,
then the withdrawal will be taken on a pro rata basis across all investment
choices. You may be assessed a charge of up to $10 for each partial withdrawal.
We will normally pay You the amount of the Withdrawal or Cash Surrender Value,
less any taxes and applicable charges, within seven calendar days of Our receipt
of a good order request. We may, however, delay payment of amounts from the
Sub-Accounts if the New York Stock Exchange is closed for other than a regular
holiday or weekend, trading is restricted by the Commission, the Commission
declares that an emergency exists or the Commission by order permits the
postponement of payment to protect Policy Owners. In addition, we may delay
payment of proceeds that are not attributable to the Sub-Accounts for up to six
months for the date of Our receipt of a good order request.
LOANS
AVAILABILITY OF LOANS -- At any time while the Policy is in force and has a Cash
Surrender Value, You may obtain a loan from Us. We will hold the Policy as sole
security for repayment of any such loans taken. We may defer granting a loan,
for the period permitted by law but not more than six months, unless the loan is
to be used to pay premiums on any policies You have with Us. The minimum loan
amount that we will allow is $250. In Tennessee, there is no minimum.
When you take a loan, an amount equal to the loan is transferred from your
investment choices to the Loan Account as collateral.
Unless you specify otherwise, all loan amounts will be transferred on a pro rata
basis from the Fixed Account and each of the Sub-Accounts to the Loan Account.
If total Indebtedness equals or exceeds the Cash Value on any Monthly Activity
Date, the Policy will then go into default. See "Lapse and Reinstatement."
PREFERRED INDEBTEDNESS -- If, at any time your Account Value exceeds the total
of all premiums paid since issue, a portion of your Indebtedness may qualify as
preferred. Preferred Indebtedness is charged a lower interest rate than
non-preferred Indebtedness. The maximum amount of preferred Indebtedness is the
amount by which the Account Value exceeds the total premiums paid and is
determined on each Monthly Activity Date.
LOAN REPAYMENTS -- You can repay all or any part of a loan at any time while
your Policy is in force and the insured is alive. The amount of your Policy loan
repayment will be deducted from the Loan Account. It will be allocated among the
Fixed Account and Sub-Accounts in the same percentage as premiums are allocated.
All loan repayments must be clearly marked as such. Any payment not clearly
marked as a loan repayment will be considered to be a premium payment.
EFFECT OF LOANS ON ACCOUNT VALUE -- A loan, whether or not repaid, will have a
permanent effect on your Account Value and Death Benefit. This effect occurs
because the investment results of each Sub-Account will apply only to the amount
remaining in such Sub-Accounts. In addition, the rate of interest credited to
the Fixed Account will usually be different than the rate credited to the Loan
Account. The longer a loan is outstanding, the greater the effect on your
Account Value is likely to be. Therefore, it is generally advisable to use any
Premium Payments made to the Policy while a loan is outstanding to repay the
loan. Such effect could be favorable or unfavorable. If the Fixed Account and
the Sub-Accounts earn more than the annual interest rate for funds held in the
Loan Account, your Account Value will not increase as rapidly as it would have
had no loan been made. If the Fixed Account and the Sub-Accounts earn less than
the Loan Account, then your Account Value will be greater than it would have
been had no loan been made. Additionally, if not repaid, the aggregate amount of
the outstanding Indebtedness will reduce the death proceeds and the Cash
Surrender Value otherwise payable.
Taking a loan may increase the risk that a Policy may lapse. If a Policy loan is
outstanding when a Policy is surrendered, cancelled, or allowed to lapse, the
amount of the outstanding indebtedness (plus accrued interest) will be deemed
distributed and will be taxed accordingly. Before taking out a Policy loan, you
should consult a tax advisor as to the potential tax consequences.
CREDITED INTEREST -- Any amounts in the Loan Account will be credited with
interest at an annual rate of 3.0%.
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32 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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INTEREST CHARGED ON INDEBTEDNESS -- Interest will accrue daily on the
Indebtedness at the Policy loan rate. Because the interest charged on
Indebtedness may exceed the rate credited to the Loan Account, the Indebtedness
may grow faster than the Loan Account. If this happens, additional collateral
will be transferred to the Loan Account. The additional collateral equals the
difference between the Indebtedness and the value of the Loan Account. The
additional collateral, if any, will be transferred on each Monthly Activity Date
from the Fixed Account and the Sub-Accounts to the Loan Account on a pro rata
basis.
POLICY LOAN RATES -- The table below shows the interest rates we will charge on
your Indebtedness.
<Table>
<Caption>
INTEREST RATE CHARGED
DURING POLICY YEARS PORTION OF INDEBTEDNESS EQUALS 3.0% PLUS:
<S> <C> <C>
------------------------------------------------------------------------------------------
1-10 Preferred 0%
Non-Preferred 2.0%
11 and later Preferred 0%
Non-Preferred 1.0%
</Table>
LAPSE AND REINSTATEMENT
LAPSE AND GRACE PERIOD -- Your Policy will be in default on any Monthly Activity
Date on which either:
- The Account Value is not sufficient to cover the Monthly Deduction Amount;
or
- The Indebtedness exceeds the Cash Value; and
- The No-Lapse Guarantee is not available.
A 61-day "Grace Period" will begin from the date of any Policy default. Upon
default, we will mail you and any assignee written notice of the amount of
premiums that will be required to continue the Policy in force. During the
No-Lapse Guarantee Period, the premium required will be the lesser of a) the
amount required to create a Cash Surrender Value equal to three Monthly
Deduction Amounts as of the date your Policy goes into default; and b) the
amount, if any, required to maintain the No-Lapse Guarantee for three months
beyond the date your Policy goes into default. After the No-Lapse Guarantee
Period, the premium required will be no greater than an amount that results in a
Cash Surrender Value equal to three Monthly Deduction Amounts as of the date
your Policy goes into default.
If the required premium set forth in the notice is not received by the end of
the Grace Period and the No-Lapse Guarantee is not available, the Policy will
terminate. If the No-Lapse Guarantee is available, the Policy will remain in
force. For more information about the No-Lapse Guarantee, see the section
entitled "No-Lapse Guarantee."
If the insured dies during the Grace Period, we will pay the death proceeds
reduced by any money you owe us, such as outstanding loans, loan interest or
unpaid charges.
NO-LAPSE GUARANTEE -- The Policy will remain in force as long as the No-Lapse
Guarantee is available, as described below.
The No-Lapse Guarantee is available as long as:
- the Policy is in the No-Lapse Guarantee Period; and
- on each Monthly Activity Date during that period, the cumulative premiums
paid into the Policy, less Indebtedness and less withdrawals from the
Policy, equal or exceed an amount known as the Cumulative No-Lapse Guarantee
Premium.
The length of the No-Lapse Guarantee Period is a period that begins at issuance
of your Policy and continues for the lesser of 5 years or your attainment of age
85 during which the No-Lapse Guarantee is available. The No-Lapse Guarantee is
not available in New Jersey and Maryland. In Illinois, this provision is
referred to as the "Policy Coverage Protection Benefit." The Cumulative No-Lapse
Guarantee Premium is the premium required to maintain the No-Lapse Guarantee.
Your specific No-Lapse Guarantee Premium is described on the specifications page
of your Policy.
You may be required to make premium payments to keep the No-Lapse Guarantee
available, as described above.
If during the No-Lapse Guarantee Period, the Face Amount is increased or
decreased, or riders are added or increased, deleted or reduced, a new monthly
No-Lapse Guarantee Premium will be calculated. We will send you a notice of the
new Monthly No-Lapse Guarantee Premium, which will be used in calculating the
Cumulative No-Lapse Guarantee Premium in subsequent months.
REINSTATEMENT -- Prior to the death of the insured, a Policy may be reinstated
prior to the maturity date, provided such Policy has not been surrendered for
cash, and provided further that:
- You request reinstatement in writing within five years after termination;
- You submit satisfactory evidence of insurability to us;
- any Indebtedness existing at the time the Policy was terminated is repaid or
carried over to the reinstated Policy; and
- You pay a premium sufficient to cover (a) all Monthly Deduction Amounts that
are due and unpaid during the Grace Period and (b) the sum of Monthly
Deduction Amounts for the next three months after the date the Policy is
reinstated.
If the Policy lapse occurs because the Account Value is not sufficient to cover
the Monthly Deduction Amount, then the Account Value on the reinstatement date
equals:
- The Cash Value on the date of Policy termination; plus
- Net Premiums attributable to premiums paid at the time of Policy
reinstatement; minus
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 33
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- The Monthly Deduction Amounts that were due and unpaid during the Grace
Period.
If the Policy lapse occurs because the Indebtedness exceeds the Cash Value, then
the Account Value on the reinstatement date equals:
- The Cash Value on the date of Policy termination; plus
- Net Premiums attributable to premiums paid at the time of reinstatement;
minus
- The Monthly Deduction Amounts that were due and unpaid during the Grace
Period; plus
- The Surrender Charge at the time of reinstatement.
The Surrender Charge, if any, that will be assessed upon the surrender of any
reinstated Policy, will be calculated based on the Policy duration from the
original Policy Date and as though the Policy had never lapsed.
FEDERAL TAX CONSIDERATIONS
INTRODUCTION
The following summary of tax rules does not provide or constitute any tax
advice. It provides only a general discussion of certain of the expected federal
income tax consequences with respect to amounts contributed to, invested in or
received from a Contract, based on our understanding of the existing provisions
of the Internal Revenue Code ("Code"), Treasury Regulations thereunder, and
public interpretations thereof by the IRS (e.g., Revenue Rulings, Revenue
Procedures or Notices) or by published court decisions. This summary discusses
only certain federal income tax consequences to United States Persons, and does
not discuss state, local or foreign tax consequences. The term United States
Persons means citizens or residents of the United States, domestic corporations,
domestic partnerships, trusts or estates that are subject to United States
federal income tax, regardless of the source of their income. See "Life
Insurance Purchases by Nonresident Aliens and Foreign Entities," regarding life
insurance purchases by non-U.S. Persons.
This summary has been prepared by us after consultation with tax counsel, but no
opinion of tax counsel has been obtained. We do not make any guarantee or
representation regarding any tax status (e.g., federal, state, local or foreign)
of any Contract or any transaction involving a Contract. In addition, there is
always a possibility that the tax treatment of a life insurance contract could
change by legislation or other means (such as regulations, rulings or judicial
decisions). Moreover, it is always possible that any such change in tax
treatment could be made retroactive (that is, made effective prior to the date
of the change). Accordingly, you should consult a qualified tax adviser for
complete information and advice before purchasing a Contract.
Although this discussion addresses some of the tax consequences if you use the
Contract in various arrangements, including tax-qualified retirement
arrangements, deferred compensation plans, split-dollar insurance arrangements
or other employee benefits arrangements, the discussion is by no means
exhaustive. The tax consequences of any such arrangement may vary depending on
the particular facts and circumstances of each individual arrangement and
whether the arrangement satisfies certain tax qualification requirements or
falls within a potentially adverse and/or broad tax definition or tax
classification (e.g., for a deferred compensation or split-dollar arrangement).
In addition, the tax rules affecting such an arrangement may have changed
recently, e.g., by legislation or regulations that affect compensatory or
employee benefit arrangements. Therefore, if you are contemplating the use of a
Contract in any arrangement the value of which to you depends in part on its tax
consequences, you should consult a qualified tax adviser regarding the tax
treatment of the proposed arrangement and of any Contract used in it.
The federal, as well as the state and local, tax laws and regulations may
require the Company to report certain transactions with respect to your contract
(such as an exchange of or a distribution from the contract) to the Internal
Revenue Service and state and local tax authorities, and generally to provide
you with a copy of what was reported. This copy is not intended to supplant your
own records. It is your responsibility to ensure that what you report to the
Internal Revenue Service and other relevant taxing authorities on your income
tax returns is accurate based on your books and record. You should review
whatever is reported to the taxing authorities by the Company against your own
records, and in consultation with your own tax advisor, and should notify the
Company if you find any discrepancies in case corrections have to be made.
THE DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL PURPOSES ONLY. SPECIAL
TAX RULES MAY APPLY WITH RESPECT TO CERTAIN SITUATIONS THAT ARE NOT DISCUSSED
HEREIN. EACH POTENTIAL PURCHASER OF A CONTRACT IS ADVISED TO CONSULT WITH A
QUALIFIED TAX ADVISER AS TO THE CONSEQUENCES OF ANY AMOUNTS INVESTED IN A
CONTRACT UNDER APPLICABLE FEDERAL, STATE, LOCAL OR FOREIGN TAX LAW.
TAXATION OF HARTFORD AND THE SEPARATE ACCOUNT
The Separate Account is taxed as a part of Hartford, which is taxed as a life
insurance company under Subchapter L of Chapter 1 of the Code. Accordingly, the
Separate Account will not be taxed as a "regulated investment company" under
Subchapter M of Chapter 1 of the Code. Investment income and realized capital
gains on the assets of the Separate Account (the underlying Funds) are
reinvested and are taken into account in determining the value of the
Accumulation Units. As
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34 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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a result, such investment income and realized capital gains are automatically
applied to increase reserves based on the Policy.
Currently, no taxes are due on interest, dividends and short-term or long-term
capital gain earned by the Separate Account with respect to the policies.
Hartford is entitled to certain tax benefits related to the investment of
company assets, including assets of the Separate Account. These tax benefits,
which may include the foreign tax credit and the corporate dividends received
deduction, are not passed back to you since Hartford is the owner of the assets
from which the tax benefits are derived.
INCOME TAXATION OF POLICY BENEFITS -- GENERALLY
For federal income tax purposes, the policies should be treated as life
insurance contracts under Section 7702 of the Code. The death benefit under a
life insurance contract is generally excluded from the gross income of the
Beneficiary. However, there are exceptions to this general rule. Also, a life
insurance Policy Owner is generally not taxed on increments in the contract
value prior to a receipt of some amount from the Policy, e.g., upon a partial or
full surrender. Section 7702 imposes certain limits on the amounts of the
premiums paid and cash value accumulations in a Policy, in order for it to
remain tax-qualified as a life insurance contract. We intend to monitor premium
and cash value levels to assure compliance with the Section 7702 requirements.
At the time We issue the Policy, You must irrevocably elect one of the following
tests to qualify the Policy as life insurance under section 7702 of the Code:
(a) the cash value accumulation test; or (b) the guideline premium and cash
value corridor test.
Under the cash value accumulation test, a Policy's Death Benefit must be large
enough to ensure that the Policy's Account Value is never larger than the net
single premium that is needed to fund future benefits under the Policy. The net
single premium under the Policy varies according to the age(s), sex(es) and
underwriting class(s) of the insured(s) and is calculated in accordance with
section 7702 and used to determine the minimum death benefit percentages stated
in the Policy.
The guideline premium and cash value corridor test is made up of two components,
each of which must be satisfied in order to qualify as life insurance under
section 7702. Under the guideline premium portion of the test, the total
premiums you pay cannot exceed your Policy's guideline premium limit. The
guideline premium limit is the greater of the guideline single premium or the
sum of the guideline level premiums to date. Under the cash value corridor
portion of the test, the Policy's Death Benefit may not be less than the Policy
Account Value multiplied by the minimum death benefit percentages set forth in
section 7702 (and stated in the Policy).
There is some uncertainty as to the proper determination of the premium limits
for purposes of Section 7702 and 7702A in the case of policies involving
substandard risks. We believe our method of addressing substandard risks is
reasonable, but the IRS could take a contrary view. Accordingly, there is a risk
that the IRS could contend that certain policies involving substandard risks
fail to meet the definition of life insurance in Section 7702 or should be
considered modified endowment contracts.
We also believe that any loan received under a Policy will be treated as
indebtedness of the Policy Owner, and that no part of any loan under a Policy
will constitute income to the Policy Owner unless the Policy is a modified
endowment contract. There is a risk that the IRS could contend that certain
preferred Policy loans might not be loans for tax purposes. Instead, the IRS
could treat these loans as distributions from the Policy. If so, such amounts
might be currently taxable. A surrender or assignment of the Policy may have tax
consequences depending upon the circumstances. policy owners should consult a
qualified tax adviser concerning the effect of such transactions.
During the first fifteen Policy years, an "income first" rule generally applies
to distributions of cash required to be made under Code Section 7702 because of
a reduction in benefits under the Policy.
FOR POLICIES WITH THE MATURITY DATE EXTENSION RIDER ONLY: The Maturity Date
Extension Rider allows a Policy Owner to extend the maturity date to the date of
the death of the insured. If the maturity date of the Policy is extended by
rider, we believe that the Policy will continue to be treated as a life
insurance contract for federal income tax purposes after the scheduled maturity
date. However, due to the lack of specific guidance on this issue, the result is
not certain. If the Policy is not treated as a life insurance contract for
federal income tax purposes after the scheduled maturity date, among other
things, the death proceeds may be taxable to the recipient. The Policy Owner
should consult a qualified tax adviser regarding the possible adverse tax
consequences resulting from an extension of the scheduled maturity date.
DIVERSIFICATION REQUIREMENTS
The Code requires that each Sub-Account of the Separate Account supporting your
Policy be adequately diversified. Code Section 817(h) provides that a variable
life insurance contract will not be treated as a life insurance contract for any
period during which the investments made by the separate account or Underlying
Fund are not adequately diversified. If a contract is not treated as a life
insurance contract, the Policy Owner will be subject to income tax on annual
increases in cash value.
The Treasury Department's diversification regulations under Code Section 817(h)
require, among other things, that:
- no more than 55% of the value of the total assets of a segregated asset
account underlying a variable contract is represented by any one investment,
- no more than 70% is represented by any two investments,
- no more than 80% is represented by any three investments and
- no more than 90% is represented by any four investments.
<Page>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 35
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In determining whether the diversification standards are met, all securities of
the same issuer, all interests in the same real property project, and all
interests in the same commodity are each treated as a single investment. In the
case of government securities, each government agency or instrumentality is
treated as a separate issuer.
A separate account must be in compliance with the diversification standards on
the last day of each calendar quarter or within 30 days after the quarter ends.
If an insurance company inadvertently fails to meet the diversification
requirements, the company may still comply within a reasonable period and avoid
the taxation of contract income on an ongoing basis. However, either the insurer
or the Policy Owner must agree to make adjustments or pay such amounts as may be
required by the IRS for the period during which the diversification requirements
were not met.
Fund shares may also be sold to tax-qualified plans pursuant to an exemptive
order and applicable tax laws. If Fund shares are sold to non-qualified plans,
or to tax-qualified plans that later lose their tax-qualified status, the
affected Funds may fail the diversification requirements of Code Section 817(h),
which could have adverse tax consequences for Contract Owners with premiums
allocated to affected Funds. In order to prevent a Fund diversification failure
from such an occurrence, Hartford obtained a private ruling letter ("PLR") from
the IRS. As long as the Funds comply with certain terms and conditions contained
in the PLR, Fund diversification will not be prevented if purported
tax-qualified plans invest in the Funds. Hartford and the Funds will monitor the
Funds' compliance with the terms and conditions contained in the PLR.
OWNERSHIP OF THE ASSETS IN THE SEPARATE ACCOUNT
In order for a variable life insurance contract to qualify for income tax
deferral, assets in the separate account supporting the contract must be
considered to be owned by the insurance company, and not by the contract owner,
for tax purposes. The IRS has stated in published rulings that a variable
contract owner will be considered the "owner" of separate account assets for
income tax purposes if the contract owner possesses sufficient incidents of
ownership in those assets, such as the ability to exercise investment control
over the assets. In circumstances where the variable contract owner is treated
as the "tax owner" of certain separate account assets, income and gain from such
assets would be includable in the variable contract owner's gross income. The
Treasury Department indicated in 1986 that, in regulations or revenue rulings,
it would provide guidance on the extent to which contract owners may direct
their investments to particular sub-accounts without being treated as tax owners
of the underlying shares. Although no such regulations have been issued to date,
the IRS has issued a number of rulings that indicate that this issue remains
subject to a facts and circumstances test for both variable annuity and life
insurance contracts.
Rev. Rul. 2003-92, indicates that amplified by Rev. Rul. 2007-7, where interests
in a partnership offered in an insurer's separate account are not available
exclusively through the purchase of a variable insurance contract (e.g., where
such interests can be purchased directly by the general public or others without
going through such a variable contract), such "public availability" means that
such interests should be treated as owned directly by the contract owner (and
not by the insurer) for tax purposes, as if such contract owner had chosen
instead to purchase such interests directly (without going through the variable
contract). None of the shares or other interests in the fund choices offered in
our Separate Account for your Contract are available for purchase except through
an insurer's variable contracts or other permitted entities.
Rev. Rul. 2003-91 indicates that an insurer could provide as many as 20 fund
choices for its variable contract owners (each with a general investment
strategy, e.g., a small company stock fund or a special industry fund) under
certain circumstances, without causing such a contract owner to be treated as
the tax owner of any of the Underlying Fund assets. The ruling does not specify
the number of fund options, if any, that might prevent a variable contract owner
from receiving favorable tax treatment. As a result, we believe that any owner
of a Contract also should receive the same favorable tax treatment. However,
there is necessarily some uncertainty here as long as the IRS continues to use a
facts and circumstances test for investor control and other tax ownership
issues. Therefore, we reserve the right to modify the Contract as necessary to
prevent you from being treated as the tax owner of any underlying assets.
DISTRIBUTIONS OTHER THAN DEATH BENEFITS
Under existing provisions of the Code, increases in a policy owner's Investment
Value are generally not taxable to the Policy Owner unless amounts are received
(or are deemed to be received) under the Policy prior to the insured's death. If
the Policy is surrendered or matures, the amount received will be includable in
the policy owner's income to the extent that it exceeds the policy's "basis" or
"investment in the contract." (If there is any debt at the time of a surrender
or maturity, then such debt will be treated as an amount distributed to the
Policy Owner.) The "investment in the contract" is the aggregate amount of
premium payments and other consideration paid for the Policy, less the aggregate
amount received previously under the Policy to the extent such amounts received
were excluded from gross income. Whether partial withdrawals (or loan or other
amounts deemed to be received) from the Policy constitute income to the Policy
Owner depends, in part, upon whether the Policy is considered a modified
endowment contract for federal income tax purposes, as described below.
MODIFIED ENDOWMENT CONTRACTS
Code Section 7702A applies an additional limit on premiums paid, the "seven-pay"
test, to life insurance contracts. The seven-pay test provides that premiums
cannot be paid at a rate more rapidly than that allowed by the payment of seven
annual premiums using specified computational rules described in Section
7702A(c). A modified endowment contract ("MEC") is a life insurance Policy that
satisfies the Section 7702 definition of
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a life insurance contract and either (i) fails the seven-pay test of Section
7702A or (ii) is exchanged for a MEC. A Policy fails the seven-pay test if the
accumulated amount paid into the Policy at any time during the first seven
Policy years (or during any later seven-year test period) exceeds the sum of the
net level premiums that would have been paid up to that point if the Policy
provided for paid-up future benefits after the payment of seven level annual
premiums. Computational rules for the seven-pay test are described in Section
7702A(c).
A new seven-pay test and seven-year test period may be applied each time that a
Policy undergoes a material change, which includes an increase in the Face
Amount. In addition, if there is a reduction in benefits under the Policy within
any seven-year test period, the seven-pay test is applied retroactively as if
the Policy always had the reduced benefit level from the start of the seven-year
test period. Any reduction in benefits attributable to the nonpayment of
premiums will not be taken into account for purposes of the seven-pay test if
the benefits are reinstated within 90 days after the reduction.
A Policy that is classified as a MEC is eligible for certain aspects of the
beneficial tax treatment accorded to life insurance. That is, the death benefit
is generally excluded from income tax and increments in contract value are not
subject to current income tax (prior to an actual or deemed receipt of some
amount). However, if the contract is classified as a MEC, then withdrawals and
other amounts received or deemed received from the contract will be treated
first as withdrawals of income and then as a tax-free recovery of premium
payments or other basis. Thus, withdrawals will be includable in income to the
extent the contract value exceeds the unrecovered basis. Also, the income
portion of any amount received or deemed received prior to age 59 1/2 is subject
to an additional 10% penalty tax, with certain exceptions. The amount of any
loan (including unpaid interest thereon) under the contract will be treated as
an amount received from the contract for income tax and additional 10% penalty
tax purposes. In addition, if the Policy Owner assigns or pledges any portion of
the value of a contract (or agrees to assign or pledge any portion), then such
portion will be treated as an amount received from the contract for tax
purposes. The policy owner's basis in the contract is increased by the amount
includable in income with respect to such assignment, pledge or loan, though it
is not affected by any other aspect of the assignment, pledge or loan (including
its release or repayment).
All MEC policies that are issued in the same calendar year to the same Policy
Owner by the same insurer (or its affiliates) are treated as one MEC Policy for
the purpose of determining the taxable portion of any loan or other amount
received or deemed received that is subject to ordinary income tax or the 10%
penalty tax. The adverse income tax (and 10% penalty tax) treatment of loans or
other amounts received or deemed received from a MEC affects not only those
amounts received or deemed received after the date on which a Policy first
becomes a MEC, but also those amounts received or deemed received in
anticipation of the Policy becoming a MEC. Amounts received or deemed received
during the 2 years prior to such initial MEC date are automatically treated as
amounts received in anticipation of MEC status.
Before assigning, pledging, or requesting a loan or other amount to be received
under a Policy that is a MEC, a Policy Owner should consult a qualified tax
adviser.
We have instituted procedures to monitor whether a Policy may become classified
as a MEC.
ESTATE AND GENERATION SKIPPING TRANSFER TAXES
ESTATE TAX -- GENERALLY
When the insured dies, the death proceeds will generally be includable in the
policy owner's estate for purposes of federal estate tax if the insured owned
the Policy. If the Policy Owner was not the insured, the fair market value of
the Policy would be included in the policy owner's estate upon the policy
owner's death. The Policy would not be includable in the insured's estate if the
insured neither retained incidents of ownership at death nor had given up
ownership within three years before death.
GENERATION SKIPPING TRANSFER TAX -- GENERALLY
Under certain circumstances, the Code may impose a "generation skipping transfer
tax" when all or part of a life insurance Policy is transferred to, or a death
benefit is paid to, an individual two or more generations younger than the
owner. Regulations issued under the Code may require us to deduct the tax from
your Policy, or from any applicable payment, and pay it directly to the IRS.
FEDERAL INCOME TAX WITHHOLDING AND REPORTING
You must affirmatively elect that no taxes be withheld from a pre-death
distribution. Otherwise, the taxable portion of any amounts you receive will be
subject to withholding. You are not permitted to elect out of withholding if you
do not provide a social security number or other taxpayer identification number.
You may be subject to penalties under the estimated tax payment rules if your
withholding and estimated tax payments are insufficient to cover the tax due.
EMPLOYER-OWNED LIFE INSURANCE, NON-INDIVIDUAL OWNERS AND BUSINESS BENEFICIARIES
OF POLICIES
Effective for all "employer-owned life insurance contracts" issued after August
17, 2006, Code Section 101(j) provides that death benefits from an
"employer-owned life insurance contract" are subject to federal income tax in
excess of premiums and other amounts paid, unless certain notice and consent
requirements are satisfied and an exception under Section 101(j) applies.
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An "employer-owned life insurance contract" is defined as a life insurance
contract which --
(i) is owned by a person engaged in a trade or business ("policyholder")
under which the policyholder (or a related person) is directly or
indirectly a beneficiary under the contract, and
(ii) covers the life of an insured who is an employee with respect to the
trade or business of the policyholder. For these purposes, the term
"employee" means all employees, including officers and highly
compensated employees, as well as directors.
Notice and consent is generally satisfied if, before the contract is issued, the
employee --
- is notified in writing that the policyholder intends to insure the
employee's life and the maximum face amount for which the employee could be
insured at the time the contract was issued,
- provides written consent to being insured under the contract and that such
coverage may continue after the insured terminates employment, and
- is informed in writing that the policyholder (or a related party) will be a
beneficiary of any proceeds payable upon the death of the employee.
If the notice and consent requirements are met, the death benefit of an
employer-owned life insurance contract will not be taxable if an exception under
Section 101(j) applies. Section 101(j) provides exceptions based on the
insured's status (e.g., a director or certain highly compensated employees or an
insured who was an employee at any time within the 12-month period before the
insured's death) with respect to the policyholder, as well as exceptions for
death benefit amounts paid to certain of the insured's heirs (e.g., the
insured's estate or any individual who is the designated beneficiary of the
insured under the contract (other than the policyholder)).
Section 6039I imposes annual reporting and recordkeeping requirements on
employers that own one or more employer-owned life insurance contracts.
If a Policy is owned or held by a corporation, trust or other non-natural
person, this could jeopardize some (or all) of such entity's interest deduction
under Code Section 264, even where such entity's indebtedness is in no way
connected to the Policy. In addition, under Section 264(f)(5), if a business
(other than a sole proprietorship) is directly or indirectly a beneficiary of a
Policy, this Policy could be treated as held by the business for purposes of the
Section 264(f) entity-holder rules.
Increases in the Investment Value of a contract may be considered in the
determination of the corporate alternative minimum tax ("AMT") income. Death
benefit proceeds in excess of AMT basis may be included in the computation of
AMT income.
Prior to purchasing a life insurance contract, a trade or business should
consult with a qualified tax advisor.
LIFE INSURANCE PURCHASES BY NONRESIDENT ALIENS AND FOREIGN ENTITIES
The discussion above provides general information regarding U.S. federal income
tax consequences to life insurance purchasers that are U.S. citizens or
residents. Purchasers that are not U.S. citizens or residents will generally be
subject to U.S. federal income tax and withholding on taxable distributions from
life insurance policies at a 30% rate, unless a lower treaty rate applies and
required tax forms are submitted to us. If withholding applies, we are required
to withhold tax at the 30% rate, or lower treaty rate if applicable, and remit
it to the IRS. In addition, purchasers may be subject to state premium tax,
other state and/or municipal taxes, and taxes that may be imposed by the
purchaser's country of citizenship or residence. Prior to purchasing a life
insurance contract, nonresident aliens and foreign entities should consult with
a qualified tax advisor.
TAX DISCLOSURE OBLIGATIONS
In some instances certain transactions must be disclosed to the IRS or penalties
could apply. See for example, IRS Notice 2004-67. The Code also requires certain
"material advisers" to maintain a list of persons participating in such
"reportable transactions," which list must be furnished to the IRS upon request.
It is possible that such disclosures could be required by Hartford, the Owner(s)
or other persons involved in transactions involving life insurance contracts. It
is the responsibility of each party, in consultation with their tax and legal
advisors, to determine whether the particular facts and circumstances warrant
such disclosure.
SPECIAL RULES FOR PENSION AND PROFIT-SHARING PLANS
If a life insurance contract is purchased by a trust or other entity that forms
part of a pension or profit-sharing plan qualified under Section 401(a) of the
Internal Revenue Code ("Qualified Plan") for the benefit of participants covered
under the plan, the federal and state income and estate tax treatment of such
policies will be somewhat different from that described this section. The
purchase may also affect the qualified nature of the plan.
The plan participant of a Qualified Plan must recognize the economic benefit of
the insurance protection as income each year. The amount of economic benefit is
measured by an IRS Table (currently Table 2001) or by a one-year term product of
the insurer that meets specific IRS parameters outlined in IRS Notice 2002-8.
The death benefit under a life insurance contract is generally excluded from the
gross income of the beneficiary. When life insurance is purchased within a
Qualified Plan, the amount that is received income tax free is the difference
between the face amount and the cash surrender value, but only to the extent
that the participant has properly recognized into income the appropriate amount
of economic benefit.
A Qualified Plan is subject to the so called "incidental benefit rules." A
Qualified Plan is permitted to hold life insurance, so long as the life
insurance coverage is "incidental" to the primary purpose of the plan and the
plan document permits the
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38 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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purchase of life insurance. Life insurance coverage is considered "incidental"
if less than 50 percent of the contributions can be used to purchase whole life
insurance. Generally, for term, universal or variable life insurance, no more
than 25 percent of such contributions may be used. The "incidental benefit"
rules may also be satisfied if the death benefit does not exceed 100 times the
participant's anticipated monthly normal retirement benefit. If the Qualified
Plan does not comply with the incidental benefit rules, it may be subject to
adverse tax consequences.
In April 2005, the Treasury Department and the IRS issued Rev. Proc. 2005-25
which discusses the valuation of life insurance policies within the context of
Qualified Plans and Sections 83 and 79 of the Internal Revenue Code. In August
of 2005, the Treasury Department issued final regulations clarifying that a life
insurance Policy transferred out of a Qualified Plan must be taxed at its full
fair market value. The preamble to the final regulations states that taxpayers
may rely on the safe harbor method for computing full fair market value
discussed in Rev. Proc. 2005-25. Transfers may adversely affect the qualified
plan if certain conditions are not met.
Distributions from Qualified Plans are generally subject to ordinary income tax,
and if taken prior to age 59 1/2, a 10% federal tax penalty may apply to amounts
distributed from the Qualified Plan. Also, distributions from a Qualified Plan
generally are subject to federal income tax withholding requirements.
Employers and employer-created trusts may be subject to reporting, disclosure
and fiduciary obligations under the Employee Retirement Income Security Act of
1974 as amended ("ERISA").
Purchasers of life insurance in a Qualified Plan should consult a qualified tax
advisor to ensure that they comply with these complex rules and understand the
federal and state income and estate tax treatment of such policies.
FOR POLICIES WITH THE LIFE ACCESS BENEFIT RIDER ONLY:
SPECIAL CONSIDERATIONS REGARDING THE LIFEACCESS ACCELERATED BENEFIT RIDER
The following is based on our general understanding of current Federal tax laws
and is not intended as legal or tax advice. The Policy Owner should consult a
qualified personal tax advisor to determine the consequences of purchasing and
exercising the benefits provided by the Rider.
The LifeAccess Accelerated Benefit Rider allows a Policy Owner to accelerate all
or a portion of their Death Benefit and any term amount (each as determined at
the time of initial payment) if the Insured provides valid certification that
the Insured is Chronically Ill, as defined in the Rider, and otherwise satisfies
the terms of the Rider. We have designed this Rider so that the benefits paid
under the Rider will be treated for federal income tax purposes as accelerated
death benefits under Section 101(g)(1)(B) of the Code. The benefit is intended
to qualify for exclusion from income subject to the qualification requirements
under applicable provisions of the Code, which are dependent on the recipient's
particular circumstances. Subject to state variations, a Policy Owner may elect
to receive the accelerated benefit in monthly payments or in a lump sum, as
described in the Policy. Receipt of an accelerated benefit payable monthly may
be treated differently than if you receive the payment in a lump sum for Federal
tax purposes. Accelerated benefits under this Rider may be taxable as income.
You should consult a personal tax advisor before purchasing the Rider or
applying for benefits.
The exclusion from income tax for accelerated death benefits does not apply to
any amounts paid to a Policy Owner other than the Insured if the Policy Owner
has an insurable interest with respect to the life of the Insured by reason of
the Insured being an officer, employee or director of the Policy Owner or by
reason of the Insured being financially interested in any trade or business
carried on by the Policy Owner. In addition, special rules apply to determine
the taxability of benefits when there is more than one contract providing
accelerated benefits on account of chronic illness and/or other insurance
policies on the Insured that will pay similar benefits, and more than one Policy
Owner. Where the owner and insured are not the same (e.g., when a Policy with
the Rider is owned by an irrevocable life insurance trust), other tax
considerations may also arise in connection with getting benefits to the
Insured, for example, gift taxes in personal settings, compensation income in
the employment context and inclusion of the life insurance Policy or Policy
proceeds for estate tax purposes.
Death Benefit, Account Value, Cash Value and the Loan Account Value, if any,
will be reduced if your receive accelerated death benefits under this Rider. Any
adjustments made to the Death Benefit and other values as a result of payments
under the Rider will also generally cause adjustments to the tax limits that
apply to your Policy. Any amount you receive as an accelerated death benefit
will reduce the amount the named Beneficiary(ies) under the Policy may receive
upon the death of the Insured.
The Rider is not intended to be a health contract or a qualified long term care
insurance contract under section 7702B(b) of the Code nor is it intended to be a
non-qualified long term care contract and it is not intended or designed to
eliminate the need for such coverage.
The policy owner's and/or the policy owner's spouse or dependents' eligibility
for certain public assistance programs, such as Medicaid, and other government
benefits or entitlements may be affected by owning this Rider or by receiving
benefits under the Rider.
Although we do not believe the charges for this Rider should be treated as
distributions for income tax purposes, there is a possibility that the charges
may be considered distributions and may be taxable to the owner to the extent
not considered a nontaxable return of premiums paid for the life insurance
Policy. Charges for the Rider are not deductible as medical expenses for income
tax purposes.
Certain transfers-for-value of a life insurance Policy cause the policy's death
benefit to be subject to income tax when paid. If there is such a
transfer-for-value, benefits accelerated under this Rider may also be subject to
income tax.
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 39
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For income tax purposes, payment of benefits will be reported to the Policy
Owner. The Policy Owner must then file the applicable IRS form to determine the
amounts to be included or excluded from income for the applicable tax year. If
there is more than one accelerated death benefit rider for chronic illness,
other insurance policies on the Insured that will pay similar benefits, or any
other reimbursement of the Insured's expenses, receipt of all such benefits must
be considered to determine your tax obligation.
LEGAL PROCEEDINGS
There continues to be significant federal and state regulatory activity relating
to financial services companies. Like other insurance companies, we are involved
in lawsuits, arbitrations, and regulatory/legal proceedings. Certain of the
lawsuits and legal actions the Company is involved in assert claims for
substantial amounts. While it is not possible to predict with certainty the
ultimate outcome of any pending or future case, legal proceeding or regulatory
action, we do not expect the ultimate result of any of these actions to result
in a material adverse effect on the Company or its Separate Accounts.
Nonetheless, given the large or indeterminate amounts sought in certain of these
actions, and the inherent unpredictability of litigation, an adverse outcome in
certain matters could, from time to time, have a material adverse effect on the
Company's results of operations or cash flows in particular quarterly or annual
periods.
RESTRICTIONS ON FINANCIAL TRANSACTIONS
Federal laws designed to counter terrorism and prevent money laundering might,
in certain circumstances, require us to block a policy owner's ability to make
certain transactions and thereby we may refuse to accept any request for
transfers, withdrawals, surrenders, or death benefits, until the instructions
are received from the appropriate regulator. We may also be required to provide
additional information about you and your Policy to government regulators.
FINANCIAL INFORMATION
We have included the financials statements for the Company and the Separate
Account for the year ended December 31, 2012 in the Statement of Additional
Information (SAI).
To receive a copy of the SAI free of charge, call you financial professional or
write to us at:
The Hartford
P.O. Box 2999
Hartford, CT 06104-2999
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40 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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GLOSSARY OF SPECIAL TERMS
1933 ACT: Refers to the Securities Act of 1933, as amended.
1940 ACT: Refers to the Investment Company Act of 1940, as amended.
ACCOUNT VALUE: the total of all amounts in the Fixed Account, Loan Account and
Sub-Accounts.
ADMINISTRATIVE OFFICE OF THE COMPANY: The Prudential Insurance Company of
America is administrator of the policies. The company is located at 751 Broad
Street, Newark, NJ 07102.
APPLICATION: A form or set of forms that must be completed and signed by the
prospective Owner and each Insured before We can issue a Policy.
BENEFICIARY: The person or persons designated in the Application or the most
recent Beneficiary designation in our files, to whom insurance proceeds are
paid.
CASH SURRENDER VALUE: the Cash Value less all Indebtedness.
CASH VALUE: the Account Value less any applicable Surrender Charges.
CUMULATIVE NO-LAPSE GUARANTEE PREMIUM: the premium required to maintain the
No-Lapse guarantee. Initially, the Cumulative No-Lapse Guarantee Premium is the
No-Lapse Guarantee Premium. On each Monthly Activity Date thereafter, the
Cumulative No-Lapse Guarantee Premium is: (a) the Cumulative No-Lapse Guarantee
Premium on the previous Monthly Activity Date; plus (b) the current No-Lapse
Guarantee Premium.
DESIGNATED ADDRESS: Our address for receiving premium payments and other
policyholder requests.
The Designated Address for sending premium payments is The Prudential Insurance
Company of America, as administrator for The Hartford, P.O. Box 64273, St. Paul,
MN 55164-0273 or to our Individual Life Operations Center at The Prudential
Insurance Company of America, as administrator for The Hartford, 500 Bielenberg
Drive, Woodbury, MN 55125.
The Designated Address for sending all other Policy holder transactions is to
our Individual Life Operations Center at The Prudential Insurance Company of
America, as administrator for The Hartford, 500 Bielenberg Drive, Woodbury, MN
55125.
FACE AMOUNT: an amount we use to determine the Death Benefit. On the Policy
date, the Face Amount equals the initial Face Amount shown in your Policy.
Thereafter, it may change under the terms of the Policy.
FIXED ACCOUNT: part of our general account to which all or a portion of the
Account Value may be allocated.
FUNDS: the registered open-end management companies in which assets of the
Separate Account may be invested.
GOOD ORDER: means all necessary documents and forms are complete and in our
possession.
INDEBTEDNESS: all loans taken on the Policy, plus any interest due or accrued
minus any loan repayments.
LOAN ACCOUNT: an account established for any amounts transferred from the Fixed
Account and Sub-Accounts as a result of loans. The amounts in the Loan Account
are credited with interest and are not subject to the investment experience of
any Sub-Accounts.
MATURITY DATE: The date on which your Policy matures and your Policy terminates.
MONTHLY ACTIVITY DATE: the Policy date and the same date in each succeeding
month as the Policy date. However, whenever the Monthly Activity Date falls on a
date other than a Valuation Day, the Monthly Activity Date will be deemed to be
the next Valuation Day.
NET PREMIUM: the amount of premium credited to Account Value. It is premium paid
minus the sales load and tax charge.
NO-LAPSE GUARANTEE: A Policy feature or rider that guarantees your Policy will
not lapse regardless of Account Value as long as You meet the requirements of
the guarantee.
NO-LAPSE GUARANTEE PERIOD: a period that begins at issuance of your Policy and
continues for the lesser of 5 years or your attainment of age 85 during which
the No-Lapse Guarantee is available.
NO-LAPSE GUARANTEE PREMIUM: the amount of monthly premium required to keep the
No-Lapse guarantee available, as shown in the policy's specifications page, and
used to calculate the Cumulative No-Lapse Guarantee Premium.
POLICY: A legal contract between the Owner and Hartford Life Insurance Company
or Hartford Life and Annuity Insurance Company that provides a death benefit
payable to the beneficiary upon death of the Insured in accordance with the
Policy.
POLICY OWNER: The Owner or entity named as such in the application whom has all
the rights stated in this Policy while the Insured is living.
PRO RATA BASIS: an allocation method based on the proportion of the Account
Value in the Fixed Account and each Sub-Account.
SEPARATE ACCOUNT: an account which has been established by us to separate the
assets funding the variable benefits for the class of contracts to which the
Policy belongs from our other assets.
SUB-ACCOUNT: a subdivision of the Separate Account.
SURRENDER CHARGE: a charge that may be assessed if you surrender your Policy or
the Face Amount is decreased.
UNDERLYING FUNDS -- The mutual funds that the Sub-Accounts invest in. The
Underlying Funds are offered exclusively as investment choices in variable
insurance products issued by life insurance companies. They are not offered or
made available
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HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 41
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directly to the public. These portfolios may contain different investments than
the similarly named mutual funds offered by the money manager; therefore,
investment results may differ. Fund holdings and investment strategies are
subject to change. Investments in some funds may involve certain risks and may
not be appropriate for all investors.
VALUATION DAY: the date on which a Sub-Account is valued. This occurs every day
the New York Stock Exchange is open for trading.
VALUATION PERIOD: The time span between the close of trading on the New York
Stock Exchange from one Valuation Day to the next.
WE, US, OUR: Hartford Life and Annuity Insurance Company.
YOU, YOUR: the owner of the Policy.
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42 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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WHERE YOU CAN FIND MORE INFORMATION
We provide information about our financial strength in reports filed with the
SEC and state insurance departments. For example, we file annual reports (Form
10-K), quarterly reports (Form 10-Q) and periodic reports (Form 8-K) with the
SEC. Forms 10-K and 10-Q include information such as our financial statements,
management discussion and analysis of the previous year of operations, risk
factors, and other information. Form 8-K reports are used to communicate
important developments that are not otherwise disclosed in the other forms
described above.
You may read or copy these reports at the SEC's Public Reference Room at 100 F.
Street N.E., Room 1580, Washington, D.C. 20549-2001. You may also obtain reports
and other information about us by contacting us using the information stated on
the cover page of this prospectus, visiting our website at
www.hartfordinvestor.com or visiting the SEC website at www.sec.gov. You may
also obtain reports and other financial information about us by contacting your
state insurance department.
811-07329
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PART B
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STATEMENT OF ADDITIONAL INFORMATION (PART B)
STAG WALL STREET VARIABLE UNIVERSAL LIFE (SERIES 11)
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
This Statement of Additional Information is not a prospectus. The information
contained in this document should be read in conjunction with the prospectus. To
obtain a prospectus, call us at 1-800-231-5453.
DATE OF PROSPECTUS: MAY 1, 2013
DATE OF STATEMENT OF ADDITIONAL INFORMATION: MAY 1, 2013
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2 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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TABLE OF CONTENTS
<Table>
<Caption>
PAGE
<S> <C>
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GENERAL INFORMATION AND HISTORY 3
SERVICES 3
EXPERTS 3
DISTRIBUTION OF THE POLICIES 3
ADDITIONAL INFORMATION ABOUT CHARGES 4
PERFORMANCE DATA 4
FINANCIAL STATEMENTS 5
</Table>
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GENERAL INFORMATION AND HISTORY
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("HARTFORD") -- Hartford Life and
Annuity Insurance Company is a stock life insurance company engaged in the
business of writing life insurance and annuities, both individual and group, in
all states of the United States, the District of Columbia and Puerto Rico,
except New York. On January 1, 1998, Hartford's name changed from ITT Hartford
Life and Annuity Insurance Company to Hartford Life and Annuity Insurance
Company. We were originally incorporated under the laws of Wisconsin on January
9, 1956, and subsequently redomiciled to Connecticut. Our offices are located in
Simsbury, Connecticut; however, our mailing address is P.O. Box 2999, Hartford,
CT 06104-2999. We are ultimately controlled by The Hartford Financial Services
Group, Inc., one of the largest financial service providers in the United
States.
Hartford Life and Annuity Insurance Company is controlled by Hartford Life
Insurance Company, which is controlled by Hartford Life & Accident Insurance
Company, which is controlled by Hartford Life Inc., which is controlled by
Hartford Accident & Indemnity Company, which is controlled by Hartford Fire
Insurance Company, which is controlled by Nutmeg Insurance Company, which is
controlled by The Hartford Financial Services Group, Inc. Each of these
companies is engaged in the business of insurance and financial services.
On January 2, 2013, Hartford Life Insurance Company and Hartford Life and
Annuity Insurance Company (collectively, "Hartford") entered into agreements
with The Prudential Insurance Company of America ("Prudential") under which
Prudential will reinsure the obligations of Hartford under the variable life
insurance policies and provide administration for the policies. Prudential is a
New Jersey domiciled life insurance company with offices located in Newark, New
Jersey. Prudential's mailing address is 213 Washington Street, Newark, NJ 07102.
Prudential is ultimately controlled by Prudential Financial, Inc.
SEPARATE ACCOUNT VL I was established as a separate account under Connecticut
law on June 8, 1995. The Separate Account is classified as a unit investment
trust registered with the Securities and Exchange Commission under the
Investment Company Act of 1940.
SERVICES
SAFEKEEPING OF ASSETS -- Title to the assets of the Separate Account is held by
Hartford. The assets are kept physically segregated and are held separate and
apart from Hartford's general corporate assets. Records are maintained of all
purchases and redemptions of Fund shares held in each of the Sub-Accounts.
EXPERTS
The statutory-basis financial statements of Hartford Life and Annuity Insurance
Company (the "Company") as of December 31, 2012 and 2011, and for each of the
three years in the period ended December 31, 2012 have been audited by Deloitte
& Touche LLP, independent auditors, as stated in their report dated April 10,
2013 (which report expresses an unmodified opinion in accordance with accounting
practices prescribed and permitted by the Insurance Department of the State of
Connecticut), and the statements of assets and liabilities of Hartford Life and
Annuity Insurance Company Separate Account VL I as of December 31, 2012, and the
related statements of operations for each of the periods presented in the year
then ended, the statements of changes in net assets for each of the periods
presented in the two years then ended, and the financial highlights in Note 6
for each of the periods presented in the five years then ended have been audited
by Deloitte & Touche LLP, an independent registered public accounting firm, as
stated in their report dated March 28, 2013, which reports are both included in
the Statement of Additional Information which is part of the registration
statement. Such financial statements are included in reliance upon the reports
of such firm given upon their authority as experts in accounting and auditing.
The principal business address of Deloitte & Touche LLP is City Place, 32nd
Floor, 185 Asylum Street, Hartford, Connecticut 06103-3402.
DISTRIBUTION OF THE POLICIES
Hartford Equity Sales Company, Inc. ("HESCO") serves as principal underwriter
for the policies and offers the policies on a continuous basis. HESCO is
controlled by Hartford and is located at the same address as Hartford. HESCO is
registered with the Securities and Exchange Commission under the Securities
Exchange Act of 1934 as a broker-dealer and is a member of the Financial
Industry Regulatory Authority ("FINRA").
Hartford currently pays HESCO underwriting commissions for its role as Principal
Underwriter of all policies offered through this Separate Account. For the past
three years, the aggregate dollar amount of underwriting commissions paid to
HESCO in its role as Principal Underwriter has been: 2012: $46,815,615; 2011:
$48,792,974; and 2010: $19,319,302. HESCO did not retain any of these
underwriting commissions.
<Page>
4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
-------------------------------------------------------------------------------
HESCO enters into sales agreements with registered broker-dealers, financial
institutions and other parties ("Financial Intermediaries"). The policies are
sold by salespersons who represent Hartford as insurance agents and who are
financial professionals ("Sales Representatives") of HESCO or certain other
registered broker-dealers who have entered into sales agreements with HESCO.
Financial Intermediaries are compensated according to a schedule in the sales
agreement and are subject to any rules or regulations that apply to variable
life insurance compensation. This compensation is usually paid from sales
charges described in the Prospectus. The compensation generally consists of
commissions and may involve other types of payments that are described more
fully in the prospectus.
ADDITIONAL INFORMATION ABOUT CHARGES
SALES LOAD -- The front-end load under the policies may be used to cover
expenses related to the sale and distribution of the policies. Refer to
prospectus for applicable sales load.
REDUCED CHARGES FOR ELIGIBLE GROUPS -- Certain charges and deductions described
above may be reduced for policies issued in connection with a specific plan,
group, or program ("Eligible Group") in accordance with our rules in effect as
of the date the application for a Policy is approved. An Eligible Group must
satisfy certain criteria such as size, expected number of Policy holders, or
present or anticipated levels of aggregate premiums, administrative expenses or
commissions. We may modify, from time to time on a uniform basis, both the
amount of the reductions and the criteria for eligibility. Reductions in charges
will not be unfairly discriminatory against any person, including the affected
Policy holders invested in the Separate Account.
UNDERWRITING PROCEDURES -- To purchase a Policy you must submit an application
to us. Within limits, you may choose the initial Face Amount. Policies generally
will be issued only on the lives of insureds the ages of 0 and 85 who supply
evidence of insurability satisfactory to us. Acceptance is subject to our
underwriting rules and we reserve the right to reject an application for any
reason.
Cost of insurance rates will be determined on each Policy anniversary based on
our future expectations of such factors as mortality, expenses, interest,
persistency and taxes. For preferred and standard risks, the cost of insurance
rate will not exceed those based on the 1980 Commissioners' Standard Ordinary
Mortality Table (ALB), Male or Female, Unismoke Table, age last birthday (unisex
rates may be required in some states). A table of guaranteed cost of insurance
rates per $1,000 will be included in your Policy, however, we reserve the right
to use rates less than those shown in the table. Special risk classes are used
when mortality experience in excess of the standard risk classes is expected.
These substandard risks will be charged a higher cost of insurance rate that
will not exceed rates based on a multiple of 1980 Commissioners' Standard
Ordinary Mortality Table (ALB), Male or Female, Unismoke Table, age last
birthday (unisex rates may be required in some states) plus any flat extra
amount assessed. The multiple will be based on the insured's substandard rating.
No change in the terms or conditions of a Policy will be made without your
consent.
UNSCHEDULED INCREASES IN FACE AMOUNT -- At any time after the first Policy year,
you may request in writing to change the Face Amount. The minimum amount by
which the Face Amount can be increased is based on our rules then in effect.
We reserve the right to limit the number of increases or decreases made under a
Policy to no more than one in any 12 month period.
All requests to increase the Face Amount must be applied for on a new
application and accompanied by your Policy. All requests will be subject to
evidence of insurability satisfactory to us. Any increase approved by us will be
effective on the Monthly Activity Date shown on the new Policy specifications
page, provided that the Monthly Deduction Amount for the first month after the
effective date of the increase is made.
PERFORMANCE DATA
Hartford may advertise the performance history of the underlying Funds of the
Policy. Performance history is based on the Funds' past performance only and is
no indication of future performance.
The performance history of the underlying Funds includes deductions for the
total fund operating expenses of the Funds. The performance information does not
include any charges or fees that are deducted from your Policy. These are
charges and fees such as the surrender charge, cost of insurance charge,
mortality and expense risk charge, and the administrative charge. Some of these
charges vary depending on your age, gender, face amount, underwriting class,
premiums, Policy duration, and account value. All of these Policy charges will
have a significant impact on your policy's account value and overall
performance. If these charges and fees were reflected in the performance data,
performance would be lower. To see the impact of these charges and fees on your
policy's performance, you should obtain a personalized illustration based on
historical Fund performance from your financial adviser.
Performance history of the underlying Funds is measured by comparing the value
of the Fund at the beginning of the period to the value of the Fund at the end
of the period. Performance is usually calculated for periods of one month, three
months, year-to-date, one year, three years, five years, ten years, and since
the inception date of the Fund if the Fund has existed for more than ten years.
<Page>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 5
-------------------------------------------------------------------------------
FINANCIAL STATEMENTS
The financial statements of the Company and the Separate Account for year ended
December 31, 2012 follow this page of the SAI. The financial statements of the
Company only bear on the Company's ability to meet its obligations under the
Contracts and should not be considered as bearing on the investment performance
of the Separate Account. The financial statements of the Separate Account
present the investment performance of the Separate Account.
For the most recent quarterly financial statement information for Hartford Life
and Annuity Insurance Company visit www.hartfordinvestor.com. Requests for
copies can also be directed to The Hartford, P.O. Box 2999, Hartford,
Connecticut 06104-2999.
<Page>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE CONTRACT OWNERS OF
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY SEPARATE ACCOUNT VL I
AND THE BOARD OF DIRECTORS OF HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
-------------------------------------------------------------------------------
We have audited the accompanying statements of assets and liabilities of each of
the individual Sub-Accounts disclosed in Note 1 which comprise the Hartford Life
and Annuity Insurance Company Separate Account VL I (the "Account") as of
December 31, 2012, and the related statements of operations for each of the
periods presented in the year then ended, the statements of changes in net
assets for each of the periods presented in the two years then ended, and the
financial highlights in Note 6 for each of the periods presented in the five
years then ended. These financial statements and financial highlights are the
responsibility of the Account's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The
Account is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Account's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of investments owned as of December 31, 2012, by correspondence with the fund
managers; where replies were not received from the fund managers, we performed
other auditing procedures. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the individual Sub-Accounts disclosed in Note 1 constituting the Hartford
Life and Annuity Insurance Company Separate Account VL I as of December 31,
2012, the results of their operations for each of the periods presented in the
year then ended, the changes in their net assets for each of the periods
presented in the two years then ended, and the financial highlights in Note 6
for each of the periods presented in the five years then ended, in conformity
with accounting principles generally accepted in the United States of America.
/s/ Deloitte & Touche LLP
Hartford, Connecticut
March 28, 2013
SA-1
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
ALLIANCEBERNSTEIN VPS ALLIANCEBERNSTEIN VPS ALLIANCEBERNSTEIN VPS
INTERNATIONAL SMALL/MID-CAP INTERNATIONAL
VALUE PORTFOLIO VALUE PORTFOLIO GROWTH PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
Number of shares 912,262 539,259 195,441
=========== =========== ==========
Cost $19,499,763 $9,142,660 $4,339,255
=========== =========== ==========
Market value $11,713,438 $9,480,180 $3,314,686
Due from Sponsor Company 9,584 6,802 1,721
Receivable from fund shares sold -- -- --
Other assets -- -- --
----------- ----------- ----------
Total assets 11,723,022 9,486,982 3,316,407
----------- ----------- ----------
LIABILITIES:
Due to Sponsor Company -- -- --
Payable for fund shares purchased 9,584 6,802 1,721
Other liabilities -- 1 --
----------- ----------- ----------
Total liabilities 9,584 6,803 1,721
----------- ----------- ----------
NET ASSETS:
For contract liabilities $11,713,438 $9,480,179 $3,314,686
=========== =========== ==========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 1,495,801 647,465 364,847
Minimum unit fair value #* $7.830881 $14.642002 $9.085135
Maximum unit fair value #* $7.830881 $14.642002 $9.085135
Contract liability $11,713,438 $9,480,179 $3,314,686
<Caption>
INVESCO V.I. INVESCO V.I.
CORE INTERNATIONAL
EQUITY FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ------------------------------------------
ASSETS:
Investments:
Number of shares 58,016 128,464
========== ==========
Cost $1,513,031 $3,238,153
========== ==========
Market value $1,748,601 $3,857,780
Due from Sponsor Company 805 5,167
Receivable from fund shares sold -- --
Other assets -- --
---------- ----------
Total assets 1,749,406 3,862,947
---------- ----------
LIABILITIES:
Due to Sponsor Company -- --
Payable for fund shares purchased 805 5,167
Other liabilities -- --
---------- ----------
Total liabilities 805 5,167
---------- ----------
NET ASSETS:
For contract liabilities $1,748,601 $3,857,780
========== ==========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 99,757 361,159
Minimum unit fair value #* $17.528629 $10.681661
Maximum unit fair value #* $17.528629 $10.681661
Contract liability $1,748,601 $3,857,780
</Table>
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is
illustrated in both the minimum and maximum unit fair value rows.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-2
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
INVESCO V.I.
INVESCO V.I. INVESCO V.I. BALANCED RISK
MID CAP CORE SMALL CAP ALLOCATION
EQUITY FUND EQUITY FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
Number of shares 1,176,049 273,064 451,095
=========== =========== ===========
Cost $15,123,090 $3,869,942 $5,389,534
=========== =========== ===========
Market value $14,947,579 $5,103,557 $5,706,345
Due from Sponsor Company 6,079 8,672 861
Receivable from fund shares sold -- -- --
Other assets -- -- --
----------- ----------- -----------
Total assets 14,953,658 5,112,229 5,707,206
----------- ----------- -----------
LIABILITIES:
Due to Sponsor Company -- -- --
Payable for fund shares purchased 6,079 8,672 861
Other liabilities -- 1 --
----------- ----------- -----------
Total liabilities 6,079 8,673 861
----------- ----------- -----------
NET ASSETS:
For contract liabilities $14,947,579 $5,103,556 $5,706,345
=========== =========== ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 796,689 327,010 463,551
Minimum unit fair value #* $18.762126 $15.606747 $12.310062
Maximum unit fair value #* $18.762126 $15.606747 $12.310062
Contract liability $14,947,579 $5,103,556 $5,706,345
<Caption>
AMERICAN FUNDS
AMERICAN FUNDS BLUE CHIP
ASSET INCOME AND
ALLOCATION FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------------
ASSETS:
Investments:
Number of shares 4,450,052 4,581,415
=========== ===========
Cost $72,833,889 $47,837,280
=========== ===========
Market value $81,480,458 $45,676,706
Due from Sponsor Company 11,486 15,165
Receivable from fund shares sold -- --
Other assets -- 1
----------- -----------
Total assets 81,491,944 45,691,872
----------- -----------
LIABILITIES:
Due to Sponsor Company -- --
Payable for fund shares purchased 11,486 15,165
Other liabilities 1 --
----------- -----------
Total liabilities 11,487 15,165
----------- -----------
NET ASSETS:
For contract liabilities $81,480,457 $45,676,707
=========== ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 4,406,802 2,711,948
Minimum unit fair value #* $18.489702 $16.842764
Maximum unit fair value #* $18.489702 $16.842764
Contract liability $81,480,457 $45,676,707
</Table>
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is
illustrated in both the minimum and maximum unit fair value rows.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-3
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
AMERICAN FUNDS
AMERICAN FUNDS GLOBAL AMERICAN FUNDS
BOND FUND GROWTH FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
Number of shares 5,099,772 2,401,424 3,198,901
=========== =========== ============
Cost $57,524,292 $40,439,643 $157,979,691
=========== =========== ============
Market value $56,964,455 $56,289,379 $193,373,547
Due from Sponsor Company 20,343 14,863 46,336
Receivable from fund shares sold -- -- --
Other assets -- -- 33
----------- ----------- ------------
Total assets 56,984,798 56,304,242 193,419,916
----------- ----------- ------------
LIABILITIES:
Due to Sponsor Company -- -- --
Payable for fund shares purchased 20,343 14,863 46,336
Other liabilities -- 5 --
----------- ----------- ------------
Total liabilities 20,343 14,868 46,336
----------- ----------- ------------
NET ASSETS:
For contract liabilities $56,964,455 $56,289,374 $193,373,580
=========== =========== ============
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 3,827,012 29,951,862 139,496,129
Minimum unit fair value #* $14.884837 $1.879328 $1.386229
Maximum unit fair value #* $14.884837 $1.879328 $1.386229
Contract liability $56,964,455 $56,289,374 $193,373,580
<Caption>
AMERICAN FUNDS AMERICAN FUNDS
GROWTH-INCOME FUND INTERNATIONAL FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- -----------------------------------------------
ASSETS:
Investments:
Number of shares 4,193,346 3,614,201
============ ===========
Cost $139,001,389 $64,172,963
============ ===========
Market value $160,353,567 $63,682,214
Due from Sponsor Company 69,396 32,110
Receivable from fund shares sold -- --
Other assets -- --
------------ -----------
Total assets 160,422,963 63,714,324
------------ -----------
LIABILITIES:
Due to Sponsor Company -- --
Payable for fund shares purchased 69,396 32,110
Other liabilities 29 --
------------ -----------
Total liabilities 69,425 32,110
------------ -----------
NET ASSETS:
For contract liabilities $160,353,538 $63,682,214
============ ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 99,775,774 2,719,902
Minimum unit fair value #* $1.607139 $23.413424
Maximum unit fair value #* $1.607139 $23.413424
Contract liability $160,353,538 $63,682,214
</Table>
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is
illustrated in both the minimum and maximum unit fair value rows.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-4
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
AMERICAN FUNDS FIDELITY VIP
AMERICAN FUNDS GLOBAL SMALL ASSET MANAGER
NEW WORLD FUND CAPITALIZATION FUND PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
Number of shares 1,524,302 1,309,125 68,561
=========== =========== ===========
Cost $27,677,331 $21,861,526 $1,158,906
=========== =========== ===========
Market value $34,677,866 $25,999,227 $1,040,072
Due from Sponsor Company 13,714 23,633 --
Receivable from fund shares sold -- -- --
Other assets 1 3 --
----------- ----------- -----------
Total assets 34,691,581 26,022,863 1,040,072
----------- ----------- -----------
LIABILITIES:
Due to Sponsor Company -- -- --
Payable for fund shares purchased 13,714 23,633 --
Other liabilities -- -- --
----------- ----------- -----------
Total liabilities 13,714 23,633 --
----------- ----------- -----------
NET ASSETS:
For contract liabilities $34,677,867 $25,999,230 $1,040,072
=========== =========== ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 1,077,035 12,010,025 343,665
Minimum unit fair value #* $32.197536 $2.164794 $3.026411
Maximum unit fair value #* $32.197536 $2.164794 $3.026411
Contract liability $34,677,867 $25,999,230 $1,040,072
<Caption>
FIDELITY VIP FIDELITY VIP
EQUITY INCOME CONTRAFUND
PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------------
ASSETS:
Investments:
Number of shares 1,714,746 1,558,137
=========== ===========
Cost $37,838,745 $42,758,970
=========== ===========
Market value $34,095,461 $40,511,566
Due from Sponsor Company 11,938 1,344
Receivable from fund shares sold -- --
Other assets -- --
----------- -----------
Total assets 34,107,399 40,512,910
----------- -----------
LIABILITIES:
Due to Sponsor Company -- --
Payable for fund shares purchased 11,938 1,344
Other liabilities -- --
----------- -----------
Total liabilities 11,938 1,344
----------- -----------
NET ASSETS:
For contract liabilities $34,095,461 $40,511,566
=========== ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 8,729,457 2,828,785
Minimum unit fair value #* $3.409746 $14.321191
Maximum unit fair value #* $12.688792 $14.321191
Contract liability $34,095,461 $40,511,566
</Table>
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is
illustrated in both the minimum and maximum unit fair value rows.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-5
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
FIDELITY VIP FIDELITY VIP FIDELITY VIP
OVERSEAS MID CAP FREEDOM 2010
PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
Number of shares 41,179 833,328 83,191
========= =========== ===========
Cost $803,116 $26,302,627 $838,306
========= =========== ===========
Market value $662,577 $24,983,170 $923,420
Due from Sponsor Company -- 13,745 --
Receivable from fund shares sold -- -- --
Other assets -- -- --
--------- ----------- -----------
Total assets 662,577 24,996,915 923,420
--------- ----------- -----------
LIABILITIES:
Due to Sponsor Company -- -- --
Payable for fund shares purchased -- 13,745 --
Other liabilities -- 2 1
--------- ----------- -----------
Total liabilities -- 13,747 1
--------- ----------- -----------
NET ASSETS:
For contract liabilities $662,577 $24,983,168 $923,419
========= =========== ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 276,514 1,635,491 76,275
Minimum unit fair value #* $2.396177 $15.275636 $12.106372
Maximum unit fair value #* $2.396177 $15.275636 $12.106372
Contract liability $662,577 $24,983,168 $923,419
<Caption>
FIDELITY VIP FIDELITY VIP
FREEDOM 2020 FREEDOM 2030
PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------------
ASSETS:
Investments:
Number of shares 88,680 96,142
=========== ===========
Cost $862,024 $938,120
=========== ===========
Market value $989,669 $1,041,215
Due from Sponsor Company -- --
Receivable from fund shares sold -- 20,022
Other assets -- --
----------- -----------
Total assets 989,669 1,061,237
----------- -----------
LIABILITIES:
Due to Sponsor Company -- 20,022
Payable for fund shares purchased -- --
Other liabilities -- --
----------- -----------
Total liabilities -- 20,022
----------- -----------
NET ASSETS:
For contract liabilities $989,669 $1,041,215
=========== ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 84,112 91,234
Minimum unit fair value #* $11.766118 $11.412628
Maximum unit fair value #* $11.766118 $11.412628
Contract liability $989,669 $1,041,215
</Table>
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is
illustrated in both the minimum and maximum unit fair value rows.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-6
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
FRANKLIN FRANKLIN
FRANKLIN SMALL CAP STRATEGIC
INCOME VALUE INCOME
SECURITIES FUND SECURITIES FUND SECURITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
Number of shares 2,445,747 1,462,413 1,228,766
=========== =========== ===========
Cost $39,740,984 $22,605,879 $14,986,806
=========== =========== ===========
Market value $36,857,400 $26,659,797 $16,182,852
Due from Sponsor Company 12,654 10,831 4,913
Receivable from fund shares sold -- -- --
Other assets -- -- --
----------- ----------- -----------
Total assets 36,870,054 26,670,628 16,187,765
----------- ----------- -----------
LIABILITIES:
Due to Sponsor Company -- -- --
Payable for fund shares purchased 12,654 10,831 4,913
Other liabilities 1 -- --
----------- ----------- -----------
Total liabilities 12,655 10,831 4,913
----------- ----------- -----------
NET ASSETS:
For contract liabilities $36,857,399 $26,659,797 $16,182,852
=========== =========== ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 2,504,422 1,127,553 1,120,741
Minimum unit fair value #* $14.716926 $23.643948 $14.439420
Maximum unit fair value #* $14.716926 $23.643948 $14.439420
Contract liability $36,857,399 $26,659,797 $16,182,852
<Caption>
TEMPLETON
MUTUAL SHARES FOREIGN
SECURITIES FUND SECURITIES FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- -------------------------------------------
ASSETS:
Investments:
Number of shares 2,574,304 97,805
=========== ==========
Cost $47,401,276 $1,311,141
=========== ==========
Market value $44,329,507 $1,405,453
Due from Sponsor Company 22,668 2,908
Receivable from fund shares sold -- --
Other assets -- --
----------- ----------
Total assets 44,352,175 1,408,361
----------- ----------
LIABILITIES:
Due to Sponsor Company -- --
Payable for fund shares purchased 22,668 2,908
Other liabilities -- --
----------- ----------
Total liabilities 22,668 2,908
----------- ----------
NET ASSETS:
For contract liabilities $44,329,507 $1,405,453
=========== ==========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 2,563,760 75,811
Minimum unit fair value #* $17.290820 $18.538988
Maximum unit fair value #* $17.290820 $18.538988
Contract liability $44,329,507 $1,405,453
</Table>
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is
illustrated in both the minimum and maximum unit fair value rows.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-7
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
TEMPLETON MUTUAL TEMPLETON
GROWTH GLOBAL DISCOVERY GLOBAL BOND
SECURITIES FUND SECURITIES FUND SECURITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
Number of shares 871,991 1,221,281 1,496,565
=========== =========== ===========
Cost $12,989,482 $25,703,332 $26,269,325
=========== =========== ===========
Market value $10,437,733 $24,645,450 $29,138,121
Due from Sponsor Company 7,255 24,532 --
Receivable from fund shares sold -- -- 160,847
Other assets -- -- --
----------- ----------- -----------
Total assets 10,444,988 24,669,982 29,298,968
----------- ----------- -----------
LIABILITIES:
Due to Sponsor Company -- -- 160,847
Payable for fund shares purchased 7,255 24,532 --
Other liabilities 1 -- 1
----------- ----------- -----------
Total liabilities 7,256 24,532 160,848
----------- ----------- -----------
NET ASSETS:
For contract liabilities $10,437,732 $24,645,450 $29,138,120
=========== =========== ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 954,553 1,773,779 1,608,661
Minimum unit fair value #* $10.934682 $13.894317 $18.113279
Maximum unit fair value #* $10.934682 $13.894317 $18.113279
Contract liability $10,437,732 $24,645,450 $29,138,120
<Caption>
HARTFORD
HARTFORD TOTAL
BALANCED RETURN BOND
HLS FUND HLS FUND
SUB-ACCOUNT (1) SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ---------------------------------------------
ASSETS:
Investments:
Number of shares 3,314,028 9,346,227
=========== ============
Cost $82,201,258 $108,209,994
=========== ============
Market value $69,696,694 $112,098,548
Due from Sponsor Company 36,623 17,912
Receivable from fund shares sold -- --
Other assets 2 25
----------- ------------
Total assets 69,733,319 112,116,485
----------- ------------
LIABILITIES:
Due to Sponsor Company -- --
Payable for fund shares purchased 36,623 17,912
Other liabilities -- --
----------- ------------
Total liabilities 36,623 17,912
----------- ------------
NET ASSETS:
For contract liabilities $69,696,696 $112,098,573
=========== ============
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 17,945,703 34,497,919
Minimum unit fair value #* $3.883754 $3.249430
Maximum unit fair value #* $3.883754 $3.249430
Contract liability $69,696,696 $112,098,573
</Table>
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is
illustrated in both the minimum and maximum unit fair value rows.
(1) Formerly Hartford Advisers HLS Fund. Change effective June 29, 2012.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-8
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
HARTFORD HARTFORD
CAPITAL DIVIDEND HARTFORD
APPRECIATION AND GROWTH GLOBAL RESEARCH
HLS FUND HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
Number of shares 3,859,680 4,829,811 44,970
============ ============ ==========
Cost $179,863,943 $94,534,364 $430,809
============ ============ ==========
Market value $167,408,999 $103,655,259 $474,695
Due from Sponsor Company 66,779 -- --
Receivable from fund shares sold -- 5,872 --
Other assets -- 2 1
------------ ------------ ----------
Total assets 167,475,778 103,661,133 474,696
------------ ------------ ----------
LIABILITIES:
Due to Sponsor Company -- 5,872 --
Payable for fund shares purchased 66,779 -- --
Other liabilities 4 -- --
------------ ------------ ----------
Total liabilities 66,783 5,872 --
------------ ------------ ----------
NET ASSETS:
For contract liabilities $167,408,995 $103,655,261 $474,696
============ ============ ==========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 22,534,247 21,443,131 43,973
Minimum unit fair value #* $7.429092 $4.833961 $10.795248
Maximum unit fair value #* $7.429092 $4.833961 $10.795248
Contract liability $167,408,995 $103,655,261 $474,696
<Caption>
HARTFORD
HARTFORD DISCIPLINED
GLOBAL GROWTH EQUITY
HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- -------------------------------------------
ASSETS:
Investments:
Number of shares 65,492 1,227,004
========== ===========
Cost $958,338 $14,770,705
========== ===========
Market value $1,080,832 $16,740,151
Due from Sponsor Company 1,399 17,025
Receivable from fund shares sold -- --
Other assets 1 --
---------- -----------
Total assets 1,082,232 16,757,176
---------- -----------
LIABILITIES:
Due to Sponsor Company -- --
Payable for fund shares purchased 1,399 17,025
Other liabilities -- --
---------- -----------
Total liabilities 1,399 17,025
---------- -----------
NET ASSETS:
For contract liabilities $1,080,833 $16,740,151
========== ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 854,345 9,413,469
Minimum unit fair value #* $1.265101 $1.778319
Maximum unit fair value #* $1.265101 $1.778319
Contract liability $1,080,833 $16,740,151
</Table>
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is
illustrated in both the minimum and maximum unit fair value rows.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-9
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
HARTFORD
GROWTH HARTFORD HARTFORD
OPPORTUNITIES HIGH YIELD INDEX
HLS FUND HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
Number of shares 874,559 481,509 1,587,129
=========== ========== ===========
Cost $25,488,764 $4,236,976 $53,956,985
=========== ========== ===========
Market value $26,146,850 $4,375,591 $47,123,230
Due from Sponsor Company 4,140 2,927 25,871
Receivable from fund shares sold -- -- --
Other assets -- -- --
----------- ---------- -----------
Total assets 26,150,990 4,378,518 47,149,101
----------- ---------- -----------
LIABILITIES:
Due to Sponsor Company -- -- --
Payable for fund shares purchased 4,140 2,927 25,871
Other liabilities 1 -- 4
----------- ---------- -----------
Total liabilities 4,141 2,927 25,875
----------- ---------- -----------
NET ASSETS:
For contract liabilities $26,146,849 $4,375,591 $47,123,226
=========== ========== ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 1,142,946 220,906 11,104,519
Minimum unit fair value #* $22.876709 $19.807474 $4.243608
Maximum unit fair value #* $22.876709 $19.807474 $4.243608
Contract liability $26,146,849 $4,375,591 $47,123,226
<Caption>
HARTFORD
INTERNATIONAL HARTFORD
OPPORTUNITIES MIDCAP
HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------------
ASSETS:
Investments:
Number of shares 3,509,255 1,958,130
=========== ===========
Cost $46,022,954 $41,416,225
=========== ===========
Market value $44,320,801 $55,131,179
Due from Sponsor Company 19,091 --
Receivable from fund shares sold -- 6,953
Other assets 6 5
----------- -----------
Total assets 44,339,898 55,138,137
----------- -----------
LIABILITIES:
Due to Sponsor Company -- 6,953
Payable for fund shares purchased 19,091 --
Other liabilities -- --
----------- -----------
Total liabilities 19,091 6,953
----------- -----------
NET ASSETS:
For contract liabilities $44,320,807 $55,131,184
=========== ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 12,940,631 11,440,868
Minimum unit fair value #* $3.424934 $4.818794
Maximum unit fair value #* $3.424934 $4.818794
Contract liability $44,320,807 $55,131,184
</Table>
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is
illustrated in both the minimum and maximum unit fair value rows.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-10
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
HARTFORD HARTFORD HARTFORD
MIDCAP VALUE MONEY MARKET SMALL COMPANY
HLS FUND HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
Number of shares 1,125,351 73,779,714 1,447,754
=========== =========== ===========
Cost $14,092,122 $73,779,714 $23,927,384
=========== =========== ===========
Market value $13,114,463 $73,779,714 $28,574,921
Due from Sponsor Company 330 -- 6,852
Receivable from fund shares sold -- 371,447 --
Other assets -- -- --
----------- ----------- -----------
Total assets 13,114,793 74,151,161 28,581,773
----------- ----------- -----------
LIABILITIES:
Due to Sponsor Company -- 371,447 --
Payable for fund shares purchased 330 -- 6,852
Other liabilities -- -- 4
----------- ----------- -----------
Total liabilities 330 371,447 6,856
----------- ----------- -----------
NET ASSETS:
For contract liabilities $13,114,463 $73,779,714 $28,574,917
=========== =========== ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 550,426 41,065,408 10,536,264
Minimum unit fair value #* $23.826006 $1.796639 $2.712054
Maximum unit fair value #* $23.826006 $1.796639 $2.712054
Contract liability $13,114,463 $73,779,714 $28,574,917
<Caption>
HARTFORD
HARTFORD U.S. GOVERNMENT
STOCK SECURITIES
HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------------
ASSETS:
Investments:
Number of shares 1,637,351 1,280,143
=========== ===========
Cost $99,952,304 $13,742,585
=========== ===========
Market value $73,238,433 $13,767,687
Due from Sponsor Company 44,961 906
Receivable from fund shares sold -- --
Other assets -- --
----------- -----------
Total assets 73,283,394 13,768,593
----------- -----------
LIABILITIES:
Due to Sponsor Company -- --
Payable for fund shares purchased 44,961 906
Other liabilities 1 --
----------- -----------
Total liabilities 44,962 906
----------- -----------
NET ASSETS:
For contract liabilities $73,238,432 $13,767,687
=========== ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 17,198,527 1,184,900
Minimum unit fair value #* $4.258413 $11.619278
Maximum unit fair value #* $4.258413 $11.619278
Contract liability $73,238,432 $13,767,687
</Table>
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is
illustrated in both the minimum and maximum unit fair value rows.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-11
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
LORD ABBETT
CALIBRATED LORD ABBETT LORD ABBETT
DIVIDEND BOND-DEBENTURE GROWTH AND
GROWTH FUND FUND INCOME FUND
SUB-ACCOUNT (2) SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
Number of shares 511,041 581,401 275,772
========== ========== ==========
Cost $7,424,826 $6,683,614 $7,712,043
========== ========== ==========
Market value $7,267,008 $7,104,724 $6,781,225
Due from Sponsor Company 2,676 1,657 17,835
Receivable from fund shares sold -- -- --
Other assets -- 1 1
---------- ---------- ----------
Total assets 7,269,684 7,106,382 6,799,061
---------- ---------- ----------
LIABILITIES:
Due to Sponsor Company -- -- --
Payable for fund shares purchased 2,676 1,657 17,835
Other liabilities 1 -- --
---------- ---------- ----------
Total liabilities 2,677 1,657 17,835
---------- ---------- ----------
NET ASSETS:
For contract liabilities $7,267,007 $7,104,725 $6,781,226
========== ========== ==========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 521,579 475,470 576,912
Minimum unit fair value #* $13.932710 $14.942519 $11.754355
Maximum unit fair value #* $13.932710 $14.942519 $11.754355
Contract liability $7,267,007 $7,104,725 $6,781,226
<Caption>
MFS INVESTORS MFS NEW
TRUST SERIES DISCOVERY SERIES
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ------------------------------------------
ASSETS:
Investments:
Number of shares 41,034 390,334
========== ==========
Cost $895,555 $5,624,782
========== ==========
Market value $940,915 $6,136,057
Due from Sponsor Company -- 768
Receivable from fund shares sold -- --
Other assets -- --
---------- ----------
Total assets 940,915 6,136,825
---------- ----------
LIABILITIES:
Due to Sponsor Company -- --
Payable for fund shares purchased -- 768
Other liabilities 1 --
---------- ----------
Total liabilities 1 768
---------- ----------
NET ASSETS:
For contract liabilities $940,914 $6,136,057
========== ==========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 65,753 265,040
Minimum unit fair value #* $14.309842 $23.151428
Maximum unit fair value #* $14.309842 $23.151428
Contract liability $940,914 $6,136,057
</Table>
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is
illustrated in both the minimum and maximum unit fair value rows.
(2) Formerly Lord Abbett Capital Structure Fund. Change effective September 27,
2012.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-12
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
MFS TOTAL MFS VALUE MFS RESEARCH
RETURN SERIES SERIES BOND SERIES
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
Number of shares 1,327,007 628,131 721,923
=========== ========== ==========
Cost $26,805,387 $7,180,967 $9,262,604
=========== ========== ==========
Market value $26,606,488 $9,045,082 $9,738,739
Due from Sponsor Company 8,623 10,659 12,254
Receivable from fund shares sold -- -- --
Other assets -- -- --
----------- ---------- ----------
Total assets 26,615,111 9,055,741 9,750,993
----------- ---------- ----------
LIABILITIES:
Due to Sponsor Company -- -- --
Payable for fund shares purchased 8,623 10,659 12,254
Other liabilities -- -- --
----------- ---------- ----------
Total liabilities 8,623 10,659 12,254
----------- ---------- ----------
NET ASSETS:
For contract liabilities $26,606,488 $9,045,082 $9,738,739
=========== ========== ==========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 1,617,058 773,607 677,724
Minimum unit fair value #* $16.453635 $11.692087 $14.369769
Maximum unit fair value #* $16.453635 $11.692087 $14.369769
Contract liability $26,606,488 $9,045,082 $9,738,739
<Caption>
INVESCO
UIF MID CAP VAN KAMPEN V.I.
GROWTH AMERICAN
PORTFOLIO VALUE FUND
SUB-ACCOUNT SUB-ACCOUNT (3)
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ------------------------------------------
ASSETS:
Investments:
Number of shares 162,922 192,798
========== ==========
Cost $1,466,274 $2,735,926
========== ==========
Market value $1,733,491 $2,855,336
Due from Sponsor Company 1,364 2,308
Receivable from fund shares sold -- --
Other assets -- 1
---------- ----------
Total assets 1,734,855 2,857,645
---------- ----------
LIABILITIES:
Due to Sponsor Company -- --
Payable for fund shares purchased 1,364 2,308
Other liabilities -- --
---------- ----------
Total liabilities 1,364 2,308
---------- ----------
NET ASSETS:
For contract liabilities $1,733,491 $2,855,337
========== ==========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 139,944 225,745
Minimum unit fair value #* $12.387060 $12.648529
Maximum unit fair value #* $12.387060 $12.648529
Contract liability $1,733,491 $2,855,337
</Table>
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is
illustrated in both the minimum and maximum unit fair value rows.
(3) Formerly Invesco Van Kampen V.I. Mid Cap Value Fund. Change effective July
15, 2012.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-13
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
OPPENHEIMER
CAPITAL OPPENHEIMER OPPENHEIMER
APPRECIATION GLOBAL SECURITIES MAIN STREET
FUND/VA FUND/VA FUND/VA
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
Number of shares 73,440 280,892 80,437
========== ========== ==========
Cost $2,985,266 $8,991,707 $1,872,999
========== ========== ==========
Market value $3,279,810 $9,058,776 $1,912,795
Due from Sponsor Company 2,779 -- 141
Receivable from fund shares sold -- 1,010 --
Other assets -- -- --
---------- ---------- ----------
Total assets 3,282,589 9,059,786 1,912,936
---------- ---------- ----------
LIABILITIES:
Due to Sponsor Company -- 1,010 --
Payable for fund shares purchased 2,779 -- 141
Other liabilities -- 1 --
---------- ---------- ----------
Total liabilities 2,779 1,011 141
---------- ---------- ----------
NET ASSETS:
For contract liabilities $3,279,810 $9,058,775 $1,912,795
========== ========== ==========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 267,690 638,209 145,995
Minimum unit fair value #* $12.252275 $14.194061 $13.101818
Maximum unit fair value #* $12.252275 $14.194061 $13.101818
Contract liability $3,279,810 $9,058,775 $1,912,795
<Caption>
OPPENHEIMER
MAIN STREET PUTNAM VT
SMALL- & MID-CAP DIVERSIFIED
FUND/VA INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ------------------------------------------
ASSETS:
Investments:
Number of shares 60,439 521,167
========== ==========
Cost $785,779 $3,870,637
========== ==========
Market value $1,206,354 $3,779,267
Due from Sponsor Company 89 3,118
Receivable from fund shares sold -- --
Other assets -- --
---------- ----------
Total assets 1,206,443 3,782,385
---------- ----------
LIABILITIES:
Due to Sponsor Company -- --
Payable for fund shares purchased 89 3,118
Other liabilities -- 1
---------- ----------
Total liabilities 89 3,119
---------- ----------
NET ASSETS:
For contract liabilities $1,206,354 $3,779,266
========== ==========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 91,197 255,540
Minimum unit fair value #* $13.228057 $13.593368
Maximum unit fair value #* $13.228057 $28.400397
Contract liability $1,206,354 $3,779,266
</Table>
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is
illustrated in both the minimum and maximum unit fair value rows.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-14
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
PUTNAM VT PUTNAM VT PUTNAM VT
GLOBAL ASSET GLOBAL GROWTH AND
ALLOCATION FUND EQUITY FUND INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
Number of shares 24,595 293,652 697,511
=========== =========== ===========
Cost $454,454 $4,937,574 $18,284,160
=========== =========== ===========
Market value $393,766 $3,534,987 $12,553,781
Due from Sponsor Company -- 453 18,378
Receivable from fund shares sold -- -- --
Other assets -- -- --
----------- ----------- -----------
Total assets 393,766 3,535,440 12,572,159
----------- ----------- -----------
LIABILITIES:
Due to Sponsor Company -- -- --
Payable for fund shares purchased -- 453 18,378
Other liabilities -- -- 2
----------- ----------- -----------
Total liabilities -- 453 18,380
----------- ----------- -----------
NET ASSETS:
For contract liabilities $393,766 $3,534,987 $12,553,779
=========== =========== ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 11,183 130,470 416,459
Minimum unit fair value #* $35.209669 $17.157542 $14.962585
Maximum unit fair value #* $35.209669 $29.391653 $36.716590
Contract liability $393,766 $3,534,987 $12,553,779
<Caption>
PUTNAM VT PUTNAM VT
GLOBAL HEALTH HIGH
CARE FUND YIELD FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------------
ASSETS:
Investments:
Number of shares 72,931 3,032,746
=========== ===========
Cost $766,727 $23,261,896
=========== ===========
Market value $956,131 $21,397,771
Due from Sponsor Company -- 5,877
Receivable from fund shares sold 7,464 --
Other assets -- --
----------- -----------
Total assets 963,595 21,403,648
----------- -----------
LIABILITIES:
Due to Sponsor Company 7,464 --
Payable for fund shares purchased -- 5,877
Other liabilities -- --
----------- -----------
Total liabilities 7,464 5,877
----------- -----------
NET ASSETS:
For contract liabilities $956,131 $21,397,771
=========== ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 50,882 811,691
Minimum unit fair value #* $18.791048 $21.165414
Maximum unit fair value #* $18.791048 $39.207905
Contract liability $956,131 $21,397,771
</Table>
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is
illustrated in both the minimum and maximum unit fair value rows.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-15
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
PUTNAM VT PUTNAM VT
PUTNAM VT INTERNATIONAL INTERNATIONAL
INCOME FUND VALUE FUND EQUITY FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
Number of shares 1,403,013 61,401 1,313,571
=========== ========== ===========
Cost $17,331,277 $851,382 $21,282,197
=========== ========== ===========
Market value $17,079,311 $576,556 $15,005,367
Due from Sponsor Company 299 -- 3,020
Receivable from fund shares sold -- -- --
Other assets -- -- --
----------- ---------- -----------
Total assets 17,079,610 576,556 15,008,387
----------- ---------- -----------
LIABILITIES:
Due to Sponsor Company -- -- --
Payable for fund shares purchased 299 -- 3,020
Other liabilities -- -- 1
----------- ---------- -----------
Total liabilities 299 -- 3,021
----------- ---------- -----------
NET ASSETS:
For contract liabilities $17,079,311 $576,556 $15,005,366
=========== ========== ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 826,873 33,535 879,462
Minimum unit fair value #* $16.678880 $17.192665 $16.633499
Maximum unit fair value #* $32.470755 $17.192665 $17.234398
Contract liability $17,079,311 $576,556 $15,005,366
<Caption>
PUTNAM VT
INTERNATIONAL PUTNAM VT
GROWTH FUND INVESTORS FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ------------------------------------------
ASSETS:
Investments:
Number of shares 19,105 61,913
========== ==========
Cost $279,622 $731,197
========== ==========
Market value $316,383 $717,576
Due from Sponsor Company -- --
Receivable from fund shares sold 3,300 --
Other assets -- --
---------- ----------
Total assets 319,683 717,576
---------- ----------
LIABILITIES:
Due to Sponsor Company 3,300 --
Payable for fund shares purchased -- --
Other liabilities -- --
---------- ----------
Total liabilities 3,300 --
---------- ----------
NET ASSETS:
For contract liabilities $316,383 $717,576
========== ==========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 18,116 57,882
Minimum unit fair value #* $17.464541 $12.397161
Maximum unit fair value #* $17.464541 $12.397161
Contract liability $316,383 $717,576
</Table>
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is
illustrated in both the minimum and maximum unit fair value rows.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-16
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
PUTNAM VT PUTNAM VT PUTNAM VT
MONEY MULTI-CAP SMALL CAP
MARKET FUND GROWTH FUND VALUE FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
Number of shares 101,044 394,941 330,838
========== =========== ===========
Cost $101,044 $9,070,558 $6,404,884
========== =========== ===========
Market value $101,044 $8,994,704 $5,058,519
Due from Sponsor Company -- -- --
Receivable from fund shares sold -- 2,978 790
Other assets -- -- --
---------- ----------- -----------
Total assets 101,044 8,997,682 5,059,309
---------- ----------- -----------
LIABILITIES:
Due to Sponsor Company -- 2,978 790
Payable for fund shares purchased -- -- --
Other liabilities 1 -- 1
---------- ----------- -----------
Total liabilities 1 2,978 791
---------- ----------- -----------
NET ASSETS:
For contract liabilities $101,043 $8,994,704 $5,058,518
========== =========== ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 56,037 348,446 436,613
Minimum unit fair value #* $1.803151 $17.208979 $11.585811
Maximum unit fair value #* $1.803151 $28.168997 $11.585811
Contract liability $101,043 $8,994,704 $5,058,518
<Caption>
PUTNAM VT PUTNAM VT
GEORGE PUTNAM GLOBAL
BALANCED FUND UTILITIES FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------------
ASSETS:
Investments:
Number of shares 70,751 46,556
=========== ===========
Cost $718,324 $737,248
=========== ===========
Market value $566,009 $565,658
Due from Sponsor Company -- --
Receivable from fund shares sold -- --
Other assets -- --
----------- -----------
Total assets 566,009 565,658
----------- -----------
LIABILITIES:
Due to Sponsor Company -- --
Payable for fund shares purchased -- --
Other liabilities -- --
----------- -----------
Total liabilities -- --
----------- -----------
NET ASSETS:
For contract liabilities $566,009 $565,658
=========== ===========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 36,382 19,407
Minimum unit fair value #* $15.557336 $29.147195
Maximum unit fair value #* $15.557336 $29.147195
Contract liability $566,009 $565,658
</Table>
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is
illustrated in both the minimum and maximum unit fair value rows.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-17
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF ASSETS AND LIABILITIES -- (CONCLUDED)
DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
PUTNAM VT PUTNAM VT
PUTNAMVT CAPITAL EQUITY
VOYAGER FUND OPPORTUNITIES FUND INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
Number of shares 444,534 294,633 423,166
=========== ========== ==========
Cost $18,251,130 $4,533,616 $5,298,875
=========== ========== ==========
Market value $16,204,779 $5,167,870 $6,659,814
Due from Sponsor Company 6,481 1,612 198
Receivable from fund shares sold -- -- --
Other assets 1 1 1
----------- ---------- ----------
Total assets 16,211,261 5,169,483 6,660,013
----------- ---------- ----------
LIABILITIES:
Due to Sponsor Company -- -- --
Payable for fund shares purchased 6,481 1,612 198
Other liabilities -- -- --
----------- ---------- ----------
Total liabilities 6,481 1,612 198
----------- ---------- ----------
NET ASSETS:
For contract liabilities $16,204,780 $5,167,871 $6,659,815
=========== ========== ==========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 468,968 241,320 338,981
Minimum unit fair value #* $16.202644 $21.414988 $19.095633
Maximum unit fair value #* $40.405692 $21.414988 $19.759287
Contract liability $16,204,780 $5,167,871 $6,659,815
<Caption>
INVESCO INVESCO
INVESCO VAN KAMPEN V.I. VAN KAMPEN V.I.
VAN KAMPEN V.I. AMERICAN MID CAP
COMSTOCK FUND FRANCHISE FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT (4)(5)(6) SUB-ACCOUNT (4)(7)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------- -----------------------------------------------------------------------
ASSETS:
Investments:
Number of shares 1,410,884 55,606 280,907
=========== ========== ==========
Cost $18,543,516 $2,062,277 $1,116,083
=========== ========== ==========
Market value $18,651,883 $2,017,397 $1,101,156
Due from Sponsor Company 8,874 1,944 1,396
Receivable from fund shares sold -- -- --
Other assets -- 1 --
----------- ---------- ----------
Total assets 18,660,757 2,019,342 1,102,552
----------- ---------- ----------
LIABILITIES:
Due to Sponsor Company -- -- --
Payable for fund shares purchased 8,874 1,944 1,396
Other liabilities -- -- --
----------- ---------- ----------
Total liabilities 8,874 1,944 1,396
----------- ---------- ----------
NET ASSETS:
For contract liabilities $18,651,883 $2,017,398 $1,101,156
=========== ========== ==========
DEFERRED CONTRACTS IN THE ACCUMULATION
PERIOD:
Units owned by participants # 1,427,789 202,129 110,172
Minimum unit fair value #* $13.063471 $9.980752 $9.994841
Maximum unit fair value #* $13.063471 $9.980752 $9.994841
Contract liability $18,651,883 $2,017,398 $1,101,156
</Table>
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is
illustrated in both the minimum and maximum unit fair value rows.
(4) Funded as of April 27, 2012.
(5) Formerly Invesco Van Kampen V.I. Capital Growth Fund. Change effective
April 30, 2012.
(6) Effective April 27, 2012 Invesco V.I. Capital Appreciation Fund merged with
Invesco Van Kampen V.I. Capital Growth Fund.
(7) Effective April 27, 2012 Invesco V.I. Capital Development Fund merged with
Invesco Van Kampen V.I. Mid Cap Growth Fund.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-18
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
ALLIANCEBERNSTEIN VPS ALLIANCEBERNSTEIN VPS ALLIANCEBERNSTEIN VPS
INTERNATIONAL SMALL/MID-CAP INTERNATIONAL
VALUE PORTFOLIO VALUE PORTFOLIO GROWTH PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $156,659 $25,917 $44,722
---------- ---------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions (1,144,573) (21,731) (211,992)
Net realized gain on distributions -- 286,676 --
Net unrealized appreciation
(depreciation) of investments during
the year 2,495,385 1,264,179 613,031
---------- ---------- ---------
Net gain (loss) on investments 1,350,812 1,529,124 401,039
---------- ---------- ---------
Net increase (decrease) in net
assets resulting from operations $1,507,471 $1,555,041 $445,761
========== ========== =========
<Caption>
INVESCO V.I. INVESCO V.I.
CORE INTERNATIONAL
EQUITY FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------
INVESTMENT INCOME:
Dividends $19,947 $51,314
-------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions 86,542 46,846
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 167,713 394,951
-------- --------
Net gain (loss) on investments 254,255 441,797
-------- --------
Net increase (decrease) in net
assets resulting from operations $274,202 $493,111
======== ========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-19
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
INVESCO V.I.
INVESCO V.I. INVESCO V.I. BALANCED RISK
MID CAP CORE SMALL CAP ALLOCATION
EQUITY FUND EQUITY FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $9,885 $ -- $42,610
---------- --------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions (117,097) 303,211 85,078
Net realized gain on distributions 128,509 -- 18,807
Net unrealized appreciation
(depreciation) of investments during
the year 1,565,172 391,283 225,103
---------- --------- ---------
Net gain (loss) on investments 1,576,584 694,494 328,988
---------- --------- ---------
Net increase (decrease) in net
assets resulting from operations $1,586,469 $694,494 $371,598
========== ========= =========
<Caption>
AMERICAN FUNDS
AMERICAN FUNDS BLUE CHIP
ASSET INCOME AND
ALLOCATION FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- -------------------------------------------
INVESTMENT INCOME:
Dividends $1,515,533 $907,287
----------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions 506,211 (242,494)
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 9,552,047 5,180,465
----------- ----------
Net gain (loss) on investments 10,058,258 4,937,971
----------- ----------
Net increase (decrease) in net
assets resulting from operations $11,573,791 $5,845,258
=========== ==========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-20
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
AMERICAN FUNDS
AMERICAN FUNDS GLOBAL AMERICAN FUNDS
BOND FUND GROWTH FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $1,417,612 $485,164 $1,504,885
---------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions (59,072) 1,261,157 2,719,085
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year 1,640,074 9,155,190 26,928,101
---------- ----------- -----------
Net gain (loss) on investments 1,581,002 10,416,347 29,647,186
---------- ----------- -----------
Net increase (decrease) in net
assets resulting from operations $2,998,614 $10,901,511 $31,152,071
========== =========== ===========
<Caption>
AMERICAN FUNDS AMERICAN FUNDS
GROWTH-INCOME FUND INTERNATIONAL FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ------------------------------------------------
INVESTMENT INCOME:
Dividends $2,535,530 $905,081
----------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions 1,417,345 (609,820)
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 21,110,456 9,876,645
----------- -----------
Net gain (loss) on investments 22,527,801 9,266,825
----------- -----------
Net increase (decrease) in net
assets resulting from operations $25,063,331 $10,171,906
=========== ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-21
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
AMERICAN FUNDS FIDELITY VIP
AMERICAN FUNDS GLOBAL SMALL ASSET MANAGER
NEW WORLD FUND CAPITALIZATION FUND PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $337,951 $344,664 $15,871
---------- ---------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions 618,029 373,650 (23,293)
Net realized gain on distributions -- -- 7,599
Net unrealized appreciation
(depreciation) of investments during
the year 4,554,966 3,563,905 127,300
---------- ---------- ---------
Net gain (loss) on investments 5,172,995 3,937,555 111,606
---------- ---------- ---------
Net increase (decrease) in net
assets resulting from operations $5,510,946 $4,282,219 $127,477
========== ========== =========
<Caption>
FIDELITY VIP FIDELITY VIP
EQUITY INCOME CONTRAFUND
PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ------------------------------------------
INVESTMENT INCOME:
Dividends $1,026,699 $448,172
---------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions (464,857) (562,136)
Net realized gain on distributions 2,114,638 --
Net unrealized appreciation
(depreciation) of investments during
the year 2,611,591 6,124,618
---------- ----------
Net gain (loss) on investments 4,261,372 5,562,482
---------- ----------
Net increase (decrease) in net
assets resulting from operations $5,288,071 $6,010,654
========== ==========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-22
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
FIDELITY VIP FIDELITY VIP FIDELITY VIP
OVERSEAS MID CAP FREEDOM 2010
PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $12,429 $95,963 $15,094
---------- ---------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions (382,434) (20,910) 19,911
Net realized gain on distributions 2,139 1,987,736 13,387
Net unrealized appreciation
(depreciation) of investments during
the year 508,540 1,255,339 48,484
---------- ---------- --------
Net gain (loss) on investments 128,245 3,222,165 81,782
---------- ---------- --------
Net increase (decrease) in net
assets resulting from operations $140,674 $3,318,128 $96,876
========== ========== ========
<Caption>
FIDELITY VIP FIDELITY VIP
FREEDOM 2020 FREEDOM 2030
PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ----------------------------------------
INVESTMENT INCOME:
Dividends $17,451 $19,766
--------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions 90,508 23,073
Net realized gain on distributions 12,543 8,601
Net unrealized appreciation
(depreciation) of investments during
the year 17,138 66,468
--------- ---------
Net gain (loss) on investments 120,189 98,142
--------- ---------
Net increase (decrease) in net
assets resulting from operations $137,640 $117,908
========= =========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-23
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
FRANKLIN FRANKLIN
FRANKLIN SMALL CAP STRATEGIC
INCOME VALUE INCOME
SECURITIES FUND SECURITIES FUND SECURITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $2,338,974 $195,327 $1,018,874
---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions (558,449) 216,424 160,699
Net realized gain on distributions -- -- 16,617
Net unrealized appreciation
(depreciation) of investments during
the year 2,543,977 3,891,904 582,997
---------- ---------- ----------
Net gain (loss) on investments 1,985,528 4,108,328 760,313
---------- ---------- ----------
Net increase (decrease) in net
assets resulting from operations $4,324,502 $4,303,655 $1,779,187
========== ========== ==========
<Caption>
TEMPLETON
MUTUAL SHARES FOREIGN
SECURITIES FUND SECURITIES FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ----------------------------------------
INVESTMENT INCOME:
Dividends $901,804 $40,452
---------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions (474,795) (11,789)
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 5,393,466 180,955
---------- --------
Net gain (loss) on investments 4,918,671 169,166
---------- --------
Net increase (decrease) in net
assets resulting from operations $5,820,475 $209,618
========== ========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-24
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
TEMPLETON MUTUAL TEMPLETON
GROWTH GLOBAL DISCOVERY GLOBAL BOND
SECURITIES FUND SECURITIES FUND SECURITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $196,462 $651,675 $1,823,602
---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions (319,874) (143,810) 388,998
Net realized gain on distributions -- 1,315,556 45,781
Net unrealized appreciation
(depreciation) of investments during
the year 1,973,806 1,274,741 1,732,351
---------- ---------- ----------
Net gain (loss) on investments 1,653,932 2,446,487 2,167,130
---------- ---------- ----------
Net increase (decrease) in net
assets resulting from operations $1,850,394 $3,098,162 $3,990,732
========== ========== ==========
<Caption>
HARTFORD
HARTFORD TOTAL
BALANCED RETURN BOND
HLS FUND HLS FUND
SUB-ACCOUNT (1) SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ------------------------------------------
INVESTMENT INCOME:
Dividends $2,061,531 $4,610,785
---------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions (2,213,507) 405,218
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 8,404,906 3,174,044
---------- ----------
Net gain (loss) on investments 6,191,399 3,579,262
---------- ----------
Net increase (decrease) in net
assets resulting from operations $8,252,930 $8,190,047
========== ==========
</Table>
(1) Formerly Hartford Advisers HLS Fund. Change effective June 29, 2012.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-25
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
HARTFORD HARTFORD
CAPITAL DIVIDEND HARTFORD
APPRECIATION AND GROWTH GLOBAL RESEARCH
HLS FUND HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $2,431,988 $2,375,752 $5,324
----------- ----------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions (2,903,166) 1,021,872 24,036
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year 28,622,471 10,034,552 87,437
----------- ----------- ---------
Net gain (loss) on investments 25,719,305 11,056,424 111,473
----------- ----------- ---------
Net increase (decrease) in net
assets resulting from operations $28,151,293 $13,432,176 $116,797
=========== =========== =========
<Caption>
HARTFORD
HARTFORD DISCIPLINED
GLOBAL GROWTH EQUITY
HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- -----------------------------------------
INVESTMENT INCOME:
Dividends $5,232 $260,634
--------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions 8,023 161,484
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 185,786 2,183,598
--------- ----------
Net gain (loss) on investments 193,809 2,345,082
--------- ----------
Net increase (decrease) in net
assets resulting from operations $199,041 $2,605,716
========= ==========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-26
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
HARTFORD
GROWTH HARTFORD HARTFORD
OPPORTUNITIES HIGH YIELD INDEX
HLS FUND HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ -- $333,837 $935,217
---------- --------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions (106,543) 21,821 (1,068,095)
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year 5,962,947 112,582 6,932,296
---------- --------- -----------
Net gain (loss) on investments 5,856,404 134,403 5,864,201
---------- --------- -----------
Net increase (decrease) in net
assets resulting from operations $5,856,404 $468,240 $6,799,418
========== ========= ===========
<Caption>
HARTFORD
INTERNATIONAL HARTFORD
OPPORTUNITIES MIDCAP
HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- -------------------------------------------
INVESTMENT INCOME:
Dividends $835,077 $446,227
----------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions (1,023,981) 1,939,453
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 8,211,936 7,585,951
----------- ----------
Net gain (loss) on investments 7,187,955 9,525,404
----------- ----------
Net increase (decrease) in net
assets resulting from operations $8,023,032 $9,971,631
=========== ==========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-27
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
HARTFORD HARTFORD HARTFORD
MIDCAP VALUE MONEY MARKET SMALL COMPANY
HLS FUND HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $151,965 $ -- $ --
---------- ------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions (318,937) -- 549,257
Net realized gain on distributions -- -- 1,783
Net unrealized appreciation
(depreciation) of investments during
the year 2,990,280 -- 3,665,635
---------- ------- ----------
Net gain (loss) on investments 2,671,343 -- 4,216,675
---------- ------- ----------
Net increase (decrease) in net
assets resulting from operations $2,823,308 $ -- $4,216,675
========== ======= ==========
<Caption>
HARTFORD
HARTFORD U.S. GOVERNMENT
STOCK SECURITIES
HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- -----------------------------------------
INVESTMENT INCOME:
Dividends $1,552,602 $386,717
----------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions (3,866,160) 20,070
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 12,451,177 89,721
----------- --------
Net gain (loss) on investments 8,585,017 109,791
----------- --------
Net increase (decrease) in net
assets resulting from operations $10,137,619 $496,508
=========== ========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-28
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
LORD ABBETT
CALIBRATED LORD ABBETT LORD ABBETT
DIVIDEND BOND-DEBENTURE GROWTH AND
GROWTH FUND FUND INCOME FUND
SUB-ACCOUNT (2) SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $218,191 $388,294 $65,826
--------- --------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions (44,860) 147,019 (139,658)
Net realized gain on distributions -- 86,447 --
Net unrealized appreciation
(depreciation) of investments during
the year 658,583 80,958 845,465
--------- --------- ----------
Net gain (loss) on investments 613,723 314,424 705,807
--------- --------- ----------
Net increase (decrease) in net
assets resulting from operations $831,914 $702,718 $771,633
========= ========= ==========
<Caption>
MFS INVESTORS MFS NEW
TRUST SERIES DISCOVERY SERIES
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- -----------------------------------------
INVESTMENT INCOME:
Dividends $7,739 $ --
--------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions 100 102,585
Net realized gain on distributions -- 595,320
Net unrealized appreciation
(depreciation) of investments during
the year 137,784 440,507
--------- ----------
Net gain (loss) on investments 137,884 1,138,412
--------- ----------
Net increase (decrease) in net
assets resulting from operations $145,623 $1,138,412
========= ==========
</Table>
(2) Formerly Lord Abbett Capital Structure Fund. Change effective September 27,
2012.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-29
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
MFS TOTAL MFS VALUE MFS RESEARCH
RETURN SERIES SERIES BOND SERIES
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $721,342 $138,167 $243,621
---------- ---------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on
security transactions (65,675) 258,454 92,570
Net realized gain on
distributions -- 64,051 58,279
Net unrealized appreciation
(depreciation) of investments
during the year 2,080,808 778,010 220,404
---------- ---------- --------
Net gain (loss) on investments 2,015,133 1,100,515 371,253
---------- ---------- --------
Net increase (decrease) in net
assets resulting from
operations $2,736,475 $1,238,682 $614,874
========== ========== ========
<Caption>
INVESCO
UIF MID CAP VAN KAMPEN V.I.
GROWTH AMERICAN
PORTFOLIO VALUE FUND
SUB-ACCOUNT SUB-ACCOUNT (3)
<S> <C> <C> <C> <C> <C> <C>
---------------------------------- -----------------------------------
INVESTMENT INCOME:
Dividends $ -- $16,524
--------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on
security transactions 219,939 (3,280)
Net realized gain on
distributions 248,191 --
Net unrealized appreciation
(depreciation) of investments
during the year (316,790) 367,564
--------- --------
Net gain (loss) on investments 151,340 364,284
--------- --------
Net increase (decrease) in net
assets resulting from
operations $151,340 $380,808
========= ========
</Table>
(3) Formerly Invesco Van Kampen V.I. Mid Cap Value Fund. Change effective July
15, 2012.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-30
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
OPPENHEIMER
CAPITAL OPPENHEIMER OPPENHEIMER
APPRECIATION GLOBAL SECURITIES MAIN STREET
FUND/VA FUND/VA FUND/VA
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $12,779 $165,095 $11,359
--------- ---------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions 27,215 (122,635) (7,953)
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year 372,682 1,593,001 249,641
--------- ---------- ---------
Net gain (loss) on investments 399,897 1,470,366 241,688
--------- ---------- ---------
Net increase (decrease) in net
assets resulting from operations $412,676 $1,635,461 $253,047
========= ========== =========
<Caption>
OPPENHEIMER
MAIN STREET PUTNAM VT
SMALL- & MID-CAP DIVERSIFIED
FUND/VA INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ------------------------------------------
INVESTMENT INCOME:
Dividends $3,638 $211,542
--------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions 55,357 (60,823)
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 121,741 255,782
--------- ---------
Net gain (loss) on investments 177,098 194,959
--------- ---------
Net increase (decrease) in net
assets resulting from operations $180,736 $406,501
========= =========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-31
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
PUTNAM VT PUTNAM VT PUTNAM VT
GLOBAL ASSET GLOBAL GROWTH AND
ALLOCATION FUND EQUITY FUND INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $4,137 $70,513 $242,433
--------- ---------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions (12,266) (534,553) (1,296,038)
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year 63,286 1,146,013 3,261,439
--------- ---------- -----------
Net gain (loss) on investments 51,020 611,460 1,965,401
--------- ---------- -----------
Net increase (decrease) in net
assets resulting from operations $55,157 $681,973 $2,207,834
========= ========== ===========
<Caption>
PUTNAM VT PUTNAM VT
GLOBAL HEALTH HIGH
CARE FUND YIELD FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- -----------------------------------------
INVESTMENT INCOME:
Dividends $14,657 $1,598,319
--------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions 19,552 (499,796)
Net realized gain on distributions 78,490 --
Net unrealized appreciation
(depreciation) of investments during
the year 78,690 2,024,556
--------- ----------
Net gain (loss) on investments 176,732 1,524,760
--------- ----------
Net increase (decrease) in net
assets resulting from operations $191,389 $3,123,079
========= ==========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-32
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
PUTNAM VT PUTNAM VT
PUTNAM VT INTERNATIONAL INTERNATIONAL
INCOME FUND VALUE FUND EQUITY FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $889,042 $18,385 $351,743
---------- -------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on
security transactions (139,483) (53,327) (1,916,020)
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments
during the year 1,057,592 145,266 4,502,951
---------- -------- ----------
Net gain (loss) on investments 918,109 91,939 2,586,931
---------- -------- ----------
Net increase (decrease) in net
assets resulting from operations $1,807,151 $110,324 $2,938,674
========== ======== ==========
<Caption>
PUTNAM VT
INTERNATIONAL PUTNAM VT
GROWTH FUND INVESTORS FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
------------------------------------ ---------------------------------
INVESTMENT INCOME:
Dividends $5,636 $11,625
------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on
security transactions 3,555 (7,784)
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments
during the year 54,401 111,646
------- --------
Net gain (loss) on investments 57,956 103,862
------- --------
Net increase (decrease) in net
assets resulting from operations $63,592 $115,487
======= ========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-33
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
PUTNAM VT PUTNAM VT PUTNAM VT
MONEY MULTI-CAP SMALL CAP
MARKET FUND GROWTH FUND VALUE FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $11 $42,871 $22,543
--- ---------- ---------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on security
transactions -- (66,907) (291,030)
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year -- 1,443,120 1,075,697
--- ---------- ---------
Net gain (loss) on investments -- 1,376,213 784,667
--- ---------- ---------
Net increase (decrease) in net assets
resulting from operations $11 $1,419,084 $807,210
=== ========== =========
<Caption>
PUTNAM VT PUTNAM VT
GEORGE PUTNAM GLOBAL
BALANCED FUND UTILITIES FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------- ----------------------------------
INVESTMENT INCOME:
Dividends $14,889 $24,312
-------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on security
transactions (53,086) (44,887)
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 117,078 51,556
-------- --------
Net gain (loss) on investments 63,992 6,669
-------- --------
Net increase (decrease) in net assets
resulting from operations $78,881 $30,981
======== ========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-34
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS -- (CONCLUDED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
PUTNAM VT PUTNAM VT
PUTNAM VT CAPITAL EQUITY
VOYAGER FUND OPPORTUNITIES FUND INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $65,876 $20,024 $152,166
---------- -------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions (411,272) 95,813 230,672
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year 2,688,500 601,911 768,548
---------- -------- ----------
Net gain (loss) on investments 2,277,228 697,724 999,220
---------- -------- ----------
Net increase (decrease) in net
assets resulting from operations $2,343,104 $717,748 $1,151,386
========== ======== ==========
<Caption>
INVESCO INVESCO
INVESCO VAN KAMPEN V.I. VAN KAMPEN V.I.
VAN KAMPEN V.I. AMERICAN MID CAP
COMSTOCK FUND FRANCHISE FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT (4)(5)(6) SUB-ACCOUNT (4)(7)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------- -----------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $271,870 $ -- $ --
---------- -------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on security
transactions (93,793) (58,126) (408,453)
Net realized gain on distributions -- -- 359
Net unrealized appreciation
(depreciation) of investments during
the year 2,953,162 281,603 531,228
---------- -------- ---------
Net gain (loss) on investments 2,859,369 223,477 123,134
---------- -------- ---------
Net increase (decrease) in net
assets resulting from operations $3,131,239 $223,477 $123,134
========== ======== =========
</Table>
(4) Funded as of April 27, 2012.
(5) Formerly Invesco Van Kampen V.I. Capital Growth Fund. Change effective
April 30, 2012.
(6) Effective April 27, 2012 Invesco V.I. Capital Appreciation Fund merged with
Invesco Van Kampen V.I. Capital Growth Fund.
(7) Effective April 27, 2012 Invesco V.I. Capital Development Fund merged with
Invesco Van Kampen V.I. Mid Cap Growth Fund.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-35
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
ALLIANCEBERNSTEIN VPS ALLIANCEBERNSTEIN VPS ALLIANCEBERNSTEIN VPS
INTERNATIONAL SMALL/MID-CAP INTERNATIONAL
VALUE PORTFOLIO VALUE PORTFOLIO GROWTH PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $156,659 $25,917 $44,722
Net realized gain (loss) on security
transactions (1,144,573) (21,731) (211,992)
Net realized gain on distributions -- 286,676 --
Net unrealized appreciation
(depreciation) of investments during
the year 2,495,385 1,264,179 613,031
----------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations 1,507,471 1,555,041 445,761
----------- ---------- ----------
UNIT TRANSACTIONS:
Purchases 1,649,349 988,241 350,500
Net transfers (381,153) (659,965) (36,892)
Surrenders for benefit payments and
fees (520,118) (363,154) (137,361)
Other transactions (2,025) (137) (357)
Death benefits (77,216) (14,863) (5,529)
Net loan activity (112,861) (135,569) (6,793)
Cost of insurance and other fees (982,450) (690,401) (283,250)
----------- ---------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (426,474) (875,848) (119,682)
----------- ---------- ----------
Net increase (decrease) in net assets 1,080,997 679,193 326,079
NET ASSETS:
Beginning of year 10,632,441 8,800,986 2,988,607
----------- ---------- ----------
End of year $11,713,438 $9,480,179 $3,314,686
=========== ========== ==========
<Caption>
INVESCO V.I. INVESCO V.I.
CORE INTERNATIONAL
EQUITY FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ------------------------------------------
OPERATIONS:
Net investment income (loss) $19,947 $51,314
Net realized gain (loss) on security
transactions 86,542 46,846
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 167,713 394,951
---------- ----------
Net increase (decrease) in net assets
resulting from operations 274,202 493,111
---------- ----------
UNIT TRANSACTIONS:
Purchases 157,390 258,222
Net transfers (529,165) 498,681
Surrenders for benefit payments and
fees (129,728) (158,124)
Other transactions (462) 369
Death benefits (8,464) (15,187)
Net loan activity (27,971) (5,150)
Cost of insurance and other fees (145,228) (221,437)
---------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (683,628) 357,374
---------- ----------
Net increase (decrease) in net assets (409,426) 850,485
NET ASSETS:
Beginning of year 2,158,027 3,007,295
---------- ----------
End of year $1,748,601 $3,857,780
========== ==========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-36
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
INVESCO V.I.
INVESCO V.I. INVESCO V.I. BALANCED RISK
MID CAP CORE SMALL CAP ALLOCATION
EQUITY FUND EQUITY FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $9,885 $ -- $42,610
Net realized gain (loss) on security
transactions (117,097) 303,211 85,078
Net realized gain on distributions 128,509 -- 18,807
Net unrealized appreciation
(depreciation) of investments during
the year 1,565,172 391,283 225,103
----------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations 1,586,469 694,494 371,598
----------- ---------- ----------
UNIT TRANSACTIONS:
Purchases 1,367,316 444,832 209,264
Net transfers (1,003,445) (678,094) 3,072,559
Surrenders for benefit payments and
fees (957,674) (289,396) (70,868)
Other transactions (1,128) 462 (1,004)
Death benefits (58,893) (22,792) --
Net loan activity (191,329) (30,839) (18,424)
Cost of insurance and other fees (1,018,200) (351,397) (226,768)
----------- ---------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (1,863,353) (927,224) 2,964,759
----------- ---------- ----------
Net increase (decrease) in net assets (276,884) (232,730) 3,336,357
NET ASSETS:
Beginning of year 15,224,463 5,336,286 2,369,988
----------- ---------- ----------
End of year $14,947,579 $5,103,556 $5,706,345
=========== ========== ==========
<Caption>
AMERICAN FUNDS
AMERICAN FUNDS BLUE CHIP
ASSET INCOME AND
ALLOCATION FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------------
OPERATIONS:
Net investment income (loss) $1,515,533 $907,287
Net realized gain (loss) on security
transactions 506,211 (242,494)
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 9,552,047 5,180,465
----------- -----------
Net increase (decrease) in net assets
resulting from operations 11,573,791 5,845,258
----------- -----------
UNIT TRANSACTIONS:
Purchases 6,045,688 4,051,807
Net transfers 2,284,120 (961,618)
Surrenders for benefit payments and
fees (3,951,815) (2,167,041)
Other transactions 883 (450)
Death benefits (714,976) (245,384)
Net loan activity (456,713) (175,477)
Cost of insurance and other fees (6,069,896) (3,419,379)
----------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (2,862,709) (2,917,542)
----------- -----------
Net increase (decrease) in net assets 8,711,082 2,927,716
NET ASSETS:
Beginning of year 72,769,375 42,748,991
----------- -----------
End of year $81,480,457 $45,676,707
=========== ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-37
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
AMERICAN FUNDS
AMERICAN FUNDS GLOBAL AMERICAN FUNDS
BOND FUND GROWTH FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $1,417,612 $485,164 $1,504,885
Net realized gain (loss) on security
transactions (59,072) 1,261,157 2,719,085
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year 1,640,074 9,155,190 26,928,101
----------- ----------- ------------
Net increase (decrease) in net assets
resulting from operations 2,998,614 10,901,511 31,152,071
----------- ----------- ------------
UNIT TRANSACTIONS:
Purchases 4,453,225 4,211,620 16,612,281
Net transfers 1,407,371 (1,759,512) (5,815,947)
Surrenders for benefit payments and
fees (3,610,674) (2,995,813) (11,737,845)
Other transactions (1,478) (996) 1,768
Death benefits (976,780) (330,945) (1,421,801)
Net loan activity (343,061) (378,793) (1,522,163)
Cost of insurance and other fees (4,354,378) (3,631,006) (13,430,117)
----------- ----------- ------------
Net increase (decrease) in net assets
resulting from unit transactions (3,425,775) (4,885,445) (17,313,824)
----------- ----------- ------------
Net increase (decrease) in net assets (427,161) 6,016,066 13,838,247
NET ASSETS:
Beginning of year 57,391,616 50,273,308 179,535,333
----------- ----------- ------------
End of year $56,964,455 $56,289,374 $193,373,580
=========== =========== ============
<Caption>
AMERICAN FUNDS AMERICAN FUNDS
GROWTH-INCOME FUND INTERNATIONAL FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- -----------------------------------------------
OPERATIONS:
Net investment income (loss) $2,535,530 $905,081
Net realized gain (loss) on security
transactions 1,417,345 (609,820)
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 21,110,456 9,876,645
------------ -----------
Net increase (decrease) in net assets
resulting from operations 25,063,331 10,171,906
------------ -----------
UNIT TRANSACTIONS:
Purchases 13,158,800 5,653,117
Net transfers (2,958,387) (3,545,594)
Surrenders for benefit payments and
fees (8,896,756) (3,604,612)
Other transactions (2,291) (2,905)
Death benefits (1,752,229) (422,216)
Net loan activity (691,632) (244,592)
Cost of insurance and other fees (11,368,221) (4,304,897)
------------ -----------
Net increase (decrease) in net assets
resulting from unit transactions (12,510,716) (6,471,699)
------------ -----------
Net increase (decrease) in net assets 12,552,615 3,700,207
NET ASSETS:
Beginning of year 147,800,923 59,982,007
------------ -----------
End of year $160,353,538 $63,682,214
============ ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-38
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
AMERICAN FUNDS FIDELITY VIP
AMERICAN FUNDS GLOBAL SMALL ASSET MANAGER
NEW WORLD FUND CAPITALIZATION FUND PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $337,951 $344,664 $15,871
Net realized gain (loss) on security
transactions 618,029 373,650 (23,293)
Net realized gain on distributions -- -- 7,599
Net unrealized appreciation
(depreciation) of investments during
the year 4,554,966 3,563,905 127,300
----------- ----------- ----------
Net increase (decrease) in net assets
resulting from operations 5,510,946 4,282,219 127,477
----------- ----------- ----------
UNIT TRANSACTIONS:
Purchases 2,805,235 2,240,481 --
Net transfers (1,245,968) (1,282,100) (14,158)
Surrenders for benefit payments and
fees (1,817,404) (1,630,224) (14,676)
Other transactions (526) 1,861 (405)
Death benefits (243,258) (266,025) (47,056)
Net loan activity (173,262) (235,904) (268)
Cost of insurance and other fees (2,280,043) (1,764,788) (90,168)
----------- ----------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (2,955,226) (2,936,699) (166,731)
----------- ----------- ----------
Net increase (decrease) in net assets 2,555,720 1,345,520 (39,254)
NET ASSETS:
Beginning of year 32,122,147 24,653,710 1,079,326
----------- ----------- ----------
End of year $34,677,867 $25,999,230 $1,040,072
=========== =========== ==========
<Caption>
FIDELITY VIP FIDELITY VIP
EQUITY INCOME CONTRAFUND
PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------------
OPERATIONS:
Net investment income (loss) $1,026,699 $448,172
Net realized gain (loss) on security
transactions (464,857) (562,136)
Net realized gain on distributions 2,114,638 --
Net unrealized appreciation
(depreciation) of investments during
the year 2,611,591 6,124,618
----------- -----------
Net increase (decrease) in net assets
resulting from operations 5,288,071 6,010,654
----------- -----------
UNIT TRANSACTIONS:
Purchases 2,380,951 4,177,853
Net transfers 166,485 (2,395,758)
Surrenders for benefit payments and
fees (2,050,685) (1,934,807)
Other transactions (3,324) 3,957
Death benefits (618,455) (251,147)
Net loan activity (109,863) (387,363)
Cost of insurance and other fees (2,428,570) (3,123,474)
----------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (2,663,461) (3,910,739)
----------- -----------
Net increase (decrease) in net assets 2,624,610 2,099,915
NET ASSETS:
Beginning of year 31,470,851 38,411,651
----------- -----------
End of year $34,095,461 $40,511,566
=========== ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-39
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
FIDELITY VIP FIDELITY VIP FIDELITY VIP
OVERSEAS MID CAP FREEDOM 2010
PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $12,429 $95,963 $15,094
Net realized gain (loss) on security
transactions (382,434) (20,910) 19,911
Net realized gain on distributions 2,139 1,987,736 13,387
Net unrealized appreciation
(depreciation) of investments during
the year 508,540 1,255,339 48,484
---------- ----------- ----------
Net increase (decrease) in net assets
resulting from operations 140,674 3,318,128 96,876
---------- ----------- ----------
UNIT TRANSACTIONS:
Purchases -- 2,301,655 15,219
Net transfers (880,026) (521,141) (14,585)
Surrenders for benefit payments and
fees (36,745) (1,008,469) (61,871)
Other transactions (1) 486 (11)
Death benefits -- (76,311) --
Net loan activity (7,110) (298,454) (2,090)
Cost of insurance and other fees (39,449) (1,808,801) (68,289)
---------- ----------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (963,331) (1,411,035) (131,627)
---------- ----------- ----------
Net increase (decrease) in net assets (822,657) 1,907,093 (34,751)
NET ASSETS:
Beginning of year 1,485,234 23,076,075 958,170
---------- ----------- ----------
End of year $662,577 $24,983,168 $923,419
========== =========== ==========
<Caption>
FIDELITY VIP FIDELITY VIP
FREEDOM 2020 FREEDOM 2030
PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ------------------------------------------
OPERATIONS:
Net investment income (loss) $17,451 $19,766
Net realized gain (loss) on security
transactions 90,508 23,073
Net realized gain on distributions 12,543 8,601
Net unrealized appreciation
(depreciation) of investments during
the year 17,138 66,468
---------- ----------
Net increase (decrease) in net assets
resulting from operations 137,640 117,908
---------- ----------
UNIT TRANSACTIONS:
Purchases 43,226 57,589
Net transfers 61,223 406,382
Surrenders for benefit payments and
fees (442,842) (161,178)
Other transactions (2) (600)
Death benefits -- --
Net loan activity (648) (10,281)
Cost of insurance and other fees (81,460) (66,753)
---------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (420,503) 225,159
---------- ----------
Net increase (decrease) in net assets (282,863) 343,067
NET ASSETS:
Beginning of year 1,272,532 698,148
---------- ----------
End of year $989,669 $1,041,215
========== ==========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-40
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
FRANKLIN FRANKLIN
FRANKLIN SMALL CAP STRATEGIC
INCOME VALUE INCOME
SECURITIES FUND SECURITIES FUND SECURITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $2,338,974 $195,327 $1,018,874
Net realized gain (loss) on security
transactions (558,449) 216,424 160,699
Net realized gain on distributions -- -- 16,617
Net unrealized appreciation
(depreciation) of investments during
the year 2,543,977 3,891,904 582,997
----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations 4,324,502 4,303,655 1,779,187
----------- ----------- -----------
UNIT TRANSACTIONS:
Purchases 3,182,635 2,137,217 909,205
Net transfers (936,198) (1,111,970) 2,942,640
Surrenders for benefit payments and
fees (1,938,076) (1,155,131) (1,159,146)
Other transactions 2,918 1,376 (297)
Death benefits (302,246) (91,284) (292,121)
Net loan activity (220,184) (100,847) 9,818
Cost of insurance and other fees (2,857,630) (1,649,188) (783,931)
----------- ----------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (3,068,781) (1,969,827) 1,626,168
----------- ----------- -----------
Net increase (decrease) in net assets 1,255,721 2,333,828 3,405,355
NET ASSETS:
Beginning of year 35,601,678 24,325,969 12,777,497
----------- ----------- -----------
End of year $36,857,399 $26,659,797 $16,182,852
=========== =========== ===========
<Caption>
TEMPLETON
MUTUAL SHARES FOREIGN
SECURITIES FUND SECURITIES FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- -------------------------------------------
OPERATIONS:
Net investment income (loss) $901,804 $40,452
Net realized gain (loss) on security
transactions (474,795) (11,789)
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 5,393,466 180,955
----------- ----------
Net increase (decrease) in net assets
resulting from operations 5,820,475 209,618
----------- ----------
UNIT TRANSACTIONS:
Purchases 4,219,134 86,176
Net transfers (1,732,471) 162,582
Surrenders for benefit payments and
fees (2,396,132) (32,771)
Other transactions 884 (122)
Death benefits (96,969) (1,605)
Net loan activity (159,326) (46,846)
Cost of insurance and other fees (3,319,975) (73,537)
----------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (3,484,855) 93,877
----------- ----------
Net increase (decrease) in net assets 2,335,620 303,495
NET ASSETS:
Beginning of year 41,993,887 1,101,958
----------- ----------
End of year $44,329,507 $1,405,453
=========== ==========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-41
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
TEMPLETON MUTUAL TEMPLETON
GROWTH GLOBAL DISCOVERY GLOBAL BOND
SECURITIES FUND SECURITIES FUND SECURITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $196,462 $651,675 $1,823,602
Net realized gain (loss) on security
transactions (319,874) (143,810) 388,998
Net realized gain on distributions -- 1,315,556 45,781
Net unrealized appreciation
(depreciation) of investments during
the year 1,973,806 1,274,741 1,732,351
----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations 1,850,394 3,098,162 3,990,732
----------- ----------- -----------
UNIT TRANSACTIONS:
Purchases 1,114,738 2,381,570 1,643,904
Net transfers (120,749) (1,168,625) 904,029
Surrenders for benefit payments and
fees (424,897) (1,136,030) (2,498,138)
Other transactions (807) 1,814 (669)
Death benefits (10,074) (157,891) (334,997)
Net loan activity (69,911) (240,406) (88,384)
Cost of insurance and other fees (882,588) (1,850,929) (1,617,433)
----------- ----------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (394,288) (2,170,497) (1,991,688)
----------- ----------- -----------
Net increase (decrease) in net assets 1,456,106 927,665 1,999,044
NET ASSETS:
Beginning of year 8,981,626 23,717,785 27,139,076
----------- ----------- -----------
End of year $10,437,732 $24,645,450 $29,138,120
=========== =========== ===========
<Caption>
HARTFORD
HARTFORD TOTAL
BALANCED RETURN BOND
HLS FUND HLS FUND
SUB-ACCOUNT (1) SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ----------------------------------------------
OPERATIONS:
Net investment income (loss) $2,061,531 $4,610,785
Net realized gain (loss) on security
transactions (2,213,507) 405,218
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 8,404,906 3,174,044
------------ ------------
Net increase (decrease) in net assets
resulting from operations 8,252,930 8,190,047
------------ ------------
UNIT TRANSACTIONS:
Purchases 5,488,686 8,184,105
Net transfers (1,061,788) 2,299,762
Surrenders for benefit payments and
fees (6,710,421) (8,473,141)
Other transactions (31,633) (3,191)
Death benefits (1,480,611) (1,505,378)
Net loan activity (316,285) (865,538)
Cost of insurance and other fees (6,335,646) (8,544,267)
------------ ------------
Net increase (decrease) in net assets
resulting from unit transactions (10,447,698) (8,907,648)
------------ ------------
Net increase (decrease) in net assets (2,194,768) (717,601)
NET ASSETS:
Beginning of year 71,891,464 112,816,174
------------ ------------
End of year $69,696,696 $112,098,573
============ ============
</Table>
(1) Formerly Hartford Advisers HLS Fund. Change effective June 29, 2012.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-42
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
HARTFORD HARTFORD
CAPITAL DIVIDEND HARTFORD
APPRECIATION AND GROWTH GLOBAL RESEARCH
HLS FUND HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $2,431,988 $2,375,752 $5,324
Net realized gain (loss) on security
transactions (2,903,166) 1,021,872 24,036
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year 28,622,471 10,034,552 87,437
------------ ------------ ----------
Net increase (decrease) in net assets
resulting from operations 28,151,293 13,432,176 116,797
------------ ------------ ----------
UNIT TRANSACTIONS:
Purchases 11,600,845 8,240,558 5,441
Net transfers (7,518,631) (3,263,808) (440,076)
Surrenders for benefit payments and
fees (11,564,308) (7,313,741) (7,979)
Other transactions (1,185) (6,327) (1)
Death benefits (1,431,982) (1,139,604) --
Net loan activity (1,544,887) (1,603,023) (391)
Cost of insurance and other fees (11,422,784) (7,697,031) (19,905)
------------ ------------ ----------
Net increase (decrease) in net assets
resulting from unit transactions (21,882,932) (12,782,976) (462,911)
------------ ------------ ----------
Net increase (decrease) in net assets 6,268,361 649,200 (346,114)
NET ASSETS:
Beginning of year 161,140,634 103,006,061 820,810
------------ ------------ ----------
End of year $167,408,995 $103,655,261 $474,696
============ ============ ==========
<Caption>
HARTFORD
HARTFORD DISCIPLINED
GLOBAL GROWTH EQUITY
HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- -------------------------------------------
OPERATIONS:
Net investment income (loss) $5,232 $260,634
Net realized gain (loss) on security
transactions 8,023 161,484
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 185,786 2,183,598
---------- -----------
Net increase (decrease) in net assets
resulting from operations 199,041 2,605,716
---------- -----------
UNIT TRANSACTIONS:
Purchases 24,029 1,448,743
Net transfers 113,786 50,024
Surrenders for benefit payments and
fees (56,922) (1,010,775)
Other transactions 8 662
Death benefits (4,779) (110,436)
Net loan activity (187) (4,494)
Cost of insurance and other fees (55,167) (1,402,155)
---------- -----------
Net increase (decrease) in net assets
resulting from unit transactions 20,768 (1,028,431)
---------- -----------
Net increase (decrease) in net assets 219,809 1,577,285
NET ASSETS:
Beginning of year 861,024 15,162,866
---------- -----------
End of year $1,080,833 $16,740,151
========== ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-43
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
HARTFORD
GROWTH HARTFORD HARTFORD
OPPORTUNITIES HIGH YIELD INDEX
HLS FUND HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $ -- $333,837 $935,217
Net realized gain (loss) on security
transactions (106,543) 21,821 (1,068,095)
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year 5,962,947 112,582 6,932,296
----------- ---------- -----------
Net increase (decrease) in net assets
resulting from operations 5,856,404 468,240 6,799,418
----------- ---------- -----------
UNIT TRANSACTIONS:
Purchases 2,793,165 253,867 3,240,270
Net transfers (627,306) 1,500,600 (501,444)
Surrenders for benefit payments and
fees (1,483,096) (217,220) (3,436,393)
Other transactions 2,599 3 (310)
Death benefits (78,750) (10,996) (191,693)
Net loan activity (395,617) (3,803) (262,775)
Cost of insurance and other fees (2,182,012) (268,200) (3,514,066)
----------- ---------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (1,971,017) 1,254,251 (4,666,411)
----------- ---------- -----------
Net increase (decrease) in net assets 3,885,387 1,722,491 2,133,007
NET ASSETS:
Beginning of year 22,261,462 2,653,100 44,990,219
----------- ---------- -----------
End of year $26,146,849 $4,375,591 $47,123,226
=========== ========== ===========
<Caption>
HARTFORD
INTERNATIONAL HARTFORD
OPPORTUNITIES MIDCAP
HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------------
OPERATIONS:
Net investment income (loss) $835,077 $446,227
Net realized gain (loss) on security
transactions (1,023,981) 1,939,453
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 8,211,936 7,585,951
----------- -----------
Net increase (decrease) in net assets
resulting from operations 8,023,032 9,971,631
----------- -----------
UNIT TRANSACTIONS:
Purchases 3,974,011 3,078,417
Net transfers (3,519,671) (2,517,454)
Surrenders for benefit payments and
fees (3,682,435) (4,099,892)
Other transactions (3,451) (7,846)
Death benefits (186,696) (421,261)
Net loan activity (384,831) (876,960)
Cost of insurance and other fees (3,096,440) (3,602,913)
----------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (6,899,513) (8,447,909)
----------- -----------
Net increase (decrease) in net assets 1,123,519 1,523,722
NET ASSETS:
Beginning of year 43,197,288 53,607,462
----------- -----------
End of year $44,320,807 $55,131,184
=========== ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-44
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
HARTFORD HARTFORD HARTFORD
MIDCAP VALUE MONEY MARKET SMALL COMPANY
HLS FUND HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $151,965 $ -- $ --
Net realized gain (loss) on security
transactions (318,937) -- 549,257
Net realized gain on distributions -- -- 1,783
Net unrealized appreciation
(depreciation) of investments during
the year 2,990,280 -- 3,665,635
----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations 2,823,308 -- 4,216,675
----------- ----------- -----------
UNIT TRANSACTIONS:
Purchases 862,147 10,503,964 1,861,568
Net transfers (371,826) 22,987,135 (1,014,064)
Surrenders for benefit payments and
fees (1,062,557) (35,042,803) (1,913,644)
Other transactions (1,587) -- (640)
Death benefits (91,195) (1,690,764) (187,994)
Net loan activity (56,848) 1,263,196 (260,196)
Cost of insurance and other fees (811,382) (8,902,894) (1,914,604)
----------- ----------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (1,533,248) (10,882,166) (3,429,574)
----------- ----------- -----------
Net increase (decrease) in net assets 1,290,060 (10,882,166) 787,101
NET ASSETS:
Beginning of year 11,824,403 84,661,880 27,787,816
----------- ----------- -----------
End of year $13,114,463 $73,779,714 $28,574,917
=========== =========== ===========
<Caption>
HARTFORD
HARTFORD U.S. GOVERNMENT
STOCK SECURITIES
HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------------
OPERATIONS:
Net investment income (loss) $1,552,602 $386,717
Net realized gain (loss) on security
transactions (3,866,160) 20,070
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 12,451,177 89,721
----------- -----------
Net increase (decrease) in net assets
resulting from operations 10,137,619 496,508
----------- -----------
UNIT TRANSACTIONS:
Purchases 6,327,402 1,033,643
Net transfers (2,912,153) 1,279,180
Surrenders for benefit payments and
fees (5,587,443) (1,590,872)
Other transactions (12,986) 380
Death benefits (608,746) (156,928)
Net loan activity (547,464) (58,612)
Cost of insurance and other fees (6,166,429) (995,507)
----------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (9,507,819) (488,716)
----------- -----------
Net increase (decrease) in net assets 629,800 7,792
NET ASSETS:
Beginning of year 72,608,632 13,759,895
----------- -----------
End of year $73,238,432 $13,767,687
=========== ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-45
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
LORD ABBETT
CALIBRATED LORD ABBETT LORD ABBETT
DIVIDEND BOND-DEBENTURE GROWTH AND
GROWTH FUND FUND INCOME FUND
SUB-ACCOUNT (2) SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $218,191 $388,294 $65,826
Net realized gain (loss) on security
transactions (44,860) 147,019 (139,658)
Net realized gain on distributions -- 86,447 --
Net unrealized appreciation
(depreciation) of investments during
the year 658,583 80,958 845,465
---------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations 831,914 702,718 771,633
---------- ---------- ----------
UNIT TRANSACTIONS:
Purchases 693,967 377,305 817,358
Net transfers (195,298) 1,722,510 (395,090)
Surrenders for benefit payments and
fees (222,358) (722,557) (302,580)
Other transactions (246) (501) (339)
Death benefits (25,683) -- (11,447)
Net loan activity (36,707) 9,124 (35,905)
Cost of insurance and other fees (552,365) (351,046) (571,476)
---------- ---------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (338,690) 1,034,835 (499,479)
---------- ---------- ----------
Net increase (decrease) in net assets 493,224 1,737,553 272,154
NET ASSETS:
Beginning of year 6,773,783 5,367,172 6,509,072
---------- ---------- ----------
End of year $7,267,007 $7,104,725 $6,781,226
========== ========== ==========
<Caption>
MFS INVESTORS MFS NEW
TRUST SERIES DISCOVERY SERIES
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ----------------------------------------
OPERATIONS:
Net investment income (loss) $7,739 $ --
Net realized gain (loss) on security
transactions 100 102,585
Net realized gain on distributions -- 595,320
Net unrealized appreciation
(depreciation) of investments during
the year 137,784 440,507
-------- ----------
Net increase (decrease) in net assets
resulting from operations 145,623 1,138,412
-------- ----------
UNIT TRANSACTIONS:
Purchases 48,210 410,648
Net transfers 18,021 (158,996)
Surrenders for benefit payments and
fees (10,669) (318,105)
Other transactions 10 337
Death benefits -- (2,494)
Net loan activity (387) (13,911)
Cost of insurance and other fees (55,898) (377,571)
-------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (713) (460,092)
-------- ----------
Net increase (decrease) in net assets 144,910 678,320
NET ASSETS:
Beginning of year 796,004 5,457,737
-------- ----------
End of year $940,914 $6,136,057
======== ==========
</Table>
(2) Formerly Lord Abbett Capital Structure Fund. Change effective September 27,
2012.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-46
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
MFS TOTAL MFS VALUE MFS RESEARCH
RETURN SERIES SERIES BOND SERIES
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $721,342 $138,167 $243,621
Net realized gain (loss) on security
transactions (65,675) 258,454 92,570
Net realized gain on distributions -- 64,051 58,279
Net unrealized appreciation
(depreciation) of investments during
the year 2,080,808 778,010 220,404
----------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations 2,736,475 1,238,682 614,874
----------- ---------- ----------
UNIT TRANSACTIONS:
Purchases 2,114,175 597,026 597,284
Net transfers 939,918 1,139,140 2,774,985
Surrenders for benefit payments and
fees (1,277,182) (642,191) (875,395)
Other transactions (565) 111 37
Death benefits (61,214) (18,782) (63,944)
Net loan activity (340,648) (24,866) 5,103
Cost of insurance and other fees (1,730,596) (492,118) (684,103)
----------- ---------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (356,112) 558,320 1,753,967
----------- ---------- ----------
Net increase (decrease) in net assets 2,380,363 1,797,002 2,368,841
NET ASSETS:
Beginning of year 24,226,125 7,248,080 7,369,898
----------- ---------- ----------
End of year $26,606,488 $9,045,082 $9,738,739
=========== ========== ==========
<Caption>
INVESCO
UIF MID CAP VAN KAMPEN V.I.
GROWTH AMERICAN
PORTFOLIO VALUE FUND
SUB-ACCOUNT SUB-ACCOUNT (3)
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ------------------------------------------
OPERATIONS:
Net investment income (loss) $ -- $16,524
Net realized gain (loss) on security
transactions 219,939 (3,280)
Net realized gain on distributions 248,191 --
Net unrealized appreciation
(depreciation) of investments during
the year (316,790) 367,564
---------- ----------
Net increase (decrease) in net assets
resulting from operations 151,340 380,808
---------- ----------
UNIT TRANSACTIONS:
Purchases 142,167 215,880
Net transfers (363,326) 389,559
Surrenders for benefit payments and
fees (117,640) (82,450)
Other transactions (69) (1,677)
Death benefits (62) (50,863)
Net loan activity (2,103) (1,555)
Cost of insurance and other fees (137,101) (160,889)
---------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (478,134) 308,005
---------- ----------
Net increase (decrease) in net assets (326,794) 688,813
NET ASSETS:
Beginning of year 2,060,285 2,166,524
---------- ----------
End of year $1,733,491 $2,855,337
========== ==========
</Table>
(3) Formerly Invesco Van Kampen V.I. Mid Cap Value Fund. Change effective July
15, 2012.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-47
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
OPPENHEIMER
CAPITAL OPPENHEIMER OPPENHEIMER
APPRECIATION GLOBAL SECURITIES MAIN STREET
FUND/VA FUND/VA FUND/VA
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $12,779 $165,095 $11,359
Net realized gain (loss) on security
transactions 27,215 (122,635) (7,953)
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year 372,682 1,593,001 249,641
---------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations 412,676 1,635,461 253,047
---------- ---------- ----------
UNIT TRANSACTIONS:
Purchases 381,009 931,946 235,064
Net transfers (40,797) (370,583) 240,822
Surrenders for benefit payments and
fees (129,308) (519,055) (149,536)
Other transactions (984) 1,059 323
Death benefits (88,261) (21,413) (144)
Net loan activity (9,413) (122,276) (9,609)
Cost of insurance and other fees (286,250) (680,235) (156,535)
---------- ---------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (174,004) (780,557) 160,385
---------- ---------- ----------
Net increase (decrease) in net assets 238,672 854,904 413,432
NET ASSETS :
Beginning of year 3,041,138 8,203,871 1,499,363
---------- ---------- ----------
End of year $3,279,810 $9,058,775 $1,912,795
========== ========== ==========
<Caption>
OPPENHEIMER
MAIN STREET PUTNAM VT
SMALL- & MID-CAP DIVERSIFIED
FUND/VA INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ------------------------------------------
OPERATIONS:
Net investment income (loss) $3,638 $211,542
Net realized gain (loss) on security
transactions 55,357 (60,823)
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 121,741 255,782
---------- ----------
Net increase (decrease) in net assets
resulting from operations 180,736 406,501
---------- ----------
UNIT TRANSACTIONS:
Purchases 93,597 327,235
Net transfers 47,825 (118,302)
Surrenders for benefit payments and
fees (51,652) (273,042)
Other transactions 48 99
Death benefits -- (41)
Net loan activity (283) 12,279
Cost of insurance and other fees (75,558) (254,484)
---------- ----------
Net increase (decrease) in net assets
resulting from unit transactions 13,977 (306,256)
---------- ----------
Net increase (decrease) in net assets 194,713 100,245
NET ASSETS :
Beginning of year 1,011,641 3,679,021
---------- ----------
End of year $1,206,354 $3,779,266
========== ==========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-48
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
PUTNAM VT PUTNAM VT PUTNAM VT
GLOBAL ASSET GLOBAL GROWTH AND
ALLOCATION FUND EQUITY FUND INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $4,137 $70,513 $242,433
Net realized gain (loss) on security
transactions (12,266) (534,553) (1,296,038)
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year 63,286 1,146,013 3,261,439
-------- ---------- -----------
Net increase (decrease) in net assets
resulting from operations 55,157 681,973 2,207,834
-------- ---------- -----------
UNIT TRANSACTIONS:
Purchases -- 257,196 996,511
Net transfers -- (186,197) (171,930)
Surrenders for benefit payments and
fees (19,335) (502,565) (1,026,706)
Other transactions (24) (347) (945)
Death benefits (2,324) (56,635) (124,015)
Net loan activity (722) 8,105 (71,820)
Cost of insurance and other fees (37,828) (323,697) (1,273,418)
-------- ---------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (60,233) (804,140) (1,672,323)
-------- ---------- -----------
Net increase (decrease) in net assets (5,076) (122,167) 535,511
NET ASSETS:
Beginning of year 398,842 3,657,154 12,018,268
-------- ---------- -----------
End of year $393,766 $3,534,987 $12,553,779
======== ========== ===========
<Caption>
PUTNAM VT PUTNAM VT
GLOBAL HEALTH HIGH
CARE FUND YIELD FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ------------------------------------------
OPERATIONS:
Net investment income (loss) $14,657 $1,598,319
Net realized gain (loss) on security
transactions 19,552 (499,796)
Net realized gain on distributions 78,490 --
Net unrealized appreciation
(depreciation) of investments during
the year 78,690 2,024,556
--------- -----------
Net increase (decrease) in net assets
resulting from operations 191,389 3,123,079
--------- -----------
UNIT TRANSACTIONS:
Purchases -- 1,417,096
Net transfers (9,969) (619,098)
Surrenders for benefit payments and
fees (32,157) (1,124,194)
Other transactions (31) (1,159)
Death benefits (3,058) (357,166)
Net loan activity (4,676) (137,394)
Cost of insurance and other fees (75,603) (1,537,642)
--------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (125,494) (2,359,557)
--------- -----------
Net increase (decrease) in net assets 65,895 763,522
NET ASSETS:
Beginning of year 890,236 20,634,249
--------- -----------
End of year $956,131 $21,397,771
========= ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-49
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
PUTNAM VT PUTNAM VT
PUTNAM VT INTERNATIONAL INTERNATIONAL
INCOME FUND VALUE FUND EQUITY FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $889,042 $18,385 $351,743
Net realized gain (loss) on security
transactions (139,483) (53,327) (1,916,020)
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year 1,057,592 145,266 4,502,951
----------- --------- -----------
Net increase (decrease) in net assets
resulting from operations 1,807,151 110,324 2,938,674
----------- --------- -----------
UNIT TRANSACTIONS:
Purchases 1,600,139 -- 1,285,262
Net transfers (268,379) (14,030) (1,360,545)
Surrenders for benefit payments and
fees (1,492,245) (12,527) (954,831)
Other transactions 266 2 (531)
Death benefits (54,631) -- (179,053)
Net loan activity (188,746) (1,745) (36,028)
Cost of insurance and other fees (1,331,163) (55,744) (1,231,556)
----------- --------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (1,734,759) (84,044) (2,477,282)
----------- --------- -----------
Net increase (decrease) in net assets 72,392 26,280 461,392
NET ASSETS:
Beginning of year 17,006,919 550,276 14,543,974
----------- --------- -----------
End of year $17,079,311 $576,556 $15,005,366
=========== ========= ===========
<Caption>
PUTNAM VT
INTERNATIONAL PUTNAM VT
GROWTH FUND INVESTORS FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- -----------------------------------------
OPERATIONS:
Net investment income (loss) $5,636 $11,625
Net realized gain (loss) on security
transactions 3,555 (7,784)
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 54,401 111,646
--------- ----------
Net increase (decrease) in net assets
resulting from operations 63,592 115,487
--------- ----------
UNIT TRANSACTIONS:
Purchases -- --
Net transfers (41,327) (19,981)
Surrenders for benefit payments and
fees (14,108) (9,235)
Other transactions 7 (27)
Death benefits (1,842) (902)
Net loan activity (1,341) (14,533)
Cost of insurance and other fees (24,673) (65,305)
--------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (83,284) (109,983)
--------- ----------
Net increase (decrease) in net assets (19,692) 5,504
NET ASSETS:
Beginning of year 336,075 712,072
--------- ----------
End of year $316,383 $717,576
========= ==========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-50
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
PUTNAM VT PUTNAM VT PUTNAM VT
MONEY MULTI-CAP SMALL CAP
MARKET FUND GROWTH FUND VALUE FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $11 $42,871 $22,543
Net realized gain (loss) on security
transactions -- (66,907) (291,030)
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year -- 1,443,120 1,075,697
-------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations 11 1,419,084 807,210
-------- ---------- ----------
UNIT TRANSACTIONS:
Purchases -- 660,909 561,302
Net transfers (2,721) 5,641 (294,019)
Surrenders for benefit payments and
fees (4,800) (871,756) (272,085)
Other transactions (7) (1,148) (145)
Death benefits -- (112,701) (5,047)
Net loan activity -- (34,028) (123,468)
Cost of insurance and other fees (6,330) (796,658) (414,372)
-------- ---------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (13,858) (1,149,741) (547,834)
-------- ---------- ----------
Net increase (decrease) in net assets (13,847) 269,343 259,376
NET ASSETS:
Beginning of year 114,890 8,725,361 4,799,142
-------- ---------- ----------
End of year $101,043 $8,994,704 $5,058,518
======== ========== ==========
<Caption>
PUTNAM VT PUTNAM VT
GEORGE PUTNAM GLOBAL
BALANCED FUND UTILITIES FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ----------------------------------------
OPERATIONS:
Net investment income (loss) $14,889 $24,312
Net realized gain (loss) on security
transactions (53,086) (44,887)
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 117,078 51,556
--------- ---------
Net increase (decrease) in net assets
resulting from operations 78,881 30,981
--------- ---------
UNIT TRANSACTIONS:
Purchases -- --
Net transfers (46,828) (20,760)
Surrenders for benefit payments and
fees (21,329) (56,122)
Other transactions (800) (11)
Death benefits (43,527) (3,627)
Net loan activity (2,186) (5,409)
Cost of insurance and other fees (58,395) (49,409)
--------- ---------
Net increase (decrease) in net assets
resulting from unit transactions (173,065) (135,338)
--------- ---------
Net increase (decrease) in net assets (94,184) (104,357)
NET ASSETS:
Beginning of year 660,193 670,015
--------- ---------
End of year $566,009 $565,658
========= =========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-51
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONCLUDED)
FOR THE YEAR ENDED DECEMBER 31, 2012
-------------------------------------------------------------------------------
<Table>
<Caption>
PUTNAM VT PUTNAM VT
PUTNAM VT CAPITAL EQUITY
VOYAGER FUND OPPORTUNITIES FUND INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $65,876 $20,024 $152,166
Net realized gain (loss) on security
transactions (411,272) 95,813 230,672
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year 2,688,500 601,911 768,548
----------- ---------- -----------
Net increase (decrease) in net assets
resulting from operations 2,343,104 717,748 1,151,386
----------- ---------- -----------
UNIT TRANSACTIONS:
Purchases 1,287,971 486,085 457,468
Net transfers (478,383) (373,778) (314,152)
Surrenders for benefit payments and
fees (1,754,792) (308,907) (635,307)
Other transactions (5,224) (639) (1,124)
Death benefits (146,404) (41,864) (32,106)
Net loan activity (25,725) (49,561) 14,731
Cost of insurance and other fees (1,538,548) (394,019) (538,000)
----------- ---------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (2,661,105) (682,683) (1,048,490)
----------- ---------- -----------
Net increase (decrease) in net assets (318,001) 35,065 102,896
NET ASSETS:
Beginning of year 16,522,781 5,132,806 6,556,919
----------- ---------- -----------
End of year $16,204,780 $5,167,871 $6,659,815
=========== ========== ===========
<Caption>
INVESCO INVESCO
INVESCO VAN KAMPEN V.I. VAN KAMPEN V.I.
VAN KAMPEN V.I. AMERICAN MID CAP
COMSTOCK FUND FRANCHISE FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT (4)(5)(6) SUB-ACCOUNT (4)(7)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------- -----------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $271,870 $ -- $ --
Net realized gain (loss) on security
transactions (93,793) (58,126) (408,453)
Net realized gain on distributions -- -- 359
Net unrealized appreciation
(depreciation) of investments during
the year 2,953,162 281,603 531,228
----------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations 3,131,239 223,477 123,134
----------- ---------- ----------
UNIT TRANSACTIONS:
Purchases 1,858,935 281,316 123,112
Net transfers (662,777) 25,724 (19,993)
Surrenders for benefit payments and
fees (900,107) (48,749) (36,963)
Other transactions (3,181) (1,399) (1,349)
Death benefits (111,255) (64,400) (40,906)
Net loan activity (203,049) (8,070) (1,029)
Cost of insurance and other fees (1,480,287) (190,845) (99,568)
----------- ---------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (1,501,721) (6,423) (76,696)
----------- ---------- ----------
Net increase (decrease) in net assets 1,629,518 217,054 46,438
NET ASSETS:
Beginning of year 17,022,365 1,800,344 1,054,718
----------- ---------- ----------
End of year $18,651,883 $2,017,398 $1,101,156
=========== ========== ==========
</Table>
(4) Funded as of April 27, 2012.
(5) Formerly Invesco Van Kampen V.I. Capital Growth Fund. Change effective
April 30, 2012.
(6) Effective April 27, 2012 Invesco V.I. Capital Appreciation Fund merged with
Invesco Van Kampen V.I. Capital Growth Fund.
(7) Effective April 27, 2012 Invesco V.I. Capital Development Fund merged with
Invesco Van Kampen V.I. Mid Cap Growth Fund.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-52
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 2011
-------------------------------------------------------------------------------
<Table>
<Caption>
ALLIANCEBERNSTEIN VPS ALLIANCEBERNSTEIN VPS ALLIANCEBERNSTEIN VPS
INTERNATIONAL SMALL/MID-CAP INTERNATIONAL
VALUE PORTFOLIO VALUE PORTFOLIO GROWTH PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $478,638 $24,995 $93,404
Net realized gain (loss) on security
transactions 154,185 164,432 56,109
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year (3,047,986) (1,041,698) (714,664)
----------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations (2,415,163) (852,271) (565,151)
----------- ---------- ----------
UNIT TRANSACTIONS:
Purchases 1,926,202 1,173,062 428,149
Net transfers (103,879) (813,620) (199,174)
Surrenders for benefit payments and
fees (727,701) (660,770) (220,603)
Other transactions 2,010 (5,282) 41
Death benefits (12,785) (20,993) (1,821)
Net loan activity 20,438 (51,959) (31,324)
Cost of insurance and other fees (1,271,800) (863,079) (343,258)
----------- ---------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (167,515) (1,242,641) (367,990)
----------- ---------- ----------
Net increase (decrease) in net assets (2,582,678) (2,094,912) (933,141)
NET ASSETS:
Beginning of year 13,215,119 10,895,898 3,921,748
----------- ---------- ----------
End of year $10,632,441 $8,800,986 $2,988,607
=========== ========== ==========
<Caption>
INVESCO V.I. INVESCO V.I.
CAPITAL CORE
APPRECIATION FUND EQUITY FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------------
OPERATIONS:
Net investment income (loss) $2,994 $17,671
Net realized gain (loss) on security
transactions 14,010 15,768
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year (167,339) (8,624)
---------- ----------
Net increase (decrease) in net assets
resulting from operations (150,335) 24,815
---------- ----------
UNIT TRANSACTIONS:
Purchases 281,190 199,850
Net transfers (23,551) 412,279
Surrenders for benefit payments and
fees (81,944) (197,394)
Other transactions (225) (163)
Death benefits -- (10,558)
Net loan activity (5,884) (5,942)
Cost of insurance and other fees (225,338) (153,169)
---------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (55,752) 244,903
---------- ----------
Net increase (decrease) in net assets (206,087) 269,718
NET ASSETS:
Beginning of year 2,006,431 1,888,309
---------- ----------
End of year $1,800,344 $2,158,027
========== ==========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-53
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2011
-------------------------------------------------------------------------------
<Table>
<Caption>
INVESCO V.I. INVESCO V.I. INVESCO V.I.
INTERNATIONAL MID CAP CORE SMALL CAP
GROWTH FUND EQUITY FUND EQUITY FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $46,639 $50,002 $ --
Net realized gain (loss) on security
transactions 6,241 81,082 (53,806)
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year (244,180) (1,191,222) (51,668)
----------- ------------ -----------
Net increase (decrease) in net assets
resulting from operations (191,300) (1,060,138) (105,474)
----------- ------------ -----------
UNIT TRANSACTIONS:
Purchases 311,334 1,482,799 505,043
Net transfers 599,782 296,104 877,011
Surrenders for benefit payments and
fees (189,109) (776,330) (238,906)
Other transactions (3,576) (102) 567
Death benefits (19,133) (31,714) (31,871)
Net loan activity (35,946) (96,313) (21,395)
Cost of insurance and other fees (228,585) (1,271,983) (410,596)
----------- ------------ -----------
Net increase (decrease) in net assets
resulting from unit transactions 434,767 (397,539) 679,853
----------- ------------ -----------
Net increase (decrease) in net assets 243,467 (1,457,677) 574,379
NET ASSETS:
Beginning of year 2,763,828 16,682,140 4,761,907
----------- ------------ -----------
End of year $3,007,295 $15,224,463 $5,336,286
=========== ============ ===========
<Caption>
INVESCO V.I.
INVESCO V.I. BALANCED RISK
CAPITAL ALLOCATION
DEVELOPMENT FUND FUND
SUB-ACCOUNT SUB-ACCOUNT (A)(B)
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------------
OPERATIONS:
Net investment income (loss) $ -- $26,833
Net realized gain (loss) on security
transactions 26,731 (38,524)
Net realized gain on distributions -- 89,937
Net unrealized appreciation
(depreciation) of investments during
the year (109,476) 18,864
----------- -----------
Net increase (decrease) in net assets
resulting from operations (82,745) 97,110
----------- -----------
UNIT TRANSACTIONS:
Purchases 131,984 72,622
Net transfers (17,342) 1,680,289
Surrenders for benefit payments and
fees (52,428) (58,839)
Other transactions (16) 11
Death benefits -- (8,821)
Net loan activity (12,979) (59,212)
Cost of insurance and other fees (121,025) (58,690)
----------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (71,806) 1,567,360
----------- -----------
Net increase (decrease) in net assets (154,551) 1,664,470
NET ASSETS:
Beginning of year 1,209,269 705,518
----------- -----------
End of year $1,054,718 $2,369,988
=========== ===========
</Table>
(a) Funded as of April 29, 2011.
(b) Effective April 29, 2011 Invesco V.I. Global Multi-Asset Fund merged with
Invesco V.I. Balanced Risk Allocation Fund.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-54
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2011
-------------------------------------------------------------------------------
<Table>
<Caption>
AMERICAN FUNDS
AMERICAN FUNDS BLUE CHIP
ASSET INCOME AND AMERICAN FUNDS
ALLOCATION FUND GROWTH FUND BOND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $1,407,425 $769,402 $1,729,381
Net realized gain (loss) on security
transactions (336,250) 139,717 388,213
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year (18,522) (1,306,442) 1,345,730
----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations 1,052,653 (397,323) 3,463,324
----------- ----------- -----------
UNIT TRANSACTIONS:
Purchases 6,731,155 4,510,941 5,131,703
Net transfers (893,379) (767,747) (1,489,998)
Surrenders for benefit payments and
fees (3,403,887) (1,703,904) (2,702,663)
Other transactions (1,599) 868 (274)
Death benefits (324,788) (319,587) (269,316)
Net loan activity (1,571,223) (411,207) (370,392)
Cost of insurance and other fees (6,816,094) (3,833,443) (4,851,032)
----------- ----------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (6,279,815) (2,524,079) (4,551,972)
----------- ----------- -----------
Net increase (decrease) in net assets (5,227,162) (2,921,402) (1,088,648)
NET ASSETS:
Beginning of year 77,996,537 45,670,393 58,480,264
----------- ----------- -----------
End of year $72,769,375 $42,748,991 $57,391,616
=========== =========== ===========
<Caption>
AMERICAN FUNDS
GLOBAL AMERICAN FUNDS
GROWTH FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ---------------------------------------------
OPERATIONS:
Net investment income (loss) $726,884 $1,194,152
Net realized gain (loss) on security
transactions (401,597) (2,150,478)
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year (5,301,854) (7,046,281)
----------- ------------
Net increase (decrease) in net assets
resulting from operations (4,976,567) (8,002,607)
----------- ------------
UNIT TRANSACTIONS:
Purchases 4,949,957 19,152,224
Net transfers (1,014,928) (5,430,261)
Surrenders for benefit payments and
fees (2,678,351) (11,080,362)
Other transactions 5,790 (2,135)
Death benefits (345,365) (730,090)
Net loan activity (375,036) (1,244,790)
Cost of insurance and other fees (4,257,421) (15,893,464)
----------- ------------
Net increase (decrease) in net assets
resulting from unit transactions (3,715,354) (15,228,878)
----------- ------------
Net increase (decrease) in net assets (8,691,921) (23,231,485)
NET ASSETS:
Beginning of year 58,965,229 202,766,818
----------- ------------
End of year $50,273,308 $179,535,333
=========== ============
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-55
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2011
-------------------------------------------------------------------------------
<Table>
<Caption>
AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS
GROWTH-INCOME FUND INTERNATIONAL FUND NEW WORLD FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $2,402,587 $1,202,061 $615,992
Net realized gain (loss) on security
transactions (3,029,623) (16,262) (35,443)
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year (2,165,034) (10,977,439) (5,910,969)
------------ ------------- -----------
Net increase (decrease) in net assets
resulting from operations (2,792,070) (9,791,640) (5,330,420)
------------ ------------- -----------
UNIT TRANSACTIONS:
Purchases 15,008,837 6,731,690 3,398,161
Net transfers (4,955,789) (1,283,594) 512,503
Surrenders for benefit payments and
fees (8,769,731) (3,107,149) (2,486,477)
Other transactions 6,804 2,124 2,837
Death benefits (691,377) (323,148) (51,918)
Net loan activity (710,679) (399,272) (76,092)
Cost of insurance and other fees (12,885,743) (5,357,924) (2,837,235)
------------ ------------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (12,997,678) (3,737,273) (1,538,221)
------------ ------------- -----------
Net increase (decrease) in net assets (15,789,748) (13,528,913) (6,868,641)
NET ASSETS:
Beginning of year 163,590,671 73,510,920 38,990,788
------------ ------------- -----------
End of year $147,800,923 $59,982,007 $32,122,147
============ ============= ===========
<Caption>
AMERICAN FUNDS FIDELITY VIP
GLOBAL SMALL ASSET MANAGER
CAPITALIZATION FUND PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ---------------------------------------
OPERATIONS:
Net investment income (loss) $404,176 $22,429
Net realized gain (loss) on security
transactions (912,763) (39,938)
Net realized gain on distributions -- 5,514
Net unrealized appreciation
(depreciation) of investments during
the year (5,568,709) (10,812)
----------- ----------
Net increase (decrease) in net assets
resulting from operations (6,077,296) (22,807)
----------- ----------
UNIT TRANSACTIONS:
Purchases 2,670,716 --
Net transfers (1,216,901) (26,107)
Surrenders for benefit payments and
fees (2,282,638) (119,085)
Other transactions 7,902 (13)
Death benefits (115,719) --
Net loan activity (239,074) (199)
Cost of insurance and other fees (2,321,699) (109,700)
----------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (3,497,413) (255,104)
----------- ----------
Net increase (decrease) in net assets (9,574,709) (277,911)
NET ASSETS:
Beginning of year 34,228,419 1,357,237
----------- ----------
End of year $24,653,710 $1,079,326
=========== ==========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-56
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2011
-------------------------------------------------------------------------------
<Table>
<Caption>
FIDELITY VIP FIDELITY VIP FIDELITY VIP
EQUITY INCOME CONTRAFUND OVERSEAS
PORTFOLIO PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $809,249 $318,600 $24,674
Net realized gain (loss) on security
transactions (454,481) 108,715 (15,683)
Net realized gain on distributions -- -- 3,457
Net unrealized appreciation
(depreciation) of investments during
the year (24,530) (1,458,533) (326,967)
----------- ----------- ----------
Net increase (decrease) in net assets
resulting from operations 330,238 (1,031,218) (314,519)
----------- ----------- ----------
UNIT TRANSACTIONS:
Purchases 2,698,202 4,610,253 --
Net transfers (658,950) 1,449,868 (33,676)
Surrenders for benefit payments and
fees (2,006,251) (1,873,126) (20,907)
Other transactions 2,598 3,016 (1)
Death benefits (241,133) (191,752) --
Net loan activity (291,411) (364,440) (6,420)
Cost of insurance and other fees (2,678,777) (3,537,276) (90,600)
----------- ----------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (3,175,722) 96,543 (151,604)
----------- ----------- ----------
Net increase (decrease) in net assets (2,845,484) (934,675) (466,123)
NET ASSETS:
Beginning of year 34,316,335 39,346,326 1,951,357
----------- ----------- ----------
End of year $31,470,851 $38,411,651 $1,485,234
=========== =========== ==========
<Caption>
FIDELITY VIP FIDELITY VIP
MID CAP FREEDOM 2010
PORTFOLIO PORTFOLIO
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- -----------------------------------------
OPERATIONS:
Net investment income (loss) $5,654 $18,233
Net realized gain (loss) on security
transactions 117,942 (746)
Net realized gain on distributions 44,426 4,963
Net unrealized appreciation
(depreciation) of investments during
the year (3,014,821) (28,422)
----------- --------
Net increase (decrease) in net assets
resulting from operations (2,846,799) (5,972)
----------- --------
UNIT TRANSACTIONS:
Purchases 2,716,027 23,551
Net transfers 244,026 172,860
Surrenders for benefit payments and
fees (1,319,156) (14,579)
Other transactions 3,236 --
Death benefits (20,736) --
Net loan activity (122,126) --
Cost of insurance and other fees (2,261,214) (83,474)
----------- --------
Net increase (decrease) in net assets
resulting from unit transactions (759,943) 98,358
----------- --------
Net increase (decrease) in net assets (3,606,742) 92,386
NET ASSETS:
Beginning of year 26,682,817 865,784
----------- --------
End of year $23,076,075 $958,170
=========== ========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-57
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2011
-------------------------------------------------------------------------------
<Table>
<Caption>
FIDELITY VIP FIDELITY VIP FRANKLIN
FREEDOM 2020 FREEDOM 2030 INCOME
PORTFOLIO PORTFOLIO SECURITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $25,526 $13,551 $2,078,263
Net realized gain (loss) on security
transactions (1,717) 3,726 50,643
Net realized gain on distributions 4,885 2,117 --
Net unrealized appreciation
(depreciation) of investments during
the year (49,049) (40,552) (1,275,818)
---------- -------- -----------
Net increase (decrease) in net assets
resulting from operations (20,355) (21,158) 853,088
---------- -------- -----------
UNIT TRANSACTIONS:
Purchases 62,423 48,760 3,663,956
Net transfers 156,241 7,485 193,946
Surrenders for benefit payments and
fees (51,251) (13,889) (1,427,101)
Other transactions 1 (181) 1,447
Death benefits -- -- (202,811)
Net loan activity (613) (266) (275,661)
Cost of insurance and other fees (115,316) (56,767) (3,216,217)
---------- -------- -----------
Net increase (decrease) in net assets
resulting from unit transactions 51,485 (14,858) (1,262,441)
---------- -------- -----------
Net increase (decrease) in net assets 31,130 (36,016) (409,353)
NET ASSETS:
Beginning of year 1,241,402 734,164 36,011,031
---------- -------- -----------
End of year $1,272,532 $698,148 $35,601,678
========== ======== ===========
<Caption>
FRANKLIN FRANKLIN
SMALL CAP STRATEGIC
VALUE INCOME
SECURITIES FUND SECURITIES FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------------
OPERATIONS:
Net investment income (loss) $178,006 $749,352
Net realized gain (loss) on security
transactions (40,121) (3,502)
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year (1,116,048) (456,864)
----------- -----------
Net increase (decrease) in net assets
resulting from operations (978,163) 288,986
----------- -----------
UNIT TRANSACTIONS:
Purchases 2,370,412 960,400
Net transfers (836,579) 2,770,731
Surrenders for benefit payments and
fees (1,763,506) (939,072)
Other transactions 1,111 85
Death benefits (73,550) (65,131)
Net loan activity (208,647) (71,595)
Cost of insurance and other fees (1,934,151) (738,617)
----------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (2,444,910) 1,916,801
----------- -----------
Net increase (decrease) in net assets (3,423,073) 2,205,787
NET ASSETS:
Beginning of year 27,749,042 10,571,710
----------- -----------
End of year $24,325,969 $12,777,497
=========== ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-58
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2011
-------------------------------------------------------------------------------
<Table>
<Caption>
TEMPLETON TEMPLETON
MUTUAL SHARES FOREIGN GROWTH
SECURITIES FUND SECURITIES FUND SECURITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $1,056,353 $15,514 $138,045
Net realized gain (loss) on security
transactions (227,384) (8,828) 64,665
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year (1,344,294) (141,128) (900,812)
----------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations (515,325) (134,442) (698,102)
----------- ---------- ----------
UNIT TRANSACTIONS:
Purchases 5,065,741 108,697 1,398,794
Net transfers (1,980,489) 607,427 (759,883)
Surrenders for benefit payments and
fees (2,013,148) (26,038) (593,329)
Other transactions (1,867) 149 (256)
Death benefits (428,677) (2,772) (8,264)
Net loan activity (274,998) (991) (146,515)
Cost of insurance and other fees (3,817,289) (63,671) (1,031,561)
----------- ---------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (3,450,727) 622,801 (1,141,014)
----------- ---------- ----------
Net increase (decrease) in net assets (3,966,052) 488,359 (1,839,116)
NET ASSETS:
Beginning of year 45,959,939 613,599 10,820,742
----------- ---------- ----------
End of year $41,993,887 $1,101,958 $8,981,626
=========== ========== ==========
<Caption>
MUTUAL TEMPLETON
GLOBAL DISCOVERY GLOBAL BOND
SECURITIES FUND SECURITIES FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------------
OPERATIONS:
Net investment income (loss) $563,644 $1,541,133
Net realized gain (loss) on security
transactions (54,863) 583
Net realized gain on distributions 543,271 179,221
Net unrealized appreciation
(depreciation) of investments during
the year (1,853,433) (2,004,317)
----------- -----------
Net increase (decrease) in net assets
resulting from operations (801,381) (283,380)
----------- -----------
UNIT TRANSACTIONS:
Purchases 2,685,702 2,024,419
Net transfers 319,122 1,913,007
Surrenders for benefit payments and
fees (1,140,948) (1,536,746)
Other transactions (1,277) 211
Death benefits (180,494) (86,750)
Net loan activity (223,127) (34,931)
Cost of insurance and other fees (2,079,990) (1,737,389)
----------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (621,012) 541,821
----------- -----------
Net increase (decrease) in net assets (1,422,393) 258,441
NET ASSETS:
Beginning of year 25,140,178 26,880,635
----------- -----------
End of year $23,717,785 $27,139,076
=========== ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-59
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2011
-------------------------------------------------------------------------------
<Table>
<Caption>
HARTFORD HARTFORD
HARTFORD TOTAL CAPITAL
ADVISERS RETURN BOND APPRECIATION
HLS FUND HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $1,236,242 $244,237 $1,413,483
Net realized gain (loss) on security
transactions (1,409,928) 79,602 (4,900,205)
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year 1,660,444 7,402,430 (17,882,770)
----------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations 1,486,758 7,726,269 (21,369,492)
----------- ------------ ------------
UNIT TRANSACTIONS:
Purchases 6,462,254 9,424,730 13,633,614
Net transfers (7,066,967) (2,209,723) (4,888,119)
Surrenders for benefit payments and
fees (3,518,712) (6,633,518) (10,263,454)
Other transactions (3,509) (3,581) 2,548
Death benefits (769,958) (769,077) (1,134,490)
Net loan activity (495,026) (537,858) (1,116,116)
Cost of insurance and other fees (7,238,491) (9,686,288) (13,679,950)
----------- ------------ ------------
Net increase (decrease) in net assets
resulting from unit transactions (12,630,409) (10,415,315) (17,445,967)
----------- ------------ ------------
Net increase (decrease) in net assets (11,143,651) (2,689,046) (38,815,459)
NET ASSETS:
Beginning of year 83,035,115 115,505,220 199,956,093
----------- ------------ ------------
End of year $71,891,464 $112,816,174 $161,140,634
=========== ============ ============
<Caption>
HARTFORD
DIVIDEND HARTFORD
AND GROWTH GLOBAL RESEARCH
HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------------
OPERATIONS:
Net investment income (loss) $2,173,954 $113
Net realized gain (loss) on security
transactions (1,066,442) 467
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year 329,629 (70,927)
------------ --------
Net increase (decrease) in net assets
resulting from operations 1,437,141 (70,347)
------------ --------
UNIT TRANSACTIONS:
Purchases 9,670,177 58,344
Net transfers (2,552,935) 62,196
Surrenders for benefit payments and
fees (5,356,581) (10,567)
Other transactions (5,174) --
Death benefits (430,907) (6,074)
Net loan activity (814,153) (2,215)
Cost of insurance and other fees (8,657,937) (40,541)
------------ --------
Net increase (decrease) in net assets
resulting from unit transactions (8,147,510) 61,143
------------ --------
Net increase (decrease) in net assets (6,710,369) (9,204)
NET ASSETS:
Beginning of year 109,716,430 830,014
------------ --------
End of year $103,006,061 $820,810
============ ========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-60
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2011
-------------------------------------------------------------------------------
<Table>
<Caption>
HARTFORD HARTFORD
HARTFORD DISCIPLINED GROWTH
GLOBAL GROWTH EQUITY OPPORTUNITIES
HLS FUND HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $357 $184,553 $ --
Net realized gain (loss) on security
transactions 2,428 96,482 776,587
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year (143,862) (65,058) (2,875,716)
---------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations (141,077) 215,977 (2,099,129)
---------- ------------ ------------
UNIT TRANSACTIONS:
Purchases 17,972 1,644,861 3,268,423
Net transfers 9,820 (83,766) (1,549,688)
Surrenders for benefit payments and
fees (24,158) (1,008,037) (1,363,798)
Other transactions (41) (6,753) 227
Death benefits (176) (154,823) (85,016)
Net loan activity (4,878) (55,113) (229,945)
Cost of insurance and other fees (61,205) (1,536,585) (2,508,765)
---------- ------------ ------------
Net increase (decrease) in net assets
resulting from unit transactions (62,666) (1,200,216) (2,468,562)
---------- ------------ ------------
Net increase (decrease) in net assets (203,743) (984,239) (4,567,691)
NET ASSETS:
Beginning of year 1,064,767 16,147,105 26,829,153
---------- ------------ ------------
End of year $861,024 $15,162,866 $22,261,462
========== ============ ============
<Caption>
HARTFORD HARTFORD
HIGH YIELD INDEX
HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ------------------------------------------
OPERATIONS:
Net investment income (loss) $242,005 $795,873
Net realized gain (loss) on security
transactions (1,584) 753,022
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year (149,218) (482,312)
------------ ------------
Net increase (decrease) in net assets
resulting from operations 91,203 1,066,583
------------ ------------
UNIT TRANSACTIONS:
Purchases 229,373 3,909,219
Net transfers 981,235 (1,941,577)
Surrenders for benefit payments and
fees (397,976) (3,672,554)
Other transactions (810) (11,281)
Death benefits (1,310) (902,663)
Net loan activity 78,672 (399,651)
Cost of insurance and other fees (212,600) (3,987,900)
------------ ------------
Net increase (decrease) in net assets
resulting from unit transactions 676,584 (7,006,407)
------------ ------------
Net increase (decrease) in net assets 767,787 (5,939,824)
NET ASSETS:
Beginning of year 1,885,313 50,930,043
------------ ------------
End of year $2,653,100 $44,990,219
============ ============
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-61
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2011
-------------------------------------------------------------------------------
<Table>
<Caption>
HARTFORD
INTERNATIONAL HARTFORD HARTFORD
OPPORTUNITIES MIDCAP MIDCAP VALUE
HLS FUND HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $22,497 $420,990 $1,365
Net realized gain (loss) on security
transactions 139,280 1,340,592 (545,320)
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year (7,273,641) (6,451,613) (609,783)
----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations (7,111,864) (4,690,031) (1,153,738)
----------- ----------- -----------
UNIT TRANSACTIONS:
Purchases 4,584,227 3,588,913 991,950
Net transfers (1,030,466) (2,719,347) (495,145)
Surrenders for benefit payments and
fees (2,564,376) (3,840,221) (748,865)
Other transactions (2,105) 1,235 1,179
Death benefits (192,061) (286,174) (32,389)
Net loan activity (236,843) (336,002) (71,557)
Cost of insurance and other fees (3,886,439) (4,196,220) (875,265)
----------- ----------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (3,328,063) (7,787,816) (1,230,092)
----------- ----------- -----------
Net increase (decrease) in net assets (10,439,927) (12,477,847) (2,383,830)
NET ASSETS:
Beginning of year 53,637,215 66,085,309 14,208,233
----------- ----------- -----------
End of year $43,197,288 $53,607,462 $11,824,403
=========== =========== ===========
<Caption>
HARTFORD HARTFORD
MONEY MARKET SMALL COMPANY
HLS FUND HLS FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------------
OPERATIONS:
Net investment income (loss) $ -- $ --
Net realized gain (loss) on security
transactions -- 1,604,236
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year -- (2,516,495)
----------- -----------
Net increase (decrease) in net assets
resulting from operations -- (912,259)
----------- -----------
UNIT TRANSACTIONS:
Purchases 13,466,783 2,038,820
Net transfers 21,880,836 (1,079,124)
Surrenders for benefit payments and
fees (34,969,445) (2,041,598)
Other transactions (37,483) 680
Death benefits (783,043) (190,404)
Net loan activity 353,621 (171,245)
Cost of insurance and other fees (10,014,782) (2,136,659)
----------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (10,103,513) (3,579,530)
----------- -----------
Net increase (decrease) in net assets (10,103,513) (4,491,789)
NET ASSETS:
Beginning of year 94,765,393 32,279,605
----------- -----------
End of year $84,661,880 $27,787,816
=========== ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-62
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2011
-------------------------------------------------------------------------------
<Table>
<Caption>
HARTFORD
HARTFORD U.S. GOVERNMENT LORD ABBETT
STOCK SECURITIES CAPITAL STRUCTURE
HLS FUND HLS FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $1,046,082 $370,020 $193,472
Net realized gain (loss) on security
transactions (331,625) (13,151) 43,143
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year (1,487,080) 293,343 (240,469)
------------ ------------ -----------
Net increase (decrease) in net assets
resulting from operations (772,623) 650,212 (3,854)
------------ ------------ -----------
UNIT TRANSACTIONS:
Purchases 7,136,497 1,201,113 775,127
Net transfers (2,617,010) 401,813 (243,809)
Surrenders for benefit payments and
fees (4,476,100) (1,113,282) (235,118)
Other transactions 4,200 1,836 37
Death benefits (619,021) (92,200) (12,002)
Net loan activity (310,155) (59,854) (66,093)
Cost of insurance and other fees (7,062,279) (1,131,849) (627,608)
------------ ------------ -----------
Net increase (decrease) in net assets
resulting from unit transactions (7,943,868) (792,423) (409,466)
------------ ------------ -----------
Net increase (decrease) in net assets (8,716,491) (142,211) (413,320)
NET ASSETS:
Beginning of year 81,325,123 13,902,106 7,187,103
------------ ------------ -----------
End of year $72,608,632 $13,759,895 $6,773,783
============ ============ ===========
<Caption>
LORD ABBETT
LORD ABBETT GROWTH AND
BOND-DEBENTURE INCOME
FUND FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ----------------------------------------
OPERATIONS:
Net investment income (loss) $316,112 $50,436
Net realized gain (loss) on security
transactions 9,993 (24,016)
Net realized gain on distributions 39,480 --
Net unrealized appreciation
(depreciation) of investments during
the year (144,352) (480,084)
----------- -----------
Net increase (decrease) in net assets
resulting from operations 221,233 (453,664)
----------- -----------
UNIT TRANSACTIONS:
Purchases 373,718 975,460
Net transfers 849,796 133,832
Surrenders for benefit payments and
fees (484,168) (457,333)
Other transactions 40 2,759
Death benefits (23,800) (100,595)
Net loan activity (66,517) (152,204)
Cost of insurance and other fees (314,652) (663,964)
----------- -----------
Net increase (decrease) in net assets
resulting from unit transactions 334,417 (262,045)
----------- -----------
Net increase (decrease) in net assets 555,650 (715,709)
NET ASSETS:
Beginning of year 4,811,522 7,224,781
----------- -----------
End of year $5,367,172 $6,509,072
=========== ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-63
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2011
-------------------------------------------------------------------------------
<Table>
<Caption>
MFS INVESTORS MFS NEW MFS TOTAL
TRUST SERIES DISCOVERY SERIES RETURN SERIES
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $8,451 $ -- $654,735
Net realized gain (loss) on security
transactions 93,674 (22,525) (230,916)
Net realized gain on distributions -- 724,881 --
Net unrealized appreciation
(depreciation) of investments during
the year (122,592) (1,344,628) 33,331
------------ ------------ -----------
Net increase (decrease) in net assets
resulting from operations (20,467) (642,272) 457,150
------------ ------------ -----------
UNIT TRANSACTIONS:
Purchases 47,987 437,660 2,262,098
Net transfers (424,841) 679,720 (645,579)
Surrenders for benefit payments and
fees (25,818) (221,669) (1,369,625)
Other transactions (3) (1,115) 611
Death benefits -- (31,570) (267,745)
Net loan activity (1,081) (64,048) (75,340)
Cost of insurance and other fees (62,953) (428,210) (1,991,491)
------------ ------------ -----------
Net increase (decrease) in net assets
resulting from unit transactions (466,709) 370,768 (2,087,071)
------------ ------------ -----------
Net increase (decrease) in net assets (487,176) (271,504) (1,629,921)
NET ASSETS:
Beginning of year 1,283,180 5,729,241 25,856,046
------------ ------------ -----------
End of year $796,004 $5,457,737 $24,226,125
============ ============ ===========
<Caption>
MFS VALUE MFS RESEARCH
SERIES BOND SERIES
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ----------------------------------------
OPERATIONS:
Net investment income (loss) $104,850 $174,188
Net realized gain (loss) on security
transactions 1,323 9,188
Net realized gain on distributions 28,359 74,982
Net unrealized appreciation
(depreciation) of investments during
the year (141,657) 171,519
----------- -----------
Net increase (decrease) in net assets
resulting from operations (7,125) 429,877
----------- -----------
UNIT TRANSACTIONS:
Purchases 690,587 550,050
Net transfers 1,062,843 3,070,002
Surrenders for benefit payments and
fees (338,657) (499,017)
Other transactions (56) 316
Death benefits (64,613) (78,250)
Net loan activity (83,242) (53,334)
Cost of insurance and other fees (488,292) (596,662)
----------- -----------
Net increase (decrease) in net assets
resulting from unit transactions 778,570 2,393,105
----------- -----------
Net increase (decrease) in net assets 771,445 2,822,982
NET ASSETS:
Beginning of year 6,476,635 4,546,916
----------- -----------
End of year $7,248,080 $7,369,898
=========== ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-64
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2011
-------------------------------------------------------------------------------
<Table>
<Caption>
INVESCO OPPENHEIMER
UIF MID CAP VAN KAMPEN V.I. CAPITAL
GROWTH MID CAP APPRECIATION
PORTFOLIO VALUE FUND FUND/VA
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $4,877 $13,608 $3,505
Net realized gain (loss) on security
transactions 2,469 9,780 95,190
Net realized gain on distributions 822 -- --
Net unrealized appreciation
(depreciation) of investments during
the year (196,908) (16,507) (139,319)
---------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations (188,740) 6,881 (40,624)
---------- ---------- ----------
UNIT TRANSACTIONS:
Purchases 186,174 195,379 429,801
Net transfers 406,392 94,353 (24,825)
Surrenders for benefit payments and
fees (65,397) (99,237) (185,269)
Other transactions (185) 80 (74)
Death benefits (8,103) (7,497) (13,743)
Net loan activity (9,852) (24,050) (101,756)
Cost of insurance and other fees (154,890) (180,580) (343,091)
---------- ---------- ----------
Net increase (decrease) in net assets
resulting from unit transactions 354,139 (21,552) (238,957)
---------- ---------- ----------
Net increase (decrease) in net assets 165,399 (14,671) (279,581)
NET ASSETS:
Beginning of year 1,894,886 2,181,195 3,320,719
---------- ---------- ----------
End of year $2,060,285 $2,166,524 $3,041,138
========== ========== ==========
<Caption>
OPPENHEIMER OPPENHEIMER
GLOBAL SECURITIES MAIN STREET
FUND/VA FUND/VA
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- -------------------------------------------
OPERATIONS:
Net investment income (loss) $93,540 $9,265
Net realized gain (loss) on security
transactions 2,931 18,752
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year (866,847) (32,608)
----------- ----------
Net increase (decrease) in net assets
resulting from operations (770,376) (4,591)
----------- ----------
UNIT TRANSACTIONS:
Purchases 1,161,120 222,364
Net transfers 103,148 (26,024)
Surrenders for benefit payments and
fees (472,903) (121,121)
Other transactions 350 (101)
Death benefits (22,626) (1,373)
Net loan activity (179,102) (11,379)
Cost of insurance and other fees (852,331) (166,415)
----------- ----------
Net increase (decrease) in net assets
resulting from unit transactions (262,344) (104,049)
----------- ----------
Net increase (decrease) in net assets (1,032,720) (108,640)
NET ASSETS:
Beginning of year 9,236,591 1,608,003
----------- ----------
End of year $8,203,871 $1,499,363
=========== ==========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-65
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2011
-------------------------------------------------------------------------------
<Table>
<Caption>
OPPENHEIMER
MAIN STREET PUTNAM VT PUTNAM VT
SMALL- & MID-CAP DIVERSIFIED GLOBAL ASSET
FUND/VA INCOME FUND ALLOCATION FUND
SUB-ACCOUNT (C) SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $3,849 $366,010 $20,845
Net realized gain (loss) on security
transactions 5,502 (1,201) (10,968)
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year (35,678) (489,251) (9,024)
---------- ---------- ---------
Net increase (decrease) in net assets
resulting from operations (26,327) (124,442) 853
---------- ---------- ---------
UNIT TRANSACTIONS:
Purchases 94,885 352,512 --
Net transfers 50,986 143,164 (16,965)
Surrenders for benefit payments and
fees (31,514) (132,544) (7,438)
Other transactions (129) (137) (1)
Death benefits (6,608) (20,189) --
Net loan activity (8,450) (12,878) (654)
Cost of insurance and other fees (75,115) (280,416) (38,707)
---------- ---------- ---------
Net increase (decrease) in net assets
resulting from unit transactions 24,055 49,512 (63,765)
---------- ---------- ---------
Net increase (decrease) in net assets (2,272) (74,930) (62,912)
NET ASSETS:
Beginning of year 1,013,913 3,753,951 461,754
---------- ---------- ---------
End of year $1,011,641 $3,679,021 $398,842
========== ========== =========
<Caption>
PUTNAM VT PUTNAM VT
GLOBAL GROWTH AND
EQUITY FUND INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- -------------------------------------------
OPERATIONS:
Net investment income (loss) $91,575 $194,147
Net realized gain (loss) on security
transactions (202,814) (1,399,720)
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year (60,620) 708,523
---------- -----------
Net increase (decrease) in net assets
resulting from operations (171,859) (497,050)
---------- -----------
UNIT TRANSACTIONS:
Purchases 292,126 1,214,202
Net transfers (59,516) (2,070,182)
Surrenders for benefit payments and
fees (267,582) (522,824)
Other transactions (598) (5,765)
Death benefits (58,129) (107,338)
Net loan activity 2,233 (34,119)
Cost of insurance and other fees (360,822) (1,401,937)
---------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (452,288) (2,927,963)
---------- -----------
Net increase (decrease) in net assets (624,147) (3,425,013)
NET ASSETS:
Beginning of year 4,281,301 15,443,281
---------- -----------
End of year $3,657,154 $12,018,268
========== ===========
</Table>
(c) Formerly Oppenheimer Main Street Small Cap Fund. Change effective April 29,
2011.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-66
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2011
-------------------------------------------------------------------------------
<Table>
<Caption>
PUTNAM VT PUTNAM VT
GLOBAL HEALTH HIGH PUTNAM VT
CARE FUND YIELD FUND INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $13,185 $1,699,937 $1,558,375
Net realized gain (loss) on security
transactions 57,141 313,885 18,402
Net realized gain on distributions 31,625 -- --
Net unrealized appreciation
(depreciation) of investments during
the year (92,915) (1,560,104) (688,563)
-------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations 9,036 453,718 888,214
-------- ----------- -----------
UNIT TRANSACTIONS:
Purchases -- 1,610,906 1,754,789
Net transfers (26,607) (371,026) (384,449)
Surrenders for benefit payments and
fees (185,279) (1,321,594) (1,160,321)
Other transactions 97 (3,632) (50)
Death benefits (17,017) (90,931) (89,899)
Net loan activity (14,136) (552,550) (84,135)
Cost of insurance and other fees (97,493) (1,882,287) (1,511,898)
-------- ----------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (340,435) (2,611,114) (1,475,963)
-------- ----------- -----------
Net increase (decrease) in net assets (331,399) (2,157,396) (587,749)
NET ASSETS:
Beginning of year 1,221,635 22,791,645 17,594,668
-------- ----------- -----------
End of year $890,236 $20,634,249 $17,006,919
======== =========== ===========
<Caption>
PUTNAM VT PUTNAM VT
INTERNATIONAL INTERNATIONAL
VALUE FUND EQUITY FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- -----------------------------------------
OPERATIONS:
Net investment income (loss) $19,839 $604,774
Net realized gain (loss) on security
transactions (75,235) (157,507)
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year (32,914) (3,373,812)
-------- -----------
Net increase (decrease) in net assets
resulting from operations (88,310) (2,926,545)
-------- -----------
UNIT TRANSACTIONS:
Purchases -- 1,467,908
Net transfers (25,967) (32,681)
Surrenders for benefit payments and
fees (32,989) (1,107,692)
Other transactions (187) 956
Death benefits (8,421) (126,503)
Net loan activity -- (37,654)
Cost of insurance and other fees (61,525) (1,422,012)
-------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (129,089) (1,257,678)
-------- -----------
Net increase (decrease) in net assets (217,399) (4,184,223)
NET ASSETS:
Beginning of year 767,675 18,728,197
-------- -----------
End of year $550,276 $14,543,974
======== ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-67
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 2011
-------------------------------------------------------------------------------
<Table>
<Caption>
PUTNAM VT PUTNAM VT
INTERNATIONAL PUTNAM VT MONEY
GROWTH FUND INVESTORS FUND MARKET FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $12,196 $10,992 $13
Net realized gain (loss) on security
transactions (23,042) (23,603) --
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year (64,660) 13,887 --
------------ ------------ -----------
Net increase (decrease) in net assets
resulting from operations (75,506) 1,276 13
------------ ------------ -----------
UNIT TRANSACTIONS:
Purchases -- -- --
Net transfers (1,690) (7,009) --
Surrenders for benefit payments and
fees (25,873) (26,676) (10,404)
Other transactions (744) (5) (5)
Death benefits (24,539) (1,729) --
Net loan activity (1,738) (17,379) (23)
Cost of insurance and other fees (33,836) (68,348) (7,138)
------------ ------------ -----------
Net increase (decrease) in net assets
resulting from unit transactions (88,420) (121,146) (17,570)
------------ ------------ -----------
Net increase (decrease) in net assets (163,926) (119,870) (17,557)
NET ASSETS:
Beginning of year 500,001 831,942 132,447
------------ ------------ -----------
End of year $336,075 $712,072 $114,890
============ ============ ===========
<Caption>
PUTNAM VT PUTNAM VT
MULTI-CAP SMALL CAP
GROWTH FUND VALUE FUND
SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------- ----------------------------------------
OPERATIONS:
Net investment income (loss) $37,616 $24,158
Net realized gain (loss) on security
transactions (280,353) 27,218
Net realized gain on distributions -- --
Net unrealized appreciation
(depreciation) of investments during
the year (225,091) (268,846)
----------- -----------
Net increase (decrease) in net assets
resulting from operations (467,828) (217,470)
----------- -----------
UNIT TRANSACTIONS:
Purchases 718,724 658,693
Net transfers (364,392) (289,811)
Surrenders for benefit payments and
fees (603,076) (166,953)
Other transactions (4,913) 300
Death benefits (130,787) (4,133)
Net loan activity 9,362 (24,691)
Cost of insurance and other fees (866,044) (484,393)
----------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (1,241,126) (310,988)
----------- -----------
Net increase (decrease) in net assets (1,708,954) (528,458)
NET ASSETS:
Beginning of year 10,434,315 5,327,600
----------- -----------
End of year $8,725,361 $4,799,142
=========== ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-68
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS -- (CONCLUDED)
FOR THE YEAR ENDED DECEMBER 31, 2011
-------------------------------------------------------------------------------
<Table>
<Caption>
PUTNAM VT PUTNAM VT
GEORGE PUTNAM GLOBAL PUTNAM VT
BALANCED FUND UTILITIES FUND VOYAGER FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) $16,829 $31,326 $50,201
Net realized gain (loss) on security
transactions (54,583) (53,422) (2,692,628)
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year 59,373 (19,688) (821,743)
--------- --------- -----------
Net increase (decrease) in net assets
resulting from operations 21,619 (41,784) (3,464,170)
--------- --------- -----------
UNIT TRANSACTIONS:
Purchases -- -- 1,516,625
Net transfers (71,469) (18,402) (2,534,494)
Surrenders for benefit payments and
fees (12,685) (66,439) (1,017,492)
Other transactions -- (69) (10,450)
Death benefits -- (4,075) (167,982)
Net loan activity (2,602) (6,256) (108,009)
Cost of insurance and other fees (65,756) (58,776) (1,794,169)
--------- --------- -----------
Net increase (decrease) in net assets
resulting from unit transactions (152,512) (154,017) (4,115,971)
--------- --------- -----------
Net increase (decrease) in net assets (130,893) (195,801) (7,580,141)
NET ASSETS:
Beginning of year 791,086 865,816 24,102,922
--------- --------- -----------
End of year $660,193 $670,015 $16,522,781
========= ========= ===========
<Caption>
PUTNAM VT PUTNAM VT INVESCO
CAPITAL EQUITY VAN KAMPEN V.I.
OPPORTUNITIES FUND INCOME FUND COMSTOCK FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------- -----------------------------------------------------------
OPERATIONS:
Net investment income (loss) $6,863 $100,618 $231,434
Net realized gain (loss) on security
transactions 21,671 89,796 135,080
Net realized gain on distributions -- -- --
Net unrealized appreciation
(depreciation) of investments during
the year (345,353) (105,848) (716,815)
---------- ---------- -----------
Net increase (decrease) in net assets
resulting from operations (316,819) 84,566 (350,301)
---------- ---------- -----------
UNIT TRANSACTIONS:
Purchases 578,681 362,131 2,057,144
Net transfers 130,264 1,866,906 (105,762)
Surrenders for benefit payments and
fees (207,028) (479,970) (620,192)
Other transactions 13 (2,939) (7)
Death benefits (3,219) (26,214) (72,780)
Net loan activity (36,305) (43,082) (85,650)
Cost of insurance and other fees (455,522) (514,838) (1,599,782)
---------- ---------- -----------
Net increase (decrease) in net assets
resulting from unit transactions 6,884 1,161,994 (427,029)
---------- ---------- -----------
Net increase (decrease) in net assets (309,935) 1,246,560 (777,330)
NET ASSETS:
Beginning of year 5,442,741 5,310,359 17,799,695
---------- ---------- -----------
End of year $5,132,806 $6,556,919 $17,022,365
========== ========== ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
SA-69
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
1. ORGANIZATION:
Separate Account VL I (the "Account") is a separate investment account
established by Hartford Life and Annuity Insurance Company (the "Sponsor
Company") and is registered with the Securities and Exchange Commission
("SEC") as a unit investment trust under the Investment Company Act of 1940,
as amended. Both the Sponsor Company and the Account are subject to
supervision and regulation by the Department of Insurance of the State of
Connecticut and the SEC. The contract owners of the Sponsor Company direct
their deposits into various investment options (the "Sub-Accounts") within
the Account.
The Account is comprised of the following Sub-Accounts: the
AllianceBernstein VPS International Value Portfolio, AllianceBernstein VPS
Small/Mid-Cap Value Portfolio, AllianceBernstein VPS International Growth
Portfolio, Invesco V.I. Core Equity Fund, Invesco V.I. International Growth
Fund, Invesco V.I. Mid Cap Core Equity Fund, Invesco V.I. Small Cap Equity
Fund, Invesco V.I. Balanced Risk Allocation Fund, American Funds Asset
Allocation Fund, American Funds Blue Chip Income and Growth Fund, American
Funds Bond Fund, American Funds Global Growth Fund, American Funds Growth
Fund, American Funds Growth-Income Fund, American Funds International Fund,
American Funds New World Fund, American Funds Global Small Capitalization
Fund, Fidelity VIP Asset Manager Portfolio, Fidelity VIP Equity Income
Portfolio, Fidelity VIP Contrafund Portfolio, Fidelity VIP Overseas
Portfolio, Fidelity VIP Mid Cap Portfolio, Fidelity VIP Freedom 2010
Portfolio, Fidelity VIP Freedom 2020 Portfolio, Fidelity VIP Freedom 2030
Portfolio, Franklin Income Securities Fund, Franklin Small Cap Value
Securities Fund, Franklin Strategic Income Securities Fund, Mutual Shares
Securities Fund, Templeton Foreign Securities Fund, Templeton Growth
Securities Fund, Mutual Global Discovery Securities Fund, Templeton Global
Bond Securities Fund, Hartford Balanced HLS Fund (formerly Hartford Advisers
HLS Fund), Hartford Total Return Bond HLS Fund, Hartford Capital
Appreciation HLS Fund, Hartford Dividend and Growth HLS Fund, Hartford
Global Research HLS Fund, Hartford Global Growth HLS Fund, Hartford
Disciplined Equity HLS Fund, Hartford Growth Opportunities HLS Fund,
Hartford High Yield HLS Fund, Hartford Index HLS Fund, Hartford
International Opportunities HLS Fund, Hartford MidCap HLS Fund, Hartford
MidCap Value HLS Fund, Hartford Money Market HLS Fund, Hartford Small
Company HLS Fund, Hartford Stock HLS Fund, Hartford U.S. Government
Securities HLS Fund, Lord Abbett Calibrated Dividend Growth Fund (formerly
Lord Abbett Capital Structure Fund), Lord Abbett Bond-Debenture Fund, Lord
Abbett Growth and Income Fund, MFS Investors Trust Series, MFS New Discovery
Series, MFS Total Return Series, MFS Value Series, MFS Research Bond Series,
UIF Mid Cap Growth Portfolio, Invesco Van Kampen V.I. American Value Fund
(formerly Invesco Van Kampen V.I. Mid Cap Value Fund), Oppenheimer Capital
Appreciation Fund/VA, Oppenheimer Global Securities Fund/VA, Oppenheimer
Main Street Fund/VA, Oppenheimer Main Street Small- & Mid-Cap Fund/VA,
Putnam VT Diversified Income Fund, Putnam VT Global Asset Allocation Fund,
Putnam VT Global Equity Fund, Putnam VT Growth and Income Fund, Putnam VT
Global Health Care Fund, Putnam VT High Yield Fund, Putnam VT Income Fund,
Putnam VT International Value Fund, Putnam VT International Equity Fund,
Putnam VT International Growth Fund, Putnam VT Investors Fund, Putnam VT
Money Market Fund, Putnam VT Multi-Cap Growth Fund, Putnam VT Small Cap
Value Fund, Putnam VT George Putnam Balanced Fund, Putnam VT Global
Utilities Fund, Putnam VT Voyager Fund, Putnam VT Capital Opportunities
Fund, Putnam VT Equity Income Fund, Invesco Van Kampen V.I. Comstock Fund,
Invesco Van Kampen V.I. American Franchise Fund (formerly Invesco Van Kampen
V.I. Capital Growth Fund) (merged with Invesco V.I. Capital Appreciation
Fund), and Invesco Van Kampen V.I. Mid Cap Growth Fund (merged with Invesco
V.I. Capital Development Fund).
The Sub-Accounts are invested in mutual funds (the "Funds") of the same
name.
Under applicable insurance law, the assets and liabilities of the Account
are clearly identified and distinguished from the Sponsor Company's other
assets and liabilities and are not chargeable with liabilities arising out
of any other business the Sponsor Company may conduct.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with accounting principles generally
accepted in the United States of America (U.S. GAAP):
a) SECURITY TRANSACTIONS -- Security transactions are recorded on the
trade date (date the order to buy or sell is executed). Realized
gains and losses on the sales of securities are computed using the
average cost method. Dividend income is either accrued daily or as of
the ex-dividend date based upon the fund. Net realized gain on
distributions income is accrued as of the ex-dividend date. Net
realized gain on distributions income
SA-70
<Page>
-------------------------------------------------------------------------------
represents those dividends from the Funds, which are characterized as
capital gains under tax regulations.
b) UNIT TRANSACTIONS -- Unit transactions are executed based on the unit
values calculated at the close of the business day.
c) FEDERAL INCOME TAXES -- The operations of the Account form a part of,
and are taxed with, the total operations of the Sponsor Company,
which is taxed as an insurance company under the Internal Revenue
Code (IRC). Under the current provisions of the IRC, the Sponsor
Company does not expect to incur federal income taxes on the earnings
of the Account to the extent the earnings are credited to the
contract owners. Based on this, no charge is being made currently to
the Account for federal income taxes. The Sponsor Company will review
periodically the status of this policy in the event of changes in the
tax law. A charge may be made in future years for any federal income
taxes that would be attributable to the contracts.
d) USE OF ESTIMATES -- The preparation of financial statements in
conformity with U.S. GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities as of the date of the financial statements and the
reported amounts of income and expenses during the period. The most
significant estimate contained within the financial statements are
the fair value measurements.
e) MORTALITY RISK -- The mortality risk is fully borne by the Sponsor
Company and may result in additional amounts being transferred into
the Account by the Sponsor Company to cover shorter longevity of
contract owners than expected. Conversely, if amounts allocated
exceed amounts required, transfers may be made to the Sponsor
Company.
f) FAIR VALUE MEASUREMENTS -- The Sub-Accounts' investments are carried
at fair value in the Account's financial statements. The investments
in shares of the Funds are valued at the December 31, 2012 closing
net asset value as determined by the appropriate Fund manager. For
financial instruments that are carried at fair value, a hierarchy is
used to place the instruments into three broad levels (Levels 1, 2
and 3) by prioritizing the inputs in the valuation techniques used
to measure fair value.
Level 1: Observable inputs that reflect unadjusted quoted prices for
identical assets or liabilities in active markets that the Account has
the ability to access at the measurement date. Level 1 investments
include highly liquid open-ended management investment companies ("mutual
funds").
Level 2: Observable inputs, other than unadjusted quoted prices included
in Level 1, for the asset or liability or prices for similar assets and
liabilities. Level 2 investments include those that are model priced by
vendors using observable inputs.
Level 3: Valuations that are derived from techniques in which one or more
of the significant inputs are unobservable (including assumptions about
risk). Because Level 3 fair values, by their nature, contain unobservable
market inputs, considerable judgment is used to determine the Level 3
fair values. Level 3 fair values represent the best estimate of an amount
that could be realized in a current market exchange absent actual market
exchanges.
In certain cases, the inputs used to measure fair value fall into
different levels of the fair value hierarchy. In such cases, an
investment's level within the fair value hierarchy is based on the lowest
level of input that is significant to the fair value measurement.
As of December 31, 2012, the Sub-Accounts invest in mutual funds which
are carried at fair value and represent Level 1 investments under the
fair value hierarchy levels. There were no Level 2 or Level 3 investments
in the Sub-Accounts. The Account's policy is to recognize transfers of
securities among the levels at the beginning of the reporting period.
There were no transfers among the levels for the year ended December 31,
2012.
g) ACCOUNTING FOR UNCERTAIN TAX POSITIONS -- Management evaluates
whether or not there are uncertain tax positions that require
financial statement recognition and has determined that no reserves
for uncertain tax positions are required at December 31, 2012. The
2007 through 2012 tax years generally remain subject to examination
by U.S. federal and most state tax authorities.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
Each Sub-account is charged certain fees, according to contract terms, as
follows:
a) COST OF INSURANCE -- In accordance with terms of the contracts, the
Sponsor Company makes deductions for costs of insurance charges
(COI), which relate to the death benefit component of the contract.
The COI is calculated based on several factors including age, gender,
risk class, timing of premium payments, investment performance of the
Sub-Account, the death benefit amount, fees and charges assessed and
outstanding policy loans.
SA-71
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
-------------------------------------------------------------------------------
Because a contract's account value and death benefit may vary from month
to month, the cost of insurance charge may also vary. These charges are
deducted through redemption of units from applicable contract owners'
accounts and are included on the accompanying statements of changes in
net assets.
b) MORTALITY AND EXPENSE RISK CHARGES -- The Sponsor Company, as an
issuer of variable life contracts, assesses mortality and expense
risk charges for which it receives a maximum annual fee of 1.40% of
the Sub-Account's average daily net assets. These expenses are
deducted through a redemption of units from applicable contract
owners' accounts and are reflected in cost of insurance and other
fees on the accompanying statements of changes in net assets.
c) ADMINISTRATIVE CHARGES -- The Sponsor Company provides administrative
services to the Account and charges the Account a maximum annual rate
of $30 or a maximum of $10 plus $0.03 per $1,000 of basic face
amount, or $15 plus $0.05 per $1,000 of supplemental face amount at
the policy issue date for these services. These expenses are deducted
through the redemption of units from applicable contract owners'
accounts and are reflected in cost of insurance and other fees on the
accompanying statements of changes in net assets for these services.
d) RIDER CHARGES -- The Sponsor Company will charge an expense for
various Rider charges, which are deducted through a redemption of
units from applicable contract owners' accounts and are included in
cost of insurance and other fees in the accompanying statements of
changes in net assets. For further detail regarding specific product
rider charges, please refer to Note 6, Financial Highlights.
e) ISSUE CHARGES -- The Sponsor Company may make deductions to cover
issue expenses at a maximum rate of $54.17 per $1,000 of the initial
face value. These charges are deducted through a redemption of units
from applicable contract owners' accounts and are reflected in cost
of insurance and other fees in the accompanying statements of changes
in net assets.
4. PURCHASES AND SALES OF INVESTMENTS:
The cost of purchases and proceeds from sales of investments for the year
ended December 31, 2012 were as follows:
<Table>
<Caption>
PURCHASES PROCEEDS
SUB-ACCOUNT AT COST FROM SALES
<S> <C> <C>
--------------------------------------------------------------------------------
AllianceBernstein VPS International Value
Portfolio $1,172,277 $1,442,093
AllianceBernstein VPS Small/Mid-Cap Value
Portfolio 860,601 1,423,856
AllianceBernstein VPS International Growth
Portfolio 434,210 509,169
Invesco V.I. Core Equity Fund 131,685 795,367
Invesco V.I. International Growth Fund 786,617 377,929
Invesco V.I. Mid Cap Core Equity Fund 799,292 2,524,249
Invesco V.I. Small Cap Equity Fund 520,969 1,448,191
Invesco V.I. Balanced Risk Allocation Fund 4,500,343 1,474,167
American Funds Asset Allocation Fund 5,698,742 7,045,914
American Funds Blue Chip Income and Growth Fund 1,794,437 3,804,694
American Funds Bond Fund 3,799,253 5,807,418
American Funds Global Growth Fund 1,148,980 5,549,243
American Funds Growth Fund 3,049,656 18,858,514
American Funds Growth-Income Fund 4,604,518 14,579,568
American Funds International Fund 1,963,702 7,530,320
American Funds New World Fund 1,392,484 4,009,760
American Funds Global Small Capitalization Fund 791,068 3,383,106
Fidelity VIP Asset Manager Portfolio 23,471 166,732
Fidelity VIP Equity Income Portfolio 4,744,973 4,267,090
Fidelity VIP Contrafund Portfolio 2,554,475 6,017,043
Fidelity VIP Overseas Portfolio 14,567 963,330
Fidelity VIP Mid Cap Portfolio 3,292,931 2,620,266
Fidelity VIP Freedom 2010 Portfolio 259,559 362,703
</Table>
SA-72
<Page>
-------------------------------------------------------------------------------
<Table>
<Caption>
PURCHASES PROCEEDS
SUB-ACCOUNT AT COST FROM SALES
<S> <C> <C>
--------------------------------------------------------------------------------
Fidelity VIP Freedom 2020 Portfolio $244,264 $634,773
Fidelity VIP Freedom 2030 Portfolio 533,253 279,727
Franklin Income Securities Fund 4,275,945 5,005,750
Franklin Small Cap Value Securities Fund 866,138 2,640,637
Franklin Strategic Income Securities Fund 5,078,136 2,416,477
Mutual Shares Securities Fund 1,736,439 4,319,489
Templeton Foreign Securities Fund 478,224 343,895
Templeton Growth Securities Fund 641,630 839,454
Mutual Global Discovery Securities Fund 3,093,778 3,297,044
Templeton Global Bond Securities Fund 5,215,212 5,337,515
Hartford Balanced HLS Fund* 2,866,120 11,252,272
Hartford Total Return Bond HLS Fund 9,474,508 13,771,420
Hartford Capital Appreciation HLS Fund 3,116,447 22,567,384
Hartford Dividend and Growth HLS Fund 4,159,750 14,567,002
Hartford Global Research HLS Fund 70,641 528,229
Hartford Global Growth HLS Fund 150,021 124,024
Hartford Disciplined Equity HLS Fund 1,120,132 1,887,922
Hartford Growth Opportunities HLS Fund 1,079,330 3,050,345
Hartford High Yield HLS Fund 2,441,636 853,548
Hartford Index HLS Fund 2,196,714 5,927,916
Hartford International Opportunities HLS Fund 1,765,933 7,830,375
Hartford MidCap HLS Fund 877,578 8,879,261
Hartford MidCap Value HLS Fund 618,534 1,999,818
Hartford Money Market HLS Fund 27,659,744 38,541,910
Hartford Small Company HLS Fund 706,126 4,133,920
Hartford Stock HLS Fund 1,996,801 9,952,007
Hartford U.S. Government Securities HLS Fund 3,595,492 3,697,492
Lord Abbett Calibrated Dividend Growth Fund* 932,333 1,052,830
Lord Abbett Bond-Debenture Fund 2,981,572 1,471,998
Lord Abbett Growth and Income Fund 397,444 831,098
MFS Investors Trust Series 217,928 210,902
MFS New Discovery Series 1,489,049 1,353,820
MFS Total Return Series 2,613,715 2,248,485
MFS Value Series 2,056,291 1,295,755
MFS Research Bond Series 3,914,038 1,858,171
UIF Mid Cap Growth Portfolio 781,092 1,011,035
Invesco Van Kampen V.I. American Value Fund* 810,860 486,332
Oppenheimer Capital Appreciation Fund/VA 243,767 404,992
Oppenheimer Global Securities Fund/VA 769,399 1,384,860
Oppenheimer Main Street Fund/VA 546,459 374,716
Oppenheimer Main Street Small- & Mid-Cap Fund/VA 180,356 162,740
Putnam VT Diversified Income Fund 638,945 733,658
Putnam VT Global Asset Allocation Fund 4,137 60,234
Putnam VT Global Equity Fund 185,171 918,799
Putnam VT Growth and Income Fund 773,487 2,203,375
Putnam VT Global Health Care Fund 93,147 125,495
Putnam VT High Yield Fund 3,335,931 4,097,170
Putnam VT Income Fund 2,119,843 2,965,560
Putnam VT International Value Fund 18,385 84,044
</Table>
SA-73
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
-------------------------------------------------------------------------------
<Table>
<Caption>
PURCHASES PROCEEDS
SUB-ACCOUNT AT COST FROM SALES
<S> <C> <C>
--------------------------------------------------------------------------------
Putnam VT International Equity Fund $964,470 $3,090,009
Putnam VT International Growth Fund 5,636 83,284
Putnam VT Investors Fund 11,625 109,983
Putnam VT Money Market Fund 11 13,857
Putnam VT Multi-Cap Growth Fund 590,893 1,697,763
Putnam VT Small Cap Value Fund 301,582 826,872
Putnam VT George Putnam Balanced Fund 14,889 173,065
Putnam VT Global Utilities Fund 24,312 135,337
Putnam VT Voyager Fund 882,310 3,477,540
Putnam VT Capital Opportunities Fund 304,201 966,861
Putnam VT Equity Income Fund 886,213 1,782,537
Invesco Van Kampen V.I. Comstock Fund 733,042 1,962,893
Invesco Van Kampen V.I. American Franchise Fund* 2,247,691 2,254,115
Invesco Van Kampen V.I. Mid Cap Growth Fund* 1,330,254 1,406,591
</Table>
* See Note 1 for additional information related to this Sub-Account.
5. CHANGES IN UNITS OUTSTANDING:
The changes in units outstanding for the year ended December 31, 2012 were
as follows:
<Table>
<Caption>
UNITS UNITS NET INCREASE
SUB-ACCOUNT ISSUED REDEEMED (DECREASE)
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------
AllianceBernstein VPS
International Value Portfolio 141,936 196,614 (54,678)
AllianceBernstein VPS
Small/Mid-Cap Value Portfolio 40,391 105,018 (64,627)
AllianceBernstein VPS
International Growth Portfolio 46,178 60,406 (14,228)
Invesco V.I. Core Equity Fund 6,672 47,120 (40,448)
Invesco V.I. International
Growth Fund 73,897 38,005 35,892
Invesco V.I. Mid Cap Core Equity
Fund 36,204 139,857 (103,653)
Invesco V.I. Small Cap Equity
Fund 35,285 97,703 (62,418)
Invesco V.I. Balanced Risk
Allocation Fund 374,607 124,725 249,882
American Funds Asset Allocation
Fund 238,022 404,103 (166,081)
American Funds Blue Chip Income
and Growth Fund 54,679 233,219 (178,540)
American Funds Bond Fund 162,979 398,865 (235,886)
American Funds Global Growth
Fund 383,187 3,217,438 (2,834,251)
American Funds Growth Fund 1,182,220 14,369,978 (13,187,758)
American Funds Growth-Income
Fund 1,340,801 9,607,507 (8,266,706)
American Funds International
Fund 48,813 349,521 (300,708)
American Funds New World Fund 35,403 133,824 (98,421)
American Funds Global Small
Capitalization Fund 219,546 1,668,197 (1,448,651)
Fidelity VIP Asset Manager
Portfolio -- 57,484 (57,484)
Fidelity VIP Equity Income
Portfolio 431,540 1,202,313 (770,773)
Fidelity VIP Contrafund
Portfolio 152,687 438,967 (286,280)
Fidelity VIP Overseas Portfolio -- 471,878 (471,878)
Fidelity VIP Mid Cap Portfolio 83,137 178,281 (95,144)
Fidelity VIP Freedom 2010
Portfolio 20,106 32,144 (12,038)
Fidelity VIP Freedom 2020
Portfolio 18,604 56,780 (38,176)
Fidelity VIP Freedom 2030
Portfolio 46,853 26,079 20,774
Franklin Income Securities Fund 138,822 359,573 (220,751)
Franklin Small Cap Value
Securities Fund 31,124 121,596 (90,472)
</Table>
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<Page>
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<Table>
<Caption>
UNITS UNITS NET INCREASE
SUB-ACCOUNT ISSUED REDEEMED (DECREASE)
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------
Franklin Strategic Income
Securities Fund 296,703 176,977 119,726
Mutual Shares Securities Fund 51,124 261,980 (210,856)
Templeton Foreign Securities
Fund 26,290 20,757 5,533
Templeton Growth Securities Fund 45,403 85,278 (39,875)
Mutual Global Discovery
Securities Fund 84,602 245,859 (161,257)
Templeton Global Bond Securities
Fund 196,987 312,357 (115,370)
Hartford Balanced HLS Fund* 214,590 3,005,049 (2,790,459)
Hartford Total Return Bond HLS
Fund 1,534,067 4,371,789 (2,837,722)
Hartford Capital Appreciation
HLS Fund 99,494 3,233,449 (3,133,955)
Hartford Dividend and Growth HLS
Fund 388,994 3,151,111 (2,762,117)
Hartford Global Research HLS
Fund 6,381 52,427 (46,046)
Hartford Global Growth HLS Fund 119,290 104,845 14,445
Hartford Disciplined Equity HLS
Fund 508,910 1,124,276 (615,366)
Hartford Growth Opportunities
HLS Fund 50,018 141,538 (91,520)
Hartford High Yield HLS Fund 112,569 44,776 67,793
Hartford Index HLS Fund 307,369 1,461,692 (1,154,323)
Hartford International
Opportunities HLS Fund 295,835 2,514,919 (2,219,084)
Hartford MidCap HLS Fund 93,583 1,940,090 (1,846,507)
Hartford MidCap Value HLS Fund 21,182 90,870 (69,688)
Hartford Money Market HLS Fund 16,061,773 22,118,731 (6,056,958)
Hartford Small Company HLS Fund 269,341 1,581,558 (1,312,217)
Hartford Stock HLS Fund 107,016 2,411,698 (2,304,682)
Hartford U.S. Government
Securities HLS Fund 279,401 322,497 (43,096)
Lord Abbett Calibrated Dividend
Growth Fund* 54,127 79,281 (25,154)
Lord Abbett Bond-Debenture Fund 175,690 104,426 71,264
Lord Abbett Growth and Income
Fund 29,189 72,972 (43,783)
MFS Investors Trust Series 15,032 15,576 (544)
MFS New Discovery Series 40,601 61,337 (20,736)
MFS Total Return Series 120,696 141,760 (21,064)
MFS Value Series 169,166 116,275 52,891
MFS Research Bond Series 258,755 131,606 127,149
UIF Mid Cap Growth Portfolio 42,365 82,867 (40,502)
Invesco Van Kampen V.I. American
Value Fund* 65,863 40,653 25,210
Oppenheimer Capital Appreciation
Fund/VA 19,295 34,084 (14,789)
Oppenheimer Global Securities
Fund/VA 46,673 107,532 (60,859)
Oppenheimer Main Street Fund/VA 42,427 29,878 12,549
Oppenheimer Main Street Small- &
Mid-Cap Fund/VA 14,179 12,972 1,207
Putnam VT Diversified Income
Fund 33,062 51,606 (18,544)
Putnam VT Global Asset
Allocation Fund -- 1,787 (1,787)
Putnam VT Global Equity Fund 4,978 34,714 (29,736)
Putnam VT Growth and Income Fund 24,071 70,064 (45,993)
Putnam VT Global Health Care
Fund -- 7,186 (7,186)
Putnam VT High Yield Fund 75,454 175,972 (100,518)
Putnam VT Income Fund 66,948 135,331 (68,383)
Putnam VT International Value
Fund -- 5,449 (5,449)
Putnam VT International Equity
Fund 40,699 200,943 (160,244)
Putnam VT International Growth
Fund -- 5,214 (5,214)
Putnam VT Investors Fund -- 9,356 (9,356)
Putnam VT Money Market Fund -- 7,681 (7,681)
</Table>
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<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
-------------------------------------------------------------------------------
<Table>
<Caption>
UNITS UNITS NET INCREASE
SUB-ACCOUNT ISSUED REDEEMED (DECREASE)
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------
Putnam VT Multi-Cap Growth Fund 29,062 71,024 (41,962)
Putnam VT Small Cap Value Fund 25,718 75,767 (50,049)
Putnam VT George Putnam Balanced
Fund -- 11,475 (11,475)
Putnam VT Global Utilities Fund -- 4,810 (4,810)
Putnam VT Voyager Fund 38,063 112,054 (73,991)
Putnam VT Capital Opportunities
Fund 13,745 46,546 (32,801)
Putnam VT Equity Income Fund 39,670 99,037 (59,367)
Invesco Van Kampen V.I. Comstock
Fund 38,004 159,862 (121,858)
Invesco Van Kampen V.I. American
Franchise Fund* 220,141 210,740 9,401
Invesco Van Kampen V.I. Mid Cap
Growth Fund* 130,849 115,936 14,913
</Table>
* See Note 1 for additional information related to this Sub-Account.
The changes in units outstanding for the year ended December 31, 2011 were
as follows:
<Table>
<Caption>
UNITS UNITS NET INCREASE
SUB-ACCOUNT ISSUED REDEEMED (DECREASE)
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------
AllianceBernstein VPS
International Value Portfolio 173,074 175,127 (2,053)
AllianceBernstein VPS
Small/Mid-Cap Value Portfolio 62,714 156,210 (93,496)
AllianceBernstein VPS
International Growth Portfolio 67,593 106,144 (38,551)
Invesco V.I. Capital
Appreciation Fund 16,964 22,035 (5,071)
Invesco V.I. Core Equity Fund 41,975 24,374 17,601
Invesco V.I. International
Growth Fund 97,328 50,844 46,484
Invesco V.I. Mid Cap Core Equity
Fund 89,419 112,704 (23,285)
Invesco V.I. Small Cap Equity
Fund 144,760 100,321 44,439
Invesco V.I. Capital Development
Fund 9,236 15,376 (6,140)
Invesco V.I. Balanced Risk
Allocation Fund 242,424 72,855 169,569
American Funds Asset Allocation
Fund 101,098 493,100 (392,002)
American Funds Blue Chip Income
and Growth Fund 93,803 263,483 (169,680)
American Funds Bond Fund 186,730 516,457 (329,727)
American Funds Global Growth
Fund 685,010 2,936,536 (2,251,526)
American Funds Growth Fund 2,618,845 15,001,152 (12,382,307)
American Funds Growth-Income
Fund 779,610 10,133,081 (9,353,471)
American Funds International
Fund 78,248 242,628 (164,380)
American Funds New World Fund 76,732 129,084 (52,352)
American Funds Global Small
Capitalization Fund 346,269 1,996,069 (1,649,800)
Fidelity VIP Asset Manager
Portfolio -- 90,374 (90,374)
Fidelity VIP Equity Income
Portfolio 148,128 1,207,414 (1,059,286)
Fidelity VIP Contrafund
Portfolio 345,507 332,476 13,031
Fidelity VIP Overseas Portfolio -- 66,113 (66,113)
Fidelity VIP Mid Cap Portfolio 178,417 231,748 (53,331)
Fidelity VIP Freedom 2010
Portfolio 32,951 24,095 8,856
Fidelity VIP Freedom 2020
Portfolio 22,206 17,734 4,472
Fidelity VIP Freedom 2030
Portfolio 14,991 16,530 (1,539)
Franklin Income Securities Fund 185,156 282,203 (97,047)
Franklin Small Cap Value
Securities Fund 51,053 170,209 (119,156)
Franklin Strategic Income
Securities Fund 289,263 139,452 149,811
Mutual Shares Securities Fund 93,830 324,239 (230,409)
Templeton Foreign Securities
Fund 45,551 10,244 35,307
Templeton Growth Securities Fund 57,289 177,354 (120,065)
Mutual Global Discovery
Securities Fund 190,421 245,775 (55,354)
Templeton Global Bond Securities
Fund 272,216 240,928 31,288
</Table>
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<Page>
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<Table>
<Caption>
UNITS UNITS NET INCREASE
SUB-ACCOUNT ISSUED REDEEMED (DECREASE)
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------
Hartford Advisers HLS Fund 232,210 3,890,969 (3,658,759)
Hartford Total Return Bond HLS
Fund 1,194,796 4,757,135 (3,562,339)
Hartford Capital Appreciation
HLS Fund 240,700 2,791,002 (2,550,302)
Hartford Dividend and Growth HLS
Fund 535,723 2,452,290 (1,916,567)
Hartford Global Research HLS
Fund 14,931 7,490 7,441
Hartford Global Growth HLS Fund 21,811 76,326 (54,515)
Hartford Disciplined Equity HLS
Fund 455,447 1,229,642 (774,195)
Hartford Growth Opportunities
HLS Fund 79,765 201,056 (121,291)
Hartford High Yield HLS Fund 121,053 81,852 39,201
Hartford Index HLS Fund 371,724 2,241,537 (1,869,813)
Hartford International
Opportunities HLS Fund 430,596 1,464,558 (1,033,962)
Hartford MidCap HLS Fund 78,617 1,874,825 (1,796,208)
Hartford MidCap Value HLS Fund 24,796 86,044 (61,248)
Hartford Money Market HLS Fund 16,819,095 22,442,658 (5,623,563)
Hartford Small Company HLS Fund 459,362 1,912,015 (1,452,653)
Hartford Stock HLS Fund 156,471 2,258,920 (2,102,449)
Hartford U.S. Government
Securities HLS Fund 232,356 305,528 (73,172)
Lord Abbett Capital Structure
Fund 66,807 101,295 (34,488)
Lord Abbett Bond-Debenture Fund 128,570 102,604 25,966
Lord Abbett Growth and Income
Fund 73,298 99,658 (26,360)
MFS Investors Trust Series 48,973 87,217 (38,244)
MFS New Discovery Series 65,908 49,324 16,584
MFS Total Return Series 71,844 213,030 (141,186)
MFS Value Series 192,880 114,223 78,657
MFS Research Bond Series 304,533 116,555 187,978
UIF Mid Cap Growth Portfolio 98,461 72,068 26,393
Invesco Van Kampen V.I. Mid Cap
Value Fund 42,385 45,412 (3,027)
Oppenheimer Capital Appreciation
Fund/VA 23,531 45,261 (21,730)
Oppenheimer Global Securities
Fund/VA 78,721 99,613 (20,892)
Oppenheimer Main Street Fund/VA 10,796 20,015 (9,219)
Oppenheimer Main Street Small- &
Mid-Cap Fund/VA 12,875 10,928 1,947
Putnam VT Diversified Income
Fund 72,783 66,515 6,268
Putnam VT Global Asset
Allocation Fund -- 2,019 (2,019)
Putnam VT Global Equity Fund 6,787 24,347 (17,560)
Putnam VT Growth and Income Fund 24,536 112,392 (87,856)
Putnam VT Global Health Care
Fund -- 20,905 (20,905)
Putnam VT High Yield Fund 134,013 245,368 (111,355)
Putnam VT Income Fund 91,023 155,928 (64,905)
Putnam VT International Value
Fund -- 8,051 (8,051)
Putnam VT International Equity
Fund 68,198 142,463 (74,265)
Putnam VT International Growth
Fund -- 5,254 (5,254)
Putnam VT Investors Fund 4 11,548 (11,544)
Putnam VT Money Market Fund -- 9,743 (9,743)
Putnam VT Multi-Cap Growth Fund 15,727 66,402 (50,675)
Putnam VT Small Cap Value Fund 32,137 60,193 (28,056)
Putnam VT George Putnam Balanced
Fund -- 11,139 (11,139)
Putnam VT Global Utilities Fund -- 5,452 (5,452)
Putnam VT Voyager Fund 71,565 162,227 (90,662)
Putnam VT Capital Opportunities
Fund 42,846 41,649 1,197
Putnam VT Equity Income Fund 150,663 82,443 68,220
Invesco Van Kampen V.I. Comstock
Fund 79,928 116,540 (36,612)
</Table>
SA-77
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
-------------------------------------------------------------------------------
6. FINANCIAL HIGHLIGHTS:
The following is a summary of units, unit fair values, net assets, expense
ratios, investment income ratios, and total return ratios representing the
lowest and highest contract charges for each of the periods presented within
each Sub-Account that had outstanding units as of and for the period ended
December 31, 2012. The unit value range presented below represents the unit
values of the highest and lowest contract charges, therefore a specific
Sub-Account unit value may be outside of the range presented in this table.
Financial highlights for net assets allocated to Sub-Accounts that have
merged during the period, if applicable, have been shown for the surviving
fund.
<Table>
<Caption>
UNIT
FAIR VALUE
SUB-ACCOUNT UNITS # LOWEST TO HIGHEST # NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
ALLIANCEBERNSTEIN VPS
INTERNATIONAL VALUE
PORTFOLIO
2012 1,495,801 $7.830881 to $7.830881 $11,713,438
2011 1,550,479 6.857519 to 6.857519 10,632,441
2010 1,552,532 8.511980 to 8.511980 13,215,119
2009 1,596,628 8.161134 to 8.161134 13,030,298
2008 1,602,576 6.074134 to 6.074134 9,734,259
ALLIANCEBERNSTEIN VPS
SMALL/MID-CAP VALUE
PORTFOLIO
2012 647,465 14.642002 to 14.642002 9,480,179
2011 712,092 12.359340 to 12.359340 8,800,986
2010 805,588 13.525397 to 13.525397 10,895,898
2009 725,696 10.684549 to 10.684549 7,753,732
2008 741,924 7.489616 to 7.489616 5,556,724
ALLIANCEBERNSTEIN VPS
INTERNATIONAL GROWTH
PORTFOLIO
2012 364,847 9.085135 to 9.085135 3,314,686
2011 379,075 7.883945 to 7.883945 2,988,607
2010 417,626 9.390573 to 9.390573 3,921,748
2009 408,450 8.339156 to 8.339156 3,406,124
2008 390,722 5.989175 to 5.989175 2,340,105
INVESCO V.I. CORE EQUITY FUND
2012 99,757 17.528629 to 17.528629 1,748,601
2011 140,205 15.391910 to 15.391910 2,158,027
2010 122,604 15.401643 to 15.401643 1,888,309
2009 129,893 14.058334 to 14.058334 1,826,077
2008 141,615 10.957579 to 10.957579 1,551,758
INVESCO V.I. INTERNATIONAL
GROWTH FUND
2012 361,159 10.681661 to 10.681661 3,857,780
2011 325,267 9.245632 to 9.245632 3,007,295
2010 278,783 9.913898 to 9.913898 2,763,828
2009 173,459 8.784056 to 8.784056 1,523,674
2008 54,856 6.495072 to 6.495072 356,296
INVESCO V.I. MID CAP CORE
EQUITY FUND
2012 796,689 18.762126 to 18.762126 14,947,579
2011 900,342 16.909642 to 16.909642 15,224,463
2010 923,627 18.061560 to 18.061560 16,682,140
2009 1,024,144 15.827870 to 15.827870 16,210,018
2008 1,093,334 12.155426 to 12.155426 13,289,938
INVESCO V.I. SMALL CAP EQUITY
FUND
2012 327,010 15.606747 to 15.606747 5,103,556
2011 389,428 13.702870 to 13.702870 5,336,286
2010 344,989 13.803070 to 13.803070 4,761,907
2009 287,138 10.738505 to 10.738505 3,083,436
2008 195,093 8.853684 to 8.853684 1,727,293
<Caption>
INVESTMENT
EXPENSE INCOME TOTAL RETURN
RATIO LOWEST TO RATIO LOWEST TO RATIO LOWEST TO
SUB-ACCOUNT HIGHEST* HIGHEST** HIGHEST***
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------- ------------------------------------------------------------------------------------------
ALLIANCEBERNSTEIN VPS
INTERNATIONAL VALUE
PORTFOLIO
2012 -- to -- 1.41% to 1.41% 14.19% to 14.19%
2011 -- to -- 3.98% to 3.98% (19.44)% to (19.44)%
2010 -- to -- 2.71% to 2.71% 4.30% to 4.30%
2009 -- to -- 1.15% to 1.15% 34.36% to 34.36%
2008 -- to -- 0.88% to 0.88% (53.28)% to (53.28)%
ALLIANCEBERNSTEIN VPS
SMALL/MID-CAP VALUE
PORTFOLIO
2012 -- to -- 0.28% to 0.28% 18.47% to 18.47%
2011 -- to -- 0.26% to 0.26% (8.62)% to (8.62)%
2010 -- to -- 0.27% to 0.27% 26.59% to 26.59%
2009 -- to -- 0.80% to 0.80% 42.66% to 42.66%
2008 -- to -- 0.44% to 0.44% (35.75)% to (35.75)%
ALLIANCEBERNSTEIN VPS
INTERNATIONAL GROWTH
PORTFOLIO
2012 -- to -- 1.38% to 1.38% 15.24% to 15.24%
2011 -- to -- 2.75% to 2.75% (16.04)% to (16.04)%
2010 -- to -- 1.82% to 1.82% 12.61% to 12.61%
2009 -- to -- 0.04% to 0.04% 39.24% to 39.24%
2008 -- to -- -- to -- (48.96)% to (48.96)%
INVESCO V.I. CORE EQUITY FUND
2012 -- to -- 0.95% to 0.95% 13.88% to 13.88%
2011 -- to -- 0.91% to 0.91% (0.06)% to (0.06)%
2010 -- to -- 0.98% to 0.98% 9.56% to 9.56%
2009 -- to -- 1.87% to 1.87% 28.30% to 28.30%
2008 -- to -- 2.66% to 2.66% (30.14)% to (30.14)%
INVESCO V.I. INTERNATIONAL
GROWTH FUND
2012 -- to -- 1.51% to 1.51% 15.53% to 15.53%
2011 -- to -- 1.54% to 1.54% (6.74)% to (6.74)%
2010 -- to -- 2.56% to 2.56% 12.86% to 12.86%
2009 -- to -- 2.14% to 2.14% 35.24% to 35.24%
2008 -- to -- 2.07% to 2.07% (35.05)% to (35.05)%
INVESCO V.I. MID CAP CORE
EQUITY FUND
2012 -- to -- 0.06% to 0.06% 10.96% to 10.96%
2011 -- to -- 0.30% to 0.30% (6.38)% to (6.38)%
2010 -- to -- 0.56% to 0.56% 14.11% to 14.11%
2009 -- to -- 1.34% to 1.34% 30.21% to 30.21%
2008 -- to -- 1.61% to 1.61% (28.52)% to (28.52)%
INVESCO V.I. SMALL CAP EQUITY
FUND
2012 -- to -- -- to -- 13.89% to 13.89%
2011 -- to -- -- to -- (0.73)% to (0.73)%
2010 -- to -- -- to -- 28.54% to 28.54%
2009 -- to -- -- to -- 21.29% to 21.29%
2008 -- to -- -- to -- (31.31)% to (31.31)%
</Table>
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<Page>
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<Table>
<Caption>
UNIT
FAIR VALUE
SUB-ACCOUNT UNITS # LOWEST TO HIGHEST # NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
INVESCO V.I. BALANCED RISK
ALLOCATION FUND
2012 463,551 $12.310062 to $12.310062 $5,706,345
2011 213,669 11.091880 to 11.091880 2,369,988
AMERICAN FUNDS ASSET
ALLOCATION FUND
2012 4,406,802 18.489702 to 18.489702 81,480,457
2011 4,572,883 15.913238 to 15.913238 72,769,375
2010 4,964,885 15.709635 to 15.709635 77,996,537
2009 5,424,088 13.963461 to 13.963461 75,739,039
2008 5,614,716 11.262300 to 11.262300 63,234,615
AMERICAN FUNDS BLUE CHIP
INCOME AND GROWTH FUND
2012 2,711,948 16.842764 to 16.842764 45,676,707
2011 2,890,488 14.789539 to 14.789539 42,748,991
2010 3,060,168 14.924145 to 14.924145 45,670,393
2009 3,164,379 13.286460 to 13.286460 42,043,389
2008 3,206,911 10.382553 to 10.382553 33,295,926
AMERICAN FUNDS BOND FUND
2012 3,827,012 14.884837 to 14.884837 56,964,455
2011 4,062,898 14.125783 to 14.125783 57,391,616
2010 4,392,625 13.313285 to 13.313285 58,480,264
2009 4,738,312 12.507300 to 12.507300 59,263,485
2008 4,604,691 11.107228 to 11.107228 51,145,347
AMERICAN FUNDS GLOBAL GROWTH
FUND
2012 29,951,862 1.879328 to 1.879328 56,289,374
2011 32,786,113 1.533372 to 1.533372 50,273,308
2010 35,037,639 1.682911 to 1.682911 58,965,229
2009 37,029,042 1.506019 to 1.506019 55,766,441
2008 40,130,537 1.058316 to 1.058316 42,470,789
AMERICAN FUNDS GROWTH FUND
2012 139,496,129 1.386229 to 1.386229 193,373,580
2011 152,683,887 1.175863 to 1.175863 179,535,333
2010 165,066,194 1.228397 to 1.228397 202,766,818
2009 178,427,219 1.035048 to 1.035048 184,680,735
2008 189,655,749 0.742443 to 0.742443 140,808,583
AMERICAN FUNDS GROWTH-INCOME
FUND
2012 99,775,774 1.607139 to 1.607139 160,353,538
2011 108,042,480 1.367989 to 1.367989 147,800,923
2010 117,395,951 1.393495 to 1.393495 163,590,671
2009 126,174,184 1.250601 to 1.250601 157,793,561
2008 135,621,416 0.952901 to 0.952901 129,233,783
AMERICAN FUNDS INTERNATIONAL
FUND
2012 2,719,902 23.413424 to 23.413424 63,682,214
2011 3,020,610 19.857580 to 19.857580 59,982,007
2010 3,184,990 23.080421 to 23.080421 73,510,920
2009 3,313,025 21.523685 to 21.523685 71,308,504
2008 3,509,365 15.043908 to 15.043908 52,794,571
<Caption>
INVESTMENT
EXPENSE INCOME TOTAL RETURN
RATIO LOWEST TO RATIO LOWEST TO RATIO LOWEST TO
SUB-ACCOUNT HIGHEST* HIGHEST** HIGHEST***
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------- ------------------------------------------------------------------------------------------
INVESCO V.I. BALANCED RISK
ALLOCATION FUND
2012 -- to -- 1.05% to 1.05% 10.98% to 10.98%
2011 -- to -- -- to -- 10.92% to 10.92%
AMERICAN FUNDS ASSET
ALLOCATION FUND
2012 -- to -- 1.94% to 1.94% 16.19% to 16.19%
2011 -- to -- 1.85% to 1.85% 1.30% to 1.30%
2010 -- to -- 1.96% to 1.96% 12.51% to 12.51%
2009 -- to -- 2.38% to 2.38% 23.98% to 23.98%
2008 -- to -- 2.64% to 2.64% (29.51)% to (29.51)%
AMERICAN FUNDS BLUE CHIP
INCOME AND GROWTH FUND
2012 -- to -- 1.99% to 1.99% 13.88% to 13.88%
2011 -- to -- 1.74% to 1.74% (0.90)% to (0.90)%
2010 -- to -- 1.75% to 1.75% 12.33% to 12.33%
2009 -- to -- 2.16% to 2.16% 27.97% to 27.97%
2008 -- to -- 2.11% to 2.11% (36.51)% to (36.51)%
AMERICAN FUNDS BOND FUND
2012 -- to -- 2.48% to 2.48% 5.37% to 5.37%
2011 -- to -- 2.95% to 2.95% 6.10% to 6.10%
2010 -- to -- 2.94% to 2.94% 6.44% to 6.44%
2009 -- to -- 3.26% to 3.26% 12.61% to 12.61%
2008 -- to -- 5.69% to 5.69% (9.35)% to (9.35)%
AMERICAN FUNDS GLOBAL GROWTH
FUND
2012 -- to -- 0.90% to 0.90% 22.56% to 22.56%
2011 -- to -- 1.29% to 1.29% (8.89)% to (8.89)%
2010 -- to -- 1.49% to 1.49% 11.75% to 11.75%
2009 -- to -- 1.42% to 1.42% 42.30% to 42.30%
2008 -- to -- 1.86% to 1.86% (38.39)% to (38.39)%
AMERICAN FUNDS GROWTH FUND
2012 -- to -- 0.79% to 0.79% 17.89% to 17.89%
2011 -- to -- 0.60% to 0.60% (4.28)% to (4.28)%
2010 -- to -- 0.72% to 0.72% 18.68% to 18.68%
2009 -- to -- 0.66% to 0.66% 39.41% to 39.41%
2008 -- to -- 0.85% to 0.85% (43.97)% to (43.97)%
AMERICAN FUNDS GROWTH-INCOME
FUND
2012 -- to -- 1.62% to 1.62% 17.48% to 17.48%
2011 -- to -- 1.53% to 1.53% (1.83)% to (1.83)%
2010 -- to -- 1.48% to 1.48% 11.43% to 11.43%
2009 -- to -- 1.61% to 1.61% 31.24% to 31.24%
2008 -- to -- 0.77% to 0.77% (37.85)% to (37.85)%
AMERICAN FUNDS INTERNATIONAL
FUND
2012 -- to -- 1.47% to 1.47% 17.91% to 17.91%
2011 -- to -- 1.74% to 1.74% (13.96)% to (13.96)%
2010 -- to -- 2.06% to 2.06% 7.23% to 7.23%
2009 -- to -- 1.56% to 1.56% 43.07% to 43.07%
2008 -- to -- 2.00% to 2.00% (42.12)% to (42.12)%
</Table>
SA-79
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
-------------------------------------------------------------------------------
<Table>
<Caption>
UNIT
FAIR VALUE
SUB-ACCOUNT UNITS # LOWEST TO HIGHEST # NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
AMERICAN FUNDS NEW WORLD FUND
2012 1,077,035 $32.197536 to $32.197536 $34,677,867
2011 1,175,456 27.327395 to 27.327395 32,122,147
2010 1,227,808 31.756414 to 31.756414 38,990,788
2009 1,240,272 26.941235 to 26.941235 33,414,455
2008 1,275,691 18.002579 to 18.002579 22,965,729
AMERICAN FUNDS GLOBAL SMALL
CAPITALIZATION FUND
2012 12,010,025 2.164794 to 2.164794 25,999,230
2011 13,458,676 1.831808 to 1.831808 24,653,710
2010 15,108,476 2.265511 to 2.265511 34,228,419
2009 16,196,983 1.850714 to 1.850714 29,975,983
2008 16,823,811 1.147402 to 1.147402 19,303,674
FIDELITY VIP ASSET MANAGER
PORTFOLIO
2012 343,665 3.026411 to 3.026411 1,040,072
2011 401,149 2.690584 to 2.690584 1,079,326
2010 491,523 2.761290 to 2.761290 1,357,237
2009 605,337 2.416579 to 2.416579 1,462,845
2008 743,264 1.871681 to 1.871681 1,391,153
FIDELITY VIP EQUITY INCOME
PORTFOLIO
2012 8,729,457 3.409746 to 12.688792 34,095,461
2011 9,500,230 2.906674 to 10.840042 31,470,851
2010 10,559,516 2.878704 to 10.769489 34,316,335
2009 11,921,056 2.499987 to 9.371563 33,117,657
2008 13,475,260 1.919982 to 7.215315 28,294,360
FIDELITY VIP CONTRAFUND
PORTFOLIO
2012 2,828,785 14.321191 to 14.321191 40,511,566
2011 3,115,065 12.330930 to 12.330930 38,411,651
2010 3,102,034 12.684040 to 12.684040 39,346,326
2009 3,020,361 10.847941 to 10.847941 32,764,696
2008 2,797,455 8.007735 to 8.007735 22,401,277
FIDELITY VIP OVERSEAS
PORTFOLIO
2012 276,514 2.396177 to 2.396177 662,577
2011 748,392 1.984568 to 1.984568 1,485,234
2010 814,505 2.395759 to 2.395759 1,951,357
2009 919,076 2.118000 to 2.118000 1,946,603
2008 1,134,846 1.673907 to 1.673907 1,899,627
FIDELITY VIP MID CAP
PORTFOLIO
2012 1,635,491 15.275636 to 15.275636 24,983,168
2011 1,730,635 13.333878 to 13.333878 23,076,075
2010 1,783,966 14.957023 to 14.957023 26,682,817
2009 1,721,490 11.633336 to 11.633336 20,026,666
2008 1,742,992 8.324310 to 8.324310 14,509,208
FIDELITY VIP FREEDOM 2010
PORTFOLIO
2012 76,275 12.106372 to 12.106372 923,419
2011 88,313 10.849651 to 10.849651 958,170
2010 79,457 10.896238 to 10.896238 865,784
2009 65,695 9.681661 to 9.681661 636,037
2008 35,646 7.810650 to 7.810650 278,415
<Caption>
INVESTMENT
EXPENSE INCOME TOTAL RETURN
RATIO LOWEST TO RATIO LOWEST TO RATIO LOWEST TO
SUB-ACCOUNT HIGHEST* HIGHEST** HIGHEST***
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------- ------------------------------------------------------------------------------------------
AMERICAN FUNDS NEW WORLD FUND
2012 -- to -- 1.00% to 1.00% 17.82% to 17.82%
2011 -- to -- 1.70% to 1.70% (13.95)% to (13.95)%
2010 -- to -- 1.61% to 1.61% 17.87% to 17.87%
2009 -- to -- 1.54% to 1.54% 49.65% to 49.65%
2008 -- to -- 1.52% to 1.52% (42.37)% to (42.37)%
AMERICAN FUNDS GLOBAL SMALL
CAPITALIZATION FUND
2012 -- to -- 1.34% to 1.34% 18.18% to 18.18%
2011 -- to -- 1.33% to 1.33% (19.14)% to (19.14)%
2010 -- to -- 1.73% to 1.73% 22.41% to 22.41%
2009 -- to -- 1.73% to 1.73% 61.30% to 61.30%
2008 -- to -- -- to -- (53.52)% to (53.52)%
FIDELITY VIP ASSET MANAGER
PORTFOLIO
2012 -- to -- 1.47% to 1.47% 12.48% to 12.48%
2011 -- to -- 1.81% to 1.81% (2.56)% to (2.56)%
2010 -- to -- 1.62% to 1.62% 14.26% to 14.26%
2009 -- to -- 2.25% to 2.25% 29.11% to 29.11%
2008 -- to -- 2.39% to 2.39% (28.72)% to (28.72)%
FIDELITY VIP EQUITY INCOME
PORTFOLIO
2012 -- to -- 2.97% to 3.07% 17.05% to 17.31%
2011 -- to -- 2.31% to 2.46% 0.66% to 0.97%
2010 -- to -- 1.67% to 1.79% 14.92% to 15.15%
2009 -- to -- 2.19% to 2.28% 29.88% to 30.21%
2008 -- to -- 2.45% to 2.63% (42.81)% to (42.65)%
FIDELITY VIP CONTRAFUND
PORTFOLIO
2012 -- to -- 1.10% to 1.10% 16.14% to 16.14%
2011 -- to -- 0.82% to 0.82% (2.78)% to (2.78)%
2010 -- to -- 1.06% to 1.06% 16.93% to 16.93%
2009 -- to -- 1.24% to 1.24% 35.47% to 35.47%
2008 -- to -- 0.91% to 0.91% (42.69)% to (42.69)%
FIDELITY VIP OVERSEAS
PORTFOLIO
2012 -- to -- 1.80% to 1.80% 20.74% to 20.74%
2011 -- to -- 1.36% to 1.36% (17.16)% to (17.16)%
2010 -- to -- 1.39% to 1.39% 13.11% to 13.11%
2009 -- to -- 2.04% to 2.04% 26.53% to 26.53%
2008 -- to -- 2.60% to 2.60% (43.81)% to (43.81)%
FIDELITY VIP MID CAP
PORTFOLIO
2012 -- to -- 0.39% to 0.39% 14.56% to 14.56%
2011 -- to -- 0.02% to 0.02% (10.85)% to (10.85)%
2010 -- to -- 0.13% to 0.13% 28.57% to 28.57%
2009 -- to -- 0.47% to 0.47% 39.75% to 39.75%
2008 -- to -- 0.25% to 0.25% (39.61)% to (39.61)%
FIDELITY VIP FREEDOM 2010
PORTFOLIO
2012 -- to -- 1.50% to 1.50% 11.58% to 11.58%
2011 -- to -- 1.87% to 1.87% (0.43)% to (0.43)%
2010 -- to -- 2.20% to 2.20% 12.55% to 12.55%
2009 -- to -- 4.93% to 4.93% 23.96% to 23.96%
2008 -- to -- 8.24% to 8.24% (21.89)% to (21.89)%
</Table>
SA-80
<Page>
-------------------------------------------------------------------------------
<Table>
<Caption>
UNIT
FAIR VALUE
SUB-ACCOUNT UNITS # LOWEST TO HIGHEST # NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
FIDELITY VIP FREEDOM 2020
PORTFOLIO
2012 84,112 $11.766118 to $11.766118 $989,669
2011 122,288 10.405993 to 10.405993 1,272,532
2010 117,816 10.536819 to 10.536819 1,241,402
2009 65,607 9.216289 to 9.216289 604,655
2008 31,464 7.169550 to 7.169550 225,584
FIDELITY VIP FREEDOM 2030
PORTFOLIO
2012 91,234 11.412628 to 11.412628 1,041,215
2011 70,460 9.908391 to 9.908391 698,148
2010 71,999 10.196865 to 10.196865 734,164
2009 16,039 8.798777 to 8.798777 141,119
2008 6,844 6.707483 to 6.707483 45,903
FRANKLIN INCOME SECURITIES
FUND
2012 2,504,422 14.716926 to 14.716926 36,857,399
2011 2,725,173 13.064004 to 13.064004 35,601,678
2010 2,822,220 12.759824 to 12.759824 36,011,031
2009 2,892,295 11.324722 to 11.324722 32,754,439
2008 2,983,512 8.351913 to 8.351913 24,918,032
FRANKLIN SMALL CAP VALUE
SECURITIES FUND
2012 1,127,553 23.643948 to 23.643948 26,659,797
2011 1,218,025 19.971648 to 19.971648 24,325,969
2010 1,337,181 20.751900 to 20.751900 27,749,042
2009 1,403,621 16.184436 to 16.184436 22,716,814
2008 1,504,562 12.530774 to 12.530774 18,853,326
FRANKLIN STRATEGIC INCOME
SECURITIES FUND
2012 1,120,741 14.439420 to 14.439420 16,182,852
2011 1,001,015 12.764539 to 12.764539 12,777,497
2010 851,204 12.419716 to 12.419716 10,571,710
2009 645,409 11.167863 to 11.167863 7,207,844
2008 192,923 8.855462 to 8.855462 1,708,421
MUTUAL SHARES SECURITIES FUND
2012 2,563,760 17.290820 to 17.290820 44,329,507
2011 2,774,616 15.135026 to 15.135026 41,993,887
2010 3,005,025 15.294362 to 15.294362 45,959,939
2009 3,178,790 13.754639 to 13.754639 43,723,111
2008 3,323,687 10.912235 to 10.912235 36,268,854
TEMPLETON FOREIGN SECURITIES
FUND
2012 75,811 18.538988 to 18.538988 1,405,453
2011 70,278 15.680071 to 15.680071 1,101,958
2010 34,971 17.545864 to 17.545864 613,599
2009 5,614 16.185319 to 16.185319 90,859
TEMPLETON GROWTH SECURITIES
FUND
2012 954,553 10.934682 to 10.934682 10,437,732
2011 994,428 9.031951 to 9.031951 8,981,626
2010 1,114,493 9.709116 to 9.709116 10,820,742
2009 1,138,169 9.040690 to 9.040690 10,289,834
2008 1,136,464 6.895852 to 6.895852 7,836,891
<Caption>
INVESTMENT
EXPENSE INCOME TOTAL RETURN
RATIO LOWEST TO RATIO LOWEST TO RATIO LOWEST TO
SUB-ACCOUNT HIGHEST* HIGHEST** HIGHEST***
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------- ------------------------------------------------------------------------------------------
FIDELITY VIP FREEDOM 2020
PORTFOLIO
2012 -- to -- 1.65% to 1.65% 13.07% to 13.07%
2011 -- to -- 1.99% to 1.99% (1.24)% to (1.24)%
2010 -- to -- 2.77% to 2.77% 14.33% to 14.33%
2009 -- to -- 3.79% to 3.79% 28.55% to 28.55%
2008 -- to -- 8.93% to 8.93% (28.31)% to (28.31)%
FIDELITY VIP FREEDOM 2030
PORTFOLIO
2012 -- to -- 2.03% to 2.03% 15.18% to 15.18%
2011 -- to -- 1.88% to 1.88% (2.83)% to (2.83)%
2010 -- to -- 2.45% to 2.45% 15.89% to 15.89%
2009 -- to -- 2.44% to 2.44% 31.18% to 31.18%
2008 -- to -- 11.75% to 11.75% (32.93)% to (32.93)%
FRANKLIN INCOME SECURITIES
FUND
2012 -- to -- 6.41% to 6.41% 12.65% to 12.65%
2011 -- to -- 5.72% to 5.72% 2.38% to 2.38%
2010 -- to -- 6.66% to 6.66% 12.67% to 12.67%
2009 -- to -- 8.11% to 8.11% 35.59% to 35.59%
2008 -- to -- 5.51% to 5.51% (29.66)% to (29.66)%
FRANKLIN SMALL CAP VALUE
SECURITIES FUND
2012 -- to -- 0.78% to 0.78% 18.39% to 18.39%
2011 -- to -- 0.69% to 0.69% (3.76)% to (3.76)%
2010 -- to -- 0.76% to 0.76% 28.22% to 28.22%
2009 -- to -- 1.64% to 1.64% 29.16% to 29.16%
2008 -- to -- 1.15% to 1.15% (33.02)% to (33.02)%
FRANKLIN STRATEGIC INCOME
SECURITIES FUND
2012 -- to -- 6.90% to 6.90% 13.12% to 13.12%
2011 -- to -- 6.24% to 6.24% 2.78% to 2.78%
2010 -- to -- 4.78% to 4.78% 11.21% to 11.21%
2009 -- to -- 7.67% to 7.67% 26.11% to 26.11%
2008 -- to -- 0.57% to 0.57% (11.45)% to (11.45)%
MUTUAL SHARES SECURITIES FUND
2012 -- to -- 2.06% to 2.06% 14.24% to 14.24%
2011 -- to -- 2.37% to 2.37% (1.04)% to (1.04)%
2010 -- to -- 1.58% to 1.58% 11.19% to 11.19%
2009 -- to -- 1.96% to 1.96% 26.05% to 26.05%
2008 -- to -- 3.12% to 3.12% (37.11)% to (37.11)%
TEMPLETON FOREIGN SECURITIES
FUND
2012 -- to -- 3.14% to 3.14% 18.23% to 18.23%
2011 -- to -- 1.67% to 1.67% (10.63)% to (10.63)%
2010 -- to -- 1.64% to 1.64% 8.41% to 8.41%
2009 -- to -- -- to -- 61.85% to 61.85%
TEMPLETON GROWTH SECURITIES
FUND
2012 -- to -- 2.05% to 2.05% 21.07% to 21.07%
2011 -- to -- 1.34% to 1.34% (6.97)% to (6.97)%
2010 -- to -- 1.36% to 1.36% 7.39% to 7.39%
2009 -- to -- 3.13% to 3.13% 31.10% to 31.10%
2008 -- to -- 1.81% to 1.81% (42.32)% to (42.32)%
</Table>
SA-81
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
-------------------------------------------------------------------------------
<Table>
<Caption>
UNIT
FAIR VALUE
SUB-ACCOUNT UNITS # LOWEST TO HIGHEST # NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
MUTUAL GLOBAL DISCOVERY
SECURITIES FUND
2012 1,773,779 $13.894317 to $13.894317 $24,645,450
2011 1,935,036 12.257024 to 12.257024 23,717,785
2010 1,990,390 12.630777 to 12.630777 25,140,178
2009 1,834,316 11.281734 to 11.281734 20,694,263
2008 1,677,235 9.148724 to 9.148724 15,344,558
TEMPLETON GLOBAL BOND
SECURITIES FUND
2012 1,608,661 18.113279 to 18.113279 29,138,120
2011 1,724,031 15.741644 to 15.741644 27,139,076
2010 1,692,743 15.879928 to 15.879928 26,880,635
2009 1,226,442 13.875288 to 13.875288 17,017,234
2008 818,967 11.691131 to 11.691131 9,574,652
HARTFORD BALANCED HLS FUND+
2012 17,945,703 3.883754 to 3.883754 69,696,696
2011 20,736,162 3.466961 to 3.466961 71,891,464
2010 24,394,921 3.403787 to 3.403787 83,035,115
2009 27,379,590 3.035419 to 3.035419 83,108,529
2008 31,141,455 2.329770 to 2.329770 72,552,427
HARTFORD TOTAL RETURN BOND
HLS FUND
2012 34,497,919 3.249430 to 3.249430 112,098,573
2011 37,335,641 3.021675 to 3.021675 112,816,174
2010 40,897,980 2.824228 to 2.824228 115,505,220
2009 45,229,164 2.626884 to 2.626884 118,811,768
2008 47,985,924 2.284046 to 2.284046 109,602,057
HARTFORD CAPITAL APPRECIATION
HLS FUND
2012 22,534,247 7.429092 to 7.429092 167,408,995
2011 25,668,202 6.277831 to 6.277831 161,140,634
2010 28,218,504 7.085992 to 7.085992 199,956,093
2009 31,640,091 6.082370 to 6.082370 192,446,743
2008 35,247,202 4.175508 to 4.175508 147,174,973
HARTFORD DIVIDEND AND GROWTH
HLS FUND
2012 21,443,131 4.833961 to 4.833961 103,655,261
2011 24,205,248 4.255526 to 4.255526 103,006,061
2010 26,121,815 4.200184 to 4.200184 109,716,430
2009 28,165,762 3.710229 to 3.710229 104,501,428
2008 30,391,567 2.975883 to 2.975883 90,441,746
HARTFORD GLOBAL RESEARCH HLS
FUND
2012 43,973 10.795248 to 10.795248 474,696
2011 90,019 9.118201 to 9.118201 820,810
2010 82,578 10.051239 to 10.051239 830,014
2009 41,057 8.664032 to 8.664032 355,719
2008 143,976 6.096042 to 6.096042 877,685
HARTFORD GLOBAL GROWTH HLS
FUND
2012 854,345 1.265101 to 1.265101 1,080,833
2011 839,900 1.025151 to 1.025151 861,024
2010 894,415 1.190460 to 1.190460 1,064,767
2009 974,154 1.041982 to 1.041982 1,015,051
2008 1,029,113 0.768187 to 0.768187 790,551
<Caption>
INVESTMENT
EXPENSE INCOME TOTAL RETURN
RATIO LOWEST TO RATIO LOWEST TO RATIO LOWEST TO
SUB-ACCOUNT HIGHEST* HIGHEST** HIGHEST***
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------- ------------------------------------------------------------------------------------------
MUTUAL GLOBAL DISCOVERY
SECURITIES FUND
2012 -- to -- 2.64% to 2.64% 13.36% to 13.36%
2011 -- to -- 2.22% to 2.22% (2.96)% to (2.96)%
2010 -- to -- 1.28% to 1.28% 11.96% to 11.96%
2009 -- to -- 1.19% to 1.19% 23.32% to 23.32%
2008 -- to -- 2.43% to 2.43% (28.46)% to (28.46)%
TEMPLETON GLOBAL BOND
SECURITIES FUND
2012 -- to -- 6.41% to 6.41% 15.07% to 15.07%
2011 -- to -- 5.57% to 5.57% (0.87)% to (0.87)%
2010 -- to -- 1.41% to 1.41% 14.45% to 14.45%
2009 -- to -- 3.44% to 3.44% 18.68% to 18.68%
2008 -- to -- 4.01% to 4.01% 6.21% to 6.21%
HARTFORD BALANCED HLS FUND+
2012 -- to -- 2.87% to 2.87% 12.02% to 12.02%
2011 -- to -- 1.62% to 1.62% 1.86% to 1.86%
2010 -- to -- 1.41% to 1.41% 12.14% to 12.14%
2009 -- to -- 2.23% to 2.23% 30.29% to 30.29%
2008 -- to -- 3.07% to 3.07% (31.64)% to (31.64)%
HARTFORD TOTAL RETURN BOND
HLS FUND
2012 -- to -- 4.10% to 4.10% 7.54% to 7.54%
2011 -- to -- 0.21% to 0.21% 6.99% to 6.99%
2010 -- to -- 4.08% to 4.08% 7.51% to 7.51%
2009 -- to -- 3.84% to 3.84% 15.01% to 15.01%
2008 -- to -- 6.69% to 6.69% (7.63)% to (7.63)%
HARTFORD CAPITAL APPRECIATION
HLS FUND
2012 -- to -- 1.46% to 1.46% 18.34% to 18.34%
2011 -- to -- 0.76% to 0.76% (11.41)% to (11.41)%
2010 -- to -- 0.75% to 0.75% 16.50% to 16.50%
2009 -- to -- 0.92% to 0.92% 45.67% to 45.67%
2008 -- to -- 1.83% to 1.83% (45.59)% to (45.59)%
HARTFORD DIVIDEND AND GROWTH
HLS FUND
2012 -- to -- 2.25% to 2.25% 13.59% to 13.59%
2011 -- to -- 2.04% to 2.04% 1.32% to 1.32%
2010 -- to -- 1.94% to 1.94% 13.21% to 13.21%
2009 -- to -- 2.28% to 2.28% 24.68% to 24.68%
2008 -- to -- 2.34% to 2.34% (32.43)% to (32.43)%
HARTFORD GLOBAL RESEARCH HLS
FUND
2012 -- to -- 1.04% to 1.04% 18.39% to 18.39%
2011 -- to -- 0.01% to 0.01% (9.28)% to (9.28)%
2010 -- to -- 1.23% to 1.23% 16.01% to 16.01%
2009 -- to -- 0.36% to 0.36% 42.13% to 42.13%
2008 -- to -- 1.21% to 1.21% (39.04)% to (39.04)%
HARTFORD GLOBAL GROWTH HLS
FUND
2012 -- to -- 0.54% to 0.54% 23.41% to 23.41%
2011 -- to -- 0.04% to 0.04% (13.89)% to (13.89)%
2010 -- to -- 0.27% to 0.27% 14.25% to 14.25%
2009 -- to -- 0.77% to 0.77% 35.64% to 35.64%
2008 -- to -- 0.66% to 0.66% (52.46)% to (52.46)%
</Table>
SA-82
<Page>
-------------------------------------------------------------------------------
<Table>
<Caption>
UNIT
FAIR VALUE
SUB-ACCOUNT UNITS # LOWEST TO HIGHEST # NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
HARTFORD DISCIPLINED EQUITY
HLS FUND
2012 9,413,469 $1.778319 to $1.778319 $16,740,151
2011 10,028,835 1.511927 to 1.511927 15,162,866
2010 10,803,030 1.494683 to 1.494683 16,147,105
2009 11,036,210 1.310608 to 1.310608 14,464,145
2008 11,115,471 1.043087 to 1.043087 11,594,403
HARTFORD GROWTH OPPORTUNITIES
HLS FUND
2012 1,142,946 22.876709 to 22.876709 26,146,849
2011 1,234,466 18.033268 to 18.033268 22,261,462
2010 1,355,757 19.789063 to 19.789063 26,829,153
2009 1,375,499 16.832526 to 16.832526 23,153,131
2008 1,359,332 12.987431 to 12.987431 17,654,224
HARTFORD HIGH YIELD HLS FUND
2012 220,906 19.807474 to 19.807474 4,375,591
2011 153,113 17.327676 to 17.327676 2,653,100
2010 113,912 16.550662 to 16.550662 1,885,313
2009 36,726 14.249514 to 14.249514 523,323
HARTFORD INDEX HLS FUND
2012 11,104,519 4.243608 to 4.243608 47,123,226
2011 12,258,842 3.670022 to 3.670022 44,990,219
2010 14,128,655 3.604734 to 3.604734 50,930,043
2009 15,374,219 3.141833 to 3.141833 48,303,228
2008 16,554,257 2.490602 to 2.490602 41,230,064
HARTFORD INTERNATIONAL
OPPORTUNITIES HLS FUND
2012 12,940,631 3.424934 to 3.424934 44,320,807
2011 15,159,715 2.849479 to 2.849479 43,197,288
2010 16,193,677 3.312232 to 3.312232 53,637,215
2009 13,458,593 2.893130 to 2.893130 38,937,460
2008 15,036,419 2.167800 to 2.167800 32,595,949
HARTFORD MIDCAP HLS FUND
2012 11,440,868 4.818794 to 4.818794 55,131,184
2011 13,287,375 4.034466 to 4.034466 53,607,462
2010 15,083,583 4.381274 to 4.381274 66,085,309
2009 16,971,147 3.549140 to 3.549140 60,232,976
2008 19,984,268 2.710162 to 2.710162 54,160,603
HARTFORD MIDCAP VALUE HLS
FUND
2012 550,426 23.826006 to 23.826006 13,114,463
2011 620,114 19.068102 to 19.068102 11,824,403
2010 681,362 20.852684 to 20.852684 14,208,233
2009 758,100 16.726572 to 16.726572 12,680,406
2008 896,735 11.600671 to 11.600671 10,402,729
HARTFORD MONEY MARKET HLS
FUND
2012 41,065,408 1.796639 to 1.796639 73,779,714
2011 47,122,366 1.796639 to 1.796639 84,661,880
2010 52,745,929 1.796639 to 1.796639 94,765,393
2009 59,565,514 1.796639 to 1.796639 107,017,725
2008 70,437,691 1.795505 to 1.795505 126,471,226
<Caption>
INVESTMENT
EXPENSE INCOME TOTAL RETURN
RATIO LOWEST TO RATIO LOWEST TO RATIO LOWEST TO
SUB-ACCOUNT HIGHEST* HIGHEST** HIGHEST***
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------- ------------------------------------------------------------------------------------------
HARTFORD DISCIPLINED EQUITY
HLS FUND
2012 -- to -- 1.60% to 1.60% 17.62% to 17.62%
2011 -- to -- 1.16% to 1.16% 1.15% to 1.15%
2010 -- to -- 1.35% to 1.35% 14.05% to 14.05%
2009 -- to -- 1.62% to 1.62% 25.65% to 25.65%
2008 -- to -- 1.23% to 1.23% (37.27)% to (37.27)%
HARTFORD GROWTH OPPORTUNITIES
HLS FUND
2012 -- to -- -- to -- 26.86% to 26.86%
2011 -- to -- -- to -- (8.87)% to (8.87)%
2010 -- to -- 0.02% to 0.02% 17.56% to 17.56%
2009 -- to -- 0.54% to 0.54% 29.61% to 29.61%
2008 -- to -- 0.43% to 0.43% (45.66)% to (45.66)%
HARTFORD HIGH YIELD HLS FUND
2012 -- to -- 9.13% to 9.13% 14.31% to 14.31%
2011 -- to -- 9.35% to 9.35% 4.69% to 4.69%
2010 -- to -- 0.78% to 0.78% 16.15% to 16.15%
2009 -- to -- 50.97% to 50.97% 42.50% to 42.50%
HARTFORD INDEX HLS FUND
2012 -- to -- 1.99% to 1.99% 15.63% to 15.63%
2011 -- to -- 1.66% to 1.66% 1.81% to 1.81%
2010 -- to -- 1.72% to 1.72% 14.73% to 14.73%
2009 -- to -- 2.06% to 2.06% 26.15% to 26.15%
2008 -- to -- 2.16% to 2.16% (37.11)% to (37.11)%
HARTFORD INTERNATIONAL
OPPORTUNITIES HLS FUND
2012 -- to -- 1.93% to 1.93% 20.20% to 20.20%
2011 -- to -- 0.05% to 0.05% (13.97)% to (13.97)%
2010 -- to -- 1.31% to 1.31% 14.49% to 14.49%
2009 -- to -- 2.00% to 2.00% 33.46% to 33.46%
2008 -- to -- 2.34% to 2.34% (42.25)% to (42.25)%
HARTFORD MIDCAP HLS FUND
2012 -- to -- 0.79% to 0.79% 19.44% to 19.44%
2011 -- to -- 0.68% to 0.68% (7.92)% to (7.92)%
2010 -- to -- 0.24% to 0.24% 23.45% to 23.45%
2009 -- to -- 0.54% to 0.54% 30.96% to 30.96%
2008 -- to -- 0.52% to 0.52% (35.32)% to (35.32)%
HARTFORD MIDCAP VALUE HLS
FUND
2012 -- to -- 1.19% to 1.19% 24.95% to 24.95%
2011 -- to -- 0.01% to 0.01% (8.56)% to (8.56)%
2010 -- to -- 0.59% to 0.59% 24.67% to 24.67%
2009 -- to -- 0.82% to 0.82% 44.19% to 44.19%
2008 -- to -- 0.78% to 0.78% (40.21)% to (40.21)%
HARTFORD MONEY MARKET HLS
FUND
2012 -- to -- -- to -- -- to --
2011 -- to -- -- to -- -- to --
2010 -- to -- -- to -- -- to --
2009 -- to -- 0.06% to 0.06% 0.06% to 0.06%
2008 -- to -- 2.02% to 2.02% 2.14% to 2.14%
</Table>
SA-83
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
-------------------------------------------------------------------------------
<Table>
<Caption>
UNIT
FAIR VALUE
SUB-ACCOUNT UNITS # LOWEST TO HIGHEST # NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
HARTFORD SMALL COMPANY HLS
FUND
2012 10,536,264 $2.712054 to $2.712054 $28,574,917
2011 11,848,481 2.345264 to 2.345264 27,787,816
2010 13,301,134 2.426831 to 2.426831 32,279,605
2009 15,351,526 1.955060 to 1.955060 30,013,155
2008 17,770,074 1.512167 to 1.512167 26,871,319
HARTFORD STOCK HLS FUND
2012 17,198,527 4.258413 to 4.258413 73,238,432
2011 19,503,209 3.722907 to 3.722907 72,608,632
2010 21,605,658 3.764066 to 3.764066 81,325,123
2009 24,737,911 3.278812 to 3.278812 81,110,961
2008 28,223,648 2.316588 to 2.316588 65,382,562
HARTFORD U.S. GOVERNMENT
SECURITIES HLS FUND
2012 1,184,900 11.619278 to 11.619278 13,767,687
2011 1,227,996 11.205160 to 11.205160 13,759,895
2010 1,301,168 10.684330 to 10.684330 13,902,106
2009 1,381,902 10.293920 to 10.293920 14,225,191
2008 1,611,560 9.957373 to 9.957373 16,046,908
LORD ABBETT CALIBRATED
DIVIDEND GROWTH FUND+
2012 521,579 13.932710 to 13.932710 7,267,007
2011 546,733 12.389564 to 12.389564 6,773,783
2010 581,221 12.365526 to 12.365526 7,187,103
2009 603,729 10.774410 to 10.774410 6,504,823
2008 598,557 8.730699 to 8.730699 5,225,821
LORD ABBETT BOND-DEBENTURE
FUND
2012 475,470 14.942519 to 14.942519 7,104,725
2011 404,206 13.278309 to 13.278309 5,367,172
2010 378,240 12.720824 to 12.720824 4,811,522
2009 288,987 11.326127 to 11.326127 3,273,108
2008 74,185 8.432890 to 8.432890 625,590
LORD ABBETT GROWTH AND INCOME
FUND
2012 576,912 11.754355 to 11.754355 6,781,226
2011 620,695 10.486745 to 10.486745 6,509,072
2010 647,055 11.165635 to 11.165635 7,224,781
2009 639,261 9.509797 to 9.509797 6,079,242
2008 654,919 7.998229 to 7.998229 5,238,191
MFS INVESTORS TRUST SERIES
2012 65,753 14.309842 to 14.309842 940,914
2011 66,297 12.006715 to 12.006715 796,004
2010 104,541 12.274423 to 12.274423 1,283,180
2009 128,127 11.048366 to 11.048366 1,415,594
2008 149,591 8.706510 to 8.706510 1,302,419
MFS NEW DISCOVERY SERIES
2012 265,040 23.151428 to 23.151428 6,136,057
2011 285,776 19.097956 to 19.097956 5,457,737
2010 269,192 21.283072 to 21.283072 5,729,241
2009 298,813 15.610690 to 15.610690 4,664,679
2008 226,626 9.566346 to 9.566346 2,167,981
<Caption>
INVESTMENT
EXPENSE INCOME TOTAL RETURN
RATIO LOWEST TO RATIO LOWEST TO RATIO LOWEST TO
SUB-ACCOUNT HIGHEST* HIGHEST** HIGHEST***
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------- ------------------------------------------------------------------------------------------
HARTFORD SMALL COMPANY HLS
FUND
2012 -- to -- -- to -- 15.64% to 15.64%
2011 -- to -- -- to -- (3.36)% to (3.36)%
2010 -- to -- -- to -- 24.13% to 24.13%
2009 -- to -- 0.01% to 0.01% 29.29% to 29.29%
2008 -- to -- 0.11% to 0.11% (40.60)% to (40.60)%
HARTFORD STOCK HLS FUND
2012 -- to -- 2.05% to 2.05% 14.38% to 14.38%
2011 -- to -- 1.35% to 1.35% (1.09)% to (1.09)%
2010 -- to -- 1.14% to 1.14% 14.80% to 14.80%
2009 -- to -- 1.56% to 1.56% 41.54% to 41.54%
2008 -- to -- 2.08% to 2.08% (43.13)% to (43.13)%
HARTFORD U.S. GOVERNMENT
SECURITIES HLS FUND
2012 -- to -- 2.85% to 2.85% 3.70% to 3.70%
2011 -- to -- 2.68% to 2.68% 4.87% to 4.87%
2010 -- to -- 4.37% to 4.37% 3.79% to 3.79%
2009 -- to -- 0.03% to 0.03% 3.38% to 3.38%
2008 -- to -- 8.20% to 8.20% (0.43)% to (0.43)%
LORD ABBETT CALIBRATED
DIVIDEND GROWTH FUND+
2012 -- to -- 2.98% to 2.98% 12.46% to 12.46%
2011 -- to -- 2.67% to 2.67% 0.19% to 0.19%
2010 -- to -- 2.92% to 2.92% 14.77% to 14.77%
2009 -- to -- 3.53% to 3.53% 23.41% to 23.41%
2008 -- to -- 4.42% to 4.42% (26.19)% to (26.19)%
LORD ABBETT BOND-DEBENTURE
FUND
2012 -- to -- 6.49% to 6.49% 12.53% to 12.53%
2011 -- to -- 6.22% to 6.22% 4.38% to 4.38%
2010 -- to -- 7.09% to 7.09% 12.31% to 12.31%
2009 -- to -- 9.30% to 9.30% 34.31% to 34.31%
2008 -- to -- 23.33% to 23.33% (15.67)% to (15.67)%
LORD ABBETT GROWTH AND INCOME
FUND
2012 -- to -- 0.97% to 0.97% 12.09% to 12.09%
2011 -- to -- 0.71% to 0.71% (6.08)% to (6.08)%
2010 -- to -- 0.57% to 0.57% 17.41% to 17.41%
2009 -- to -- 1.05% to 1.05% 18.90% to 18.90%
2008 -- to -- 1.71% to 1.71% (36.42)% to (36.42)%
MFS INVESTORS TRUST SERIES
2012 -- to -- 0.87% to 0.87% 19.18% to 19.18%
2011 -- to -- 0.68% to 0.68% (2.18)% to (2.18)%
2010 -- to -- 1.46% to 1.46% 11.10% to 11.10%
2009 -- to -- 1.82% to 1.82% 26.90% to 26.90%
2008 -- to -- 0.75% to 0.75% (33.08)% to (33.08)%
MFS NEW DISCOVERY SERIES
2012 -- to -- -- to -- 21.22% to 21.22%
2011 -- to -- -- to -- (10.27)% to (10.27)%
2010 -- to -- -- to -- 36.34% to 36.34%
2009 -- to -- -- to -- 63.18% to 63.18%
2008 -- to -- -- to -- (39.33)% to (39.33)%
</Table>
SA-84
<Page>
-------------------------------------------------------------------------------
<Table>
<Caption>
UNIT
FAIR VALUE
SUB-ACCOUNT UNITS # LOWEST TO HIGHEST # NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
MFS TOTAL RETURN SERIES
2012 1,617,058 $16.453635 to $16.453635 $26,606,488
2011 1,638,122 14.788967 to 14.788967 24,226,125
2010 1,779,308 14.531519 to 14.531519 25,856,046
2009 1,997,895 13.218935 to 13.218935 26,410,041
2008 2,034,439 11.199735 to 11.199735 22,785,179
MFS VALUE SERIES
2012 773,607 11.692087 to 11.692087 9,045,082
2011 720,716 10.056780 to 10.056780 7,248,080
2010 642,059 10.087285 to 10.087285 6,476,635
2009 545,166 9.044166 to 9.044166 4,930,571
2008 268,898 7.370068 to 7.370068 1,981,796
MFS RESEARCH BOND SERIES
2012 677,724 14.369769 to 14.369769 9,738,739
2011 550,575 13.385817 to 13.385817 7,369,898
2010 362,597 12.539864 to 12.539864 4,546,916
2009 75,975 11.668778 to 11.668778 886,541
UIF MID CAP GROWTH PORTFOLIO
2012 139,944 12.387060 to 12.387060 1,733,491
2011 180,446 11.417730 to 11.417730 2,060,285
2010 154,053 12.300233 to 12.300233 1,894,886
2009 191,642 9.299431 to 9.299431 1,782,164
2008 59,212 5.909437 to 5.909437 349,908
INVESCO VAN KAMPEN V.I.
AMERICAN VALUE FUND+
2012 225,745 12.648529 to 12.648529 2,855,337
2011 200,535 10.803724 to 10.803724 2,166,524
2010 203,562 10.715150 to 10.715150 2,181,195
2009 248,735 8.769934 to 8.769934 2,181,394
2008 222,373 6.302084 to 6.302084 1,401,416
OPPENHEIMER CAPITAL
APPRECIATION FUND/VA
2012 267,690 12.252275 to 12.252275 3,279,810
2011 282,479 10.765893 to 10.765893 3,041,138
2010 304,209 10.915899 to 10.915899 3,320,719
2009 308,342 10.001462 to 10.001462 3,083,872
2008 298,920 6.938164 to 6.938164 2,073,956
OPPENHEIMER GLOBAL SECURITIES
FUND/VA
2012 638,209 14.194061 to 14.194061 9,058,775
2011 699,068 11.735440 to 11.735440 8,203,871
2010 719,960 12.829306 to 12.829306 9,236,591
2009 717,828 11.088193 to 11.088193 7,959,418
2008 697,204 7.956807 to 7.956807 5,547,520
OPPENHEIMER MAIN STREET
FUND/VA
2012 145,995 13.101818 to 13.101818 1,912,795
2011 133,446 11.235715 to 11.235715 1,499,363
2010 142,665 11.271167 to 11.271167 1,608,003
2009 145,110 9.731208 to 9.731208 1,412,095
2008 146,474 7.602822 to 7.602822 1,113,613
<Caption>
INVESTMENT
EXPENSE INCOME TOTAL RETURN
RATIO LOWEST TO RATIO LOWEST TO RATIO LOWEST TO
SUB-ACCOUNT HIGHEST* HIGHEST** HIGHEST***
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------- ------------------------------------------------------------------------------------------
MFS TOTAL RETURN SERIES
2012 -- to -- 2.76% to 2.76% 11.26% to 11.26%
2011 -- to -- 2.61% to 2.61% 1.77% to 1.77%
2010 -- to -- 2.75% to 2.75% 9.93% to 9.93%
2009 -- to -- 3.57% to 3.57% 18.03% to 18.03%
2008 -- to -- 3.15% to 3.15% (22.13)% to (22.13)%
MFS VALUE SERIES
2012 -- to -- 1.62% to 1.62% 16.26% to 16.26%
2011 -- to -- 1.53% to 1.53% (0.30)% to (0.30)%
2010 -- to -- 1.41% to 1.41% 11.53% to 11.53%
2009 -- to -- 1.08% to 1.08% 22.72% to 22.72%
2008 -- to -- -- to -- (26.30)% to (26.30)%
MFS RESEARCH BOND SERIES
2012 -- to -- 2.80% to 2.80% 7.35% to 7.35%
2011 -- to -- 2.66% to 2.66% 6.75% to 6.75%
2010 -- to -- 2.06% to 2.06% 7.47% to 7.47%
2009 -- to -- -- to -- 16.69% to 16.69%
UIF MID CAP GROWTH PORTFOLIO
2012 -- to -- -- to -- 8.49% to 8.49%
2011 -- to -- 0.24% to 0.24% (7.17)% to (7.17)%
2010 -- to -- -- to -- 32.27% to 32.27%
2009 -- to -- -- to -- 57.37% to 57.37%
2008 -- to -- 0.41% to 0.41% (40.91)% to (40.91)%
INVESCO VAN KAMPEN V.I.
AMERICAN VALUE FUND+
2012 -- to -- 0.66% to 0.66% 17.08% to 17.08%
2011 -- to -- 0.61% to 0.61% 0.83% to 0.83%
2010 -- to -- 0.88% to 0.88% 22.18% to 22.18%
2009 -- to -- 1.19% to 1.19% 39.16% to 39.16%
2008 -- to -- 0.73% to 0.73% (41.42)% to (41.42)%
OPPENHEIMER CAPITAL
APPRECIATION FUND/VA
2012 -- to -- 0.39% to 0.39% 13.81% to 13.81%
2011 -- to -- 0.11% to 0.11% (1.37)% to (1.37)%
2010 -- to -- -- to -- 9.14% to 9.14%
2009 -- to -- 0.01% to 0.01% 44.15% to 44.15%
2008 -- to -- -- to -- (45.66)% to (45.66)%
OPPENHEIMER GLOBAL SECURITIES
FUND/VA
2012 -- to -- 1.93% to 1.93% 20.95% to 20.95%
2011 -- to -- 1.04% to 1.04% (8.53)% to (8.53)%
2010 -- to -- 1.20% to 1.20% 15.70% to 15.70%
2009 -- to -- 1.86% to 1.86% 39.36% to 39.36%
2008 -- to -- 1.22% to 1.22% (40.33)% to (40.33)%
OPPENHEIMER MAIN STREET
FUND/VA
2012 -- to -- 0.64% to 0.64% 16.61% to 16.61%
2011 -- to -- 0.60% to 0.60% (0.31)% to (0.31)%
2010 -- to -- 0.87% to 0.87% 15.83% to 15.83%
2009 -- to -- 1.55% to 1.55% 28.00% to 28.00%
2008 -- to -- 1.14% to 1.14% (38.63)% to (38.63)%
</Table>
SA-85
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
-------------------------------------------------------------------------------
<Table>
<Caption>
UNIT
FAIR VALUE
SUB-ACCOUNT UNITS # LOWEST TO HIGHEST # NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
OPPENHEIMER MAIN STREET
SMALL- & MID-CAP FUND/ VA
2012 91,197 $13.228057 to $13.228057 $1,206,354
2011 89,990 11.241671 to 11.241671 1,011,641
2010 88,043 11.516057 to 11.516057 1,013,913
2009 94,990 9.358432 to 9.358432 888,957
2008 36,241 6.836775 to 6.836775 247,768
PUTNAM VT DIVERSIFIED INCOME
FUND
2012 255,540 13.593368 to 28.400397 3,779,266
2011 274,084 12.188642 to 25.400730 3,679,021
2010 267,816 12.587405 to 26.192973 3,753,951
2009 232,227 11.171885 to 23.175409 2,992,302
2008 121,560 7.191250 to 14.968756 1,221,208
PUTNAM VT GLOBAL ASSET
ALLOCATION FUND
2012 11,183 35.209669 to 35.209669 393,766
2011 12,970 30.751053 to 30.751053 398,842
2010 14,989 30.806593 to 30.806593 461,754
2009 18,193 26.783076 to 26.783076 487,276
2008 21,967 19.786145 to 19.786145 434,635
PUTNAM VT GLOBAL EQUITY FUND
2012 130,470 17.157542 to 29.391653 3,534,987
2011 160,206 14.276598 to 24.381165 3,657,154
2010 177,766 15.020302 to 25.604302 4,281,302
2009 211,061 13.675389 to 23.229823 4,659,824
2008 234,522 10.521629 to 17.847130 3,985,418
PUTNAM VT GROWTH AND INCOME
FUND
2012 416,459 14.962585 to 36.716590 12,553,779
2011 462,452 12.559145 to 30.742591 12,018,268
2010 550,308 13.170377 to 32.170965 15,443,281
2009 618,435 11.514849 to 28.044583 15,308,489
2008 711,231 8.870392 to 21.545827 13,842,778
PUTNAM VT GLOBAL HEALTH CARE
FUND
2012 50,882 18.791048 to 18.791048 956,131
2011 58,068 15.330913 to 15.330913 890,236
2010 78,973 15.468968 to 15.468968 1,221,635
2009 99,275 15.065962 to 15.065962 1,495,666
2008 128,139 11.913774 to 11.913774 1,526,616
PUTNAM VT HIGH YIELD FUND
2012 811,691 21.165414 to 39.207905 21,397,771
2011 912,209 18.244699 to 33.700697 20,634,249
2010 1,023,564 17.930173 to 33.089518 22,791,645
2009 1,365,734 15.722517 to 28.889334 27,050,816
2008 1,080,380 10.468992 to 19.219456 15,113,898
PUTNAM VT INCOME FUND
2012 826,873 16.678880 to 32.470755 17,079,311
2011 895,256 15.060896 to 29.236133 17,006,919
2010 960,161 14.343729 to 27.802373 17,594,668
2009 1,045,682 13.055246 to 25.224094 17,792,908
2008 1,224,728 8.902167 to 17.133269 14,771,688
<Caption>
INVESTMENT
EXPENSE INCOME TOTAL RETURN
RATIO LOWEST TO RATIO LOWEST TO RATIO LOWEST TO
SUB-ACCOUNT HIGHEST* HIGHEST** HIGHEST***
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------- ------------------------------------------------------------------------------------------
OPPENHEIMER MAIN STREET
SMALL- & MID-CAP FUND/ VA
2012 -- to -- 0.32% to 0.32% 17.67% to 17.67%
2011 -- to -- 0.37% to 0.37% (2.38)% to (2.38)%
2010 -- to -- 0.40% to 0.40% 23.06% to 23.06%
2009 -- to -- 0.45% to 0.45% 36.88% to 36.88%
2008 -- to -- -- to -- (31.63)% to (31.63)%
PUTNAM VT DIVERSIFIED INCOME
FUND
2012 -- to -- 5.59% to 5.96% 11.52% to 11.81%
2011 -- to -- 9.41% to 10.01% (3.17)% to (3.02)%
2010 -- to -- 12.93% to 14.37% 12.67% to 13.02%
2009 -- to -- 4.68% to 7.30% 54.83% to 55.35%
2008 -- to -- 6.27% to 6.27% (31.00)% to (28.09)%
PUTNAM VT GLOBAL ASSET
ALLOCATION FUND
2012 -- to -- 1.01% to 1.01% 14.50% to 14.50%
2011 -- to -- 4.81% to 4.81% (0.18)% to (0.18)%
2010 -- to -- 5.91% to 5.91% 15.02% to 15.02%
2009 -- to -- 6.37% to 6.37% 35.36% to 35.36%
2008 -- to -- 4.27% to 4.27% (33.16)% to (33.16)%
PUTNAM VT GLOBAL EQUITY FUND
2012 -- to -- 1.59% to 1.97% 20.18% to 20.55%
2011 -- to -- 1.97% to 2.20% (4.95)% to (4.78)%
2010 -- to -- 2.12% to 2.50% 9.84% to 10.22%
2009 -- to -- 0.20% to 0.20% 29.97% to 30.16%
2008 -- to -- 2.39% to 2.83% (45.35)% to (45.24)%
PUTNAM VT GROWTH AND INCOME
FUND
2012 -- to -- 1.68% to 1.99% 19.14% to 19.43%
2011 -- to -- 1.22% to 1.50% (4.64)% to (4.44)%
2010 -- to -- 1.53% to 1.80% 14.38% to 14.71%
2009 -- to -- 2.60% to 3.21% 29.81% to 30.16%
2008 -- to -- 2.11% to 2.60% (38.70)% to (38.57)%
PUTNAM VT GLOBAL HEALTH CARE
FUND
2012 -- to -- 1.55% to 1.55% 22.57% to 22.57%
2011 -- to -- 1.20% to 1.20% (0.89)% to (0.89)%
2010 -- to -- 2.21% to 2.21% 2.68% to 2.68%
2009 -- to -- -- to -- 26.46% to 26.46%
2008 -- to -- -- to -- (16.90)% to (16.90)%
PUTNAM VT HIGH YIELD FUND
2012 -- to -- 7.64% to 7.76% 16.01% to 16.34%
2011 -- to -- 7.93% to 8.14% 1.75% to 1.85%
2010 -- to -- 7.29% to 8.16% 14.04% to 14.54%
2009 -- to -- 7.24% to 10.18% 50.18% to 50.31%
2008 -- to -- 9.03% to 9.62% (26.07)% to (26.01)%
PUTNAM VT INCOME FUND
2012 -- to -- 4.91% to 5.35% 10.74% to 11.06%
2011 -- to -- 8.54% to 9.05% 5.00% to 5.16%
2010 -- to -- 10.87% to 11.28% 9.87% to 10.22%
2009 -- to -- 5.57% to 6.23% 46.65% to 47.22%
2008 -- to -- 6.66% to 7.84% (23.93)% to (23.78)%
</Table>
SA-86
<Page>
-------------------------------------------------------------------------------
<Table>
<Caption>
UNIT
FAIR VALUE
SUB-ACCOUNT UNITS # LOWEST TO HIGHEST # NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
PUTNAM VT INTERNATIONAL VALUE
FUND
2012 33,535 $17.192665 to $17.192665 $576,556
2011 38,984 14.115362 to 14.115362 550,276
2010 47,035 16.321304 to 16.321304 767,675
2009 53,973 15.194392 to 15.194392 820,094
2008 75,590 12.021934 to 12.021934 908,738
PUTNAM VT INTERNATIONAL
EQUITY FUND
2012 879,462 16.633499 to 17.234398 15,005,366
2011 1,039,706 13.643423 to 14.102062 14,543,974
2010 1,113,971 16.424598 to 16.931002 18,728,197
2009 1,271,461 14.928049 to 15.354656 19,397,415
2008 1,496,720 11.977464 to 12.283717 18,290,657
PUTNAM VT INTERNATIONAL
GROWTH FUND
2012 18,116 17.464541 to 17.464541 316,383
2011 23,330 14.405383 to 14.405383 336,075
2010 28,584 17.492096 to 17.492096 500,001
2009 35,103 15.550584 to 15.550584 545,865
2008 52,541 11.206894 to 11.206894 588,816
PUTNAM VT INVESTORS FUND
2012 57,882 12.397161 to 12.397161 717,576
2011 67,238 10.590309 to 10.590309 712,072
2010 78,782 10.560103 to 10.560103 831,942
2009 93,998 9.243957 to 9.243957 868,909
2008 137,322 7.046749 to 7.046749 967,670
PUTNAM VT MONEY MARKET FUND
2012 56,037 1.803151 to 1.803151 101,043
2011 63,718 1.803089 to 1.803089 114,890
2010 73,461 1.802966 to 1.802966 132,447
2009 100,832 1.802303 to 1.802303 181,730
2008 112,744 1.796082 to 1.796082 202,497
PUTNAM VT MULTI-CAP GROWTH
FUND
2012 348,446 17.208979 to 28.168997 8,994,704
2011 390,408 14.738812 to 24.058223 8,725,361
2010 441,083 15.528059 to 25.291913 10,434,315
2009 461,019 12.988059 to 21.099132 9,093,128
2008 545,071 9.829288 to 15.925954 8,165,677
PUTNAM VT SMALL CAP VALUE
FUND
2012 436,613 11.585811 to 11.585811 5,058,518
2011 486,662 9.861349 to 9.861349 4,799,142
2010 514,718 10.350514 to 10.350514 5,327,600
2009 547,588 8.215811 to 8.215811 4,498,883
2008 544,907 6.246201 to 6.246201 3,403,598
PUTNAM VT GEORGE PUTNAM
BALANCED FUND
2012 36,382 15.557336 to 15.557336 566,009
2011 47,857 13.795090 to 13.795090 660,193
2010 58,996 13.409259 to 13.409259 791,086
2009 83,074 12.059130 to 12.059130 1,001,801
2008 110,984 9.580101 to 9.580101 1,063,234
<Caption>
INVESTMENT
EXPENSE INCOME TOTAL RETURN
RATIO LOWEST TO RATIO LOWEST TO RATIO LOWEST TO
SUB-ACCOUNT HIGHEST* HIGHEST** HIGHEST***
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------- ------------------------------------------------------------------------------------------
PUTNAM VT INTERNATIONAL VALUE
FUND
2012 -- to -- 3.31% to 3.31% 21.80% to 21.80%
2011 -- to -- 2.92% to 2.92% (13.52)% to (13.52)%
2010 -- to -- 3.58% to 3.58% 7.42% to 7.42%
2009 -- to -- -- to -- 26.39% to 26.39%
2008 -- to -- 2.23% to 2.23% (45.85)% to (45.85)%
PUTNAM VT INTERNATIONAL
EQUITY FUND
2012 -- to -- 2.16% to 2.51% 21.92% to 22.21%
2011 -- to -- 3.24% to 3.56% (16.93)% to (16.71)%
2010 -- to -- 3.62% to 3.76% 13.42% to 16.93%
2009 -- to -- -- to -- 24.63% to 25.00%
2008 -- to -- 2.11% to 2.49% (43.95)% to (38.61)%
PUTNAM VT INTERNATIONAL
GROWTH FUND
2012 -- to -- 1.76% to 1.76% 21.24% to 21.24%
2011 -- to -- 2.78% to 2.78% (17.65)% to (17.65)%
2010 -- to -- 3.30% to 3.30% 12.49% to 12.49%
2009 -- to -- 2.17% to 2.17% 38.76% to 38.76%
2008 -- to -- 1.94% to 1.94% (42.37)% to (42.37)%
PUTNAM VT INVESTORS FUND
2012 -- to -- 1.58% to 1.58% 17.06% to 17.06%
2011 -- to -- 1.39% to 1.39% 0.29% to 0.29%
2010 -- to -- 1.50% to 1.50% 14.24% to 14.24%
2009 -- to -- 1.49% to 1.49% 31.18% to 31.18%
2008 -- to -- 0.55% to 0.55% (39.44)% to (39.44)%
PUTNAM VT MONEY MARKET FUND
2012 -- to -- 0.01% to 0.01% -- to --
2011 -- to -- 0.01% to 0.01% 0.01% to 0.01%
2010 -- to -- 0.04% to 0.04% 0.04% to 0.04%
2009 -- to -- 0.36% to 0.36% 0.35% to 0.35%
2008 -- to -- 2.80% to 2.80% 2.83% to 2.83%
PUTNAM VT MULTI-CAP GROWTH
FUND
2012 -- to -- 0.23% to 0.51% 16.76% to 17.09%
2011 -- to -- 0.25% to 0.40% (5.08)% to (4.88)%
2010 -- to -- 0.36% to 0.57% 19.56% to 19.87%
2009 -- to -- 0.36% to 0.69% 32.14% to 32.48%
2008 -- to -- 0.31% to 0.31% (38.75)% to (38.62)%
PUTNAM VT SMALL CAP VALUE
FUND
2012 -- to -- 0.45% to 0.45% 17.49% to 17.49%
2011 -- to -- 0.48% to 0.48% (4.73)% to (4.73)%
2010 -- to -- 0.30% to 0.30% 25.98% to 25.98%
2009 -- to -- 1.64% to 1.64% 31.53% to 31.53%
2008 -- to -- 1.39% to 1.39% (39.36)% to (39.36)%
PUTNAM VT GEORGE PUTNAM
BALANCED FUND
2012 -- to -- 2.29% to 2.29% 12.77% to 12.77%
2011 -- to -- 2.39% to 2.39% 2.88% to 2.88%
2010 -- to -- 5.92% to 5.92% 11.20% to 11.20%
2009 -- to -- 5.10% to 5.10% 25.88% to 25.88%
2008 -- to -- 5.03% to 5.03% (40.47)% to (40.47)%
</Table>
SA-87
<Page>
SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS -- (CONCLUDED)
-------------------------------------------------------------------------------
<Table>
<Caption>
UNIT
FAIR VALUE
SUB-ACCOUNT UNITS # LOWEST TO HIGHEST # NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
PUTNAM VT GLOBAL UTILITIES
FUND
2012 19,407 $29.147195 to $29.147195 $565,658
2011 24,217 27.667582 to 27.667582 670,015
2010 29,669 29.182239 to 29.182239 865,816
2009 37,730 28.580962 to 28.580962 1,078,357
2008 51,166 26.547468 to 26.547468 1,358,315
PUTNAM VT VOYAGER FUND
2012 468,968 16.202644 to 40.405692 16,204,780
2011 542,959 14.184465 to 35.287020 16,522,781
2010 633,621 17.266105 to 42.844173 24,102,922
2009 748,322 14.293431 to 35.386121 23,533,318
2008 823,737 8.721088 to 21.538000 16,121,335
PUTNAM VT CAPITAL
OPPORTUNITIES FUND
2012 241,320 21.414988 to 21.414988 5,167,871
2011 274,121 18.724634 to 18.724634 5,132,806
2010 272,924 19.942323 to 19.942323 5,442,741
2009 289,846 15.395267 to 15.395267 4,462,259
2008 319,244 10.572218 to 10.572218 3,375,113
PUTNAM VT EQUITY INCOME FUND
2012 338,981 19.095633 to 19.759287 6,659,815
2011 398,348 15.963640 to 16.562094 6,556,919
2010 330,128 15.639461 to 16.249834 5,310,358
2009 435,607 13.861395 to 14.430719 6,226,804
2008 372,379 11.322627 to 11.322627 4,216,312
INVESCO VAN KAMPEN V.I.
COMSTOCK FUND
2012 1,427,789 13.063471 to 13.063471 18,651,883
2011 1,549,647 10.984671 to 10.984671 17,022,365
2010 1,586,259 11.221180 to 11.221180 17,799,695
2009 1,643,470 9.698918 to 9.698918 15,939,883
2008 1,579,258 7.553239 to 7.553239 11,928,513
INVESCO VAN KAMPEN V.I.
AMERICAN FRANCHISE FUND+
2012 202,129 9.980752 to 9.980752 2,017,398
INVESCO VAN KAMPEN V.I. MID
CAP GROWTH FUND+
2012 110,172 9.994841 to 9.994841 1,101,156
<Caption>
INVESTMENT
EXPENSE INCOME TOTAL RETURN
RATIO LOWEST TO RATIO LOWEST TO RATIO LOWEST TO
SUB-ACCOUNT HIGHEST* HIGHEST** HIGHEST***
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------- ------------------------------------------------------------------------------------------
PUTNAM VT GLOBAL UTILITIES
FUND
2012 -- to -- 4.05% to 4.05% 5.35% to 5.35%
2011 -- to -- 4.08% to 4.08% (5.19)% to (5.19)%
2010 -- to -- 4.39% to 4.39% 2.10% to 2.10%
2009 -- to -- 4.74% to 4.74% 7.66% to 7.66%
2008 -- to -- 2.59% to 2.59% (30.33)% to (30.33)%
PUTNAM VT VOYAGER FUND
2012 -- to -- 0.35% to 0.39% 14.23% to 14.51%
2011 -- to -- -- to 0.28% (17.85)% to (17.64)%
2010 -- to -- 1.32% to 1.49% 20.80% to 21.08%
2009 -- to -- 0.76% to 1.14% 63.90% to 64.30%
2008 -- to -- 0.29% to 0.29% (37.03)% to (36.87)%
PUTNAM VT CAPITAL
OPPORTUNITIES FUND
2012 -- to -- 0.37% to 0.37% 14.37% to 14.37%
2011 -- to -- 0.13% to 0.13% (6.11)% to (6.11)%
2010 -- to -- 0.26% to 0.26% 29.54% to 29.54%
2009 -- to -- 0.61% to 0.61% 45.62% to 45.62%
2008 -- to -- 0.47% to 0.47% (35.18)% to (35.18)%
PUTNAM VT EQUITY INCOME FUND
2012 -- to -- 2.29% to 2.52% 19.30% to 19.62%
2011 -- to -- 1.56% to 2.13% 1.92% to 2.07%
2010 -- to -- 2.18% to 2.19% 12.61% to 12.83%
2009 -- to -- 1.12% to 1.37% 27.45% to 38.61%
2008 -- to -- 1.96% to 1.96% (31.14)% to (31.14)%
INVESCO VAN KAMPEN V.I.
COMSTOCK FUND
2012 -- to -- 1.50% to 1.50% 18.92% to 18.92%
2011 -- to -- 1.33% to 1.33% (2.11)% to (2.11)%
2010 -- to -- 0.13% to 0.13% 15.70% to 15.70%
2009 -- to -- 4.33% to 4.33% 28.41% to 28.41%
2008 -- to -- 2.15% to 2.15% (35.80)% to (35.80)%
INVESCO VAN KAMPEN V.I.
AMERICAN FRANCHISE FUND+
2012 -- to -- -- to -- (0.19)% to (0.19)%
INVESCO VAN KAMPEN V.I. MID
CAP GROWTH FUND+
2012 -- to -- -- to -- (0.05)% to (0.05)%
</Table>
* This represents the annualized contract expenses of the Sub-Account
for the year indicated and includes only those expenses that are
charged through a reduction in the unit values. Excluded are
expenses of the Funds and charges made directly to contract owner
accounts through the redemption of units. Where the expense ratio
is the same for each unit value, it is presented in both the lowest
and highest columns.
** These amounts represent the dividends, excluding distributions of
capital gains, received by the Sub-Account from the Fund, net of
management fees assessed by the Fund's manager, divided by the
average net assets. These ratios exclude those expenses, such as
mortality and expense risk charges, that result in direct
reductions in the unit values. The recognition of investment income
by the Sub-Account is affected by the timing of the declaration of
dividends by the Fund in which the Sub-Account invests. Where the
investment income ratio is the same for each unit value, it is
presented in both the lowest and highest columns.
*** This represents the total return for the year indicated and
reflects a deduction only for expenses assessed through the daily
unit value calculation. The total return does not include any
expenses assessed through the redemption of units; inclusion of
these expenses in the calculation would result in a reduction in
the total return presented. Investment options with a date notation
indicate the effective date of that investment option in the
Account. The total return is calculated for the year indicated or
from the effective date through the end of the reporting period.
# Rounded units/unit fair values. Where only one unit value exists,
it is presented in both the lowest and highest columns.
+ See Note 1 for additional information related to this Sub-Account.
SA-88
<Page>
-------------------------------------------------------------------------------
RIDERS:
The Sponsor Company will make certain deductions for various Rider charges:
- Enhanced No Lapse Guarantee Rider (per $1,000 Face amount) $0.01 -
$0.10
- Term Insurance Rider (per $1,000 of the net amount at risk) $0.14 -
$999.96
- Death Benefit Guarantee Charge (per $1,000 Face amount) $0.01 - $0.06
- Deduction Amount Waiver Rider (of the monthly deduction amount) 6.90%
- 34.50%
- Waiver of Specified Amount Disability Benefit Rider (per $1 of
specified amount) $0.039 - $0.199
- Accidental Death Benefit Rider (per $1,000 of the net amount at risk)
$1.00 - $2.196
- Child Insurance Rider (per $1,000 of benefit) $6.00
- Accelerated Death Benefit Rider $300.00 (one time charge when benefit
exercised)
- Lifetime No Lapse Guarantee Rider (per $1,000 of the face amount)
$0.01 - $0.06
- Yearly Renewable Term Life Insurance Rider (per the net amount at
risk) $1.01 - $179.44
- Waiver of Scheduled Premium Option Rider (each time waived) 11.00%
- Estate Protection Rider (per $1,000 of the face amount) $0.2496 -
$8.9244
- Guaranteed Withdrawal Benefit 0.75% (of Account Value invested in the
Eligible Investment Choices)
- Last Survivor Yearly Renewable Term (per $1,000 of the net amount at
risk) $0.0012 - $27.894
These charges can be assessed as a reduction in unit values or a redemption
of units from applicable contract owners' accounts as specified in the
product prospectus.
7. SUBSEQUENT EVENTS:
On September 27, 2012, Hartford Financial Services Group, the ultimate
parent of the Sponsor Company, announced it had entered into a definitive
agreement to sell its Individual Life insurance business to Prudential
Financial, Inc. ("Prudential"). The sale, which is structured as a
reinsurance transaction, closed on January 2, 2013. As part of the
agreement, the Sponsor Company will continue to sell life insurance products
and riders during a transition period, and Prudential will assume all
expenses and risk for in force business through a reinsurance agreement.
Management has evaluated events subsequent to December 31, 2012 and through
the financial statement issuance date of March 28, 2013, noting there are no
additional subsequent events requiring adjustment or disclosure in the
financial statements.
SA-89
<Page>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
INDEPENDENT AUDITORS' REPORT
FINANCIAL STATEMENTS -- STATUTORY-BASIS
As of December 31, 2012 and 2011, and for the
Years Ended December 31, 2012, 2011 and 2010
<Page>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
TABLE OF CONTENTS
<Table>
<Caption>
PAGE:
<S> <C> <C> <C>
----------------------------------------------------------------------------------
Independent Auditors' Report F-2
Financial Statements -- Statutory-Basis:
Admitted Assets, Liabilities and Capital and Surplus F-3
Statements of Operations F-4
Statements of Changes in Capital and Surplus F-5
Statements of Cash Flows F-6
Notes to Financial Statements F7-41
</Table>
F-1
<Page>
<Table>
<S> <C>
[DELOITTE LOGO] DELOITTE & TOUCHE LLP
CityPlaceI, 32ndFloor
185 Asylum Street
Hartford,CT 06103-3402
USA
Tel:+1 860 725 3000
Fax:+1860 725 3500
www.deloitte.com
</Table>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
Hartford Life and Annuity Insurance Company
Hartford, Connecticut
We have audited the accompanying statutory-basis financial statements of
Hartford Life and Annuity Insurance Company (the "Company"), which comprise the
statutory-basis statements of admitted assets, liabilities, and capital and
surplus as of December 31, 2012 and 2011, and the related statutory-basis
statements of operations, changes in capital and surplus, and cash flows each of
the three years in the period ended December 31, 2012, and the related notes to
the statutory-basis financial statements.
Management's Responsibility for the Statutory-Basis Financial Statements
Management is responsible for the preparation and fair presentation of these
statutory-basis financial statements in accordance with the accounting practices
prescribed or permitted by the Insurance Department of the State of Connecticut.
Management is also responsible for the design, implementation, and maintenance
of internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatement, whether due to
fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these statutory-basis financial
statements based on our audits. We conducted our audits in accordance with
auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statutory-basis financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the statutory-basis financial statements. The
procedures selected depend on the auditor's judgment, including the assessment
of the risks of material misstatement of the statutory-basis financial
statements, whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the Company's preparation and
fair presentation of the statutory-basis financial statements in order to design
audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company's internal
control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of significant accounting estimates made by management, as well
as evaluating the overall presentation of the statutory-basis financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinions.
Basis for Adverse Opinion on Accounting Principles Generally Accepted in the
United States of America
As described in Note 2 to the statutory-basis financial statements, the
statutory-basis financial statements are prepared by the Company using the
accounting practices prescribed or permitted by the Insurance Department of the
State of Connecticut, which is a basis of accounting other than accounting
principles generally accepted in the United States of America, to meet the
requirements of the Insurance Department of the State of Connecticut.
The effects on the statutory-basis financial statements of the variances between
the statutory-basis of accounting described in Note 2 to the statutory-basis
financial statements and accounting principles generally accepted in the United
States of America, although not reasonably determinable, are presumed to be
material.
Adverse Opinion on Accounting Principles Generally Accepted in the United States
of America
In our opinion, because of the significance of the matter described in the Basis
for Adverse Opinion on Accounting Principles Generally Accepted in the United
States of America paragraph, the statutory-basis financial statements referred
to above do not present fairly, in accordance with accounting principles
generally accepted in the United States of America, the financial position of
the Company as of December 31, 2012 and 2011, or the results of its operations
or its cash flows for each of the three years in the period ended December 31,
2012.
Opinion on Statutory Basis of Accounting
In our opinion, the statutory-basis financial statements referred to above
present fairly, in all material respects, the admitted assets, liabilities, and
capital and surplus of the Company as of December 31, 2012 and 2011, and the
results of its operations and its cash flows for each of the three years in the
period ended December 31, 2012, in accordance with the accounting practices
prescribed or permitted by the Insurance Department of the State of Connecticut
as described in Note 2 to the statutory-basis financial statements.
/s/ Deloitte & Touche LLP
April 10, 2013
F-2
<Page>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
ADMITTED ASSETS, LIABILITIES AND CAPITAL AND SURPLUS
(STATUTORY-BASIS)
<Table>
<Caption>
AS OF DECEMBER 31,
2012 2011
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------
ADMITTED ASSETS
Bonds $13,760,107,102 $11,394,354,135
Common and preferred stocks 833,792,149 1,017,063,560
Mortgage loans on real
estate 907,375,838 660,905,198
Real estate 24,674,594 25,506,912
Contract loans 375,218,562 370,655,282
Cash and short-term
investments 2,012,782,902 3,179,543,702
Derivatives 673,239,577 1,602,784,576
Other invested assets 279,355,350 251,264,156
------------------- -------------------
TOTAL CASH AND INVESTED
ASSETS 18,866,546,074 18,502,077,521
------------------- -------------------
Investment income due and
accrued 200,098,931 167,669,384
Amounts recoverable for
reinsurance 226,878,415 82,357,163
Federal income tax
recoverable -- 66,466,241
Deferred tax asset 394,723,616 529,817,226
Receivables from parent,
subsidiaries and
affiliates 13,512,043 19,756,182
Other assets 157,051,791 134,763,018
Separate Account assets 45,851,885,131 48,255,070,982
------------------- -------------------
TOTAL ADMITTED ASSETS $65,710,696,001 $67,757,977,717
------------------- -------------------
LIABILITIES
Aggregate reserves for
future benefits $9,208,744,094 $11,213,317,982
Liability for deposit-type
contracts 1,543,283,228 65,824,777
Policy and contract claim
liabilities 74,111,929 48,092,766
Asset valuation reserve 162,571,194 179,493,239
Interest maintenance
reserve 88,321,743 60,883,805
Payables to parent,
subsidiaries and
affiliates 35,894,640 23,109,160
Accrued expense allowances
and other amounts due from
Separate Accounts (670,087,726) (884,460,194)
Funds held under
reinsurance treaties with
unauthorized reinsurers 2,981,569,933 2,552,745,907
Payable for investment
repurchase program 1,614,859,275 --
Collateral on derivatives 467,830,775 1,488,105,981
Other liabilities 1,325,497,396 824,354,242
Separate Account
liabilities 45,851,885,131 48,255,070,982
------------------- -------------------
TOTAL LIABILITIES 62,684,481,612 63,826,538,647
------------------- -------------------
CAPITAL AND SURPLUS
Common stock -- par value
$1,250 per share, 3,000
shares authorized, 2,000
shares issued and
outstanding 2,500,000 2,500,000
Aggregate write-ins for
other than special surplus
funds 169,606,804 174,887,393
Gross paid-in and
contributed surplus 2,771,903,231 2,893,378,493
Aggregate write-ins for
special surplus funds -- 176,605,742
Unassigned surplus 82,204,354 684,067,442
------------------- -------------------
TOTAL CAPITAL AND SURPLUS 3,026,214,389 3,931,439,070
------------------- -------------------
TOTAL LIABILITIES AND
CAPITAL AND SURPLUS $65,710,696,001 $67,757,977,717
------------------- -------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
F-3
<Page>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS
(STATUTORY-BASIS)
<Table>
<Caption>
FOR THE YEARS ENDED DECEMBER 31,
2012 2011 2010
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums and annuity considerations $1,288,798,535 $1,401,142,759 $1,110,039,826
Net investment income 687,977,036 637,017,383 651,852,402
Commissions and expense allowances on reinsurance 49,989,787 34,051,212 90,333,930
ceded
Reserve adjustments on reinsurance ceded (8,032,092,137) (7,279,328,984) (6,345,615,060)
Fee income 1,206,201,964 1,366,934,784 1,452,299,854
Other revenues 22,453,259 13,413,968 26,435,811
------------------ ------------------ ------------------
TOTAL REVENUES (4,776,671,556) (3,826,768,878) (3,014,653,237)
------------------ ------------------ ------------------
BENEFITS AND EXPENSES
Death and annuity benefits 759,877,305 703,019,683 696,946,177
Disability and other benefits 8,161,076 9,127,886 9,295,233
Surrenders and other fund withdrawals 305,668,254 331,833,655 283,345,881
Commissions and expense allowances 468,295,588 523,282,542 509,398,932
(Decrease) increase in aggregate reserves for life (378,937,282) 2,416,785,246 648,536,025
and accident and health policies
General insurance expenses 354,659,954 308,877,214 367,574,662
Net transfers from Separate Accounts (7,601,449,859) (7,446,610,318) (6,144,421,221)
Modified coinsurance adjustment on reinsurance (292,387,321) (201,842,919) (236,815,941)
assumed
Other expenses 125,643,377 230,507,595 148,320,783
------------------ ------------------ ------------------
TOTAL BENEFITS AND EXPENSES (6,250,468,908) (3,125,019,416) (3,717,819,469)
------------------ ------------------ ------------------
NET GAIN (LOSS) FROM OPERATIONS BEFORE FEDERAL INCOME 1,473,797,352 (701,749,462) 703,166,232
TAX EXPENSE (BENEFIT)
Federal income tax expense (benefit) 323,855,226 115,068,345 (65,495,355)
------------------ ------------------ ------------------
NET GAIN (LOSS) FROM OPERATIONS 1,149,942,126 (816,817,807) 768,661,587
------------------ ------------------ ------------------
Net realized capital losses, after tax (438,565,374) (41,037,858) (688,717,817)
------------------ ------------------ ------------------
NET INCOME (LOSS) $711,376,752 $(857,855,665) $79,943,770
------------------ ------------------ ------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
F-4
<Page>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS
(STATUTORY-BASIS)
<Table>
<Caption>
FOR THE YEARS ENDED DECEMBER 31,
2012 2011 2010
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK -- PAR VALUE $1,250 PER SHARE, 3,000 SHARES
AUTHORIZED, 2,000 SHARES ISSUED AND OUTSTANDING
Balance, beginning and end of year $2,500,000 $2,500,000 $2,500,000
----------------- ----------------- -----------------
GROSS PAID-IN AND CONTRIBUTED SURPLUS
Balance, beginning of year 2,893,378,493 2,890,696,495 2,889,208,215
Capital (return) contribution (121,475,262) 2,681,998 1,488,280
----------------- ----------------- -----------------
BALANCE, END OF YEAR 2,771,903,231 2,893,378,493 2,890,696,495
----------------- ----------------- -----------------
AGGREGATE WRITE-INS FOR OTHER THAN SPECIAL SURPLUS FUNDS
Balance, beginning of year 174,887,393 182,105,606 189,963,147
Amortization of gain on inforce reinsurance (5,280,589) (7,218,213) (7,857,541)
----------------- ----------------- -----------------
BALANCE, END OF YEAR 169,606,804 174,887,393 182,105,606
----------------- ----------------- -----------------
AGGREGATE WRITE-INS FOR SPECIAL SURPLUS FUNDS
Balance, beginning of year 176,605,742 181,471,058 266,358,000
Change in additional admitted deferred tax asset (176,605,742) (4,865,316) (84,886,942)
----------------- ----------------- -----------------
BALANCE, END OF YEAR -- 176,605,742 181,471,058
----------------- ----------------- -----------------
UNASSIGNED FUNDS
Balance, beginning of year 684,067,442 805,765,945 737,571,154
Net income (loss) 711,376,752 (857,855,665) 79,943,770
Change in net unrealized capital (losses) gains on (106,980,222) 352,961,532 (342,230,129)
common stocks and other invested assets
Change in net unrealized foreign exchange capital (823,914,426) 265,927,783 151,724,446
(losses) gains
Change in net deferred income tax 72,756,668 499,609,022 47,041,083
Change in asset valuation reserve 16,922,045 (162,934,104) 9,004,550
Change in nonadmitted assets (648,630,747) (219,410,471) 211,752,886
Cumulative effect of change in accounting principles 176,605,742 -- --
Change in liability for reinsurance in unauthorized 1,100 3,400 4,736,976
companies
Dividends to stockholder -- -- (72,000,000)
Correction of prior year error -- -- (21,778,791)
----------------- ----------------- -----------------
BALANCE, END OF YEAR 82,204,354 684,067,442 805,765,945
----------------- ----------------- -----------------
CAPITAL AND SURPLUS
BALANCE, END OF YEAR $3,026,214,389 $3,931,439,070 $4,062,539,104
----------------- ----------------- -----------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
F-5
<Page>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
(STATUTORY-BASIS)
<Table>
<Caption>
FOR THE YEARS ENDED DECEMBER 31,
2012 2011 2010
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
Premiums and annuity considerations $1,289,285,920 $1,399,332,372 $1,167,274,877
Net investment income 702,155,801 613,946,357 763,045,855
Reserve adjustments on reinsurance (8,032,092,137) (7,279,328,984) (6,345,615,060)
Miscellaneous income 1,261,070,634 1,409,156,457 1,553,382,340
----------------- ----------------- -----------------
Total income (4,779,579,782) (3,856,893,798) (2,861,911,988)
----------------- ----------------- -----------------
Benefits paid 861,678,272 1,061,260,232 549,412,033
Federal income tax (recoveries) payments (75,830,891) (115,479,588) 363,856,309
Net transfers from Separate Accounts (7,815,822,328) (7,863,768,436) (6,455,732,342)
Other expenses 1,837,953,351 64,878,126 327,668,851
----------------- ----------------- -----------------
Total benefits and expenses (5,192,021,596) (6,853,109,666) (5,214,795,149)
----------------- ----------------- -----------------
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES 412,441,814 2,996,215,868 2,352,883,161
----------------- ----------------- -----------------
INVESTING ACTIVITIES
PROCEEDS FROM INVESTMENTS SOLD, MATURED OR REPAID
Bonds 6,156,517,642 5,209,426,005 5,961,461,765
Common and preferred stocks 199,580,266 53,875,698 133,591,230
Mortgage loans 69,995,071 34,571,199 82,742,398
Derivatives and other 33,818,042 251,024,069 600,107,338
----------------- ----------------- -----------------
Total investment proceeds 6,459,911,021 5,548,896,971 6,777,902,731
----------------- ----------------- -----------------
COST OF INVESTMENTS ACQUIRED
Bonds 8,537,855,101 6,908,483,885 6,988,480,966
Common and preferred stocks 15,489,335 146,121,947 51,045,814
Mortgage loans 316,475,000 256,825,000 33,125,000
Real estate 236,398 -- 106,600
Derivatives and other 1,207,268,735 119,866,202 1,755,491,882
----------------- ----------------- -----------------
Total investments acquired 10,077,324,569 7,431,297,034 8,828,250,262
----------------- ----------------- -----------------
Net increase in contract loans 4,563,280 6,146,082 11,680,007
----------------- ----------------- -----------------
NET CASH USED FOR INVESTING ACTIVITIES (3,621,976,828) (1,888,546,145) (2,062,027,538)
----------------- ----------------- -----------------
FINANCING AND MISCELLANEOUS ACTIVITIES
Dividends to stockholder -- -- (72,000,000)
Funds held under reinsurance treaties with unauthorized
reinsurers 428,824,026 552,976,734 (154,549,016)
Collateral received on investment repurchase program 1,614,859,275 -- --
Net other cash used (909,087) (54,575,550) (73,312,602)
----------------- ----------------- -----------------
NET CASH PROVIDED BY (USED FOR) FINANCING AND
MISCELLANEOUS ACTIVITIES 2,042,774,214 498,401,184 (299,861,618)
----------------- ----------------- -----------------
Net (decrease) increase in cash and short-term
investments (1,166,760,800) 1,606,070,907 (9,005,995)
CASH AND SHORT-TERM INVESTMENTS, beginning of year 3,179,543,702 1,573,472,795 1,582,478,790
----------------- ----------------- -----------------
CASH AND SHORT-TERM INVESTMENTS, END OF YEAR $2,012,782,902 $3,179,543,702 $1,573,472,795
----------------- ----------------- -----------------
Note: Supplemental disclosures of cash flow information
for non-cash transactions:
Capital contribution from parent to settle intercompany
balances related to stock compensation 5,189,550 2,681,998 1,488,280
Capital contribution to subsidiary to settle
intercompany balances related to stock compensation 2,721,550 1,736,296 --
Shares of subsidiary Hartford Life, Ltd. contributed to
subsidiary Hartford Life International, Ltd. -- -- 29,472,142
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
F-6
<Page>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2012 AND 2011 AND 2010
--------------------------------------------------------------------------------
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Hartford Life and Annuity Insurance Company ("HLAI" or the "Company") is a
wholly-owned subsidiary of Hartford Life Insurance Company ("HLIC"), which is an
indirect subsidiary of Hartford Life, Inc. ("HLI"). HLI is indirectly owned by
The Hartford Financial Services Group, Inc. ("The Hartford").
On September 29, 2010, the Company contributed Hartford Life Ltd., a
wholly-owned subsidiary based in Bermuda, to Hartford Life International, Ltd.,
also a wholly-owned subsidiary, in order to align all of the Company's foreign
subsidiaries under one foreign holding company.
On March 21, 2012, the Company's ultimate parent, The Hartford, announced that
it had decided to focus on its property and casualty, group benefits and mutual
funds businesses. As a result, The Hartford ceased selling its individual
annuity products in the second quarter of 2012. In addition, The Hartford sold
its individual life, retirement plans and Woodbury Financial Services
businesses. See Notes 14 and 15.
The Company offers a complete line of fixed and variable annuities, universal
and traditional individual life insurance and benefit products such as
disability insurance.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying statutory-basis financial statements of HLAI have been prepared
in conformity with statutory accounting practices prescribed or permitted by the
State of Connecticut Department of Insurance ("the Department"). The Department
recognizes only statutory accounting practices prescribed or permitted by the
State of Connecticut for determining and reporting the financial condition and
results of operations of an insurance company and for determining solvency under
the State of Connecticut Insurance Law. The National Association of Insurance
Commissioners' Accounting Practices and Procedures Manual ("NAIC SAP") has been
adopted as a component of prescribed practices by the State of Connecticut.
A difference prescribed by Connecticut state law allows the Company to receive a
reinsurance reserve credit for a reinsurance treaty that provides for a limited
right of unilateral cancellation by the reinsurer. Even if the Company did not
obtain reinsurance reserve credit for this reinsurance treaty, the Company's
risk-based capital would not have triggered a regulatory event.
A reconciliation of the Company's net income and capital and surplus between
NAIC SAP and practices prescribed by the Department is shown below for the years
ended December 31:
<Table>
<Caption>
2012 2011 2010
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS), STATE OF CONNECTICUT BASIS $711,376,752 $(857,855,665) $79,943,770
State prescribed practice:
Reinsurance reserve credit (as described above) (88,280,194) 161,739,538 (3,086,978)
----------------- ------------------ -----------------
(88,280,194) 161,739,538 (3,086,978)
NET INCOME (LOSS), NAIC SAP $ 799,656,946 $ (1,019,595,203) $ 83,030,748
----------------- ------------------ -----------------
Statutory capital and surplus, State of Connecticut
Basis $3,026,214,389 $3,931,439,071 $4,062,539,104
State prescribed practice:
Less: Reinsurance reserve credit (as described above) 307,774,786 396,054,980 234,315,442
----------------- ------------------ -----------------
307,774,786 396,054,980 234,315,442
STATUTORY CAPITAL AND SURPLUS, NAIC SAP $ 2,718,439,603 $ 3,535,384,091 $ 3,828,223,662
----------------- ------------------ -----------------
</Table>
The Company does not follow any other prescribed or permitted statutory
accounting practices that have a material effect on statutory surplus, statutory
net income or risk-based capital.
The preparation of financial statements in conformity with NAIC SAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reported periods. Actual results could differ from those
estimates. The most significant estimates include those used in determining the
liability for aggregate reserves for life, accident and health, and fixed and
variable annuity policies; evaluation of other-than-temporary impairments;
valuation of derivatives; and contingencies relating to corporate litigation and
regulatory matters. Certain of these estimates are particularly sensitive to
market conditions, and deterioration and/or volatility in the worldwide debt or
equity markets could have a material impact on the statutory-basis financial
statements. Although some variability is inherent in these estimates, management
believes the amounts provided are adequate.
F-7
<Page>
Approximately $1.5 billion of policyholder reserves on annuities assumed from
Hartford Life Insurance K.K., a Japan based affiliate, that were previously
recorded within Aggregate reserves for future benefits have been reclassified to
Liability for deposit-type contracts in the current period at the direction of
the Department. Prior periods have not been reclassified.
Certain other reclassifications have been made to prior year financial
information to conform to the current year presentation.
Accounting practices and procedures as prescribed or permitted by the Department
are different in certain material respects from accounting principles generally
accepted in the United States of America ("GAAP"). The more significant
differences are:
(1) for statutory purposes, policy acquisition costs (commissions, underwriting
and selling expenses, etc.) and sales inducements are charged to expense
when incurred rather than capitalized and amortized for GAAP purposes;
(2) recognition of premium revenues, which for statutory purposes are generally
recorded as collected or when due during the premium paying period of the
contract and which for GAAP purposes, for universal life policies and
investment products, generally only consist of charges assessed to policy
account balances for cost of insurance, policy administration and
surrenders. For GAAP, when policy charges received relate to coverage or
services to be provided in the future, the charges are recognized as
revenue on a pro-rata basis over the expected life and gross profit stream
of the policy. Also, for GAAP purposes, premiums for traditional life
insurance policies are recognized as revenues when they are due from
policyholders;
(3) development of liabilities for future policy benefits, which for statutory
purposes predominantly use interest rate and mortality assumptions
prescribed by the National Association of Insurance Commissioners ("NAIC"),
which may vary considerably from interest and mortality assumptions used
under GAAP. Additionally for GAAP, reserves for guaranteed minimum death
benefits ("GMDB") are based on models that involve a range of scenarios and
assumptions, including those regarding expected market rates of return and
volatility, contract surrender rates and mortality experience, and,
reserves for guaranteed withdrawal benefits are considered embedded
derivatives and reported at fair value;
(4) exclusion of certain assets designated as nonadmitted assets from the
Statements of Admitted Assets, Liabilities and Capital and Surplus for
statutory purposes by directly charging surplus;
(5) the calculation of the postretirement benefits obligation which, for
statutory accounting, excludes non-vested employees whereas GAAP
liabilities include a provision for such employees; statutory and GAAP
accounting permit either immediate recognition of the liability or
straight-line amortization of the liability over a period not to exceed 20
years. For GAAP, The Hartford's obligation was immediately recognized. For
statutory accounting, the remaining obligation is expected to be recognized
ratably over the next 4 years;
(6) establishment of a formula reserve for realized and unrealized losses due
to default and equity risk associated with certain invested assets (Asset
Valuation Reserve ("AVR")) for statutory purposes; as well as the deferral
and amortization of realized gains and losses, caused by changes in
interest rates during the period the asset is held, into income over the
original life to maturity of the asset sold (Interest Maintenance Reserve
("IMR")) for statutory purposes; whereas on a GAAP basis, no such formula
reserve is required and realized gains and losses are recognized in the
period the asset is sold;
(7) the reporting of reserves and benefits, net of reinsurance ceded for
statutory purposes; whereas on a GAAP basis, reserves are reported gross of
reinsurance with reserve credits presented as recoverable assets;
(8) for statutory purposes, investments in unaffiliated bonds, other than
loan-backed and structured securities, rated in NAIC classes 1 through 5
are carried at amortized cost, and unaffiliated bonds, other than
loan-backed and structured securities, rated in NAIC class 6 are carried at
the lower of amortized cost or fair value. Loan-backed bonds and structured
securities are carried at either amortized cost or the lower of amortized
cost or fair value in accordance with the provisions of Statement of
Statutory Accounting Principles ("SSAP") No. 43 -- Revised (Loan-backed and
Structured Securities). GAAP requires that fixed maturities and loan-backed
and structured securities be classified as "held-to-maturity,"
"available-for-sale" or "trading," based on the Company's intentions with
respect to the ultimate disposition of the security and its ability to
affect those intentions. The Company's bonds and loan-backed securities
were classified on a GAAP basis as "available-for-sale" and accordingly,
these investments and common stocks were reflected at fair value with the
corresponding impact included as a separate component of Stockholder's
Equity;
(9) for statutory purposes, Separate Account liabilities are calculated using
prescribed actuarial methodologies, which approximate the market value of
Separate Account assets, less applicable surrender charges. The Separate
Account surplus generated by these reserving methods is recorded as an
amount due to or from Separate Accounts on the Statements of Admitted
Assets, Liabilities and Capital and Surplus, with changes reflected in the
Statements of Operations. On a GAAP basis, Separate Account assets and
liabilities must meet specific conditions to qualify as a Separate Account
asset or liability. Amounts reported for Separate Account assets and
liabilities are based upon the fair value of the underlying assets;
F-8
<Page>
(10) the consolidation of financial statements for GAAP reporting, whereas
statutory accounting requires standalone financial statements with earnings
of subsidiaries reflected as changes in unrealized gains or losses in
surplus;
(11) deferred income taxes, which provide for statutory/tax temporary
differences, are subject to limitation and are charged directly to surplus,
whereas, GAAP would include GAAP/tax temporary differences recognized as a
component of net income;
(12) comprehensive income and its components are not presented in the
statutory-basis financial statements;
(13) for statutory purposes derivative instruments that qualify for hedging,
replication, or income generation are accounted for in a manner consistent
with the hedged item, cash instrument and covered asset, respectively,
which is typically amortized cost. Derivative instruments held for other
investment and risk management activities, which do not receive hedge
accounting treatment, receive fair value accounting for statutory purposes
and are recorded at fair value with corresponding changes in value reported
in unrealized gains and losses within surplus. For GAAP, derivative
instruments are recorded at fair value with changes in value reported in
earnings, with the exception of cash flow hedges and net investment hedges
of a foreign operation, which are carried at fair value with changes in
value reported as a separate component of Stockholder's Equity. In
addition, statutory accounting does not record the hedge ineffectiveness on
qualified hedge positions, whereas, GAAP records the hedge ineffectiveness
in earnings; and
(14) embedded derivatives for statutory accounting are not bifurcated from the
host contract, whereas, GAAP accounting requires the embedded derivative to
be bifurcated from the host instrument, accounted for and reported
separately.
AGGREGATE RESERVES FOR LIFE AND ACCIDENT AND HEALTH POLICIES AND CONTRACTS AND
LIABILITY FOR DEPOSIT-TYPE CONTRACTS
Aggregate reserves for payment of future life, health and annuity benefits are
computed in accordance with applicable actuarial standards. Reserves for life
insurance policies are generally based on the 1941, 1958, 1980 and 2001
Commissioner's Standard Ordinary Mortality Tables and various valuation rates
ranging from 2.25% to 6.00%. Accumulation and on-benefit annuity reserves are
based principally on individual and group annuity tables at various rates
ranging from 2.50% to 9.50% and using the Commissioner's Annuity Reserve
Valuation Method ("CARVM"). Accident and health reserves are established using a
two year preliminary term method and morbidity tables based primarily on Company
experience.
For non-interest sensitive ordinary life plans, the Company waives deduction of
deferred fractional premiums upon death of insured. Return of the unearned
portion of the final premium is governed by the terms of the contract. The
Company does not have any forms for which the cash values are in excess of the
legally computed reserve.
Extra premiums are charged for substandard lives, in addition to the regular
gross premiums for the true age. Mean reserves for traditional insurance
products are determined by computing the regular mean reserve for the plan at
the true age, and adding one-half (1/2) of the extra premium charge for the
year. For plans with explicit mortality charges, mean reserves are based on
appropriate multiples of standard rates of mortality.
As of December 31, 2012 and 2011, the Company had $15,553,422,110 and
$17,416,612,680, respectively, of insurance in force for which the gross
premiums are less than the net premiums according to the standard valuation set
by the State of Connecticut. Reserves to cover the above insurance at December
31, 2012 and 2011 totaled $64,681,219 and $74,633,381, respectively.
The Company has established Separate Accounts to segregate the assets and
liabilities of certain life insurance, pension and annuity contracts that must
be segregated from the Company's General Account assets under the terms of its
contracts. The assets consist primarily of marketable securities and are
reported at fair value. Premiums, benefits and expenses relating to these
contracts are reported in the Statements of Operations.
F-9
<Page>
An analysis of annuity actuarial reserves and deposit fund liabilities by
withdrawal characteristics for the General Account and Separate Accounts as of
December 31, 2012 is presented below:
<Table>
<Caption>
SEPARATE
ACCOUNTS SEPARATE
GENERAL WITH ACCOUNTS
ACCOUNT GUARANTEES NONGUARANTEED TOTAL % OF TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
A. Subject to discretionary withdrawal
1. With fair value adjustment $1,504,858,853 $ -- $ -- $1,504,858,853 3.28%
2. At book value less current surrender
charge of 5% or more 179,906,297 -- -- 179,906,297 0.39%
3. At fair value -- -- 41,311,170,020 41,311,170,020 89.94%
--------------- ---- --------------- --------------- ------
4. Total with adjustment or at fair value 1,684,765,150 -- 41,311,170,020 42,995,935,170 93.61%
5. At book value without adjustment
(minimal or no charge or adjustment) 2,445,873,881 -- -- 2,445,873,881 5.32%
B. Not subject to discretionary withdrawal 360,640,185 -- 130,875,400 491,515,585 1.07%
--------------- ---- --------------- --------------- ------
C. Total (gross) 4,491,279,216 -- 41,442,045,420 45,933,324,636 100.00%
D. Reinsurance ceded 212,088,582 -- -- 212,088,582
--------------- ---- --------------- --------------- ------
E. Total (net) $4,279,190,634 $ -- $41,442,045,420 $45,721,236,054
--------------- ---- --------------- --------------- ------
Reconciliation of total annuity actuarial
reserves and deposit fund liabilities:
F. Life and Accident & Health Annual
Statement:
1. Exhibit 5, Annuities Section, Total
(net) $2,732,473,849
2. Exhibit 5, Supplementary Contract
Section, Total (net) 3,433,555
3. Exhibit 7, Deposit-Type Contracts
Section, Total (net) 1,543,283,230
---------------
4. Subtotal 4,279,190,634
Separate Account Annual Statement:
5. Exhibit 3, Annuities Section, Total
(net) 41,442,045,420
6. Exhibit 3, Supplemental Contract
Section, Total (net) --
7. Policyholder dividend and coupon
accumulations --
8. Policyholder premiums --
9. Guaranteed interest contracts --
10. Exhibit 4, Deposit-Type Contracts
Section, Total (net) --
---------------
11. Subtotal 41,442,045,420
---------------
12. Combined total $45,721,236,054
---------------
</Table>
INVESTMENTS
Investments in unaffiliated bonds, other than loan-backed and structured
securities, rated in NAIC classes 1-5 are carried at amortized cost and
unaffiliated bonds rated in NAIC class 6 are carried at the lower of amortized
cost or fair value. Short-term investments include all investments whose
maturities, at the time of acquisition, are one year or less and are stated at
amortized cost. Unaffiliated common stocks are carried at fair value.
Investments in stocks of uncombined subsidiaries, controlled and affiliated
("SCA") companies are based on the net worth of the subsidiary in accordance
with SSAP No. 97 (Investment in Subsidiary, Controlled, and Affiliated Entities,
a replacement of SSAP No. 88). The Company's investment value in a foreign
insurance subsidiary is affected by adjusting GAAP annuity account value
reserves using VA CARVM. Methodology is consistent with domestic accumulation
annuity reserves. The change in the carrying value is recorded as a change in
net unrealized capital gains (losses), a component of unassigned surplus.
Unaffiliated preferred stocks are carried at cost, lower of cost or amortized
cost, or fair value depending on the assigned credit rating and whether the
preferred stock is redeemable or non-redeemable. Mortgage loans on real estate
are stated at the outstanding principal balance, less any allowances for credit
losses. Loan-backed bonds and structured securities are carried at either
amortized cost or the lower of amortized cost or fair value in accordance with
the provisions of SSAP No. 43 -- Revised. Significant changes in estimated cash
flows from the original purchase assumptions are accounted for using the
prospective method, except for highly rated fixed rate securities, which use the
retrospective method. The Company has ownership interests in joint ventures,
investment partnerships and limited liability companies. The Company carries
these interests based upon audited financial statements in accordance with SSAP
No. 48 (Joint Ventures, Partnerships and Limited Liability Companies). Contract
loans are carried at outstanding balance, which approximates fair value.
Interest income from fixed maturities and mortgage loans on real estate is
recognized when earned on the constant effective yield method based on estimated
timing of cash flows. The amortization of premium and accretion of discount for
fixed maturities also takes into consideration call and maturity dates that
produce the lowest yield. For fixed rate securitized financial assets subject to
prepayment risk, yields are recalculated and adjusted periodically to reflect
historical and/or estimated future repayments using the retrospective method;
however, if these investments are impaired, any yield adjustments are made using
the prospective method. The Company has not elected under SSAP No. 43 -- Revised
to use the book value as of January 1, 1994 as the cost for applying the
retrospective adjustment method to securities purchased prior to that date.
Investment income on variable rate and interest only securities is determined
using the prospective method. Prepayment fees on bonds and mortgage loans on
real estate are recorded in net investment income when earned. Dividends are
recorded as earned on the ex-dividend date. For partnership investments, income
is earned when cash
F-10
<Page>
distributions of income are received. For impaired debt securities, the Company
accretes the new cost basis to the estimated future cash flows over the expected
remaining life of the security by prospectively adjusting the security's yield.
Due and accrued investment income amounts over 90 days past due are nonadmitted.
There was no investment income due and accrued excluded from surplus at December
31, 2012 and 2011.
Net realized gains and losses from investment sales represent the difference
between the sales proceeds and the lower of cost of the investment sold,
determined on a specific identification basis. Net realized capital gains and
losses also result from termination or settlement of derivative contracts that
do not qualify, or are not designated, as a hedge for accounting purposes.
Impairments are recognized within net realized capital losses when investment
losses in value are deemed other-than-temporary. Foreign currency transaction
gains and losses are also recognized within net realized capital gains and
losses.
The AVR is designed to provide a standardized reserving process for realized and
unrealized losses due to default and equity risks associated with invested
assets. The AVR balances were $162,571,194 and $179,493,239 as of December 31,
2012 and 2011, respectively. Additionally, the IMR captures net realized capital
gains and losses, net of applicable income taxes, resulting from changes in
interest rates and amortizes these gains or losses into income over the life of
the bond, preferred stock or mortgage loan sold. The IMR balances as of December
31, 2012 and 2011 were $88,321,737, and $60,883,805, respectively. The net
capital gains captured in the IMR, net of taxes, in 2012, 2011, and 2010 were
$44,533,696, $22,055,099 and $67,929,917, respectively. The amount of income
amortized from the IMR net of taxes in 2012, 2011, and 2010 included in the
Company's Statements of Operations, was $17,095,758, $4,967,011 and $15,097,035,
respectively. Realized capital gains and losses, net of taxes, not included in
the IMR are reported in the Statements of Operations.
The Company's accounting policy requires that a decline in the value of a bond
or equity security below its cost or amortized cost basis be assessed to
determine if the decline is other-than-temporary. In addition, for securities
expected to be sold, an other-than-temporary impairment ("OTTI") charge is
recognized if the Company does not expect the fair value of a security to
recover to its cost or amortized cost basis prior to the expected date of sale.
The impaired value of the other-than-temporarily impaired investment becomes its
new cost basis. The Company has a security monitoring process overseen by a
committee of investment and accounting professionals that identifies securities
that, due to certain characteristics, as described below, are subjected to an
enhanced analysis on a quarterly basis.
Securities that are in an unrealized loss position are reviewed at least
quarterly to determine if an OTTI is present based on certain quantitative and
qualitative factors. The primary factors considered in evaluating whether a
decline in value for securities not subject to SSAP No. 43 -- Revised is
other-than-temporary include: (a) the length of time and the extent to which the
fair value has been less than cost or amortized cost, (b) changes in the
financial condition, credit rating and near-term prospects of the issuer, and
(c) whether the debtor is current on contractually obligated payments. Once an
impairment charge has been recorded, the Company continues to review the
other-than-temporarily impaired securities for further OTTIs on an ongoing
basis.
For securities that are not subject to SSAP No. 43 -- Revised, if the decline in
value of a bond or equity security is other-than-temporary, a charge is recorded
in net realized capital losses equal to the difference between the fair value
and cost or amortized cost basis of the security.
For certain securitized financial assets with contractual cash flows (including
asset-backed securities), SSAP No. 43 -- Revised requires the Company to
periodically update its best estimate of cash flows over the life of the
security. If management determines that its best estimate of expected future
cash flows discounted at the security's effective yield prior to the impairment
are less than its amortized cost, then an OTTI charge is recognized equal to the
difference between the amortized cost and the Company's best estimate of
expected future cash flows discounted at the security's effective yield prior to
the impairment. The Company's best estimate of expected future cash flows
discounted at the security's effective yield prior to the impairment becomes its
new cost basis. Estimating future cash flows is a quantitative and qualitative
process that incorporates information received from third-party sources along
with certain internal assumptions and judgments regarding the future performance
of the underlying collateral. As a result, actual results may differ from
estimates. Projections of expected future cash flows may change based upon new
information regarding the performance of the underlying collateral. In addition,
if the Company does not have the intent and ability to hold a security subject
to the provisions of SSAP No. 43 - - Revised until the recovery of value, the
security is written down to fair value.
Net realized capital losses resulting from write-downs for OTTIs on corporate
and asset-backed bonds were $21,190,901, $9,684,957 and $16,191,903 for the
years ended December 31, 2012, 2011 and 2010, respectively. Net realized capital
losses resulting from write-downs for OTTIs on equities were $33,439, $245,204
and $0 for the years ended December 31, 2012, 2011 and 2010, respectively.
F-11
<Page>
Mortgage loans on real estate are considered to be impaired when management
estimates that, based upon current information and events, it is probable that
the Company will be unable to collect all amounts due according to the
contractual terms of the loan agreement. For mortgage loans on real estate that
are determined to be impaired, a valuation allowance is established for the
difference between the carrying amount and the Company's share of the fair value
of the collateral. Additionally, a loss contingency valuation allowance is
established for estimated probable credit losses on certain homogenous groups of
loans. Changes in valuation allowances are recorded in net unrealized capital
gains and losses. Interest income on an impaired loan is accrued to the extent
it is deemed collectable and the loan continues to perform under its original or
restructured terms. Interest income on defaulted loans is recognized when
received. As of December 31, 2012, 2011 and 2010, the Company had impaired
mortgage loans on real estate with related allowances for credit losses of
$565,263, $682,306 and $2,561,000, respectively.
The Company may at any time use derivative instruments, including swaps, caps,
floors, options, futures and forwards. On the date the derivative contract is
entered into, the Company designates the derivative as hedging (fair value, cash
flow, or net investment in a foreign operation), replication, income generation,
or held for other investment and/or risk management activities, which primarily
involves managing asset or liability related risks which do not qualify for
hedge accounting under SSAP No. 86 (Accounting for Derivative Instruments and
Hedging, Income Generation, and Replication (Synthetic Asset) Transactions). The
Company's derivative transactions are permitted uses of derivatives under the
derivative use plan required by the Department.
Derivatives used in hedging relationships are accounted for in a manner
consistent with the item hedged. Typically, cost paid or consideration received
at inception of a contract is reported on the balance sheet as a derivative
asset or liability, respectively. Periodic cash flows and accruals are recorded
in a manner consistent with the hedged item. Upon termination of the derivative,
any gain or loss is recognized as a derivative capital gain or loss.
Derivatives used in replication relationships are accounted for in a manner
consistent with the cash instrument and the replicated asset. Typically, cost
paid or consideration received at inception of the contract is recorded on the
balance sheet as a derivative asset or liability, respectively. Periodic cash
flows and accruals of income/expense are recorded as a component of derivative
net investment income. Upon termination of the derivative, any gain or loss is
recognized as a derivative capital gain or loss.
Derivatives used in income generation relationships are accounted for in a
manner consistent with the associated covered asset. Typically, consideration
received at inception of the contract is recorded on the balance sheet as a
derivative liability. Upon termination, any remaining derivative liability,
along with any disposition payments are recorded to derivative capital gain or
loss.
Derivatives held for other investment and/or risk management activities receive
fair value accounting. The derivatives are carried on the balance sheet at fair
value and the changes in fair value are recorded in derivative unrealized gains
and losses. Periodic cash flows and accruals of income/expense are recorded as a
component of derivative net investment income.
ADOPTION OF ACCOUNTING STANDARDS
Effective January 1, 2012, the Company adopted SSAP No. 101 (Income Taxes, A
Replacement of SSAP No. 10R and SSAP No. 10). The effect of the adoption of SSAP
No. 101 on the Company's admitted assets, net income and surplus was not
material. As a result of the adoption, during the first quarter of 2012, the
Company reclassified $177 million between special surplus funds and unassigned
surplus representing the additional admitted deferred tax asset that had been
calculated under the provisions of SSAP No. 10R (Income Taxes -- Revised, A
Temporary Replacement of SSAP No. 10) and which is no longer required to be
presented as special surplus funds.
FUTURE ADOPTION OF ACCOUNTING STANDARDS
Offsetting of Financial Assets and Liabilities:
In December 2012, the Statutory Accounting Principles Working Group ("SAPWG") of
the National Association of Insurance Commissioners ("NAIC") adopted revisions
to the following SSAPs: SSAP No. 64, Offsetting and Netting of Assets and
Liabilities; SSAP No. 86, Accounting for Derivative Instruments and Hedging
Activities; and SSAP No. 103 Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities. The effect of these revisions, effective for
financial statements issued beginning January 1, 2013, will allow offsetting of
financial assets and liabilities in only certain limited circumstances and will
therefore disallow netting derivatives under master netting agreements and
similar arrangements under repurchase and reverse repurchase agreements. The
Company will adopt these changes effective January 1, 2013, and as a result both
Derivative assets and Derivative liabilities will be increased in the first
quarter 2013 statutory financial statements by approximately $793 million, from
balances as of December 31, 2012.
F-12
<Page>
-------------------------------------------------------------------------------
3. INVESTMENTS
For the years ended December 31,
(A) COMPONENTS OF NET INVESTMENT INCOME
<Table>
<Caption>
2012 2011 2010
<S> <C> <C> <C>
---------------------------------------------------------------------------------------
Interest income from bonds and short-term
investments $575,468,717 $509,808,728 $469,730,083
Interest income from contract loans 22,174,261 22,747,522 20,359,950
Interest income from mortgage loans on real
estate 41,558,591 30,291,082 27,188,650
Interest and dividends from other investments 64,491,175 86,751,995 150,668,061
Gross investment income 703,692,744 649,599,327 667,946,744
Less: investment expenses 15,715,708 12,581,944 16,094,342
------------ ------------ ------------
NET INVESTMENT INCOME $687,977,036 $637,017,383 $651,852,402
------------ ------------ ------------
</Table>
(B) COMPONENTS OF NET UNREALIZED CAPITAL GAINS (LOSSES) ON BONDS AND SHORT-TERM
INVESTMENTS
<Table>
<Caption>
2012 2011 2010
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------
Gross unrealized capital gains $1,362,269,460 $1,023,591,266 $442,646,698
Gross unrealized capital losses (66,702,724) (161,289,941) (195,775,301)
Net unrealized capital gains 1,295,566,736 862,301,325 246,871,397
Balance, beginning of year 862,301,325 246,871,397 (141,761,000)
------------ ------------ ------------
CHANGE IN NET UNREALIZED CAPITAL GAINS ON
BONDS AND SHORT-TERM INVESTMENTS $433,265,411 $615,429,928 $388,632,397
------------ ------------ ------------
</Table>
(C) COMPONENTS OF NET UNREALIZED CAPITAL (LOSSES) GAINS ON COMMON AND PREFERRED
STOCKS
<Table>
<Caption>
2012 2011 2010
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------
Gross unrealized capital gains $720,924 $4,123,643 $2,105,046
Gross unrealized capital losses (209,618,658) (174,273,946) (337,772,932)
Net unrealized capital losses (208,897,734) (170,150,303) (335,667,886)
Balance, beginning of year (170,150,303) (335,667,886) (17,158,000)
------------ ------------ ------------
CHANGE IN NET UNREALIZED CAPITAL (LOSSES) $(38,747,431) $165,517,583 $(318,509,886)
GAINS ON COMMON AND PREFERRED STOCKS
------------ ------------ ------------
</Table>
(D) COMPONENTS OF NET REALIZED CAPITAL LOSSES
<Table>
<Caption>
2012 2011 2010
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------
Bonds and short-term investments $(22,131,292) $56,145,379 $57,288,750
Common stocks -- unaffiliated 1,259,413 144,514 10,124
Common stocks -- affiliated 36,605,566 -- --
Preferred stocks -- unaffiliated -- (245,204) --
Mortgage loans on real estate (126,000) -- (43,549,377)
Derivatives (392,397,711) (77,242,753) (614,797,438)
Other invested assets 8,941,445 12,472,692 5,232,690
Net realized capital losses (367,848,579) (8,725,372) (595,815,251)
Capital gains tax expense 26,183,099 10,257,387 24,972,649
Net realized capital losses, after tax (394,031,678) (18,982,759) (620,787,900)
Less: amounts transferred to IMR 44,533,696 22,055,099 67,929,917
------------ ------------ ------------
NET REALIZED CAPITAL LOSSES, AFTER TAX $(438,565,374) $(41,037,858) $(688,717,817)
------------ ------------ ------------
</Table>
For the years ended December 31, 2012, 2011 and 2010, sales of unaffiliated
bonds and short-term investments resulted in proceeds of $6,348,001,597,
$6,028,566,737 and $6,758,918,000, gross realized capital gains of $122,902,196,
$103,207,903 and $113,537,000, and gross realized capital losses of $47,294,722,
$46,490,884 and $40,731,000 respectively, before transfers to the IMR.
For the years ended December 31, 2012, 2011 and 2010, sales of unaffiliated
common and preferred stocks resulted in proceeds of $68,765,398, $875,698 and
$10,124, gross realized capital gains of $4,275,703, $152,187 and $10,124, and
gross realized capital losses of $2,982,847, $7,673 and $0, respectively.
F-13
<Page>
(E) INVESTMENTS -- DERIVATIVE INSTRUMENTS
OVERVIEW
The Company utilizes a variety of derivative instruments, including swaps,
swaptions, caps, floors, forwards, futures and options through one of four
Company approved objectives: to hedge risk arising from interest rate, equity
market, credit spread including issuer defaults, price or foreign currency
exchange rate risk or volatility; to manage liquidity; to control transaction
costs; or to enter into income generation or replication transactions. On the
date the derivative contract is entered into, the Company designates the
derivative as hedging (fair value, cash flow, or net investment in a foreign
operation), income generation, replication, or held for other investment and/or
risk management activities, which primarily involves managing asset or liability
related risks which do not qualify for hedge accounting under SSAP No. 86. The
Company's derivative transactions are used in strategies permitted under the
derivative use plan required by the Department.
Interest rate swaps and index swaps involve the periodic exchange of payments
with other parties, at specified intervals, calculated using agreed upon rates
or indices and notional principal amounts. Generally, no cash or principal
payments are exchanged at the inception of the contract. Typically, at the time
a swap is entered into, the cash flow streams exchanged by the counterparties
are equal in value.
Credit default swaps entitle one party to receive a periodic fee in exchange for
an obligation to compensate the other party should a credit event occur on the
part of the referenced issuer.
Interest rate cap and floor contracts entitle the purchaser to receive from the
issuer at specified dates, the amount, if any, by which a specified market rate
exceeds the cap strike 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 that specify a rate of interest or
currency exchange rate to be paid or received on an obligation beginning on a
future start date and are typically settled in cash.
Financial futures are standardized commitments to either purchase or sell
designated financial instruments at a future date for a specified price and may
be settled in cash or through delivery of the underlying instrument. Futures
contracts trade on organized exchanges. Margin requirements for futures are met
by pledging securities or cash, and changes in the futures' contract values are
settled daily in cash.
Option contracts grant the purchaser, for a premium payment, the right to either
purchase from or sell to the issuer a financial instrument at a specified price,
within a specified period or on a stated date.
Swaption contracts grant the purchaser, for a premium payment, the right to
enter into an interest rate swap with the issuer on a specified future date.
Foreign currency swaps exchange an initial principal amount in two currencies,
agreeing to re-exchange the currencies at a future date, at an agreed upon
exchange rate. There may also be a periodic exchange of payments at specified
intervals calculated using the agreed upon rates and exchanged principal
amounts.
STRATEGIES
The notional value, fair value, and carrying value of derivative instruments
used during the year are disclosed in the table presented below. During the
years 2012 and 2011, the Company did not transact in or hold any positions
related to net investment hedges in a foreign operation or income generation
transactions. The notional amounts of derivative contracts represent the basis
upon which pay or receive amounts are calculated and are not reflective of
credit risk. The fair value of derivative instruments are based upon widely
accepted pricing valuation models which utilize independent third-party data as
inputs or independent broker quotations. As of December 31, 2012 and 2011, the
average fair value for derivatives held for other investment and/or risk
management activities was $879,622,080 and $994,929,586, respectively. The
Company did not have any material unrealized gains or losses during the
reporting period representing the component of the derivative instruments gain
or loss from derivatives that no longer qualify for hedge accounting.
F-14
<Page>
<Table>
<Caption>
AS OF DECEMBER 31, 2012 AS OF DECEMBER 31, 2011
NOTIONAL FAIR CARRYING NOTIONAL FAIR CARRYING
(AMOUNTS IN THOUSANDS) VALUE VALUE VALUE VALUE VALUE VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
DERIVATIVE TYPE BY STRATEGY
Cash flow hedges
Interest rate swaps $100,000 $2,419 $ -- $360,000 $24,656 $ --
Foreign currency swaps 20,082 (589) (2,098) 56,751 12,986 6,971
Japan 3Win foreign
currency swaps 1,553,624 (127,149) -- 1,775,646 183,792 --
Fair value hedges
Interest rate swaps 27,999 (50) -- 109,945 (763) --
Replication transactions
Credit default swaps 252,500 4,076 2,608 26,900 (279) (255)
Other investment and/or
Risk Management activities
Interest rate caps 54,077 -- -- 54,077 5 5
Credit default swaps 144,490 (1,060) (1,060) 274,555 3,715 3,715
Credit default swaps --
offsetting 519,972 (2,764) (2,764) 574,372 (5,047) (5,047)
Foreign currency swaps 50,000 (9,072) (9,072) 50,000 (7,205) (7,205)
U.S. GMWB hedging
derivatives 13,280,533 508,651 508,651 11,173,683 729,864 729,864
Equity index options 45,458 2,270 2,270 13,790 569 569
Interest rate swaps 20,000 4,034 4,034 460,645 (86) (86)
Interest rate swaps --
offsetting 260,010 (15,767) (15,767) 225,000 (16,422) (16,422)
U.S. macro hedge program 7,442,223 285,785 285,785 6,819,099 356,561 356,561
International program
hedging instruments 22,450,857 (167,597) (167,597) 17,044,723 497,931 497,931
----------- --------- --------- ----------- ---------- ----------
TOTAL $46,221,825 $483,187 $604,990 $39,019,186 $1,780,277 $1,566,601
----------- --------- --------- ----------- ---------- ----------
</Table>
CASH FLOW HEDGES
INTEREST RATE SWAPS: Interest rate swaps are primarily used to convert interest
receipts on floating-rate fixed maturity investments to fixed rates. Forward
starting swap agreements are used to hedge the interest rate exposure of
anticipated future purchases of fixed maturity securities. As of December 31,
2012 the Company did not hold cash flow qualifying forward starting swap
agreements. For the year ended December 31, 2012, the Company reported a gain of
$4,520,509 classified in unrealized gains and losses related to cash flow hedges
that have been discontinued because it was no longer probable that the original
forecasted transactions would occur by the end of the originally specified time
period.
Foreign currency swaps are used to convert foreign denominated cash flows
associated with certain foreign denominated fixed maturity investments to U.S.
dollars. The foreign fixed maturities are primarily denominated in euros and are
swapped to minimize cash flow fluctuations due to changes in currency rates.
FOREIGN CURRENCY SWAPS: Japan 3Win foreign currency swaps are primarily used to
hedge the foreign currency exposure related to certain guaranteed minimum income
benefit ("GMIB") fixed liability payments reinsured from a related party.
FAIR VALUE HEDGES
INTEREST RATE SWAPS: Interest rate swaps are used to hedge the changes in fair
value of certain fixed rate maturity investments due to changes in LIBOR.
REPLICATION TRANSACTIONS
CREDIT DEFAULT SWAPS: The Company periodically enters into credit default swaps
as part of replication transactions by pairing with highly rated, fixed-income
securities in order to reproduce the investment characteristics of otherwise
permissible investments.
OTHER INVESTMENT AND/OR RISK MANAGEMENT ACTIVITIES
The table below presents realized capital gains and (losses) on derivative
instruments used for other investment and/or risk management activities.
<Table>
<Caption>
REALIZED GAINS (LOSSES)
FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED
(AMOUNTS IN THOUSANDS) DECEMBER 31, 2012 DECEMBER 31, 2011 DECEMBER 31, 2010
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
BY STRATEGY
Credit default swaps $2,904 $738 $1,329
Credit default swaps -- offsetting (1,314) (265) (4)
Foreign currency swaps 12,448 -- (993)
U.S. GMWB hedging derivatives (242,461) (162,431) (144,744)
Equity index options 48 (66) --
Interest rate swaps and futures 9,294 112 5,772
Interest rate swaps -- offsetting (596) -- 5,822
U.S. macro hedge program (92,869) (276,125) (342,821)
International program hedging (104,440) 326,758 (171,159)
instruments
----------- ----------- -----------
TOTAL $(416,986) $(111,279) $(646,798)
----------- ----------- -----------
</Table>
F-15
<Page>
INTEREST RATE CAPS: The Company is exposed to policyholder surrenders during a
rising interest rate environment. Interest rate cap contracts are used to
mitigate the Company's loss in a rising interest rate environment. The increase
in yield from the cap contracts in a rising interest rate environment may be
used to raise credited rates, thereby increasing the Company's competitiveness
and reducing the policyholder's incentive to surrender.
CREDIT DEFAULT SWAPS: The Company enters into swap agreements in which the
Company reduces or assumes credit exposure from an individual entity, referenced
index or asset pool. In addition, the Company may enter into credit default
swaps to terminate existing swaps in hedging relationships, thereby offsetting
the changes in value of the original swap.
FOREIGN CURRENCY SWAPS: The Company enters into foreign currency swaps to hedge
the foreign currency exposures in certain of its foreign fixed maturity
investments.
GUARANTEED MINIMUM WITHDRAWAL BENEFIT ("GMWB") HEDGING DERIVATIVES: The Company
enters into interest rate, S&P 500 and NASDAQ index futures contracts and S&P
500 put and call options, as well as interest rate, S&P, equity volatility,
dividend, and total return Europe, Australasia, and Far East ("EAFE") swap
contracts to hedge exposure to the volatility associated with a portion of the
GMWB liabilities which are not reinsured. The Company has also entered into a
customized swap contract to hedge certain risk components for the remaining term
of certain blocks of non-reinsured GMWB riders.
EQUITY INDEX OPTIONS: The Company enters into equity index options to
economically hedge the equity risk associated with various equity indexed
products.
INTEREST RATE SWAPS AND FUTURES: The Company enters into interest rate swaps and
futures to manage duration between assets and liabilities. In addition, the
Company enters into interest rates swaps to terminate existing swaps in hedging
relationships, thereby offsetting the changes in value in the original swap.
U.S. MACRO HEDGE PROGRAM: The Company purchases equity options and futures to
economically hedge the statutory reserve impact of equity risk arising primarily
from GMDB and GMWB obligations against a decline in the equity markets.
INTERNATIONAL PROGRAM HEDGING INSTRUMENTS: The Company utilizes equity futures,
options and swaps, currency forwards and options to partially hedge against
declines in equity markets or changes in foreign currency exchange rates and the
resulting statutory surplus and capital impact primarily arising from GMDB, GMIB
and GMWB obligations issued in Japan and reinsured by the Company.
CREDIT RISK ASSUMED THROUGH CREDIT DERIVATIVES
The Company enters into credit default swaps that assume credit risk from a
referenced index or asset pool in order to synthetically replicate investment
transactions. In addition, the Company may enter into credit default swaps that
assume credit risk to terminate existing credit default swaps that reduce credit
risk, thereby offsetting the changes in value of the original swap.
The Company will receive a periodic payment based on an agreed upon rate and
notional amount and will only make a payment if there is a credit event. A
credit event payment will typically be equal to the notional value of the swap
contract less the value of the referenced security issuer's debt obligation. A
credit event is generally defined as a default on contractually obligated
interest or principal payments or bankruptcy of the referenced entity. The
credit default swaps in which the Company assumes credit risk primarily
reference investment grade baskets of up to five corporate issuers and
diversified portfolios of corporate issuers. The diversified portfolios of
corporate issuers are established within sector concentration limits and may be
divided into tranches that possess different credit ratings.
The following tables present the notional amount, fair value, carrying value,
weighted average years to maturity, underlying referenced credit obligation type
and average credit ratings, and offsetting notional amount, fair value and
carrying value for credit derivatives in which the Company is assuming credit
risk as of December 31:
AS OF DECEMBER 31, 2012
<Table>
<Caption>
NOTIONAL FAIR CARRYING
(AMOUNTS IN THOUSANDS) AMOUNT (2) VALUE VALUE
<S> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
CREDIT DERIVATIVE TYPE BY DERIVATIVE
RISK EXPOSURE
Single name credit default swaps
Investment grade risk exposure $340,953 $4,280 $2,796
Below investment grade risk exposure 14,313 (188) (188)
Basket credit default swaps (4)
Investment grade risk exposure 190,059 1,104 1,119
Investment grade risk exposure 70,000 (2,835) (2,835)
Credit linked notes
Investment grade risk exposure 50,000 45,040 49,920
-------- ------- -------
TOTAL $665,325 $47,401 $50,812
-------- ------- -------
<Caption>
UNDERLYING REFERENCED
CREDIT OBLIGATION(S) (1)
WEIGHTED
AVERAGE AVERAGE
YEARS TO CREDIT
(AMOUNTS IN THOUSANDS) MATURITY TYPE RATING
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------- --------------------------------------------------------
CREDIT DERIVATIVE TYPE BY DERIVATIVE
RISK EXPOSURE
Single name credit default swaps
Investment grade risk exposure 4 years Corporate A+
Credit/ Foreign
Gov.
Corporate
Below investment grade risk exposure 1 year Credit B+
Basket credit default swaps (4)
Corporate
Investment grade risk exposure 4 years Credit BBB+
Investment grade risk exposure 4 years CMBS Credit A+
Credit linked notes
Corporate
Investment grade risk exposure 4 years Credit BBB-
------- --------------- -----
TOTAL
------- --------------- -----
<Caption>
OFFSETTING OFFSETTING OFFSETTING
NOTIONAL FAIR CARRYING
(AMOUNTS IN THOUSANDS) AMOUNT (3) VALUE (3) VALUE (3)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------- ------------------------------------------------------
CREDIT DERIVATIVE TYPE BY DERIVATIVE
RISK EXPOSURE
Single name credit default swaps
Investment grade risk exposure $94,053 $(2,340) $(2,340)
Below investment grade risk exposure 14,313 (452) (452)
Basket credit default swaps (4)
Investment grade risk exposure 78,276 (875) (875)
Investment grade risk exposure 70,000 2,835 2,835
Credit linked notes
Investment grade risk exposure -- -- --
-------- ------ ------
TOTAL $256,642 $(832) $(832)
-------- ------ ------
</Table>
F-16
<Page>
AS OF DECEMBER 31, 2011
<Table>
<Caption>
NOTIONAL FAIR CARRYING
(AMOUNTS IN THOUSANDS) AMOUNT (2) VALUE VALUE
<S> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------
CREDIT DERIVATIVE TYPE BY DERIVATIVE
RISK EXPOSURE
Single name credit default swaps
Investment grade risk exposure $148,153 $(2,394) $(2,370)
Below investment grade risk exposure 14,313 (36) (36)
Basket credit default swaps (4)
Investment grade risk exposure 209,543 (2,110) (2,110)
Investment grade risk exposure 70,000 (6,374) (6,374)
Credit linked notes
Investment grade risk exposure 50,000 39,875 49,900
-------- ------- -------
TOTAL $492,009 $28,961 $39,010
-------- ------- -------
<Caption>
UNDERLYING REFERENCED
CREDIT OBLIGATION(S) (1)
WEIGHTED
AVERAGE
YEARS TO AVERAGE
(AMOUNTS IN THOUSANDS) MATURITY TYPE CREDIT RATING
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------- -------------------------------------------------------
CREDIT DERIVATIVE TYPE BY DERIVATIVE
RISK EXPOSURE
Single name credit default swaps
Investment grade risk exposure 2 years Corporate A-
Credit/ Foreign
Gov.
Below investment grade risk exposure 2 years Corporate BB+
Credit
Basket credit default swaps (4)
Investment grade risk exposure 5 years Corporate BBB+
Credit
Investment grade risk exposure 7 years CMBS Credit A+
Credit linked notes
Investment grade risk exposure 6 years Corporate BB+
Credit
-------- --------------- --------
TOTAL
-------- --------------- --------
<Caption>
OFFSETTING OFFSETTING OFFSETTING
NOTIONAL FAIR CARRYING
(AMOUNTS IN THOUSANDS) AMOUNT (3) VALUE (3) VALUE (3)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------- ----------------------------------------------------------
CREDIT DERIVATIVE TYPE BY DERIVATIVE
RISK EXPOSURE
Single name credit default swaps
Investment grade risk exposure $121,253 $(1,644) $(1,644)
Below investment grade risk exposure 14,313 (1,252) (1,252)
Basket credit default swaps (4)
Investment grade risk exposure 78,781 929 929
Investment grade risk exposure 70,000 6,374 6,374
Credit linked notes
Investment grade risk exposure -- -- --
------------ --------- ---------
TOTAL $284,347 $4,407 $4,407
------------ --------- ---------
</Table>
(1) The average credit ratings are based on availability and the midpoint of
the applicable ratings among Moody's, S&P, and Fitch. If no rating is
available from a rating agency, then an internally developed rating is
used.
(2) Notional amount is equal to the maximum potential future loss amount. There
is no specific collateral related to these contracts or recourse provisions
included in the contracts to offset losses.
(3) The Company has entered into offsetting credit default swaps to terminate
certain existing credit default swaps, thereby offsetting the future
changes in value of or losses paid related to the original swap.
(4) Includes $260,059 and $279,543 as of December 31, 2012 and 2011,
respectively, of standard market indices of diversified portfolios of
corporate issuers referenced through credit default swaps. These swaps are
subsequently valued based upon the observable standard market index.
CREDIT RISK
The Company's derivative counterparty exposure policy establishes market-based
credit limits, favors long-term financial stability and creditworthiness of the
counterparty and typically requires credit enhancement/credit risk reducing
agreements. The Company minimizes the credit risk in derivative instruments by
entering into transactions with high quality counterparties rated A or better,
which are monitored and evaluated by the Company's risk management team and
reviewed by senior management.
The Company has developed credit exposure thresholds which are based upon
counterparty ratings. Credit exposures are measured using the market value of
the derivatives, resulting in amounts owed to the Company by its counterparties
or potential payment obligations from the Company to its counterparties. Credit
exposures are generally quantified daily based on the prior business day's
market value and collateral is pledged to and held by, or on behalf of, the
Company to the extent the current value of derivatives exceeds the contractual
thresholds. In accordance with industry standards and the contractual
agreements, collateral is typically settled on the next business day. The
Company has exposure to credit risk for amounts below the exposure thresholds
which are uncollateralized, as well as for market fluctuations that may occur
between contractual settlement periods of collateral movements.
Counterparty exposure thresholds are developed for each of the counterparties
based upon their ratings. The maximum uncollateralized threshold for a
derivative counterparty is $10,000,000. In addition, the compliance unit
monitors counterparty credit exposure on a monthly basis to ensure compliance
with Company policies and statutory limitations. The Company also maintains a
policy of requiring that all derivative contracts, other than exchange traded
contracts and certain currency forward contracts, be governed by an
International Swaps and Derivatives Association Master Agreement which is
structured by legal entity and by counterparty and permits right of offset.
For the year ended December 31, 2012 the Company has recovered gains of
$1,837,102 on derivative instruments from re-negotiating losses incurred in 2008
due to counterparty default related to the bankruptcy of Lehman Brothers
Holdings, Inc. For the years ended December 31, 2012, 2011, and 2010 the Company
had no losses on derivative instruments due to counterparty nonperformance.
(F) CONCENTRATION OF CREDIT RISK
The Company aims to maintain a diversified investment portfolio including
issuer, sector and geographic stratification, where applicable, and has
established certain exposure limits, diversification standards and review
procedures to mitigate credit risk. As of December 31, 2012 and 2011, the
Company is not exposed to any credit concentration risk of a single issuer,
excluding U.S. government and certain U.S. government agencies, wholly-owned
subsidiaries, and a short-term investment pool greater than 10% of the Company's
capital and surplus.
F-17
<Page>
(G) BONDS, SHORT-TERM INVESTMENTS, COMMON STOCK AND PREFERRED STOCKS
<Table>
<Caption>
GROSS GROSS ESTIMATED
STATEMENT UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
BONDS AND SHORT-TERM INVESTMENTS
DECEMBER 31, 2012
U.S. government and government agencies and authorities:
-- Guaranteed and sponsored -- excluding
asset-backed $1,701,238,189 $113,882,510 $(11,282,937) $1,803,837,762
-- Guaranteed and sponsored -- asset-backed 2,269,303,170 65,613,690 (740,169) 2,334,176,691
States, municipalities and political subdivisions 541,077,559 83,135,680 (20,027) 624,193,212
International governments 425,402,388 20,370,687 (9,328) 445,763,747
All other corporate -- excluding asset-backed 6,361,023,917 892,122,605 (2,845,895) 7,250,300,627
All other corporate -- asset-backed 1,258,505,776 85,716,013 (49,217,597) 1,295,004,192
Hybrid securities 47,181,632 3,906,596 (2,586,771) 48,501,457
Short-term investments 1,218,426,755 -- -- 1,218,426,755
Affiliated bond 1,156,374,471 97,521,679 -- 1,253,896,150
---------------- --------------- ------------ ----------------
TOTAL BONDS AND SHORT-TERM INVESTMENTS $14,978,533,857 $1,362,269,460 $(66,702,724) $16,274,100,593
---------------- --------------- ------------ ----------------
</Table>
<Table>
<Caption>
GROSS GROSS ESTIMATED
UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
<S> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS DECEMBER 31, 2012
Common stocks -- unaffiliated $102,656,234 $720,924 $(4,963,989) $98,413,169
Common stocks -- affiliated 931,351,749 -- (204,239,309) 727,112,440
----------------- ----------- ---------------- ---------------
TOTAL COMMON STOCKS $1,034,007,983 $720,924 $(209,203,298) $825,525,609
----------------- ----------- ---------------- ---------------
</Table>
<Table>
<Caption>
GROSS GROSS ESTIMATED
STATEMENT UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
<S> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS DECEMBER 31, 2012
Preferred stocks -- unaffiliated $8,266,540 $ -- $(415,361) $7,851,179
------------- ---- ------------ -------------
TOTAL PREFERRED STOCKS $8,266,540 $ -- $(415,361) $7,851,179
------------- ---- ------------ -------------
</Table>
<Table>
<Caption>
GROSS GROSS ESTIMATED
STATEMENT UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------
BONDS AND SHORT-TERM INVESTMENTS
DECEMBER 31, 2011
U.S. government and government agencies
and authorities:
-- Guaranteed and sponsored -- $755,130,295 $104,729,396 $(1,048,670) $858,811,021
excluding asset-backed
-- Guaranteed and sponsored -- 1,186,617,224 44,551,484 (66,086) 1,231,102,622
asset-backed
States, municipalities and political 413,682,584 43,804,332 (954,164) 456,532,752
subdivisions
International governments 107,425,052 9,605,312 (393,067) 116,637,297
All other corporate -- excluding 6,131,755,165 687,886,439 (28,337,748) 6,791,303,856
asset-backed
All other corporate -- asset-backed 1,436,711,752 64,964,862 (107,770,233) 1,393,906,381
Hybrid securities 66,811,576 44,045 (22,719,973) 44,135,648
Short-term investments 2,395,806,381 -- -- 2,395,806,381
Affiliated bond 1,296,220,489 68,005,396 -- 1,364,225,885
----------------- ---------------- ---------------- -----------------
TOTAL BONDS AND SHORT-TERM INVESTMENTS $13,790,160,518 $1,023,591,266 $(161,289,941) $14,652,461,843
----------------- ---------------- ---------------- -----------------
</Table>
<Table>
<Caption>
GROSS GROSS ESTIMATED
UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS DECEMBER 31, 2011
Common stocks -- unaffiliated $152,370,800 $3,456,202 $(9,800,861) $146,026,141
Common stocks -- affiliated 1,025,139,835 667,441 (163,216,084) 862,591,192
----------------- ------------- ---------------- -----------------
TOTAL COMMON STOCKS $1,177,510,635 $4,123,643 $(173,016,945) $1,008,617,333
----------------- ------------- ---------------- -----------------
</Table>
F-18
<Page>
<Table>
<Caption>
GROSS GROSS ESTIMATED
STATEMENT UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
<S> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS DECEMBER 31, 2011
Preferred stocks -- unaffiliated $8,446,226 $ -- $(1,257,001) $7,189,225
------------- ---- ------------- -------------
TOTAL PREFERRED STOCKS $8,446,226 $ -- $(1,257,001) $7,189,225
------------- ---- ------------- -------------
</Table>
The statement value and estimated fair value of bonds and short-term investments
at December 31, 2012 by expected maturity year are shown below. Expected
maturities may differ from contractual maturities due to call or prepayment
provisions. Asset-backed securities, including mortgage-backed securities and
collateralized mortgage obligations, are distributed to maturity year based on
the Company's estimate of the rate of future prepayments of principal over the
remaining lives of the securities. These estimates are developed using
prepayment speeds provided in broker consensus data. Such estimates are derived
from prepayment speeds experienced at the interest rate levels projected for the
applicable underlying collateral. Actual prepayment experience may vary from
these estimates.
<Table>
<Caption>
STATEMENT ESTIMATED
VALUE FAIR VALUE
<S> <C> <C>
--------------------------------------------------------------------------------
MATURITY
Due in one year or less $1,825,114,648 $1,840,353,897
Due after one year through five years 3,500,123,823 3,659,567,243
Due after five years through ten years 4,525,043,655 4,871,237,647
Due after ten years 5,128,251,731 5,902,941,806
------------------ -----------------
TOTAL $14,978,533,857 $16,274,100,593
------------------ -----------------
</Table>
At December 31, 2012 and 2011, securities with a statement value of $3,951,872
and $3,849,385, respectively, were on deposit with government agencies as
required by law in various jurisdictions in which the Company conducts business.
(H) MORTGAGE LOANS ON REAL ESTATE
The maximum and minimum lending rates for the Company's new mortgage loans on
real estate were 4.30% and 3.00% and 5.20% and 3.44% for loans during 2012 and
2011, respectively. During 2012 and 2011, the Company did not reduce interest
rates on any outstanding mortgage loans on real estate. For loans held as of
December 31, 2012 and 2011, the highest loan to value percentage of any one loan
at the time of loan origination, exclusive of insured, guaranteed, purchase
money mortgages or construction loans was 78.02% and 75.47%, respectively. There
were no taxes, assessments or amounts advanced and not included in the mortgage
loan total. As of December 31, 2012 and 2011, the Company did not hold mortgages
with interest more than 180 days past due. As of December 31, 2012 and 2011,
there were impaired loans with a related allowance for credit losses of $565,263
and $682,306 with interest income recognized during the period the loans were
impaired of $5,330,564 and $4,961,927, respectively.
(I) RESTRUCTURED DEBT IN WHICH THE COMPANY IS A CREDITOR
The Company had no investments in restructured loans as of December 31, 2012,
2011 and 2010.
(J) REPURCHASE AGREEMENTS, DOLLAR ROLL AGREEMENTS AND COLLATERAL ARRANGEMENTS
In 2012, the Company entered into repurchase agreement and dollar roll
transactions to earn incremental income and additional liquidity. A repurchase
agreement is a transaction in which one party (transferor) agrees to sell
securities to another party (transferee) in return for cash (or securities),
with a simultaneous agreement to repurchase the same securities at a specified
price at a later date. A dollar roll is a type of repurchase transaction where a
mortgage backed security is sold with an agreement to repurchase substantially
the same security at a specified time in the future. These transactions are
generally short-term in nature, and therefore, the carrying amounts of these
instruments approximate fair value.
As part of the repurchase agreement and dollar roll transactions, the Company
transfers U.S. government and government agency securities and receives cash.
For the repurchase agreements, the Company obtains collateral in an amount equal
to at least 95% of the fair value of the securities transferred, and the
agreements with third parties contain contractual provisions to allow for
additional collateral to be obtained when necessary. The cash received from the
repurchase program is typically invested in short-term investments or bonds. The
Company accounts for the repurchase agreement and dollar roll transactions as
collateralized borrowings. The securities transferred under repurchase agreement
and dollar roll transactions are included in bonds, with the obligation to
repurchase those securities recorded in other liabilities in the Statements of
Admitted Assets, Liabilities and Capital and Surplus. The fair value of the
securities transferred was $1,622,327,938, with a corresponding agreement to
repurchase $1,614,859,275 as of December 31, 2012. The aggregate fair value of
the securities acquired from the use of the collateral was $1,621,236,227 as of
December 31, 2012.
The Company also enters into various collateral arrangements in connection with
its derivative instruments, which require both the pledging and accepting of
collateral. As of December 31, 2012 and 2011, collateral pledged of $110,458,232
and $369,461,123, respectively, was included in bonds, on the Statements of
Admitted Assets, Liabilities and Capital and Surplus.
F-19
<Page>
As of December 31, 2012 and 2011, the Company had accepted collateral relating
to the derivative instruments consisting of cash, U.S. government and U.S.
government agency securities with a statement value of $645,472,822 and
$1,708,566,498, respectively. At December 31, 2012 and 2011, cash collateral of
$483,734,283 and $1,488,105,981, respectively, was invested and recorded in the
Statements of Admitted Assets, Liabilities and Capital and Surplus in bonds and
cash and short-term investments with a corresponding amount recorded in
collateral on derivatives. The fair value of the cash collateral invested in
cash and short-term investments was $483,734,283 and $1,488,105,981 as of
December 31, 2012 and 2011, respectively. The Company is only permitted by
contract to sell or repledge the noncash collateral in the event of a default by
the counterparty and none of the collateral has been sold or repledged at
December 31, 2012 and 2011. As of December 31, 2012 and 2011, all collateral
accepted was held in separate custodial accounts.
(K) SECURITY UNREALIZED LOSS AGING
The Company has a security monitoring process overseen by a committee of
investment and accounting professionals that, on a quarterly basis, identifies
securities in an unrealized loss position that could potentially be
other-than-temporarily impaired. For further discussion regarding the Company's
OTTI policy, see Note 2. Due to the issuers' continued satisfaction of the
securities' obligations in accordance with their contractual terms and the
expectation that they will continue to do so, as well as the evaluation of the
fundamentals of the issuers' financial condition and other objective evidence,
the Company believes that the prices of the securities in the sectors identified
in the tables below were temporarily depressed as of December 31, 2012 and 2011.
The following table presents cost or statement value, fair value, and unrealized
losses for the Company's bonds and equity securities, aggregated by investment
category and length of time that individual securities have been in a continuous
unrealized loss position as of December 31, 2012:
<Table>
<Caption>
LESS THAN 12 MONTHS
AMORTIZED FAIR UNREALIZED
(AMOUNTS IN THOUSANDS) COST VALUE LOSSES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------
U.S. gov't and gov't
agencies &
authorities
-- guaranteed &
sponsored $223,652 $212,369 $(11,283)
-- guaranteed &
sponsored
-- asset-backed 249,828 249,091 (737)
States, municipalities
& political
subdivisions 1,055 1,035 (20)
International
governments 528 518 (10)
All other corporate
including
international 287,700 285,851 (1,849)
All other corporate --
asset-backed 51,133 45,653 (5,480)
Hybrid securities -- -- --
-------- -------- --------
TOTAL FIXED MATURITIES 813,896 794,517 (19,379)
Common stock --
unaffiliated 60,000 56,280 (3,720)
Common stock --
affiliated -- -- --
Preferred stock --
unaffiliated -- -- --
-------- -------- --------
TOTAL STOCKS 60,000 56,280 (3,720)
-------- -------- --------
TOTAL SECURITIES $873,896 $850,797 $(23,099)
-------- -------- --------
<Caption>
12 MONTHS OR MORE
AMORTIZED FAIR UNREALIZED
(AMOUNTS IN THOUSANDS) COST VALUE LOSSES
<S> <C> <C> <C> <C> <C> <C>
---------------------- -----------------------------------------------
U.S. gov't and gov't
agencies &
authorities
-- guaranteed &
sponsored $ -- $ -- $ --
-- guaranteed &
sponsored
-- asset-backed 78 75 (3)
States, municipalities
& political
subdivisions -- -- --
International
governments -- -- --
All other corporate
including
international 47,003 46,006 (997)
All other corporate --
asset-backed 499,760 456,023 (43,737)
Hybrid securities 26,057 23,470 (2,587)
--------- --------- --------
TOTAL FIXED MATURITIES 572,898 525,574 (47,324)
Common stock --
unaffiliated 11,397 10,153 (1,244)
Common stock --
affiliated 931,352 727,113 (204,239)
Preferred stock --
unaffiliated 8,044 7,629 (415)
--------- --------- --------
TOTAL STOCKS 950,793 744,895 (205,898)
--------- --------- --------
TOTAL SECURITIES $1,523,691 $1,270,469 $(253,222)
--------- --------- --------
<Caption>
TOTAL
AMORTIZED FAIR UNREALIZED
(AMOUNTS IN THOUSANDS) COST VALUE LOSSES
<S> <C> <C> <C> <C> <C> <C>
---------------------- -------------------------------------------------
U.S. gov't and gov't
agencies &
authorities
-- guaranteed &
sponsored $223,652 $212,369 $(11,283)
-- guaranteed &
sponsored
-- asset-backed 249,906 249,166 (740)
States, municipalities
& political
subdivisions 1,055 1,035 (20)
International
governments 528 518 (10)
All other corporate
including
international 334,703 331,857 (2,846)
All other corporate --
asset-backed 550,893 501,676 (49,217)
Hybrid securities 26,057 23,470 (2,587)
---------- ---------- --------
TOTAL FIXED MATURITIES 1,386,794 1,320,091 (66,703)
Common stock --
unaffiliated 71,397 66,433 (4,964)
Common stock --
affiliated 931,352 727,113 (204,239)
Preferred stock --
unaffiliated 8,044 7,629 (415)
---------- ---------- --------
TOTAL STOCKS 1,010,793 801,175 (209,618)
---------- ---------- --------
TOTAL SECURITIES $2,397,587 $2,121,266 $(276,321)
---------- ---------- --------
</Table>
The following discussion refers to the data presented in the table above,
excluding affiliated bond and common stock. The Company holds 100% of the common
stock of a foreign insurance subsidiary which is stated at GAAP carrying value
adjusted for certain nonadmitted items and other adjustments for NAIC SAP rules
if applicable. The Company does not have any current plans to dispose of this
investment.
As of December 31, 2012, fixed maturities, comprised of approximately 175
securities, accounted for approximately 93% of the Company's total unrealized
loss amount. The securities were primarily related to commercial mortgage-backed
securities ("CMBS"), collateralized debt obligations ("CDOs"), and U.S.
government securities which have experienced price deterioration. As of December
31, 2012, 84% of securities in an unrealized loss position were depressed less
than 20% of amortized cost. The decline in unrealized losses during 2012 was
primarily attributable to credit spread tightening and a decline in interest
rates. The Company does not have an intention to sell the securities outlined
above and has the intent and ability to hold these securities until values
recover. Furthermore, based upon the Company's cash flow modeling and the
expected continuation of contractually required principal and interest payments,
the Company has deemed these securities to be temporarily impaired as of
December 31, 2012.
Most of the securities depressed for twelve months or more relate to structured
securities with exposure to commercial and residential real estate, as well as
certain floating rate corporate securities or those securities with greater than
10 years to maturity, concentrated in the financial services sector. Current
market spreads continue to be significantly wider for structured securities with
exposure to commercial and residential real estate, as compared to spreads at
the security's respective purchase date, largely due to the economic and market
uncertainties regarding future performance of commercial and residential real
estate. In addition, the majority of securities have a floating-rate coupon
referenced to a market index where rates have declined substantially. The
Company neither has an intention to sell nor does it expect to be required to
sell the securities outlined above. Furthermore, based upon the Company's cash
flow modeling and the expected continuation of contractually required principal
and interest payments, the Company has deemed these securities to be temporarily
impaired as of December 31, 2012.
F-20
<Page>
The following table presents amortized cost, fair value, and unrealized losses
for the Company's bond and equity securities, aggregated by investment category
and length of time that individual securities have been in a continuous
unrealized loss position as of December 31, 2011:
<Table>
<Caption>
LESS THAN 12 MONTHS
AMORTIZED FAIR UNREALIZED
(AMOUNTS IN THOUSANDS) COST VALUE LOSSES
<S> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------
U.S. gov't and gov't
agencies &
authorities
-- guaranteed & $125,903 $124,854 $(1,049)
sponsored
-- guaranteed &
sponsored
-- asset-backed 36,541 36,477 (64)
States, municipalities 74,804 74,119 (685)
& political
subdivisions
International 315 315 --
governments
All other corporate 649,737 625,937 (23,800)
including
international
All other corporate -- 369,249 341,134 (28,115)
asset-backed
Hybrid securities 2,257 2,200 (57)
---------- ---------- --------
TOTAL FIXED MATURITIES 1,258,806 1,205,036 (53,770)
Common stock -- 62,886 53,088 (9,798)
unaffiliated
Common stock -- -- -- --
affiliated
Preferred stock -- -- -- --
unaffiliated
---------- ---------- --------
TOTAL STOCKS 62,886 53,088 (9,798)
---------- ---------- --------
TOTAL SECURITIES $1,321,692 $1,258,124 $(63,568)
---------- ---------- --------
<Caption>
12 MONTHS OR MORE
AMORTIZED FAIR UNREALIZED
(AMOUNTS IN THOUSANDS) COST VALUE LOSSES
<S> <C> <C> <C> <C> <C> <C>
---------------------- -------------------------------------------------
U.S. gov't and gov't
agencies &
authorities
-- guaranteed & $ -- $ -- $ --
sponsored
-- guaranteed &
sponsored
-- asset-backed 126 124 (2)
States, municipalities 10,000 9,731 (269)
& political
subdivisions
International 5,000 4,607 (393)
governments
All other corporate 78,131 73,593 (4,538)
including
international
All other corporate -- 429,162 349,507 (79,655)
asset-backed
Hybrid securities 61,557 38,894 (22,663)
---------- ---------- --------
TOTAL FIXED MATURITIES 583,976 476,456 (107,520)
Common stock -- 3 -- (3)
unaffiliated
Common stock -- 931,352 768,136 (163,216)
affiliated
Preferred stock -- 8,248 6,991 (1,257)
unaffiliated
---------- ---------- --------
TOTAL STOCKS 939,603 775,127 (164,476)
---------- ---------- --------
TOTAL SECURITIES $1,523,579 $1,251,583 $(271,996)
---------- ---------- --------
<Caption>
TOTAL
AMORTIZED FAIR UNREALIZED
(AMOUNTS IN THOUSANDS) COST VALUE LOSSES
<S> <C> <C> <C> <C> <C> <C>
---------------------- -------------------------------------------------
U.S. gov't and gov't
agencies &
authorities
-- guaranteed & $125,903 $124,854 $(1,049)
sponsored
-- guaranteed &
sponsored
-- asset-backed 36,667 36,601 (66)
States, municipalities 84,804 83,850 (954)
& political
subdivisions
International 5,315 4,922 (393)
governments
All other corporate 727,868 699,530 (28,338)
including
international
All other corporate -- 798,411 690,641 (107,770)
asset-backed
Hybrid securities 63,814 41,094 (22,720)
---------- ---------- --------
TOTAL FIXED MATURITIES 1,842,782 1,681,492 (161,290)
Common stock -- 62,889 53,088 (9,801)
unaffiliated
Common stock -- 931,352 768,136 (163,216)
affiliated
Preferred stock -- 8,248 6,991 (1,257)
unaffiliated
---------- ---------- --------
TOTAL STOCKS 1,002,489 828,215 (174,274)
---------- ---------- --------
TOTAL SECURITIES $2,845,271 $2,509,707 $(335,564)
---------- ---------- --------
</Table>
The following discussion refers to the data presented in the table above,
excluding affiliated bond and common stock. The Company holds 100% of the common
stock of a foreign insurance subsidiary which is stated at GAAP carrying value
adjusted for certain nonadmitted items and other adjustments for NAIC SAP rules
if applicable. The Company does not have any current plans to dispose of this
investment.
As of December 31, 2011, fixed maturities, comprised of approximately 480
securities, accounted for approximately 94% of the Company's total unrealized
loss amount. The securities were primarily related to commercial mortgage-backed
securities ("CMBS"), and corporate securities primarily within the financial
services and industrial sector which have experienced significant price
deterioration. As of December 31, 2011, 86% of securities in an unrealized loss
position were depressed less than 20% of amortized cost. The decline in
unrealized losses during 2011 was primarily attributable to declines in interest
rates and, to a lesser extent, credit spread tightening. The Company does not
have an intention to sell the securities outlined above and has the intent and
ability to hold these securities until values recover. Furthermore, based upon
the Company's cash flow modeling and the expected continuation of contractually
required principal and interest payments, the Company has deemed these
securities to be temporarily impaired as of December 31, 2011.
Most of the securities depressed for twelve months or more relate to structured
securities with exposure to commercial and residential real estate, as well as
certain floating rate corporate securities or those securities with greater than
10 years to maturity, concentrated in the financial services sector. Current
market spreads continue to be significantly wider for structured securities with
exposure to commercial and residential real estate, as compared to spreads at
the security's respective purchase date, largely due to the economic and market
uncertainties regarding future performance of commercial and residential real
estate. In addition, the majority of securities have a floating-rate coupon
referenced to a market index where rates have declined substantially. The
Company neither has an intention to sell nor does it expect to be required to
sell the securities outlined above. Furthermore, based upon the Company's cash
flow modeling and the expected continuation of contractually required principal
and interest payments, the Company has deemed these securities to be temporarily
impaired as of December 31, 2011.
(L) LOAN-BACKED AND STRUCTURED SECURITIES OTTIS
For the year ended December 31, 2012, the Company recognized losses for OTTIs on
loan-backed and structured securities of $48,850 due to the intent to sell
impaired securities. These securities had an amortized cost prior to recognition
of the OTTI and a fair value of $2,985,511 and $2,936,661, respectively. No OTTI
was recognized due to an inability or lack of intent to retain an investment in
a security for a period of time sufficient to recover the amortized cost basis.
F-21
<Page>
The following table summarizes OTTI for loan-backed securities held as of
December 31, 2012, recorded because the present value of estimated cash flows
expected to be collected was less than the amortized cost of the securities:
<Table>
<Caption>
2
BOOK/ADJ
CARRYING
VALUE 3
AMORTIZED PRESENT VALUE
COST BEFORE OF
1 CURRENT PERIOD PROJECTED
CUSIP OTTI CASH FLOWS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------
00503N AB 7 $7,535,388 $1,959,990
05947U HT 8 3,987,817 3,981,363
059497 BW 6 9,725,618 9,468,201
059500 BK 3 324,723 301,919
07383F YN 2 1,426,119 1,353,732
07388N AX 4 8,656,256 6,740,942
15188R AB 8 985,186 77,012
173067 AJ 8 685,067 541,014
22540V V3 3 2,653,742 2,644,326
22541N VA 4 2,380,022 2,338,979
22545X BB 8 508,624 368,740
36158Y BE 8 309,993 306,870
361849 N6 5 1,365,928 690,902
46625M CY 3 644,072 572,350
46625M KQ 1 1,741,503 1,562,570
46625Y JP 9 787,944 729,302
46625Y WE 9 3,076,000 2,571,757
55312Y BD 3 2,224,569 1,767,229
75970J AU 0 10,731 9,123
92978T BU 4 1,892,277 1,301,900
93364L AD 0 7,945,532 5,903,490
75970J AU 0 7,970 344
00503N AB 7 1,693,311 1,186,748
00503N AB 7 1,050,813 497,908
22541N NJ 4 5,519,877 4,981,232
00503N AB 7 339,385 (1)
46625M CY 3 131,678 112,628
83611Y AD 4 2,291,525 2,256,378
22540V V3 3 744,763 707,340
36158Y BE 8 44,757 25,424
46625M CY 3 81,434 46,372
46625M KQ 1 530,791 475,970
07383F MR 6 132,490 127,782
22540V V3 3 302,095 212,829
46625M PS 2 1,058,378 914,896
61746W HJ 2 368,434 260,421
38500X AC 6 213,094 51,334
05947U HT 8 291,112 39,845
07383F MR 6 49,165 7,321
173067 AJ 8 224,795 162,576
79548C DK 9 158,872 26,374
TOTAL
<Caption>
7
DATE OF
5 6 FINANCIAL
4 AMORTIZED FAIR STATEMENT
RECOGNIZED COST AFTER VALUE AT WHERE
OTTI OTTI TIME OF OTTI REPORTED
<S> <C> <C> <C> <C> <C> <C> <C> <C>
---------- -------------------------------------------------------------------------
00503N $(5,575,398) $1,959,990 $607,018 9/30/2009
05947U (6,454) 3,981,363 3,980,969 9/30/2009
059497 (257,417) 9,468,201 8,381,882 9/30/2009
059500 (22,804) 301,919 279,440 9/30/2009
07383F (72,387) 1,353,732 1,587,169 9/30/2009
07388N (1,915,314) 6,740,942 6,301,194 9/30/2009
15188R (908,174) 77,012 251,926 9/30/2009
173067 (144,053) 541,014 766,378 9/30/2009
22540V (9,416) 2,644,326 2,502,017 9/30/2009
22541N (41,043) 2,338,979 2,347,354 9/30/2009
22545X (139,884) 368,740 339,617 9/30/2009
36158Y (3,123) 306,870 288,672 9/30/2009
361849 (675,026) 690,902 946,149 9/30/2009
46625M (71,722) 572,350 526,565 9/30/2009
46625M (178,933) 1,562,570 1,521,277 9/30/2009
46625Y (58,642) 729,302 741,670 9/30/2009
46625Y (504,243) 2,571,757 3,146,164 9/30/2009
55312Y (457,340) 1,767,229 1,494,736 9/30/2009
75970J (1,608) 9,123 1,859 9/30/2009
92978T (590,377) 1,301,900 1,439,999 9/30/2009
93364L (2,042,042) 5,903,490 2,400,000 9/30/2009
75970J (7,626) 344 169 12/31/2009
00503N (506,563) 1,186,748 364,211 3/31/2010
00503N (552,905) 497,908 333,860 6/30/2010
22541N (538,645) 4,981,232 4,846,253 6/30/2010
00503N (339,386) (1) -- 9/30/2010
46625M (19,050) 112,628 45,254 3/31/2011
83611Y (35,147) 2,256,378 1,591,947 3/31/2011
22540V (37,423) 707,340 434,108 6/30/2011
36158Y (19,333) 25,424 21,738 6/30/2011
46625M (35,062) 46,372 27,758 6/30/2011
46625M (54,821) 475,970 401,846 6/30/2011
07383F (4,708) 127,782 70,900 12/31/2011
22540V (89,266) 212,829 53,423 12/31/2011
46625M (143,482) 914,896 779,975 12/31/2011
61746W (108,013) 260,421 344,430 12/31/2011
38500X (161,760) 51,334 560,040 6/30/2012
05947U (251,267) 39,845 31,173 12/31/2012
07383F (41,844) 7,321 271 12/31/2012
173067 (62,219) 162,576 330,003 12/31/2012
79548C (132,498) 26,374 21 12/31/2012
--------------- ------------ ------------ ------------
$(16,816,418)
--------------- ------------ ------------ ------------
</Table>
F-22
<Page>
4. FAIR VALUE MEASUREMENTS
Certain of the following financial instruments are carried at fair value in the
Company's Financial Statements: bonds and stocks, derivatives, and Separate
Account assets.
The following section applies the fair value hierarchy and disclosure
requirements for the Company's financial instruments that are carried at fair
value. The fair value hierarchy prioritizes the inputs in the valuation
techniques used to measure fair value into three broad levels (Level 1, 2 or 3):
Level 1 Observable inputs that reflect quoted prices for identical assets or
liabilities in active markets that the Company has the ability to
access at the measurement date. Level 1 securities include open-
ended mutual funds reported in General and Separate Account invested
assets.
Level 2 Observable inputs, other than quoted prices included in Level 1, for
the asset or liability or prices for similar assets and liabilities.
Most bonds and preferred stocks, including those reported in Separate
Account assets, are model priced by vendors using observable inputs
and are classified within Level 2.
Level 3 Valuations that are derived from techniques in which one or more of
the significant inputs are unobservable (including assumptions about
risk). Level 3 securities include less liquid securities, and complex
derivative securities. Because Level 3 fair values, by their nature,
contain one or more significant unobservable inputs as there is
little or no observable market for these assets and liabilities,
considerable judgment is used to determine the Level 3 fair values.
Level 3 fair values represent the Company's best estimate of amounts
that could be realized in a current market exchange absent actual
market exchanges.
In many situations, inputs used to measure the fair value of an asset or
liability position may fall into different levels of the fair value hierarchy.
In these situations, the Company will determine the level in which the fair
value falls based upon the lowest level input that is significant to the
determination of the fair value. Transfers of securities among the levels occur
at the beginning of the reporting period. Transfers between Level 1 and Level 2
were not material for the period ended December 31, 2012 and 2011. In most
cases, both observable (e.g., changes in interest rates) and unobservable (e.g.,
changes in risk assumptions) inputs are used in the determination of fair values
that the Company has classified within Level 3. Consequently, these values and
the related gains and losses are based upon both observable and unobservable
inputs. The Company's bonds included in Level 3 are classified as such because
these securities are primarily priced by independent brokers and/or within
illiquid markets.
F-23
<Page>
These disclosures provide information as to the extent to which the Company uses
fair value to measure financial instruments and information about the inputs
used to value those financial instruments to allow users to assess the relative
reliability of the measurements. The following tables present assets and
(liabilities) carried at fair value by hierarchy level as of:
<Table>
<Caption>
DECEMBER 31, 2012
QUOTED PRICES IN
ACTIVE MARKETS SIGNIFICANT SIGNIFICANT
FOR IDENTICAL OBSERVABLE UNOBSERVABLE
ASSETS INPUTS INPUTS
(AMOUNTS IN THOUSANDS) (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
Assets accounted for at fair
value
All other corporate --
asset-backed $ -- $12 $2,418 $2,430
Common stocks 98,409 -- 4 98,413
-------------- ---------- ----------- --------------
TOTAL BONDS AND STOCKS 98,409 12 2,422 100,843
Derivative assets
Credit derivatives -- (2,669) 1,519 (1,150)
Equity derivatives -- -- 1,800 1,800
Foreign exchange derivatives -- (11,171) -- (11,171)
Interest rate derivatives -- 26,228 -- 26,228
GMWB hedging instruments -- 98,244 341,565 439,809
US macro hedge program -- -- 333,449 333,449
International program hedging
instruments -- (75,753) (39,973) (115,726)
-------------- ---------- ----------- --------------
TOTAL DERIVATIVE ASSETS -- 34,879 638,360 673,239
Separate Account assets (1) 45,821,181 -- -- 45,821,181
-------------- ---------- ----------- --------------
TOTAL ASSETS ACCOUNTED FOR AT
FAIR VALUE $45,919,590 $34,891 $640,782 $46,595,263
-------------- ---------- ----------- --------------
Liabilities accounted for at
fair value
Derivative liabilities
Credit derivatives $ -- $1,452 $(1,519) $(67)
Equity derivatives -- -- 470 470
Interest rate derivatives -- (37,960) -- (37,960)
GMWB hedging instruments -- 891 67,951 68,842
US macro hedge program -- -- (47,664) (47,664)
International program hedging
instruments -- (31,419) (20,452) (51,871)
-------------- ---------- ----------- --------------
TOTAL LIABILITIES ACCOUNTED FOR
AT FAIR VALUE $ -- $(67,036) $(1,214) $(68,250)
-------------- ---------- ----------- --------------
</Table>
(1) Excludes approximately $30.7 million of investment sales receivable net of
investment purchases payable that are not subject to SSAP No. 100 (Fair
Value Measurements).
F-24
<Page>
<Table>
<Caption>
DECEMBER 31, 2011
QUOTED PRICES IN
ACTIVE MARKETS SIGNIFICANT
FOR IDENTICAL SIGNIFICANT UNOBSERVABLE
ASSETS OBSERVABLE INPUTS INPUTS
(AMOUNTS IN THOUSANDS) (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
Assets accounted for at fair
value
All other corporate --
asset-backed $ -- $ -- $2,468 $2,468
Common stocks 146,956 -- 4 146,960
-------------- ----------- ------------- --------------
TOTAL BONDS AND STOCKS 146,956 -- 2,472 149,428
Derivative assets
Credit derivatives -- (1,075) (512) (1,587)
Equity derivatives -- -- 569 569
Foreign exchange derivatives -- (234) -- (234)
Interest rate derivatives -- 19,676 5 19,681
GMWB hedging instruments -- 43,792 686,072 729,864
US macro hedge program -- -- 356,561 356,561
International program
hedging instruments -- 518,083 (20,152) 497,931
-------------- ----------- ------------- --------------
TOTAL DERIVATIVE ASSETS -- 580,242 1,022,543 1,602,785
Separate Account assets (1) 48,234,930 -- -- 48,234,930
-------------- ----------- ------------- --------------
TOTAL ASSETS ACCOUNTED FOR AT
FAIR VALUE $48,381,886 $580,242 $1,025,015 $49,987,143
-------------- ----------- ------------- --------------
Liabilities accounted for at
fair value
Derivative liabilities
Interest rate derivatives $ -- $(36,184) $ -- $(36,184)
-------------- ----------- ------------- --------------
TOTAL LIABILITIES ACCOUNTED
FOR AT FAIR VALUE $ -- $(36,184) $ -- $(36,184)
-------------- ----------- ------------- --------------
</Table>
(1) Excludes approximately $20.1 million of investment sales receivable net of
investment purchases payable that are not subject to SSAP No. 100.
DETERMINATION OF FAIR VALUES
The valuation methodologies used to determine the fair values of assets and
liabilities under the "exit price" notion, reflect market-participant objectives
and are based on the application of the fair value hierarchy that prioritizes
relevant observable market inputs over unobservable inputs. The Company
determines the fair values of certain financial assets and financial liabilities
based on quoted market prices where available and where prices represent
reasonable estimates of fair values. The Company also determines fair values
based on future cash flows discounted at the appropriate current market rate.
Fair values reflect adjustments for counterparty credit quality, liquidity and,
where appropriate, risk margins on unobservable parameters. The following is a
discussion of the methodologies used to determine fair values for the financial
instruments listed in the above tables.
The fair valuation process is monitored by the Valuation Committee, which is a
cross-functional group of senior management within Hartford Investment
Management Company ("HIMCO") that meets at least quarterly. The Valuation
Committee is co-chaired by the Heads of Investment Operations and Accounting and
has representation from various investment sector professionals, accounting,
operations, legal, compliance and risk management. The purpose of the committee
is to oversee the pricing policy and procedures by ensuring objective and
reliable valuation practices and pricing of financial instruments, as well as
addressing fair valuation issues and approving changes to valuation
methodologies and pricing sources. There is also a Fair Value Working Group
("Working Group") which includes the Heads of Investment Operations and
Accounting, as well as other investment, operations, accounting and risk
management professionals that meet monthly to review market data trends, pricing
statistics and results, and any proposed pricing methodology changes described
in more detail in the following paragraphs.
F-25
<Page>
BONDS AND STOCKS
The fair values of bonds and stocks in an active and orderly market (e.g. not
distressed or forced liquidation) are determined by management after considering
one of three primary sources of information: third-party pricing services,
independent broker quotations or pricing matrices. Security pricing is applied
using a "waterfall" approach whereby publicly available prices are first sought
from third-party pricing services, the remaining unpriced securities are
submitted to independent brokers for prices, or lastly, securities are priced
using a pricing matrix. Based on the typical trading volumes and the lack of
quoted market prices for bonds, third-party pricing services will normally
derive the security prices from recent reported trades for identical or similar
securities making adjustments through the reporting date based upon available
market observable information as outlined above. If there are no recently
reported trades, the third-party pricing services and independent brokers may
use matrix or model processes to develop a security price where future cash flow
expectations are developed based upon collateral performance and discounted at
an estimated market rate. Included in the pricing of certain asset-backed
securities are estimates of the rate of future prepayments of principal over the
remaining life of the securities. Such estimates are derived based on the
characteristics of the underlying structure and prepayment speeds previously
experienced at the interest rate levels projected for the underlying collateral.
Actual prepayment experience may vary from these estimates.
Prices from third-party pricing services are often unavailable for securities
that are rarely traded or are traded only in privately negotiated transactions.
As a result, certain securities are priced via independent broker quotations
which utilize inputs that may be difficult to corroborate with observable market
based data. Additionally, the majority of these independent broker quotations
are non-binding.
A pricing matrix is used to price private placement securities for which the
Company is unable to obtain a price from a third-party pricing service by
discounting the expected future cash flows from the security by a developed
market discount rate utilizing current credit spreads. Credit spreads are
developed each month using market based data for public securities adjusted for
credit spread differentials between public and private securities which are
obtained from a survey of multiple private placement brokers. The appropriate
credit spreads determined through this survey approach are based upon the
issuer's financial strength and term to maturity, utilizing an independent
public security index and trade information and adjusting for the non-public
nature of the securities.
The Working Group performs ongoing analysis of the prices and credit spreads
received from third-parties to ensure that the prices represent a reasonable
estimate of the fair value. This process involves quantitative and qualitative
analysis and is overseen by investment and accounting professionals. As a part
of this analysis, the Working Group considers trading volume, new issuance
activity and other factors to determine whether the market activity is
significantly different than normal activity in an active market, and if so,
whether transactions may not be orderly considering the weight of available
evidence. If the available evidence indicates that pricing is based upon
transactions that are stale or not orderly, the Working Group places little, if
any, weight on the transaction price and will estimate fair value utilizing an
internal pricing model. In addition, the Working Group ensures that prices
received from independent brokers represent a reasonable estimate of fair value
through the use of internal and external cash flow models developed based on
spreads, and when available, market indices. As a result of this analysis, if
the Working Group determines that there is a more appropriate fair value based
upon the available market data, the price received from the third-party is
adjusted accordingly and approved by the Valuation Committee. The Company's
internal pricing model utilizes the Company's best estimate of expected future
cash flows discounted at a rate of return that a market participant would
require. The significant inputs to the model include, but are not limited to,
current market inputs, such as credit loss assumptions, estimated prepayment
speeds and market risk premiums.
The Company conducts other specific activities to monitor controls around
pricing. Daily analyses identify price changes over 3-5%, sale trade prices that
differ over 3% from the prior day's price and purchase trade prices that differ
more than 3% from the current day's price. Weekly analyses identify prices that
differ more than 5% from published bond prices of a corporate bond index.
Monthly analyses identify price changes over 3%, prices that have not changed
and missing prices. There is also a second source validation on most sectors,
where available, for a review of any outlying prices. Analyses are conducted by
a dedicated pricing unit that follows up with trading and investment sector
professionals and challenges prices with vendors when the estimated assumptions
used differs from what the Company feels a market participant would use. Any
changes from the identified pricing source are verified by further confirmation
of assumptions used. In addition, the controls surrounding methodologies used by
the third-parties are verified using a report of an independent accountant
provided by the third-parties or, if unavailable, through on-site walk-
throughs. Examples of other procedures performed include, but are not limited
to, initial and ongoing review of third-party pricing services' methodologies,
review of pricing statistics and trends and back testing recent trades. For a
sample of structured securities, a comparison of the vendor's assumptions to our
internal econometric models is also performed; any differences are challenged in
accordance with the process described above.
The Company has analyzed the third-party pricing services' valuation
methodologies and related inputs, and has also evaluated the various types of
securities in its investment portfolio to determine an appropriate fair value
hierarchy level based upon trading activity and the observability of market
inputs. Most prices provided by third-party pricing services are classified into
Level 2 because the inputs used in pricing the securities are market observable.
Due to a general lack of
F-26
<Page>
transparency in the process that brokers use to develop prices, most valuations
that are based on brokers' prices are classified as Level 3. Some valuations may
be classified as Level 2 if the price can be corroborated with observable market
data.
DERIVATIVE INSTRUMENTS
Derivative instruments are fair valued using pricing valuation models that
utilize independent market data inputs, quoted market prices for exchange-traded
derivatives, or independent broker quotations. As of December 31, 2012 and 2011,
99% of derivatives, based upon notional values, were priced by valuation models
or quoted market prices. The remaining derivatives were priced by broker
quotations.
The Company performs various controls on derivative valuations which include
both quantitative and qualitative analyses. Analyses are conducted by a
dedicated derivative pricing team that works directly with investment sector
professionals to analyze impacts of changes in the market environment and
investigate variances. There are monthly analyses to identify market value
changes greater than pre-defined thresholds, stale prices, missing prices and
zero prices. Also on a monthly basis, a second source validation, typically to
broker quotations, is performed for certain of the more complex derivatives, as
well as for all new deals during the month. A model validation review is
performed on any new models, which typically includes detailed documentation and
validation to a second source. The model validation documentation and results of
validation are presented to the Valuation Committee for approval. There is a
monthly control to review changes in pricing sources to ensure that new models
are not moved to production until formally approved.
The Company utilizes derivative instruments to manage the risk associated with
certain assets and liabilities. However, the derivative instrument may not be
classified with the same fair value hierarchy level as the associated assets and
liabilities. Therefore the realized and unrealized gains and losses on
derivatives reported in Level 3 may not reflect the offsetting impact of the
realized and unrealized gains and losses of the associated assets and
liabilities.
VALUATION TECHNIQUES AND INPUTS FOR INVESTMENTS
Generally, the Company determines the estimated fair values of its bonds and
stocks using the market approach. The income approach is used for securities
priced using a pricing matrix, as well as for derivative instruments. For Level
1 investments, valuations are based on observable inputs that reflect quoted
prices for identical assets in active markets that the Company has the ability
to access at the measurement date.
For most of the Company's debt securities, the following inputs are typically
used in the Company's pricing methods: reported trades, benchmark yields, bids
and/or estimated cash flows. Inputs also include issuer spreads, which may
consider credit default swaps. Derivative instruments are valued using
mid-market inputs that are predominantly observable in the market.
A description of additional inputs used in the Company's Level 2 and Level 3
measurements are listed below:
Level 2 The fair values of most of the Company's Level 2 investments are
determined by management after considering prices received from
third-party pricing services. These investments include most bonds
and preferred stocks.
Asset-backed securities -- Primary inputs include monthly payment
information, collateral performance, which varies by vintage year and
includes delinquency rates, collateral valuation loss severity rates,
collateral refinancing assumptions, credit default swap indices and, for
ABS and RMBS, estimated prepayment rates.
Credit derivatives -- Primary inputs include the swap yield curve and
credit default swap curves.
Foreign exchange derivatives -- Primary inputs include the swap yield
curve, currency spot and forward rates, and cross currency basis curves.
Interest rate derivatives -- Primary input is the swap yield curve.
Level 3 Most of the Company's securities classified as Level 3 include less
liquid securities such as lower quality ABS, CMBS, commercial real
estate ("CRE") CDOs and RMBS primarily backed by below- prime loans.
Securities included in level 3 are primarily valued based on broker
prices or broker spreads, without adjustments. Primary inputs for
non-broker priced investments, including structured securities, are
consistent with the typical inputs used in Level 2 measurements noted
above, but are Level 3 due to their less liquid markets.
Additionally, certain long-dated securities are priced based on
third-party pricing services, including bank loans and below
investment grade private placement securities. Primary inputs for
these long-dated securities are consistent with the typical inputs
used in Level 1 and Level 2 measurements noted above, but include
benchmark interest rate or credit spread assumptions that are not
observable in the marketplace. Also included in Level 3 are certain
derivative instruments that either have significant unobservable
inputs or are valued based on broker quotations. Significant inputs
for these derivative contracts primarily include the typical inputs
used in the Level 1 and Level 2 measurements noted above, but also
may include the following:
Credit derivatives -- Significant unobservable inputs may include credit
correlation and swap yield curve and credit curve extrapolation beyond
observable limits.
F-27
<Page>
Equity derivatives -- Significant unobservable inputs may include equity
volatility.
Interest rate contracts -- Significant unobservable inputs may include
swap yield curve extrapolation beyond observable limits and interest
rate volatility.
SEPARATE ACCOUNT ASSETS
Separate Account assets are primarily invested in mutual funds but also have
investments in bonds and stocks. Separate Account investments are valued in the
same manner, and using the same pricing sources and inputs, as the bonds and
stocks held in the General Account of the Company.
SIGNIFICANT UNOBSERVABLE INPUTS FOR LEVEL 3 ASSETS MEASURED AT FAIR VALUES
The following tables present information about significant unobservable inputs
used in Level 3 assets measured at fair value.
<Table>
<Caption>
DECEMBER 31, 2012
PREDOMINANT SIGNIFICANT
VALUATION UNOBSERVABLE
(AMOUNTS IN THOUSANDS) FAIR VALUE METHOD INPUT MINIMUM (1)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------
ASSETS ACCOUNTED FOR
AT FAIR VALUE ON A
RECURRING BASIS
CMBS $1,918 Discounted Spread 1,267bps
cash flows (encompasses
prepayment,
default risk and
loss severity)
RMBS 500 Discounted Spread 568bps
cash flows
Constant 2%
prepayment rate
Constant default 10%
rate
Loss severity 95%
<Caption>
DECEMBER 31, 2012
IMPACT OF
WEIGHTED INCREASE IN INPUT
(AMOUNTS IN THOUSANDS) MAXIMUM (1) AVERAGE (2) ON FAIR VALUE (3)
<S> <C> <C> <C> <C> <C>
---------------------- ---------------------------------------------------
ASSETS ACCOUNTED FOR
AT FAIR VALUE ON A
RECURRING BASIS
CMBS 1,267bps 1,267bps Decrease
RMBS 642bps 616bps Decrease
2% 2% Decrease
24% 19% Decrease
100% 97% Decrease
</Table>
(1) Basis points (bps).
(2) The weighted average is determined based on the fair value of the
securities.
(3) The impact of a decrease in input would have the opposite impact to the
fair value as that presented in the table above.
<Table>
<Caption>
DECEMBER 31, 2012
PREDOMINANT SIGNIFICANT IMPACT OF
VALUATION UNOBSERVABLE INCREASE IN INPUT
(AMOUNTS IN THOUSANDS) FAIR VALUE METHOD INPUT MINIMUM MAXIMUM ON FAIR VALUE (1)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------------------------
FREE STANDING
DERIVATIVES
U.S. GMWB hedging
instruments
Equity options $276,922 Option model Equity 10% 31% Increase
volatility
Customized swaps 132,594 Discounted cash Equity 10% 10% Increase
flows volatility
U.S. Macro hedge
program
Equity options 285,785 Option model Equity 24% 43% Increase
volatility
International program
hedging
Equity options (60,425) Option model Equity 26% 28% Increase
volatility
</Table>
(1) The impact of a decrease in input would have the opposite impact to the
fair value as that presented in the table. Changes are based on long
positions, unless otherwise noted. Changes in fair value will be inversely
impacted for short positions.
Securities and derivatives for which the Company bases fair value on broker
quotations predominately include ABS, CDOs and certain credit derivatives. Due
to the lack of transparency in the process brokers use to develop prices for
these investments, the Company does not have access to the significant
unobservable inputs brokers use to price these securities and derivatives. The
Company believes however, the types of inputs brokers may use would likely be
similar to those used to price securities and derivatives for which inputs are
available to the Company, and therefore may include, but not be limited to, loss
severity rates, constant prepayment rates, constant default rates and credit
spreads. Therefore, similar to non broker priced securities and derivatives,
generally, increases in these inputs would cause fair values to decrease. For
the year ended December 31, 2012, no significant adjustments were made to broker
prices received by the Company.
F-28
<Page>
ASSETS AND LIABILITIES MEASURED AT FAIR VALUE USING SIGNIFICANT UNOBSERVABLE
INPUTS (LEVEL 3)
The tables below provides a roll-forward of financial instruments measured at
fair value using significant unobservable inputs (Level 3) for the years ended
December 31, 2012 and 2011:
<Table>
<Caption>
FAIR VALUE TRANSFERS TRANSFERS
AS OF INTO OUT OF
(AMOUNTS IN THOUSANDS) JAN. 1, 2012 LEVEL 3 (2) LEVEL 3 (2)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------
Assets
All other corporate $ -- $ -- $ --
All other corporate -- asset-backed 2,468 355 (581)
All other -- asset-backed -- -- --
Preferred stocks -- -- --
Common stocks 4 -- --
---------- ----- -------
TOTAL BONDS AND STOCKS $2,472 $355 $(581)
---------- ----- -------
Derivatives
Credit derivatives $(512) $ -- $(20)
Equity derivatives 569 -- --
Interest rate derivatives 5 -- --
GMWB hedging instruments 686,072 -- 21,718
US macro hedge program 356,561 -- --
International program hedging (20,152) -- 7,755
---------- ----- -------
TOTAL DERIVATIVES (3) $1,022,543 $ -- $29,453
---------- ----- -------
<Caption>
TOTAL
REALIZED/UNREALIZED
GAINS (LOSSES)
INCLUDED IN:
NET
(AMOUNTS IN THOUSANDS) INCOME (1) SURPLUS PURCHASES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------- ---------------------------------------------------------
Assets
All other corporate $ -- $ -- $ --
All other corporate -- asset-backed 95 256 --
All other -- asset-backed -- -- --
Preferred stocks -- -- --
Common stocks -- -- --
--------- ----- ---------
TOTAL BONDS AND STOCKS $ 95 $256 $ --
--------- ----- ---------
Derivatives
Credit derivatives $1,881 $ -- $ --
Equity derivatives 120 -- 2,042
Interest rate derivatives (5) -- --
GMWB hedging instruments (341,264) -- 55,490
US macro hedge program (322,425) -- 251,649
International program hedging (89,472) -- (33,801)
--------- ----- ---------
TOTAL DERIVATIVES (3) $(751,165) $ -- $275,380
--------- ----- ---------
<Caption>
FAIR VALUE
AS OF
(AMOUNTS IN THOUSANDS) SALES SETTLEMENTS DEC. 31, 2012
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------- ---------------------------------------------------
Assets
All other corporate $ -- $ -- $ --
All other corporate -- asset-backed (134) (41) 2,418
All other -- asset-backed -- -- --
Preferred stocks -- -- --
Common stocks -- -- 4
----- -------- ---------
TOTAL BONDS AND STOCKS $(134) $(41) $2,422
----- -------- ---------
Derivatives
Credit derivatives $ -- $(1,349) $ --
Equity derivatives -- (461) 2,270
Interest rate derivatives -- -- --
GMWB hedging instruments -- (12,500) 409,516
US macro hedge program -- -- 285,785
International program hedging -- 75,246 (60,424)
----- -------- ---------
TOTAL DERIVATIVES (3) $ -- $60,936 $637,147
----- -------- ---------
</Table>
(1) All amounts in this column are reported in net realized capital gains
(losses). All amounts are before income taxes.
(2) Transfers in and/or (out) of Level 3 are primarily attributable to changes
in the availability of market observable information and changes to the
bond and stock carrying value based on the lower of cost and market
requirement.
(3) Derivative instruments are reported in this table on a net basis for
asset/(liability) positions.
<Table>
<Caption>
FAIR VALUE TRANSFERS TRANSFERS
AS OF INTO OUT OF
(AMOUNTS IN THOUSANDS) JAN. 1, 2011 LEVEL 3 (2) LEVEL 3 (2)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------
Assets
All other corporate $ -- $ -- $ --
All other corporate -- asset-backed 644 7,050 (18,160)
All other -- asset-backed -- 21,466 (21,466)
Preferred stocks -- 233 --
Common stocks 4 -- --
--------- ------- --------
TOTAL BONDS AND STOCKS $648 $28,749 $(39,626)
--------- ------- --------
Derivatives
Credit derivatives $1,201 $ -- $ --
Equity derivatives -- -- --
Interest rate derivatives 85 -- --
GMWB hedging instruments 502,834 -- --
US macro hedge program 203,468 -- --
International program hedging 4,543 -- --
--------- ------- --------
TOTAL DERIVATIVES (3) $712,131 $ -- $ --
--------- ------- --------
<Caption>
TOTAL
REALIZED/UNREALIZED
GAINS (LOSSES)
INCLUDED IN:
NET
(AMOUNTS IN THOUSANDS) INCOME (1) SURPLUS PURCHASES
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------- ----------------------------------------------------
Assets
All other corporate $(12) $14 $ --
All other corporate -- asset-backed (35) (1,472) 14,500
All other -- asset-backed -- -- --
Preferred stocks (241) 8 --
Common stocks -- -- --
----- --------- ---------
TOTAL BONDS AND STOCKS $(288) $(1,450) $14,500
----- --------- ---------
Derivatives
Credit derivatives $ -- $475 $(945)
Equity derivatives -- (114) 683
Interest rate derivatives -- (80) --
GMWB hedging instruments -- 179,416 22,530
US macro hedge program -- (128,357) 346,500
International program hedging -- (2,917) (21,778)
----- --------- ---------
TOTAL DERIVATIVES (3) $ -- $48,423 $346,990
----- --------- ---------
<Caption>
FAIR VALUE
AS OF
(AMOUNTS IN THOUSANDS) SALES SETTLEMENTS DEC. 31, 2011
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------- -------------------------------------------------------
Assets
All other corporate $(2) $ -- $ --
All other corporate -- asset-backed -- (59) 2,468
All other -- asset-backed -- -- --
Preferred stocks -- -- --
Common stocks -- -- 4
--- -------- ----------
TOTAL BONDS AND STOCKS $(2) $(59) $2,472
--- -------- ----------
Derivatives
Credit derivatives $ $(1,243) $(512)
--
Equity derivatives -- -- 569
Interest rate derivatives -- -- 5
GMWB hedging instruments -- (18,708) 686,072
US macro hedge program -- (65,050) 356,561
International program hedging -- -- (20,152)
--- -------- ----------
TOTAL DERIVATIVES (3) $ $(85,001) $1,022,543
--
--- -------- ----------
</Table>
(1) All amounts in this column are reported in net realized capital gains
(losses). All amounts are before income taxes.
(2) Transfers in and/or (out) of Level 3 are primarily attributable to changes
in the availability of market observable information and changes to the
bond and stock carrying value based on the lower of cost or market
requirement.
(3) Derivative instruments are reported in this table on a net basis for
asset/(liability) positions.
F-29
<Page>
FAIR VALUES OF FINANCIAL INSTRUMENTS
The tables below reflect the fair values and admitted values of all admitted
assets and liabilities that are financial instruments excluding those accounted
for under the equity method (subsidiaries, joint ventures and ventures). The
fair values are also categorized into the three-level fair value hierarchy.
<Table>
<Caption>
DECEMBER 31, 2012
AGGREGATE FAIR
(AMOUNTS IN THOUSANDS) VALUE ADMITTED VALUE (LEVEL 1)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------------
TYPE OF FINANCIAL INSTRUMENT
Assets
Bonds and short-term investments --
unaffiliated $15,020,205 $13,822,160 $160,139
Bonds -- affiliated 1,253,896 1,156,374 --
Preferred stocks -- unaffiliated 7,851 8,267 --
Common stocks -- unaffiliated 98,413 98,413 98,409
Mortgage loans on real estate 931,986 907,376 --
Derivative related assets 551,444 673,240 --
Contract loans 443,179 375,219 --
Surplus debentures 18,221 15,708 --
Separate Account assets (1) 45,821,181 45,821,181 45,821,181
------------ ------------ ------------
TOTAL ASSETS $64,146,376 $62,877,938 $46,079,729
------------ ------------ ------------
Liabilities
Liability for deposit-type contracts $(1,543,283) $(1,543,283) $ --
Derivative related liabilities (68,256) (68,250) --
Separate Account liabilities (45,821,181) (45,821,181) (45,821,181)
------------ ------------ ------------
TOTAL LIABILITIES $(47,432,720) $(47,432,714) $(45,821,181)
------------ ------------ ------------
<Caption>
DECEMBER 31, 2012
NOT PRACTICABLE
(AMOUNTS IN THOUSANDS) (LEVEL 2) (LEVEL 3) (CARRYING VALUE)
<S> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------- -------------------------------------------------------
TYPE OF FINANCIAL INSTRUMENT
Assets
Bonds and short-term investments --
unaffiliated $14,478,232 $381,834 $ --
Bonds -- affiliated -- 1,253,896 --
Preferred stocks -- unaffiliated 7,629 222 --
Common stocks -- unaffiliated -- 4 --
Mortgage loans on real estate -- 931,986 --
Derivative related assets (86,916) 638,360 --
Contract loans -- 443,179 --
Surplus debentures 18,221 -- --
Separate Account assets (1) -- -- --
----------- ----------- -----
TOTAL ASSETS $14,417,166 $3,649,481 $ --
----------- ----------- -----
Liabilities
Liability for deposit-type contracts $ -- $(1,543,283) $ --
Derivative related liabilities (67,042) (1,214) --
Separate Account liabilities -- -- --
----------- ----------- -----
TOTAL LIABILITIES $(67,042) $(1,544,497) $ --
----------- ----------- -----
</Table>
(1) Excludes approximately $30.7 million, at December 31, 2012, of investment
sales receivable net of investment purchases payable that are not subject
to SSAP No. 100.
<Table>
<Caption>
DECEMBER 31, 2011
AGGREGATE FAIR
(AMOUNTS IN THOUSANDS) VALUE ADMITTED VALUE (LEVEL 1)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------------
TYPE OF FINANCIAL INSTRUMENT
Assets
Bonds and short-term investments --
unaffiliated $13,288,236 $12,493,941 $120,301
Bonds -- affiliated 1,364,226 1,296,220 --
Preferred stocks -- unaffiliated 7,189 8,446 --
Common stocks -- unaffiliated 146,026 146,026 146,022
Mortgage loans on real estate 687,446 660,905 --
Derivative related assets 1,816,460 1,602,785 --
Contract loans 442,771 370,655 --
Surplus debentures 3,140 3,121 --
Separate Account assets (1) 48,234,930 48,234,930 48,234,930
------------ ------------ ------------
TOTAL ASSETS $65,990,424 $64,817,029 $48,501,253
------------ ------------ ------------
Liabilities
Liability for deposit-type contracts $(65,825) $(65,825) $ --
Derivative related liabilities (36,184) (36,184) --
Separate Account liabilities (48,234,930) (48,234,930) (48,234,930)
------------ ------------ ------------
TOTAL LIABILITIES $(48,336,939) $(48,336,939) $(48,234,930)
------------ ------------ ------------
<Caption>
DECEMBER 31, 2011
NOT PRACTICABLE
(AMOUNTS IN THOUSANDS) (LEVEL 2) (LEVEL 3) (CARRYING VALUE)
<S> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------- ------------------------------------------------------
TYPE OF FINANCIAL INSTRUMENT
Assets
Bonds and short-term investments --
unaffiliated $12,666,026 $501,909 $ --
Bonds -- affiliated -- 1,364,226 --
Preferred stocks -- unaffiliated 6,991 198 --
Common stocks -- unaffiliated -- 4 --
Mortgage loans on real estate -- 687,446 --
Derivative related assets 793,917 1,022,543 --
Contract loans -- 442,771 --
Surplus debentures 3,140 -- --
Separate Account assets (1) -- -- --
----------- ---------- -----
TOTAL ASSETS $13,470,074 $4,019,097 $ --
----------- ---------- -----
Liabilities
Liability for deposit-type contracts $ -- $(65,825) $ --
Derivative related liabilities (36,184) -- --
Separate Account liabilities -- -- --
----------- ---------- -----
TOTAL LIABILITIES $(36,184) $(65,825) $ --
----------- ---------- -----
</Table>
(1) Excludes approximately $20.1 million, at December 31, 2011, of investment
sales receivable net of investment purchases payable that are not subject
to SSAP No. 100.
The valuation methodologies used to determine the fair values of bonds, stocks
and derivatives are described in the above Fair Value Measurements section of
this note.
The amortized cost of short-term investments approximates fair value.
Fair values for mortgage loans on real estate were estimated using discounted
cash flow calculations based on current lending rates for similar type loans.
Current lending rates reflect changes in credit spreads and the remaining terms
of the loans.
The carrying amounts of the liability for deposit-type contracts and Separate
Account liabilities approximate their fair values.
Fair values for contract loans were estimated using discounted cash flow
calculations and current interest rates.
At December 31, 2012 and 2011, the Company had no investments where it was not
practicable to estimate fair value.
F-30
<Page>
5. INCOME TAXES
A. The components of the net deferred tax asset/(deferred tax liability)
("DTA"/"(DTL)") at period end and the change in those components are as follows:
<Table>
<Caption>
2012
ORDINARY CAPITAL TOTAL
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------
1 (a) Gross DTA $1,991,996,696 $73,968,061 $2,065,964,757
(b) Statutory valuation allowance
adjustments -- -- --
(c) Adjusted gross DTA 1,991,996,696 73,968,061 2,065,964,757
(d) Deferred tax assets nonadmitted 1,100,066,331 47,098,013 1,147,164,344
(e) Subtotal net admitted deferred tax
assets 891,930,365 26,870,048 918,800,413
(f) Deferred tax liabilities 511,264,849 12,811,948 524,076,797
---------------- ------------- ----------------
(g) Net admitted deferred tax
asset/(net deferred tax liability) $380,665,516 $14,058,100 $394,723,616
---------------- ------------- ----------------
</Table>
<Table>
<Caption>
2012
ORDINARY CAPITAL TOTAL
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------
2 Admission Calculation Components SSAP
No. 101 :
(a) Federal income taxes paid in prior
years recoverable by C/B $ -- $ -- $ --
(b) Adjusted gross DTA expected to be
realized 380,665,516 14,058,100 394,723,616
(1) DTA's expected to be realized
after the balance sheet date 1,116,409,900 14,058,100 1,130,468,000
(2) DTA's allowed per limitation
threshold XXX XXX 394,723,616
(c) DTA's offset against DTLs 511,264,849 12,811,948 524,076,797
---------------- ------------- ----------------
(d) DTA's admitted as a result of
application of SSAP No. 101 $891,930,365 $26,870,048 $918,800,413
---------------- ------------- ----------------
3 (a) Ratio % used to determine recovery
period and threshold limitation 1,822%
(b) Adjusted capital and surplus used
to determine 2(b) thresholds 2,631,490,773
</Table>
<Table>
<Caption>
2012
ORDINARY CAPITAL TOTAL
PERCENT PERCENT PERCENT
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------
4 Impact of Tax Planning Strategies:
(a) Adjusted gross DTAs (% of total
adjusted gross DTAs) 0% 0% 0%
(b) Net admitted adjusted gross DTAs (%
of total net admitted
adjusted gross DTAs) 0% 0% 0%
(c) Do the tax planning strategies
include the use of reinsurance? Yes No X
</Table>
<Table>
<Caption>
2011
ORDINARY CAPITAL TOTAL
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------
1 (a) Gross DTA $1,573,302,985 $177,028,688 $1,750,331,673
(b) Statutory valuation allowance
adjustments -- -- --
(c) Adjusted gross DTA 1,573,302,985 177,028,688 1,750,331,673
(d) Deferred tax assets nonadmitted 326,583,260 171,377,688 497,960,948
(e) Subtotal net admitted deferred tax
assets 1,246,719,725 5,651,000 1,252,370,725
(f) Deferred tax liabilities 722,553,499 -- 722,553,499
---------------- -------------- ----------------
(g) Net admitted deferred tax
asset/(net deferred tax liability) $524,166,226 $5,651,000 $529,817,226
---------------- -------------- ----------------
</Table>
XXX represents not applicable amounts.
<Table>
<Caption>
2011
ORDINARY CAPITAL TOTAL
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------
2 Admission Calculation Components SSAP
No. 101 :
(a) Federal income taxes paid in prior
years recoverable by C/B $ -- $ -- $ --
(b) Adjusted gross DTA expected to be
realized 524,166,226 5,651,000 529,817,226
(1) DTA's expected to be realized
after the balance sheet date 739,232,000 5,651,000 744,883,000
(2) DTA's allowed per limitation
threshold XXX XXX 529,817,226
(c) DTA's offset against DTLs 722,553,499 -- 722,553,499
---------------- ------------ ----------------
(d) DTA's admitted as a result of
application of SSAP No. 101 $1,246,719,725 $5,651,000 $1,252,370,725
---------------- ------------ ----------------
3 (a) Ratio % used to determine recovery
period and threshold limitation 1,917%
(b) Adjusted capital and surplus used
to determine 2(b) thresholds 3,898,065,927
</Table>
F-31
<Page>
<Table>
<Caption>
2011
ORDINARY CAPITAL TOTAL
PERCENT PERCENT PERCENT
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------
4 Impact of Tax Planning Strategies:
(a) Adjusted gross DTAs (% of total
adjusted gross DTAs) 0% 0% 0%
(b) Net admitted adjusted gross DTAs (%
of total net admitted adjusted gross
DTAs) 18% 1% 19%
(c) Do the tax planning strategies
include the use of reinsurance? Yes No X
</Table>
<Table>
<Caption>
CHANGE DURING 2012
ORDINARY CAPITAL TOTAL
<S> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
1 (a) Gross DTA $418,693,711 $(103,060,627) $315,633,084
(b) Statutory valuation allowance
adjustments -- -- --
(c) Adjusted gross DTA 418,693,711 (103,060,627) 315,633,084
(d) Deferred tax assets nonadmitted 773,483,071 (124,279,675) 649,203,396
(e) Subtotal net admitted deferred tax
assets (354,789,360) 21,219,048 (333,570,312)
(f) Deferred tax liabilities (211,288,650) 12,811,948 (198,476,702)
--------------- --------------- ---------------
(g) Net admitted deferred tax
asset/(net deferred tax liability) $(143,500,710) $8,407,100 $(135,093,610)
--------------- --------------- ---------------
</Table>
<Table>
<Caption>
CHANGE DURING 2012
ORDINARY CAPITAL TOTAL
<S> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
2 Admission Calculation Components SSAP
No. 101 :
(a) Federal income taxes paid in prior
years recoverable by C/B $ -- $ -- $ --
(b) Adjusted gross DTA expected to be
realized (143,500,710) 8,407,100 (135,093,610)
(1) DTA's expected to be realized
after the balance sheet date 377,177,900 8,407,100 385,585,000
(2) DTA's allowed per limitation
threshold XXX XXX (135,093,610)
(c) DTA's offset against DTLs (211,288,650) 12,811,948 (198,476,702)
----------------- ------------- ---------------
(d) DTA's admitted as a result of
application of SSAP No. 101 $(354,789,360) $21,219,048 $(333,570,312)
----------------- ------------- ---------------
3 (a) Ratio % used to determine recovery
period and threshold limitation -95%
(b) Adjusted capital and surplus used
to determine 2(b) threshold (1,266,575,154)
</Table>
<Table>
<Caption>
CHANGE DURING 2012
ORDINARY CAPITAL TOTAL
PERCENT PERCENT PERCENT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------
4 Impact of Tax Planning Strategies:
(a) Adjusted gross DTAs (% of total
adjusted gross DTAs) 0% 0% 0%
(b) Net admitted adjusted gross DTAs (%
of total net admitted adjusted gross
DTAs) % % %
</Table>
B. DTLs are not recognized for the following amounts:
Not applicable
C. 1. The components of current income tax expense are as follows:
<Table>
<Caption>
2012 2011 CHANGE
<S> <C> <C> <C>
----------------------------------------------------------------------------------------
(a) Federal $323,810,575 $115,054,696 $208,755,879
(b) Foreign 44,651 13,649 31,002
-------------- -------------- --------------
(c) Subtotal 323,855,226 115,068,345 208,786,881
(d) Federal income tax on net capital
gains 26,183,099 10,257,387 15,925,712
(e) Utilization of capital loss
carry-forwards -- -- --
(f) Other -- -- --
-------------- -------------- --------------
(g) Federal and foreign income taxes
incurred $350,038,325 $125,325,732 $224,712,593
-------------- -------------- --------------
</Table>
F-32
<Page>
2. The main components of the period end deferred tax amounts and the change in
those components are as follows:
<Table>
<Caption>
2012 2011 CHANGE
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------
DTA: ORDINARY
Reserves $805,988,168 $817,813,096 $(11,824,928)
Tax deferred acquisition costs 253,002,416 266,456,659 (13,454,243)
Employee benefits 11,447,285 5,054,636 6,392,649
Bonds and other investments 666,125,537 281,153,876 384,971,661
NOL/Min tax credit/Foreign tax credits 242,327,721 190,524,387 51,803,334
Other 13,105,569 12,300,331 805,238
---------------- ----------------- ----------------
Subtotal: DTA Ordinary 1,991,996,696 1,573,302,985 418,693,711
Ordinary Statutory Valuation Allowance -- -- --
---------------- ----------------- ----------------
Total adjusted gross ordinary DTA 1,991,996,696 1,573,302,985 418,693,711
Nonadmitted ordinary DTA 1,100,066,331 326,583,260 773,483,071
---------------- ----------------- ----------------
Admitted ordinary DTA 891,930,365 1,246,719,725 (354,789,360)
---------------- ----------------- ----------------
DTA: CAPITAL
Bonds and other investments 73,968,061 177,028,688 (103,060,627)
---------------- ----------------- ----------------
Subtotal: DTA Capital 73,968,061 177,028,688 (103,060,627)
Capital Statutory Valuation Allowance -- -- --
---------------- ----------------- ----------------
Total adjusted gross capital DTA 73,968,061 177,028,688 (103,060,627)
Nonadmitted capital DTA 47,098,013 171,377,688 (124,279,675)
---------------- ----------------- ----------------
Admitted capital DTA 26,870,048 5,651,000 21,219,048
---------------- ----------------- ----------------
TOTAL ADMITTED DTA $918,800,413 $1,252,370,725 $(333,570,312)
---------------- ----------------- ----------------
DTL: ORDINARY
Bonds and other investments $345,583,220 $534,665,193 $(189,081,973)
Deferred and uncollected 25,872,755 24,610,814 1,261,941
Reserves 131,595,482 154,167,836 (22,572,354)
Other 8,213,392 9,109,656 (896,264)
---------------- ----------------- ----------------
Gross DTL Ordinary 511,264,849 722,553,499 (211,288,650)
---------------- ----------------- ----------------
DTL: CAPITAL
Investment related 12,811,948 -- 12,811,948
Other -- -- --
---------------- ----------------- ----------------
Gross DTL Capital 12,811,948 -- 12,811,948
---------------- ----------------- ----------------
TOTAL DTL $524,076,797 $722,553,499 $(198,476,702)
---------------- ----------------- ----------------
NET ADJUSTED DTA/(DTL) $394,723,616 $529,817,226 $(135,093,610)
---------------- ----------------- ----------------
Adjust for the change in deferred tax on (443,824,011)
unrealized gains/losses
Adjust for the stock compensation 2,470,893
transfer
Adjust for the change in nonadmitted 649,203,396
deferred tax
Other Adjustments --
----------------
Adjusted change in net deferred Income $72,756,668
Tax
----------------
</Table>
D. Reconciliation of federal income tax rate to actual effective rate:
The sum of the income tax incurred and the change in the DTA/DTL is different
from the result obtained by applying the statutory federal income tax rate to
the pretax income. The significant items causing this difference are as follows:
<Table>
<Caption>
% OF PRE-TAX
2012 INCOME 2011
TAX EFFECT $1,061,415,077 TAX EFFECT
<S> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------
Statutory tax -- 35% $371,495,277 35.00% $(256,385,476)
Tax preferred investments (89,000,000) -8.39% (91,500,000)
Affiliated dividends (12,600,000) -1.19% (25,714,500)
Valuation Allowance -- 0.00% --
All other 7,386,380 0.70% (683,314)
------------ ----- -------------
TOTAL STATUTORY INCOME TAX $277,281,657 26.12% $(374,283,290)
------------ ----- -------------
Federal and foreign income taxes
incurred $350,038,325 32.98% $125,325,732
Change in net deferred income taxes (72,756,668) -6.86% (499,609,022)
------------ ----- -------------
TOTAL STATUTORY INCOME TAX $277,281,657 26.12% $(374,283,290)
------------ ----- -------------
<Caption>
% OF PRE-TAX % OF PRE-TAX
INCOME 2010 INCOME
$(732,529,932) TAX EFFECT $39,421,066
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------- -------------------------------------------------------
Statutory tax -- 35% 35.00% $13,797,373 35.00%
Tax preferred investments 12.49% (92,800,000) -235.41%
Affiliated dividends 3.51% (49,000,000) -124.30%
Valuation Allowance 0.00% 18,491,508 46.91%
All other 0.09% 21,947,331 55.68%
------ ------------ --------
TOTAL STATUTORY INCOME TAX 51.09% $(87,563,788) -222.12%
------ ------------ --------
Federal and foreign income taxes
incurred -17.11% $(40,522,705) -102.79%
Change in net deferred income taxes 68.20% (47,041,083) -119.33%
------ ------------ --------
TOTAL STATUTORY INCOME TAX 51.09% $(87,563,788) -222.12%
------ ------------ --------
</Table>
F-33
<Page>
E. 1. At December 31, 2012, the Company had $83,580,308 of net operating loss
carryforward and $45,533,890 of foreign tax credit carryforward.
2. The amount of federal income taxes incurred in the current year and each
preceding year that will be available for recoupment in the event of future
net losses are:
2012 $ --
2011 $ --
2010 $ --
3. The aggregate amounts of deposits reported as admitted assets under Section
6603 of the IRS Code was $0 as of December 31, 2012.
F. 1. The Company's federal income tax return is consolidated within The
Hartford's consolidated federal income tax return. The consolidated federal
income tax return includes the following entities:
<Table>
<S> <C>
The Hartford Financial Services Group, Inc. (Parent) Hartford Underwriters General Agency, Inc.
Hartford Holdings, Inc. Hartford of Texas General Agency, Inc.
Nutmeg Insurance Company Nutmeg Insurance Agency, Inc.
Heritage Holdings, Inc. Hartford Lloyd's Corporation
Hartford Fire Insurance Company 1st AgChoice, Inc.
Hartford Accident and Indemnity Company ClaimPlace, Inc.
Hartford Casualty Insurance Company Access CoverageCorp, Inc.
Hartford Underwriters Insurance Company Access CoverageCorp Technologies, Inc.
Twin City Fire Insurance Company Hartford Casualty General Agency, Inc.
Pacific Insurance Company, Limited Hartford Fire General Agency, Inc.
Trumbull Insurance Company Hartford Strategic Investments LLC
Hartford Insurance Company of Illinois Hartford Life, Inc.
Hartford Insurance Company of the Midwest Hartford Life and Accident Insurance Company
Hartford Insurance Company of the Southeast Hartford Life International Ltd.
Hartford Lloyd's Insurance Company Hartford Equity Sales Company, Inc.
Property & Casualty Insurance Co. of Hartford Hartford-Comprehensive Employee Benefit Service Co.
Sentinel Insurance Company, Ltd. Hartford Securities Distribution Company, Inc.
First State Insurance Company The Evergreen Group, Incorporated
New England Insurance Company Hartford Administrative Services Company
New England Reinsurance Corporation Woodbury Financial Services, Inc.
Fencourt Reinsurance Company, Ltd. Hartford Life, Ltd.
Heritage Reinsurance Co., Ltd. Hartford Life Insurance Company
New Ocean Insurance Co., Ltd. Hartford Life and Annuity Insurance Company
Hartford Investment Management Co. Hartford International Life Reassurance Corp.
HRA Brokerage Services. Inc. American Maturity Life Insurance Company
Ersatz Corporation Champlain Life Reinsurance Company
Hartford Integrated Technologies, Inc. White River Life Reinsurance Company
Business Management Group, Inc. Hartford Fund Management Group, Inc.
</Table>
2. Federal Income Tax Allocation
The Company is included in the consolidated federal income tax return of
The Hartford and its includable subsidiaries. Estimated tax payments are
made quarterly, at which time intercompany tax settlements are made. In the
subsequent year, additional settlements are made on the unextended due date
of the return and at the time that the return is filed. The method of
allocation among affiliates of the Company is subject to written agreement
approved by the Board of Directors and based upon separate return
calculations with current credit for net losses to the extent the losses
provide a benefit in the consolidated tax return.
6. REINSURANCE
The amount of reinsurance recoverables from and payables to affiliated and
unaffiliated reinsurers were $23,783,887 and $538,948,935 respectively, as of
December 31, 2012 and $27,899,817 and $200,232,730 respectively, as of December
31, 2011.
F-34
<Page>
The effect of reinsurance as of and for the years ended December 31 is
summarized as follows:
<Table>
<Caption>
Direct Assumed Ceded Net
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
2012
Aggregate reserves for future benefits $13,136,569,365 $1,141,074,169 $(5,068,899,440) $9,208,744,094
Liability for deposit-type contracts 57,593,210 1,485,690,018 -- 1,543,283,228
Policy and contract claim liabilities 114,807,788 13,382,743 (54,078,602) 74,111,929
Premium and annuity considerations 2,380,044,324 311,741,821 (1,402,987,610) 1,288,798,535
Death, annuity, disability and other benefits 660,013,086 421,351,995 (313,326,701) 768,038,380
Surrenders and other fund withdrawals 8,896,799,930 238,908,549 (8,830,040,225) 305,668,254
</Table>
<Table>
<Caption>
Direct Assumed Ceded Net
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
2011
Aggregate reserves for future benefits $10,948,992,648 $5,217,901,345 $(4,953,576,011) $11,213,317,982
Policy and contract claim liabilities 77,162,981 9,362,396 (38,432,611) 48,092,766
Premium and annuity considerations 2,478,347,638 327,157,421 (1,404,362,300) 1,401,142,759
Death, annuity, disability and other benefits 541,731,135 421,610,418 (251,193,984) 712,147,569
Surrenders and other fund withdrawals 8,945,267,166 260,269,537 (8,873,703,048) 331,833,655
</Table>
<Table>
<Caption>
DIRECT ASSUMED CEDED NET
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
2010
Aggregate reserves for future benefits $9,741,574,542 $3,144,059,280 $(4,095,902,315) $8,789,731,507
Policy and contract claim liabilities 54,934,084 10,325,147 (23,615,797) 41,643,434
Premium and annuity considerations 2,667,556,144 652,323,718 (2,209,840,036) 1,110,039,826
Death, annuity, disability and other benefits 487,561,170 390,966,382 (172,286,142) 706,241,410
Surrenders and other fund withdrawals 8,302,516,938 209,026,355 (8,228,197,412) 283,345,881
</Table>
A. EXTERNAL REINSURANCE
The Company cedes insurance to unaffiliated insurers in order to limit its
maximum losses. Such agreements do not relieve the Company from its primary
liability to policyholders. Failure of reinsurers to honor their obligations
could result in losses to the Company. The Company reduces this risk by
evaluating the financial condition of reinsurers and monitoring for possible
concentrations of credit risk. As of December 31, 2012, the Company has two
reinsurance-related concentrations of credit risk greater than 10% of the
Company's capital and surplus. These concentrations, which are actively
monitored, have reserve credits totaling $596 million and $483 million for
Transamerica Life Insurance Company and Connecticut General Life Insurance
Company, respectively.
The Company has a reinsurance agreement under which the reinsurer has a limited
right to unilaterally cancel the reinsurance for reasons other than for
nonpayment of premium or other similar credits. The estimated amount of
aggregate reduction in the Company's surplus of this limited right to
unilaterally cancel this reinsurance agreement by the reinsurer for which
cancellation results in a net obligation of the Company to the reinsurer, and
for which such obligation is not presently accrued is $307,774,786 in 2012, a
decrease of $88,280,194 from the 2011 balance of $396,054,980. The total amount
of reinsurance credits taken for this agreement was $473,499,670 in 2012, a
decrease of $135,815,684 from the 2011 balance of $609,315,354.
B. REINSURANCE ASSUMED FROM AFFILIATES
The Company has reinsurance agreements with Hartford Life Insurance K.K.
("HLIKK"), a Japan based affiliate and a wholly- owned subsidiary of The
Hartford. Under these agreements, HLIKK ceded 100% of its covered risks to the
Company. The following list describes the reinsurance agreements with HLIKK:
- The Company assumes GMDB on covered contracts that have an associated GMIB
rider in force on or after July 31, 2006, and GMIB riders issued on or after
April 1, 2005. In connection with this reinsurance agreement, the Company
collected premiums of $172,316,300, $179,915,572 and $160,823,000 for the
years ended December 31, 2012, 2011 and 2010, respectively.
- The Company assumes in-force and prospective "3Win" annuities which bundle
guaranteed minimum accumulation benefits ("GMAB"), GMIB and GMDB risks
issued on or after February 5, 2007. As a result of capital markets
underperformance, 97% of contracts, a total of $3.1 billion, triggered
during 2008 and of this amount, $2.0 billion elected the GMIB payout
annuity, while the remainder elected a lump-sum payout. The Company received
the additional considerations, net of the first annuity payout, and is
paying the associated benefits to HLIKK over the payout period. As a result,
in 2009 the Company entered into a funding agreement with HLIC in the amount
of $1,468,809,904 for the
F-35
<Page>
purpose of funding these payments. The funding agreement calls for scheduled
annual payouts on October 31 with interest at 5.16% through 2019. In
connection with this reinsurance agreement, the Company collected premiums of
$826,283, $859,383 and $824,000 for the years ended December 31, 2012, 2011
and 2010, respectively.
- The Company assumes certain in-force and prospective GMIB and GMDB riders
issued on or after February 1, 2008. In connection with this reinsurance
agreement, the Company collected premiums of $3,294,187, $3,559,447 and
$3,413,000 for the years ended December 31, 2012, 2011 and 2010,
respectively.
- The Company assumes certain in-force and prospective GMDB riders issued on
or after April 1, 2005. In connection with this reinsurance agreement, the
Company collected premiums of $2,817,698, $3,044,045 and $2,952,000 for the
years ended December 31, 2012, 2011 and 2010, respectively.
The Company has a modified coinsurance ("Modco") reinsurance agreement with
Hartford Life Limited ("HLL"), an affiliated wholly-owned subsidiary of Hartford
Life International, Ltd. The Company assumes 100% of the risks associated with
GMDB and GMWB riders written by and in-force with HLL as of November 1, 2010. In
connection with this agreement as of December 31, 2012 and 2011, the Company
recorded a net (payable)/receivable of $(1,490,759) and $35,984,078,
respectively, and collected premiums of $9,541,634, $10,370,089, and
$344,271,000 for the years ended December 31, 2012, 2011 and 2010, respectively.
C. REINSURANCE CEDED TO AFFILIATES
The Company has a Modco and coinsurance with funds withheld reinsurance
agreement ("WRR Agreement") with White River Life Reinsurance Company ("WRR"),
an affiliated captive insurance company unauthorized in the State of
Connecticut. The Company cedes to WRR variable annuity contracts, associated
riders, and payout annuities written by the Company; annuity contracts and
associated riders assumed by the Company under unaffiliated reinsurance
agreements; GMAB, GMIB riders and GMDB risks assumed by the Company from HLIKK;
and, as of November 1, 2010, GMDB and GMWB riders assumed by the Company from
HLL.
Under Modco, the assets and liabilities, and under coinsurance with funds
withheld, the assets, associated with the reinsured business will remain on the
balance sheet of the Company in segregated portfolios, and WRR will receive the
economic risks and rewards related to the reinsured business through Modco and
funds withheld adjustments.
In connection with the WRR Agreement as of December 31, 2012 and 2011, the
Company recorded a receivable of $172,250,508 and $0 within Amounts recoverable
for reinsurance on the Statements of Admitted Assets, Liabilities and Capital
and Surplus; a payable of $527,400,013 and $221,498,890, respectively, reported
within Other liabilities ; Funds held under reinsurance treaties with
unauthorized reinsurers of $212,088,584 and $189,281,081, respectively; and paid
premiums of $719,723,726, $885,985,397, and $1,558,884,000, for the years ended
December 31, 2012, 2011, and 2010, respectively.
Effective November 1, 2007, the Company entered into a Modco and coinsurance
with funds withheld reinsurance agreement with Champlain Life Reinsurance
Company ("Champlain Life"), an affiliated captive insurance company unauthorized
in the State of Connecticut. Champlain Life uses a third-party letter of credit
to back a certain portion of its statutory reserves, and this letter of credit
has been assigned to the Company in order to provide collateral for the Company
to take reinsurance credit under this agreement. The increase in surplus, net of
federal income tax, resulting from the reinsurance agreement on the effective
date was $194,430,212. This surplus benefit will be amortized into income on a
net of tax basis as earnings emerge from the business reinsured, resulting in a
net $0 future impact to surplus. The Company reported paid premiums of
$200,281,441, $209,973,214 and $348,509,000 for the years ended December 31,
2012, 2011 and 2010, respectively. See Note 16.
On December 31, 2012, The Hartford completed the sale of its U.S. individual
annuity new business capabilities to Forethought Financial Group. Effective May
1, 2012, all new U.S. annuity policies sold by the Company are reinsured to
Forethought Life Insurance Company. The Company will cease the sale of such
annuity policies and the reinsurance agreement will terminate as to new business
in the second quarter of 2013. The reinsurance agreement has no impact on
in-force policies issued on or before April 27, 2012 and the impact of this
transaction was not material to the Company's results of operations, financial
position or liquidity. Because of this transaction, the Company will cease
ceding new business to WRR.
F-36
<Page>
7. PREMIUM AND ANNUITY CONSIDERATIONS (DEFERRED AND UNCOLLECTED)
The following table presents premiums and annuity considerations (deferred and
uncollected) as of December 31:
<Table>
<Caption>
2012 2011
Gross Net of Loading Gross Net of Loading
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------------
TYPE
Ordinary new business $1,616,249 $1,988,768 $3,057,394 $3,574,806
Ordinary renewal 17,869,947 21,931,463 16,480,250 13,986,006
Group life 49,363 32,976 54,208 35,800
------------- ------------- ------------- -------------
TOTAL $19,535,559 $23,953,207 $19,591,852 $17,596,612
------------- ------------- ------------- -------------
</Table>
8. RELATED PARTY TRANSACTIONS
Transactions between the Company and its affiliates, relate principally to tax
settlements, reinsurance, insurance coverages, rental and service fees, capital
contributions, returns of capital and payments of dividends. Investment
management fees were charged by HIMCO and are a component of net investment
income. Substantially all general insurance expenses related to the Company,
including rent and benefit plan expenses, are initially paid by affiliate
Hartford Fire Insurance Company.
Direct expenses are allocated using specific identification and indirect
expenses are allocated using other applicable methods. Indirect expenses include
those for corporate areas which, depending on type, are allocated based on
either a percentage of direct expenses or on utilization.
At December 31, 2012 and 2011, the Company reported $13,512,043 and $19,756,182,
respectively, as receivables from and $35,894,640 and $23,109,160, respectively,
as payables to parent, subsidiaries, and affiliates. The terms of the written
settlement agreements require that these amounts be settled generally within 30
days.
Related party transactions may not be indicative of the costs that would have
been incurred on a stand-alone basis. For additional information, see Notes 5,
6, 9 and 12.
9. RETIREMENT PLANS, OTHER POSTRETIREMENT BENEFIT PLANS AND POSTEMPLOYMENT
BENEFITS
The Hartford maintains The Hartford Retirement Plan for U.S. Employees, a U.S.
qualified defined benefit pension plan (the "Plan") that covers substantially
all employees of the Company. The Hartford also maintains non-qualified pension
plans to accrue retirement benefits in excess of Internal Revenue Code
limitations. These plans shall be collectively referred to as the "Pension
Plans".
Effective December 31, 2012, the Hartford amended the Plan to freeze
participation and benefit accruals. As a result, employees will not accrue
further benefits under the cash balance formula of the plan, although interest
will continue to accrue to existing account balances. Compensation earned by
employees up to December 31, 2012 will be used for purposes of calculating
benefits under the Plan but there will be no future benefit accruals after that
date. Participants as of December 31, 2012 will continue to earn vesting credit
with respect to their frozen accrued benefits as they continue to work. The
freeze also applies to The Hartford Excess Pension Plan II, The Hartford's
non-qualified excess benefit plan for certain highly compensated employees,
effective December 31, 2012. The Hartford announced these changes in April 2012.
For the years ended December 31, 2012, 2011 and 2010, the Company incurred
expenses related to the Pension Plans of $22,147,339, $18,704,662 and
$15,265,680, respectively, related to the allocation of the net periodic benefit
cost, benefit payments and funding to the Pension Plans.
The Hartford also provides certain health care and life insurance benefits for
eligible retired employees of the Company. The Hartford's contribution for
health care benefits will depend upon the retiree's date of retirement and years
of service. In addition, the plan has a defined dollar cap for certain retirees
which limits average company contributions. The Hartford has prefunded a portion
of the health care obligations through a trust fund where such prefunding can be
accomplished on a tax effective basis. Effective January 1, 2002,
company-subsidized retiree medical, retiree dental and retiree life insurance
benefits were eliminated for employees with original hire dates with the Company
on or after January 1, 2002. As of December 31, 2012, the Hartford's other
postretirement medical, dental and life insurance coverage plans were amended to
no longer provide subsidized coverage for current employees who retire on or
after January 1, 2014. The Hartford announced these changes in April 2012. For
the years ended December 31, 2012, 2011 and 2010, the Company incurred expense
related to the other postretirement benefit plans of $664,015, $1,383,478 and
$1,567,512, respectively.
Substantially all employees of the Company are eligible to participate in The
Hartford 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 base salary, by The Hartford. In
addition, The Hartford allocates a percentage of
F-37
<Page>
base salary to the Hartford Investment and Savings Plan for eligible employees.
In 2012, employees whose prior year earnings were less than $110,000 received a
contribution of 1.5% of base salary and employees whose prior year earnings were
more than $110,000 received a contribution of 0.5% of base salary. The expenses
allocated to the Company for the years ended December 31, 2012, 2011 and 2010
were $4,731,580, $4,883,327 and $5,756,026, respectively.
Effective January 1, 2013, the Hartford will increase benefits under The
Hartford Investment and Savings Plan, its defined contribution 401(k) savings
plan, and The Hartford Excess Savings Plan. The Hartford's contributions will be
increased to include a non-elective contribution of 2% of eligible compensation
and a dollar-for-dollar matching contribution of up to 6% of eligible
compensation contributed by the employee each pay period. Eligible compensation
will be expanded to include overtime and bonuses but will be limited to a total
of $1,000,000 annually.
The Company participates in postemployment plans sponsored by Hartford Fire
Insurance Company. These plans provide for medical and salary continuance
benefits for employees on long-term disability. For the years ended December 31,
2012, 2011, and 2010, the Company was allocated expenses under these plans of
$591,375, $664,382, and $712,102, respectively. In addition, expenses for the
Company under this plan were $125,785, $32,433 and ($395,700) for the years
ended December 31, 2012, 2011 and 2010, respectively, resulting from valuation
adjustments.
10. CAPITAL AND SURPLUS AND SHAREHOLDER DIVIDEND RESTRICTIONS
DIVIDEND RESTRICTIONS
The maximum amount of dividends which can be paid to shareholders by Connecticut
domiciled insurance companies, without prior approval of the Connecticut
Insurance Commissioner (the "Commissioner"), is generally restricted to the
greater of 10% of surplus as of the preceding December 31st or the net gain from
operations after dividends to policyholders, federal income taxes and before
realized capital gains or (losses) for the previous year. In addition, if any
dividend exceeds the insurer's earned surplus, it requires the prior approval of
the Commissioner. Dividends are paid as determined by the Board of Directors in
accordance with state statutes and regulations, and are not cumulative. In 2012,
2011, and 2010, ordinary dividends of $0, $0 and $72,000,000, respectively, were
paid. With respect to dividends to its parent HLIC, the Company's dividend
limitation under the holding company laws of Connecticut is $82,204,354 in 2013.
UNASSIGNED FUNDS
The portion of unassigned funds reduced by each item below at December 31, was
as follows:
<Table>
<Caption>
2012 2011
<S> <C> <C>
--------------------------------------------------------------------------
Unrealized capital losses, net of tax $934,084,695 $201,370,652
Nonadmitted asset values 1,168,207,992 519,577,245
Asset valuation reserve 162,571,194 179,493,239
Provision for reinsurance -- 1,100
</Table>
11. SEPARATE ACCOUNTS
The Company maintained Separate Account assets totaling $45,851,885,131 and
$48,255,070,982 as of December 31, 2012 and 2011, respectively. The Company
utilizes Separate Accounts to record and account for assets and liabilities for
particular lines of business. For the current reporting year, the Company
recorded assets and liabilities for individual variable annuities, variable life
and variable universal life product lines into Separate Accounts.
The Separate Account classifications are supported by state statute and are in
accordance with the domiciliary state procedures for approving items within the
Separate Accounts. Separate Account assets are segregated from other investments
and reported at fair value. Some assets are considered legally insulated whereas
others are not legally insulated from the General Account. As of December 31,
2012 and 2011, the Company's Separate Account statement included legally
insulated assets of $45,851,885,131 and $48,255,070,982, respectively.
Separate Account liabilities are determined in accordance with prescribed
actuarial methodologies, which approximate the market value less applicable
surrender charges. The resulting surplus is recorded in the General Account
Statements of Operations as a component of Net transfers from Separate Accounts.
The Company's Separate Accounts are non-guaranteed, wherein the policyholder
assumes substantially all the investment risks and rewards. Investment income
(including investment gains and losses) and interest credited to policyholders
on Separate Account assets are not separately reflected in the Statements of
Operations.
Separate Account fees, net of minimum guarantees, were $971,069,837,
$1,095,419,763 and $1,172,978,000 for the years ended December 31, 2012, 2011
and 2010, respectively, and are recorded as a component of fee income on the
Company's Statements of Operations.
F-38
<Page>
An analysis of the Separate Accounts as of December 31, 2012 is as follows:
<Table>
<Caption>
NONINDEXED
GUARANTEED NONINDEXED
LESS THAN GUARANTEED NONGUARANTEED
OR EQUAL MORE THAN SEPARATE
INDEXED TO 4% 4% ACCOUNTS TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
Premium considerations or deposits for $ -- $ -- $ -- $905,791,935 $905,791,935
the year ended 2012:
---- ---- ---- ----------------- -----------------
Reserves @ year-end:
For accounts with assets at:
Fair value -- -- -- 45,201,230,236 45,201,230,236
Amortized cost -- -- -- -- --
---- ---- ---- ----------------- -----------------
TOTAL RESERVES -- -- -- 45,201,230,236 45,201,230,236
---- ---- ---- ----------------- -----------------
By withdrawal characteristics:
Subject to discretionary withdrawal -- -- -- -- --
With fair value adjustment -- -- -- -- --
At book value without fair value -- -- -- -- --
adjustment and with surrender charge
of 5% or more
At fair value -- -- -- 45,070,354,835 45,070,354,835
At book value without fair value -- -- -- -- --
adjustment and with surrender charge
of less than 5%
---- ---- ---- ----------------- -----------------
SUBTOTAL -- -- -- 45,070,354,835 45,070,354,835
Not subject to discretionary -- -- -- 130,875,401 130,875,401
withdrawal
---- ---- ---- ----------------- -----------------
TOTAL $ -- $ -- $ -- $ 45,201,230,236 $ 45,201,230,236
---- ---- ---- ----------------- -----------------
</Table>
Below is the reconciliation of Net transfers from Separate Accounts as of
December 31,
<Table>
<Caption>
2012 2011 2010
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
Transfer to Separate Accounts $905,791,935 $866,204,030 $1,066,846,000
Transfer from Separate Accounts 8,502,888,504 8,302,354,037 7,208,445,000
----------------- ----------------- -----------------
Net transfer from Separate Accounts (7,597,096,569) (7,436,150,007) (6,141,599,000)
Internal exchanges and other Separate Account activity (4,353,290) (10,460,311) (2,822,000)
----------------- ----------------- -----------------
Transfer from Separate Accounts on the Statements of $(7,601,449,859) $(7,446,610,318) $(6,144,421,000)
Operations
----------------- ----------------- -----------------
</Table>
12. COMMITMENTS AND CONTINGENT LIABILITIES
(A) LITIGATION
The Company is or may become involved in various legal actions, some of which
assert claims for substantial amounts. Management expects that the ultimate
liability, if any, with respect to such lawsuits, after consideration of
provisions made for estimated losses and costs of defense, will not be material
to the financial condition of the Company.
(B) GUARANTY FUNDS
In all states, insurers licensed to transact certain classes of insurance are
required to become members of a guaranty fund. In most states, in the event of
the insolvency of an insurer writing any such class of insurance in the state,
members of the funds are assessed to pay certain claims of the insolvent
insurer. A particular state's fund assesses its members based on their
respective written premiums in the state for the classes of insurance in which
the insolvent insurer was engaged. Assessments are generally limited for any
year to one or two percent of premiums written per year, depending on the state.
F-39
<Page>
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
pursuant to these laws may be used as credits for a portion of the associated
premium taxes. The Company paid guaranty fund assessments of approximately
$41,397 (which includes refunds received), $777,869 and $166,851 in 2012, 2011
and 2010 respectively, of which $202,259, $694,413 and $34,365 in 2012, 2011 and
2010 respectively, increased the creditable amount against premium taxes. The
Company has a guaranty fund receivable of $3,635,667 and $3,433,408 as of
December 31, 2012 and 2011, respectively.
(C) LEASES
As discussed in Note 8, transactions with The Hartford include rental facilities
and equipment. Rent paid by the Company to The Hartford for its share of space
occupied and equipment used by The Hartford's life insurance companies was
$7,635,952, $8,039,174 and $6,941,575 in 2012, 2011 and 2010, respectively.
Future minimum rental commitments are as follows:
<Table>
<S> <C>
2013 $4,807,155
2014 3,331,208
2015 2,612,822
2016 1,943,629
2017 1,202,669
-------------
Total $13,897,483
-------------
</Table>
The principal executive office of the Company, together with its parent and
other life insurance affiliates, is located in Simsbury, Connecticut. In the
first quarter of 2010, the Company's indirect parent, Hartford Life and Accident
Insurance Company, purchased its headquarters property for $46 million.
(D) TAX MATTERS
The Company or one or more of its subsidiaries files income tax returns in the
U.S. federal jurisdiction, and various state and foreign jurisdictions. The
Company is no longer subject to U.S. federal, state and local, or non-U.S.
income tax examinations for years prior to 2007. The audit of the years
2007-2009 commenced during 2010 and is expected to conclude by the end of 2013,
with no material impact on the consolidated financial condition or results of
operations. The 2010-2011 audit commenced in the fourth quarter of 2012 and is
expected to conclude by the end of 2014. Management believes that adequate
provision has been made in the financial statements for any potential
assessments that may result from tax examinations and other tax-related matters
for all open tax years.
The Company's unrecognized tax benefits are settled with the parent consistent
with the terms of the tax sharing agreement described above.
The Separate Account dividend received deduction ("DRD") is estimated for the
current year using information from the most recent return, adjusted for current
year equity market performance and other appropriate factors, including
estimated levels of corporate dividend payments and level of policy owner equity
account balances. The actual current year DRD can vary from estimates based on,
but not limited to, changes in eligible dividends received in the mutual funds,
amounts of distributions from these mutual funds, amounts of short-term capital
gains at the mutual fund level and the Company's taxable income before the DRD.
The Company recorded benefits of $83,835,300, $119,417,997 and $88,631,465
related to the Separate Account DRD for the years ended December 31, 2012, 2011
and 2010, respectively. These amounts included benefits (charges) related to
prior years' tax returns of $(5,164,700), $938,384 and $(4,168,534) in 2012,
2011 and 2010, respectively.
The Company receives a foreign tax credit for foreign taxes paid including
payments from its Separate Account assets. This credit reduces the Company's
U.S. tax liability. The Separate Account foreign tax credit is estimated for the
current year using information from the most recent filed return, adjusted for
the change in the allocation of Separate Account investments to the
international equity markets during the current year. The actual current year
foreign tax credit can vary from the estimates due to actual foreign tax credits
passed through from the mutual funds. The Company recorded benefits of
$6,614,650, $6,751,856, and $2,396,560 related to Separate Account foreign tax
credit in the years ended December 31, 2012, 2011 and 2010, respectively.
(E) FUNDING OBLIGATIONS
At December 31, 2012, the Company had outstanding commitments totaling
$2,189,520 of which $2,189,520 is committed to fund limited partnership
investments, which may be called by the partnership during the commitment period
(on average 2 to 4 years) to fund working capital needs or to purchase new
investments. Once the commitment period expires, the Company is under no
obligation to fund the remaining unfunded commitment but may elect to do so.
F-40
<Page>
13. CORRECTION OF ERRORS
In 2010, the Company reviewed its approach with regard to the calculation of the
deferred premium asset ("DPA"), utilizing guidance provided by New York Circular
No. 11 (2010). As a result of this review, the Company determined that it had
overstated the DPA as a result of using statutory net valuation premium for
policies with a deficiency reserve where gross premium should have been used as
a basis for establishing the DPA as guided by SSAP No. 51 (Life Contracts). This
method was the outcome of a 1997 State of Connecticut audit. The Company also
had not reflected ceded DPA amounts nor established an asset for prepaid
reinsurance amounts as guided in SSAP No. 61 (Life, Deposit-Type and Accident
and Health Reinsurance).
The Company recorded an adjustment to "Capital and Surplus" of $(7,208,000) in
2010 representing the cumulative effect of this change in calculation and
accounting for the DPA. The adjustment to "Capital and Surplus" was recorded in
"Unassigned Funds" as follows: $14,571,000 in "Change in nonadmitted assets" and
$(21,779,000) in "Correction of prior year error." The change in calculation and
accounting decreased net income by approximately $0 and $1,973,000, for 2011 and
2010, respectively. The effect was immaterial to the Company's Assets,
Liabilities and Capital and Surplus for the periods ending December 31, 2011 and
2010.
14. SALES OF AFFILIATES
During the fourth quarter of 2010, the Company completed the sales of its
indirect wholly-owned subsidiaries Hartford Investments Canada Corporation
("HICC") and Hartford Advantage Investment, Ltd. ("HAIL"). The Company received
cash proceeds of $19,704,000 for the sale of HICC and $20,043,000 for the sale
of HAIL.
On November 30, 2012, the Company completed the sale of Woodbury Financial
Services, Inc. ("Woodbury Financial Services", "WFS"), a wholly-owned
subsidiary, to AIG Advisor Group, Inc. ("AIG Advisor Group"), a subsidiary of
American International Group, Inc. The disposition resulted in a gain of $37
million before tax.
15. SUBSEQUENT EVENTS
The Company has evaluated events subsequent to December 31, 2012, through April
10, 2013, the date the financial statements were available to be issued. The
Company has not evaluated subsequent events after that date for presentation in
these financial statements.
On January 2, 2013, The Hartford completed the sale of its Individual Life
insurance business to The Prudential Insurance Company of America
("Prudential"), a subsidiary of Prudential Financial, Inc. for consideration
consisting primarily of a ceding commission of which $457 million, before tax,
was allocated to the Company. The transaction resulted from The Hartford's
strategic business realignment announced in March 2012. The sale was structured
as a reinsurance transaction and is estimated to result in a before tax gain
greater than $1.0 billion consisting of a reinsurance gain and
investment-related gains, and an estimated increase to surplus greater than $1.0
billion, before tax. A reinsurance gain of approximately $600 million will be
deferred and amortized over 20 years as earnings are estimated to emerge from
the business reinsured. Upon closing, the Company reinsured $7.1 billion of
policyholder liabilities and $3.8 billion of separate account liabilities under
an indemnity reinsurance agreement. The Company also transferred invested assets
(excluding cash) with a statement value of $5.1 billion to Prudential. These
amounts are subject to change pending final determination of the net assets
sold, transaction costs and other adjustments.
The Company simultaneously recaptured the individual life insurance assumed by
an affiliate, Champlain Life Reinsurance Company ("Champlain"). As a result, on
January 2, 2013, the Company re-assumed all of the life reserves and claims
payable totaling $3.0 billion from Champlain; Champlain returned the funds
withheld totaling $2.8 billion to the Company; the Company paid a recapture fee
of $347 million to Champlain; and, the Company ceded the recaptured reserves to
Prudential. The amounts resulting from the transaction with Prudential disclosed
above include the release of the Company's remaining deferred gain of $167
million, deferred at the inception of the reinsurance to Champlain, from
restricted surplus.
On February 5, 2013, the Company received permission from the Commissioner to
pay an extraordinary dividend of $1,050,000,000 to its parent, HLIC. The Company
paid this return of capital on February 22, 2013.
F-41
<Page>
PART C
<Page>
OTHER INFORMATION
ITEM 26. EXHIBITS
(a) Resolution of the Board of Directors of Hartford Life and Annuity Insurance
Company ("Hartford")
authorizing the establishment of the Separate Account.(1)
(b) Not Applicable.
(c) Principal Underwriting Agreement.(2)
(d) Form of Flexible Premium Variable Life Insurance Policy.(3)
(1) Accelerated Death Benefit Rider(6)
(2) Accidental Death Benefit Rider(6)
(3) Child Insurance Rider(6)
(4) Cost of Living Adjustment Rider(6)
(5) Deduction Amount Waiver Rider(6)
(6) Term Insurance Rider(6)
(7) Waiver of Specified Amount Disability Benefit Rider(6)
(e) Form of Application for Flexible Premium Variable Life Insurance
Policies.(3)
(f) Certificate of Incorporation of Hartford and Bylaws of Hartford.(4)
(g) Contracts of Reinsurance.
(1) Canada Life Assurance Company(6)
(i) Amendment Nos. 5, 7 through 9
(ii) Amendment Nos. 4 through 6
(2) Swiss RE Life & Health America, Inc.(6)
(i) Amendment Nos. 10 through 13
(3) Transamerica Life Insurance Company(6)
(i) Amendment Nos. 7 through 14
(h) Participation Agreements and Amendments
(1) AllianceBernstein Variable Products Series Fund, Inc.(6)
(2) American Funds Insurance Series(6)
(i) Amendment No. 6
(3) Fidelity Variable Insurance Products(6)
(4) Franklin Templeton Variable Products Trust(6)
(5) Hartford Series Fund, Inc. and Hartford Series Fund II, Inc.(6)
(6) Invesco Variable Insurance Funds(6)
(7) Lord Abbett Series Fund, Inc.(6)
(8) MFS Variable Insurance Trust(6)
(9) Oppenheimer Variable Account Funds(6)
(10) Putnam Variable Trust(6)
(11) The Universal Institutional Funds, Inc.(6)
(i) Guarantee Agreement, between Hartford Life and Accident Insurance
Company and ITT Hartford Life and Annuity Insurance Company, its wholly
owned subsidiary, dated as of August 20, 1993 and effective as of
August 20, 1993.(5)
(ii) Guarantee Agreement, between Hartford Life Insurance Company and
ITT Hartford Life and Annuity Insurance Company, dated as of May 23,
1997.(5)
(i) Administrative Agreements and Amendments
<Page>
(1) Fidelity Variable Insurance Products(6)
(2) Franklin Templeton(6)
(3) Hartford Series Fund, Inc. and Hartford Series Fund II, Inc.(6)
(4) Invesco Variable Insurance Funds(6)
(5) Lord Abbett Series Fund, Inc.(6)
(6) The Universal Institutional Funds, Inc.(6)
(7) The Prudential Insurance Company of America
(j) Not Applicable.
(k) Opinion and Consent of Lisa M. Proch, Vice President and Assistant General
Counsel.
(l) Not Applicable.
(m) Not Applicable.
(n) (1) Consent of Independent Registered Public Accounting Firm
(2) Consent of Independent Auditors
(3) Copy of Power of Attorney.
(o) No financial statement will be omitted.
(p) Not Applicable.
(q) Memorandum describing transfer and redemption procedures.(7)
------------
(1) Incorporated by reference to Pre-Effective Amendment No. 1 to the
Registration Statement on Form S-6, File No. 33-61627, filed with the
Securities and Exchange Commission on January 23, 1996.
(2) Incorporated by reference to Post-Effective Amendment No. 9 to the
Registration Statement on Form N-6, File No. 333-148814, filed with the
Securities and Exchange Commission on April 23, 2012.
(3) Incorporated by reference to Pre-Effective Amendment No. 1 to the
Registration Statement on Form S-6, File No. 333-82866, on May 22, 2002.
(4) Incorporated by reference to Post-Effective Amendment No. 11 to the
Registration Statement on Form N-6, File No. 333-148816, filed with the
Securities and Exchange Commission on April 23, 2012.
(5) Incorporated by reference to Post-Effective Amendment No. 9, to the
Registration Statement on Form N-4, File No. 333-148565, filed on May 3,
2010.
(6) Incorporated by reference to Post-Effective Amendment No. 23 to the
Registration Statement on Form N-6, File No. 333-82866, filed with the
Securities and Exchange Commission on April 23, 2012.
(7) Incorporated by reference to Post-Effective Amendment No. 10 to the
Registration Statement on Form N-6, File No. 333-148814, filed with the
Securities and Exchange Commission on April 22, 2013.
<Page>
ITEM 27. OFFICERS AND DIRECTORS.
<Page>
<Table>
<Caption>
NAME POSITION WITH HARTFORD
<S> <C>
------------------------------------------------------------------------------------------------------------------
Lydia M. Anderson (1) Vice President
Thomas S. Barnes Vice President
Beth A. Bombara (1) Chief Executive Officer, President, Chairman of the Board, Director*
John B. Brady Actuary, Vice President
David A. Bulin Vice President
Thomas A. Campbell Actuary, Vice President
Jennifer Centrone Vice President
Michael R. Chesman (1) Senior Vice President
Michael Concannon (1) Executive Vice President
Ellen Conway Vice President
Robert A. Cornell Actuary, Vice President
Rochelle S. Cummings Vice President
James Davey Executive Vice President
George Eknaian Senior Vice President
Mark A. Esposito (1) Senior Vice President
Michael Fish Actuary, Vice President
John W. Gallant Vice President
Richard Guerrini Vice President
Christopher J. Hanlon (1) Senior Vice President
Stephen B. Harris (1) Vice President
Michael R. Hazel Vice President, Controller
Elizabeth Horvath Actuary, Vice President
Penelope A. Hrib (2) Actuary, Vice President
Charles E. Hunt (1) Vice President
Donald C. Hunt (1) Assistant Secretary, Vice President
Donna R. Jarvis Actuary, Vice President
Kathleen E. Jorens (1) Assistant Treasurer, Vice President
Michael Knipper (1) Senior Vice President
Alan J. Kreczko (1) Executive Vice President, General Counsel
William P. Meaney (1) Senior Vice President
Thomas Moran (1) Director of Taxes, Senior Vice President
Craig D. Morrow Appointed Actuary, Vice President
Mark J. Niland (1) Senior Vice President, Director*
Robert W. Paiano (1) Treasurer, Senior Vice President, Director*
Brian Pedersen Vice President
Colleen B. Pernerewski Vice President, Chief Compliance Officer of Individual Annuity, Chief
Compliance Officer of Separate Accounts
Glen-Roberts Pitruzzello (1) Vice President
Robert E. Primmer Senior Vice President
Sharon A. Ritchey Executive Vice President
David C. Robinson (1) Senior Vice President
Peter F. Sannizzaro Senior Vice President, Chief Accounting Officer, Chief Financial Officer
Terence Shields (1) Assistant Vice President, Corporate Secretary
Mark M. Socha (1) Vice President
Jahn Marie Surette Senior Vice President and Chief Procurement Officer
Martin A. Swanson Vice President
Connie Tang (1) Actuary, Vice President
Diane E. Tatelman Vice President
Anthony Vidovich (1) Vice President
James M. Yanosy (1) Senior Vice President
</Table>
<Page>
------------
Unless otherwise indicated, the principal business address of each of the above
individuals is 200 Hopmeadow Street, Simsbury, CT 06089.
* Denotes Board of Directors.
(1) Address: One Hartford Plaza, Hartford, CT 06155
(2) Address: 100 Campus Drive, Florham Park, NJ 07932-1006
<Page>
ITEM 28. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
Incorporated by reference to Post-Effective Amendment No. 10 to the
Registration Statement, File No. 333-148814, filed April 22, 2013.
ITEM 29. INDEMNIFICATION
Section 33-776 of the Connecticut General Statutes states that: "a
corporation may provide indemnification of, or advance expenses to, a
director, officer, employee or agent only as permitted by sections 33-770
to 33-779, inclusive."
ARTICLE VIII, Section 1(a) of the By-laws of the Depositor (as amended and
restated effective July 25, 2000) provides that the Corporation, to the
fullest extent permitted by applicable law as then in effect, shall
indemnify any person who was or is a director or officer of the Corporation
and who was or is threatened to be made a defendant or respondent in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, arbitrative or investigative and whether formal
or informal (including, without limitation, any action, suit or proceeding
by or in the right of the Corporation to procure a judgment in its favor)
(each, a "Proceeding"), by reason of the fact that such a person was or is
a director or officer of the Corporation or, while a director or officer of
the Corporation, is or was serving at the request of the Corporation as a
director, officer, partner, trustee, employee or agent of another domestic
or foreign corporation, partnership, joint venture, trust, employee benefit
plan or other entity (a "Covered Entity"), against all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement and
actually and reasonably incurred by such person in connection with such
Proceeding. Any such former or present director or officer of the
Corporation finally determined to be entitled to indemnification as
provided in this Article VIII is hereinafter called an "Indemnitee". Until
such final determination is made such former or present director or officer
shall be a "Potential Indemnitee" for purposes of this Article VIII.
Notwithstanding the foregoing provisions of this Section 1(a), the
Corporation shall not indemnify an Indemnitee with respect to any
Proceeding commenced by such Indemnitee unless the commencement of such
Proceeding by such Indemnitee has been approved by a majority vote of the
Disinterested Directors (as defined in Section 5(d)); provided however,
that such approval of a majority of the Disinterested Directors shall not
be required with respect to any Proceeding commenced by such Indemnitee
after a Change in Control (as defined in Section 5(d)) has occurred.
Insofar as indemnification for liability arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<Page>
ITEM 30. PRINCIPAL UNDERWRITERS
(a) HESCO acts as principal underwriter for the following investment
companies:
Hartford Life Insurance Company - Separate Account VL I
Hartford Life Insurance Company - Separate Account VL II
Hartford Life Insurance Company - ICMG Secular Trust Separate Account
Hartford Life Insurance Company - ICMG Registered Variable Life Separate
Account A
Hartford Life and Annuity Insurance Company - Separate Account VL I
Hartford Life and Annuity Insurance Company - Separate Account VL II
Hartford Life and Annuity Insurance Company - ICMG Registered
Variable Life Separate Account One
<Page>
(b) Directors and Officers of HESCO
<Table>
<Caption>
POSITIONS AND OFFICES
NAME WITH UNDERWRITER
<S> <C>
----------------------------------------------------------------------------------------------------------
Diana Benken (1) Chief Financial Officer and Controller/FINOP
Christopher S. Connor (4) AML Officer & Chief Compliance Officer
Michael J. Fixer (2) Assistant Treasurer & Assistant Vice President
Denise Gagnon (1) Privacy Officer
Sarah J. Harding (2) Assistant Secretary
Audrey E. Hayden (2) Assistant Secretary
Michael R. Hazel (1) Assistant Vice President
Kathleen E. Jorens (2) Vice President & Assistant Treasurer
Robert W. Paiano (2) Senior Vice President, Treasurer
Cathleen Shine (1) Secretary
Diane E. Tatelman (2) Vice President/Corporate Tax
Eamon J. Twomey (3) Vice President and Chief Operating Officer
Jane Wolak (1) Director
Melinda Zwecker (2) Assistant Vice President
</Table>
------------
The principal business address of each of the above individuals are:
(1) 200 Hopmeadow Street, Simsbury, CT 06089
(2) One Hartford Plaza, Hartford, CT 06155
(3) 1 Griffin Road North, Windsor, CT 06095
(4) 100 Matsonford Road, Radnor, PA 19087
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS
All of the accounts, books, records or other documents required to be kept
by Section 31(a) of the Investment Company Act of 1940 and rules
thereunder, are maintained by the following:
<Table>
<S> <C>
The Hartford 200 Hopmeadow Street, Simsbury, CT 06089
Hartford Equity Sales Company, Inc. 200 Hopmeadow Street, Simsbury, CT 06089
The Prudential Insurance Company of America 200 Hopmeadow Street, Simsbury, CT 06089
The Prudential Insurance Company of America 213 Washington Street, Newark, NJ 07102
</Table>
ITEM 32. MANAGEMENT SERVICES
On January 2, 2013, Hartford Life Insurance Company and Hartford Life and
Annuity Insurance Company (collectively, "Hartford") entered into
agreements with The Prudential Insurance Company of America ("Prudential")
under which Prudential will reinsure the obligations of Hartford under the
variable life insurance policies and provide administration for the
policies.
ITEM 33. REPRESENTATION OF REASONABLENESS OF FEES
Hartford hereby represents that the aggregate fees and charges under the
Policy are reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by Hartford.
<Page>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all the requirements
for effectiveness of this Registration Statement pursuant to Rule 485(b) under
the Securities Act of 1933 and has duly caused this Registration Statement to be
signed on its behalf, in the Town of Simsbury, and State of Connecticut on this
22nd day of April, 2013.
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
SEPARATE ACCOUNT VL I
(Registrant)
<Table>
<S> <C> <C> <C>
By: Beth A. Bombara* *By: /s/ Sun-Jin Moon
----------------------------------- -----------------------------------
Beth A. Bombara, Sun-Jin Moon
President, Chief Executive Officer Attorney-in-Fact
and Chairman of the Board,
Director*
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
(Depositor)
<Table>
<S> <C>
By: Beth A. Bombara*
-----------------------------------
Beth A. Bombara,
President, Chief Executive Officer
and Chairman of the Board,
Director*
</Table>
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons and in the capacities and on
the dates indicated.
<Table>
<S> <C> <C>
Beth A. Bombara, President, Chief Executive Officer,
Chairman of the Board, Director*
Mark J. Niland, Senior Vice President, Director* *By: /s/ Sun-Jin Moon
-----------------------------------
Robert W. Paiano, Senior Vice President, Treasurer, Sun-Jin Moon
Director* Attorney-in-Fact
Peter F. Sannizzaro, Senior Vice President, Date: April 22, 2013
Chief Accounting Officer, Chief Financial Officer*
</Table>
333-82866
<Page>
(g) Contracts of Reinsurance
(1) Canada Life Assurance Company
(i) Amendment Nos. 5, 7 through 9
(ii) Amendment Nos. 4 through 6
(2) Swiss Re Life & Health America, Inc.
(i) Amendment Nos. 10 through 13
(3) Transamerica Life Insurance Company
(i) Amendment Nos. 7 through 14
(4) The Prudential Insurance Company of America
(h) Fund Participation Agreements and Amendments
(2) (i) American Funds Insurance Series -- Amendment No. 6
(i) (7) The Prudential Insurance Company of America
(k) Opinion and consent of Lisa M. Proch, Vice President and Assistant General
Counsel.
(n) (1) Consent of Independent Registered Public Accounting Firm
(n) (2) Consent of Independent Auditors
(n) (3) Copy of Power of Attorney
<Page>
AMENDMENT 5
EFFECTIVE SEPTEMBER 1, 2010
TO THE
AUTOMATIC MONTHLY RENEWABLE TERM
REINSURANCE AGREEMENT FOR NON-EXCESS RISKS
EFFECTIVE OCTOBER 1, 2008
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
THE CANADA LIFE ASSURANCE COMPANY ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer wish to confirm the Reinsurer's
coverage for policies issued under the Issue First policy issuance program.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer hereby agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. Article III is hereby amended to include the following item 8:
8. The Ceding Company may issue policies on an Automatic Reinsurance
basis through its Issue First policy issuance program. Issue First
is a program under which a policy can be issued before the
underwriting process has been completed.
If policies issued under the Issue First program do not meet the
requirements for Automatic Reinsurance set forth above, they will be
deemed automatically reinsured as long they meet the additional
requirements for Issue First that are documented in the Ceding
Company's InfoBase data system.
Changes to the Issue First program will be handled in accordance with
Section XXII.L.
3. Policies under the Issue First Program that are deemed to be uninsurable
based on medical evidence will be reinsured using the Reinsurance Premiums
set out in Exhibit I. Exhibit I is deleted in its entirety and replaced
with the attached revised Exhibit I.
4. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between ILA and Canada Life
Amendment 5 -- Effective 09/01/2010
1
<Page>
In witness of the foregoing, the Ceding Company and the Reinsurer have, by their
respective officers, executed this Amendment in duplicate on the dates indicated
below.
THE CANADA LIFE ASSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ John Occleshaw By: /s/ Jean-Francois Poulin
-------------------------------------- ---------------------------------------
Name: John Occleshaw, MA FIA Name: Jean-Francois Poulin, FSA, FCIA
Title: Senior Vice-President Reinsurance Title: Senior Vice President Life Reinsurance
Date: October 18, 2012 Date: October 24, 2012
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Michael Roscoe
-------------------------------------- ---------------------------------------
Name: Paul Fischer, FSA, MAAA Name: Michael Roscoe, FSA, MAAA
Title: Assistant Vice President and Actuary Title: Senior Vice President
Individual Life Product Management Individual Life Product Management
Date: 10-26-2012 Date: 10/31/12
</Table>
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between ILA and Canada Life
Amendment 5 -- Effective 09/01/2010
2
<Page>
EXHIBIT I
REINSURANCE PREMIUM CALCULATION
EFFECTIVE SEPTEMBER 1, 2010
FOR SINGLE LIFE PLANS OF INSURANCE
REINSURANCE PREMIUM
YEARLY RENEWABLE TERM (YRT) REINSURANCE PREMIUM
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between ILA and Canada Life
Amendment 5 -- Effective 09/01/2010
3
<Page>
FOR SINGLE LIFE PLANS OF INSURANCE
POLICIES UNDER THE ISSUE FIRST PROGRAM THAT ARE DEEMED TO BE UNINSURABLE BASED
ON MEDICAL EVIDENCE
The Ceding Company will determine a life expectancy for an insured who would
otherwise be deemed uninsurable. Reinsurance Premiums will be calculated as per
above based on the Standard Non-Nicotine or Standard Nicotine base YRT premium
plus an extra premium to cover an actuarially equivalent mortality risk for this
life expectancy. This extra premium may be in the form of a Substandard Table
percentage and/or a Flat Extra Premium.
ANNUAL FLAT EXTRA REINSURANCE PREMIUM
The Annual Flat Extra Reinsurance Premium for each coverage equals {(i) x [
1-(ii) ] x [(iii) / 1,000]}, where:
(i) equals the applicable annual flat extra rate per 1,000, for the year of
coverage, that the Ceding Company charges for the coverage;
(ii) equals the Flat Extra Allowance Percentage, specified below; and
(iii) equals the Reinsured Net Amount At Risk for such coverage, defined in
Schedule B.
FLAT EXTRA ALLOWANCE PERCENTAGE
<Table>
<Caption>
DURATION OF FLAT EXTRA FIRST YEAR RENEWAL YEARS
<S> <C> <C>
--------------------------------------------------------
Less than 5 years
5 years or longer
</Table>
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between ILA and Canada Life
Amendment 5 -- Effective 09/01/2010
4
<Page>
FOR LAST SURVIVOR PLANS OF INSURANCE
REINSURANCE PREMIUM
Reinsurance Premium shall be calculated each month for each risk reinsured as
[(i) x (ii) / 1,000] / 12, where:
(i) equals the result of the following steps:
(ii) equals the Reinsured Net Amount at Risk for the coverage, defined in
Schedule B.
For the purposes of calculating Reinsurance Premium, the following will be
considered separate coverages: base policy, increases in coverage, and reinsured
riders. Reinsurance Premium for a single life rider attached to a last survivor
policy shall be determined in accordance with the Reinsurance Premium
calculations for single life plans of insurance.
YRT REINSURANCE PREMIUM RATE PER 1,000*
The YRT Reinsurance Premium Rate per 1,000 for each life for each coverage shall
equal (i) x (ii) + (iii), but in no event more than 1,000, where:
(i) equals the quantity [ (a) x (b) ], where:
(a) equals the applicable rate from the tables of Annual Rates per
$1,000 of Reinsured Net Amount at Risk specified in Exhibit III; and
(b) equals the applicable percentage from the tables of YRT Reinsurance
Rate Factors to be Applied to the Annual Rates per $1,000 of
Reinsured Net Amount at Risk specified in Exhibit IV;
(ii) equals the applicable Substandard Table Percentage, specified in Exhibit V,
for the risk; and
(iii) equals the Annual Flat Extra Reinsurance Premium per 1,000, as defined
below.
* For purposes of determining the YRT Reinsurance Premium Rate per 1,000, a
life deemed uninsurable will be treated as Table P for 20 years with a $250
flat extra for 10 years.
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between ILA and Canada Life
Amendment 5 -- Effective 09/01/2010
5
<Page>
FOR LAST SURVIVOR PLANS OF INSURANCE
ANNUAL FLAT EXTRA REINSURANCE PREMIUM PER 1,000
The Annual Flat Extra Reinsurance Premium per 1,000 for each coverage equals
{(i) x [ 1 - (ii)]}, where:
(i) equals the applicable annual flat extra rate per 1,000, for the year of
coverage, that the Ceding Company charges for the coverage; and
(ii) equals the Flat Extra Allowance Percentage, specified below.
FLAT EXTRA ALLOWANCE PERCENTAGE
<Table>
<Caption>
DURATION OF FLAT EXTRA FIRST YEAR RENEWAL YEARS
<S> <C> <C>
--------------------------------------------------------
Less than 5 years
5 years or more
</Table>
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between ILA and Canada Life
Amendment 5 -- Effective 09/01/2010
6
<Page>
AMENDMENT 7
EFFECTIVE OCTOBER 1, 2008
TO THE
AUTOMATIC MONTHLY RENEWABLE TERM REINSURANCE
AGREEMENT FOR NON-EXCESS RISKS
EFFECTIVE OCTOBER 1, 2008
("EFFECTIVE DATE")
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
THE CANADA LIFE ASSURANCE COMPANY ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer (collectively, the "Parties")
agree that the Agreement was implemented using YRT Reinsurance Rate Factors
("Factors") which proved to be incorrect; and
WHEREAS, the Parties agreed, in Amendment 1, to incorporate revised Factors in
Exhibit IV "YRT Reinsurance Rate Factors" as of the Effective Date, with the
revised Factors being implemented as follows:
(a) For billing transactions appearing in the November 2010 reinsurance billing
statement and thereafter, the Ceding Company had applied the revised
Factors; and
(b) For billing transactions reported to the Reinsurer prior to the November
2010 reinsurance billing statement, the Ceding Company paid the Reinsurer a
one-time payment in the amount of to correct the discrepancy which
resulted from the Ceding Company's application of the initial Factors; and
WHEREAS, the Ceding Company did remit to the Reinsurer a one-time payment in the
amount of to correct the discrepancy and such amount represented the
aggregate amount of correction for the following agreements, all effective
October 1, 2008:
(a) Automatic Monthly Renewable Term Reinsurance for Non-Excess Risks between
Hartford Life and Annuity Insurance Company and The Canada Life Assurance
Company;
(b) Automatic Monthly Renewable Term Reinsurance for Non-Excess Risks between
Hartford Life Insurance Company and The Canada Life Assurance Company;
(c) Automatic and Facultative Monthly Renewable Term Reinsurance Agreement for
Excess Risks between Hartford Life and Annuity Insurance Company and The
Canada Life Assurance Company; and
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 7 -- Effective 10/01/2008
1
<Page>
(d) Automatic and Facultative Monthly Renewable Term Reinsurance Agreement for
Excess Risks between Hartford Life Insurance Company and The Canada Life
Assurance Company; and
WHEREAS, notwithstanding the agreement of the Parties in Amendment 1 that the
above-mentioned one-time payment would be the full and final settlement
regarding this matter, the Parties now wish to recalculate all billing
transactions from the Effective Date using the revised Factors; and
WHEREAS, notwithstanding the agreement of the Parties in Amendment 1 that the
Ceding Company would not alter its administrative systems, the Parties now agree
that the Ceding Company shall alter its administrative systems to enable the
recalculation of premium.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer hereby agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. The Reinsurer shall make a refund to the Ceding Company in the amount of
representing the aggregate amount of correction.
3. The Ceding Company shall recalculate all billing transactions from the
Effective Date and pay the Reinsurer accordingly.
4. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
In witness of the foregoing, the Parties have, by their respective authorized
officers, executed this Amendment in duplicate, each of which shall be deemed an
original but both of which together shall constitute one and the same
instrument, on the dates indicated below, with an effective date of October 1,
2008.
THE CANADA LIFE ASSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ John Occleshaw By: /s/ Jean-Francois Poulin
-------------------------------------- ---------------------------------------
Name: John Occleshaw, MA FIA Name: Jean-Francois Poulin, FSA, FCIA
Title: Senior Vice-President Reinsurance Title: Senior Vice President Life Reinsurance
Date: Jun 15 2012 Date: 6/18/12
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Donna R. Jarvis
-------------------------------------- --------------------------------
Name: Paul Fischer, FSA, MAAA Name: Donna R. Jarvis
Title: Assistant Vice President and Actuary Title: Vice President and Actuary
Individual Life Product Management
Date: 7-10-12 Date: July 10, 2012
</Table>
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 7 -- Effective 10/01/2008
2
<Page>
AMENDMENT 8
EFFECTIVE MARCH 1, 2012
TO THE
AUTOMATIC MONTHLY RENEWABLE TERM
REINSURANCE AGREEMENT FOR NON-EXCESS RISKS
EFFECTIVE OCTOBER 1, 2008
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
THE CANADA LIFE ASSURANCE COMPANY ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer wish to restate the definition of
Working Reserve for the Reinsured Net Amount at Risk to reflect that it is the
approximate value of the reserve net of other reinsurance arrangements held by
the Ceding Company; and
WHEREAS, the Ceding Company and the Reinsurer wish to acknowledge that Hartford
Bicentennial UL Freedom and Hartford Bicentennial UL Joint Freedom II will now
use NAR Type B only.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer hereby agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. Schedule A is hereby deleted in its entirety and replaced with the
attached, revised Schedule A.
3. Schedule B is hereby deleted in its entirety and replaced with the
attached, revised Schedule B.
4. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 8 -- Effective 03/01/2012
1
<Page>
In witness of the foregoing, the Ceding Company and the Reinsurer have, by their
respective officers, executed this Amendment in duplicate on the dates indicated
below.
THE CANADA LIFE ASSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ John Occleshaw By: /s/ Jean-Francois Poulin
---------------------------------------------- ----------------------------------------------
Name: John Occleshaw, MA FIA Name: Jean-Francois Poulin, FSA, FCIA
Title: Senior Vice-President Title: Senior Vice President
Reinsurance Life Reinsurance
Date: June 15 2012 Date: 6/18/12
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Donna R. Jarvis
---------------------------------------------- ----------------------------------------------
Name: Paul Fisher, FSA, MAAA Name: Donna R. Jarvis
Title: Assistant Vice President and Actuary Title: Vice President and Actuary
Individual Life Product Management
Date: 7-16-12 Date: July 16, 2012
</Table>
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 8 -- Effective 03/01/2012
2
<Page>
SCHEDULE A
PLANS OF INSURANCE COVERED UNDER THIS AGREEMENT
EFFECTIVE MARCH 1, 2012
SINGLE LIFE PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
Stag UL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Bicentennial UL Founders 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford UL CV 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Wall Street VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Protector II VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Legacy 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Stag Accumulator II VUL 1980 CSO M/F Unismoke Ultimate ALB A 10/01/2008
Hartford Leaders VUL Liberty (a) 1980 CSO M/F Unismoke Ultimate ANB A 10/01/2008
Hartford Leaders VUL Liberty (b) 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Life Solutions II UL (a) 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Life Solutions II UL (b) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Advanced Universal Life 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Freedom 2001 CSO M/F S/NS Ultimate ANB B*** 10/01/2008
Hartford Quantum II VUL (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Quantum II VUL (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Extraordinary Whole Life (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Extraordinary Whole Life (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Bicentennial UL Founders II 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Hartford Bicentennial UL Founders II Extended Value Option 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Hartford Frontier Indexed Universal Life 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Hartford Frontier Indexed Universal Life Extended Value 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Option
Hartford Founders Plus UL 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Hartford Founders Plus UL Extended Value Option 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
*** The version of this product launched on 7/1/2010 used NAR Type A prior to
3/1/2012. As of 3/1/2012, NAR Type B is used prospectively for all in force
and new policies.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
---------------------------------------------------------------------------
Primary Term Insured Rider 10/01/2008
Other Covered Insured Term Life Rider 10/01/2008
Cost of Living Adjustment (COLA) Rider 10/01/2008
</Table>
NOTE: NAR Type for term riders above is C. For COLA Rider, NAR Type follows Base
Policy to which it is attached.
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 8 -- Effective 03/01/2012
3
<Page>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
---------------------------------------------------------------------------
Accidental Death Benefit (ADB) Rider 10/01/2008
Accelerated Benefit Rider (ABR) 10/01/2008
LifeAccess Accelerated Benefit Rider (LAABR) 10/01/2008
Policy Continuation Rider 10/01/2008
Policy Protection Rider (PPR) 10/01/2008
Enhanced No Lapse Guarantee Rider 10/01/2008
Lifetime No Lapse Guarantee Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Conversion Option Rider 10/01/2008
Overloan Protection Rider 10/01/2008
Waiver of Specified Amount (WSA) Rider 10/01/2008
Waiver of Monthly Deductions (WMD) Rider 10/01/2008
Children's Life Insurance Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Estate Tax Repeal Benefit Rider 10/01/2008
Modified Surrender Value Rider 10/01/2008
Cash Surrender Value Endorsement 10/01/2008
Automatic Premium Payment Rider 10/01/2008
Additional Premium Rider 10/01/2008
Qualified Plan Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
DisabilityAccess Rider (DAR) 08/11/2009
LongevityAccess Rider 03/14/2011
LifeAccess Care Rider 04/11/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING ADDITIONAL DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Primary Insured Term Rider: Provides additional level term life coverage on the
base policy insured.
Other Covered Insured Term Life Rider: Provides level term life coverage on an
insured other than the base policy insured.
Cost of Living Adjustment (COLA) Rider: Provides for biennial face amount
increases, without underwriting, based on increases in the Consumer Price Index.
The maximum amount of any single increase is $50,000. Any increase can be
declined by the policyholder, which stops future increases. Available only at
issue and only for non-substandard issue ages 0 through 60.
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 8 -- Effective 03/01/2012
4
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE:
Accidental Death Benefit Rider: Pays an additional death benefit if the death on
the insured is caused by a qualifying accident.
Accelerated Benefit Rider: Provides the policyholder up to 100% of the death
benefit, discounted with interest, if the insured's life expectancy is 12 months
or less. After acceleration, the Ceding Company shall continue to pay the
Reinsurer Reinsurance Premiums on the Reinsured Net Amount at Risk as described
in Schedule B, and the Reinsurer shall be liable for such Reinsured Net Amount
at Risk upon the death of the insured.
LifeAccess Accelerated Benefit Rider (LAABR): Provides for monthly benefits (up
to 2% of death benefit) if insured meets certain ADL and home-care requirements.
In accordance with Schedule B, during and after acceleration, the Ceding Company
shall continue to pay the Reinsurer Reinsurance Premiums on the Reinsured Net
Amount at Risk based on the Death Benefit prior to acceleration, and the
Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the death
of the insured.
Policy Continuation Rider: Intended to prevent the lapse of highly loaned
policies.
Policy Protection Rider: Protects the death benefit of the base policy and any
primary insured term rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Enhanced No Lapse Guarantee Rider: Provides that the policy will not lapse as
long as cumulative premiums paid less indebtedness less withdrawals are greater
than or equal to the cumulative no lapse guarantee premiums. Length of guarantee
varies by issue age.
Lifetime No Lapse Guarantee Rider: Same as Enhanced No Lapse Guarantee Rider but
with lifetime guarantee.
Guaranteed Minimum Accumulation Benefit (GMAB) Rider: Provides, at the end of
the GMAB Guarantee Period (usually 20 years), that the policy Account Value will
be increased, if necessary, to equal the sum of gross premiums paid to that
date. There is a small monthly charge and a minimum cumulative premium
requirement to keep the rider in force.
Paid-Up Life Insurance Rider: Similar to the GMAB rider, with the same Guarantee
Period, a monthly charge, and a cumulative premium requirement. At end of the
Guarantee Period, the owner may elect to change coverage to paid-up life using
the Account Value as a 5% NSP to determine the amount of coverage; however, the
amount of coverage will never be lower than the sum of gross premiums paid to
that date. Once elected, premiums are no longer payable.
Conversion Option Rider: During certain policy years and prior to the insured's
attained age 70, the policy may be converted, without evidence of insurability,
to any permanent plan of life insurance the Ceding Company then makes available
for conversions of this policy.
Overloan Protection Rider: Protects a policy from terminating due to overloan.
Waiver of Specified Amount (WSA) Rider: Waives a specified amount monthly while
the insured is disabled.
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 8 -- Effective 03/01/2012
5
<Page>
Waiver of Monthly Deductions (WMD) Rider: Waives monthly deduction amounts while
the insured is disabled.
Children's Life Insurance Rider: Provides level term life coverage for each
child of the insured.
Foreign Travel Exclusion Rider: Provides a limited death benefit (Account Value
less indebtedness) if the insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Estate Tax Repeal Benefit Rider: Pays the policy Account Value less indebtedness
if the Federal Estate Tax Law is fully repealed by December 31, 2010, and the
Ceding Company receives a request for this benefit amount from the policy owner.
Modified Surrender Value Rider: Changes the Cash Surrender Value definition (to
equal the Account Value) if the policy is surrendered within 3 years after the
policy issue date.
Cash Surrender Value Endorsement: Provides for enhanced Cash Surrender Value
(equal to the current Account Value) in the event of policy surrender in the
first 4 policy years, unless the policy is exchanged under Section 1035 to
another company's policy.
Automatic Premium Payment Rider: Provides for any Scheduled Premium due and
unpaid by the end of any Policy Grace Period to be paid by an automatic
deduction from the Account Value, if the Account Value exceeds the Guaranteed
Cash Value.
Additional Premium Rider: Allows additional premium amounts to be paid at the
same payment intervals as scheduled premiums.
Qualified Plan Rider: Indicates that the policy is owned by a qualified plan,
details the policy owner's reporting responsibilities to the Ceding Company, and
describes features and activities that are unavailable when the policy is owned
by a Qualified Plan.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
Disability Access Rider (DAR): Pays a monthly benefit upon disability of the
primary insured on the life insurance policy to which it is attached. The amount
of monthly benefit is permanently set at rider issue and is limited to a
24-month benefit period. The maximum monthly benefit amount is $5,000; it is
further limited to 2% of the initial face amount or 30% of monthly income at
policy issue. The minimum monthly benefit is $1,000.
LongevityAccess Rider: Provides for monthly benefits (up to 1% of death benefit)
when the insured reaches age 90 and meets the rider's eligibility requirements.
Includes a residual death benefit of 10% of the death benefit prior to
withdrawals. In accordance with Schedule B, during and after withdrawals, the
Ceding Company shall continue to pay the Reinsurer Reinsurance Premiums on the
Reinsured Net Amount at Risk based on the Death Benefit prior to withdrawals,
and the Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the
death of the insured.
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 8 -- Effective 03/01/2012
6
<Page>
LifeAccess Care Rider: Similar to the LifeAccess Accelerated Benefit Rider, but
filed as a health product in some states. Provides for monthly benefits (up to
2% of death benefit) if insured meets certain ADL and home-care requirements.
LAST SURVIVOR PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
Hartford Leaders VUL Joint Legacy 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Joint Legacy II 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Advanced Last Survivor UL 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint Freedom 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint Freedom II 2001 CSO M/F S/NS Ultimate ANB B*** 10/01/2008
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
*** The version of this product launched on 7/1/2010 used NAR Type A prior to
3/1/2012. As of 3/1/2012, NAR Type B is used prospectively for all in force
and new policies.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Estate Protection Rider (NAR Type is C) 10/01/2008
</Table>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
LS Exchange Option Rider 10/01/2008
Policy Protection Rider 10/01/2008
Estate Tax Repeal Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
Joint LifeAccess Rider 01/31/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Estate Protection Rider: This rider provides last survivor level term life
insurance on the base policy insureds for three years.
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 8 -- Effective 03/01/2012
7
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS BUT THAT ARE NOT ELIGIBLE FOR
REINSURANCE:
LS Exchange Option Rider: Allows a Last Survivor policy to be split into two
Single Life policies, without new evidence of insurability, if divorce, business
dissolution, or estate-tax repeal or reduction occurs. The face amount of each
new Single Life policy will equal one half of the Last Survivor policy face
amount. Upon a split, reinsurance will continue at point-in-scale rates for each
single life, as documented in Section X.C. (This rider is not available when one
of the insureds is uninsurable or above Table H.)
Policy Protection Rider: Protects the death benefit of the base policy and any
Estate Protection Rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Estate Tax Repeal Rider: Will pay the Account Value less indebtedness if the
Federal Estate Tax Law is fully repealed by December 31, 2010, and the Ceding
Company receives a request for this benefit amount from the policy owner.
Foreign Travel Exclusion: Provides a limited death benefit (Account Value less
indebtedness) if either insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Guaranteed Minimum Accumulation Benefit Rider and Paid-Up Life Insurance Rider:
Same as Single Life riders.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
Joint LifeAccess Rider: Similar to the LifeAccess Accelerated Benefit Rider.
Available only on Last Survivor products where the benefit will be payable for
the last surviving insured if chronically ill or if both insureds are
concurrently chronically ill.
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 8 -- Effective 03/01/2012
8
<Page>
SCHEDULE B
REINSURANCE SPECIFICATIONS
EFFECTIVE MARCH 1, 2012
AUTOMATIC REINSURANCE: The Ceding Company shall retain its available retention
on each risk, defined below as the Retained Net Amount at Risk, subject to the
applicable Ceding Company's Treaty Retention Limit shown in Exhibit II.
The Reinsurer will automatically reinsure a portion of the remainder of the
risk, called the Reinsured Net Amount at Risk, as defined below in this Schedule
B, not to exceed the Reinsurer's Maximum Automatic Participation Limit, as set
forth in Exhibit II.
TOTAL ALLOCATION LIMIT (TAL): As shown in Exhibit II.
CEDING COMPANY'S TREATY RETENTION LIMIT (CCTRL): As shown in Exhibit II.
CEDING COMPANY'S ALLOCATED RETENTION (CCAR): As shown in Exhibit II.
CURRENT RETENTION (CURRRET) = Current amount of life insurance retained by the
Ceding Company and its affiliated companies on the life for in-force life
insurance coverage. (For Last Survivor risks, see the Last Survivor Limits and
Retention Worksheet in Exhibit II.)
REINSURER'S ALLOCATED RETENTION (REINSARET): As shown in Exhibit II.
REINSURER'S ATTACHMENT POINT (REINSAPT): As shown in Exhibit II.
NAR TYPE for the Plan of Insurance to be reinsured under this Agreement, as
shown in Schedule A.
STEP 1 -- DETERMINE TOTAL NET AMOUNT AT RISK FOR THE COVERAGE
TOTAL NET AMOUNT AT RISK (TOTNAR)* =
For NAR TYPE A, Death Benefit minus the Account Value.
For NAR TYPE B, Death Benefit minus the Working Reserve, where
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 8 -- Effective 03/01/2012
9
<Page>
For NAR TYPE C, Death Benefit.
* In cases where the current Working Reserve is not available, the Ceding
Company may estimate such amount using either a previously defined Working
Reserve or the Account Value.
STEP 2 -- DETERMINE NET AMOUNT AT RISK FOR EACH "LAYER" OF COVERAGE
STEP 3 -- DETERMINE THE NAR FOR THE CEDING COMPANY AND THEN FOR THE REINSURER
MINIMUM AUTOMATIC REINSURANCE CESSION:
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 8 -- Effective 03/01/2012
10
<Page>
AMENDMENT 9
EFFECTIVE JULY 16, 2012
TO THE
AUTOMATIC MONTHLY RENEWABLE TERM
REINSURANCE AGREEMENT FOR NON-EXCESS RISKS
EFFECTIVE OCTOBER 1, 2008
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
THE CANADA LIFE ASSURANCE COMPANY ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer wish to amend the Agreement to
reflect that the following Products will be added to the Agreement and the
Effective Dates shown in Schedule A are the dates the products will become
reinsured:
- Hartford Frontier 2012 indexed UL,
- Hartford Frontier 2012 Indexed UL Extended Value Option,
- Hartford Leaders VUL Liberty 2012, and
- Hartford Leaders VUL Liberty 2012 Extended Value Option
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer hereby agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. Schedule A is deleted in its entirety and replaced with the attached
revised Schedule A.
3. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 9 -- Effective 07/16/2012
1
<Page>
In witness of the foregoing, the Ceding Company and the Reinsurer have, by their
respective officers, executed this Amendment in duplicate on the dates indicated
below.
THE CANADA LIFE ASSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ John Occleshaw By: /s/ Jean-Francois Poulin
---------------------------------------------- ----------------------------------------------
Name: John Occleshaw, MA FIA Name: Jean-Francois Poulin, FSA, FCIA
Title: Senior Vice-President Title: Senior Vice President
Reinsurance Life Reinsurance
Date: October 18, 2012 Date: October 24, 2012
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Michael Roscoe
---------------------------------------------- ----------------------------------------------
Name: Paul Fischer, FSA, MAAA Name: Michael Roscoe, FSA, MAAA
Title: Assistant Vice President and Actuary Title: Senior Vice President
Individual Life Product Management Individual Life Product Management
Date: 10-26-2012 Date: 10/31/12
</Table>
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 9 -- Effective 07/16/2012
2
<Page>
SCHEDULE A
PLANS OF INSURANCE COVERED UNDER THIS AGREEMENT
EFFECTIVE JULY 16, 2012
SINGLE LIFE PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
Stag UL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Bicentennial UL Founders 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford UL CV 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Wall Street VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Protector II VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Legacy 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Stag Accumulator II VUL 1980 CSO M/F Unismoke Ultimate ALB A 10/01/2008
Hartford Leaders VUL Liberty (a) 1980 CSO M/F Unismoke Ultimate ANB A 10/01/2008
Hartford Leaders VUL Liberty (b) 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Life Solutions II UL (a) 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Life Solutions II UL (b) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Advanced Universal Life 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Freedom 2001 CSO M/F S/NS Ultimate ANB B*** 10/01/2008
Hartford Quantum II VUL (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Quantum II VUL (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford ExtraOrdinary Whole Life (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford ExtraOrdinary Whole Life (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Bicentennial UL Founders II 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Hartford Bicentennial UL Founders II Extended Value Option 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Hartford Frontier Indexed Universal Life 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Hartford Frontier Indexed Universal Life Extended Value 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Option
Hartford Founders Plus UL 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Hartford Founders Plus UL Extended Value Option 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Hartford Frontier 2012 Indexed UL 2001 CSO M/F S/NS Ultimate ANB A 07/16/2012
Hartford Frontier 2012 Indexed UL Extended Value Option 2001 CSO M/F S/NS Ultimate ANB A 07/16/2012
Hartford Leaders VUL Liberty 2012 2001 CSO M/F Composite Ultimate ANB A 08/06/2012
Hartford Leaders VUL Liberty 2012 Extended Value Option 2001 CSO M/F Composite Ultimate ANB A 08/06/2012
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
*** The version of this product launched on 7/1/2010 used NAR Type A prior to
3/1/2012. As of 3/1/2012, NAR Type B is used prospectively for all in force
and new policies.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Primary Term Insured Rider 10/01/2008
Other Covered Insured Term Life Rider 10/01/2008
Cost of Living Adjustment (COLA) Rider 10/01/2008
</Table>
NOTE: NAR Type for term riders above is C. For COLA Rider, NAR Type follows Base
Policy to which it is attached.
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 9 -- Effective 07/16/2012
3
<Page>
SINGLE LIFE PLANS OF INSURANCE
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Accidental Death Benefit (ADB) Rider 10/01/2008
Accelerated Benefit Rider (ABR) 10/01/2008
LifeAccess Accelerated Benefit Rider (LAABR) 10/01/2008
Policy Continuation Rider 10/01/2008
Policy Protection Rider (PPR) 10/01/2008
Enhanced No Lapse Guarantee Rider 10/01/2008
Lifetime No Lapse Guarantee Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Conversion Option Rider 10/01/2008
Overloan Protection Rider 10/01/2008
Waiver of Specified Amount (WSA) Rider 10/01/2008
Waiver of Monthly Deductions (WMD) Rider 10/01/2008
Children's Life Insurance Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Estate Tax Repeal Benefit Rider 10/01/2008
Modified Surrender Value Rider 10/01/2008
Cash Surrender Value Endorsement 10/01/2008
Automatic Premium Payment Rider 10/01/2008
Additional Premium Rider 10/01/2008
Qualified Plan Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
DisabilityAccess Rider (DAR) 08/11/2009
LongevityAccess Rider 03/14/2011
LifeAccess Care Rider 04/11/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING ADDITIONAL DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Primary Insured Term Rider: Provides additional level term life coverage on the
base policy insured.
Other Covered Insured Term Life Rider: Provides level term life coverage on an
insured other than the base policy insured.
Cost of Living Adjustment (COLA) Rider: Provides for biennial face amount
increases, without underwriting, based on increases in the Consumer Price Index.
The maximum amount of any single increase is $50,000. Any increase can be
declined by the policyholder, which stops future increases. Available only at
issue and only for non-substandard issue ages 0 through 60.
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 9 -- Effective 07/16/2012
4
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE:
Accidental Death Benefit Rider: Pays an additional death benefit if the death on
the insured is caused by a qualifying accident.
Accelerated Benefit Rider: Provides the policyholder up to 100% of the death
benefit, discounted with interest, if the insured's life expectancy is 12 months
or less. After acceleration, the Ceding Company shall continue to pay the
Reinsurer Reinsurance Premiums on the Reinsured Net Amount at Risk as described
in Schedule B, and the Reinsurer shall be liable for such Reinsured Net Amount
at Risk upon the death of the insured.
LifeAccess Accelerated Benefit Rider (LAABR): Provides for monthly benefits (up
to 2% of death benefit) if insured meets certain ADL and home-care requirements.
In accordance with Schedule B, during and after acceleration, the Ceding Company
shall continue to pay the Reinsurer Reinsurance Premiums on the Reinsured Net
Amount at Risk based on the Death Benefit prior to acceleration, and the
Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the death
of the insured.
Policy Continuation Rider: Intended to prevent the lapse of highly loaned
policies.
Policy Protection Rider: Protects the death benefit of the base policy and any
primary insured term rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Enhanced No Lapse Guarantee Rider: Provides that the policy will not lapse as
long as cumulative premiums paid less indebtedness less withdrawals are greater
than or equal to the cumulative no lapse guarantee premiums. Length of guarantee
varies by issue age.
Lifetime No Lapse Guarantee Rider: Same as Enhanced No Lapse Guarantee Rider but
with lifetime guarantee.
Guaranteed Minimum Accumulation Benefit (GMAB) Rider: Provides, at the end of
the GMAB Guarantee Period (usually 20 years), that the policy Account Value will
be increased, if necessary, to equal the sum of gross premiums paid to that
date. There is a small monthly charge and a minimum cumulative premium
requirement to keep the rider in force.
Paid-Up Life Insurance Rider: Similar to the GMAB rider, with the same Guarantee
Period, a monthly charge, and a cumulative premium requirement. At end of the
Guarantee Period, the owner may elect to change coverage to paid-up life using
the Account Value as a 5% NSP to determine the amount of coverage; however, the
amount of coverage will never be lower than the sum of gross premiums paid to
that date. Once elected, premiums are no longer payable.
Conversion Option Rider: During certain policy years and prior to the insured's
attained age 70, the policy may be converted, without evidence of insurability,
to any permanent plan of life insurance the Ceding Company then makes available
for conversions of this policy.
Overloan Protection Rider: Protects a policy from terminating due to overloan.
Waiver of Specified Amount (WSA) Rider: Waives a specified amount monthly while
the insured is disabled.
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 9 -- Effective 07/16/2012
5
<Page>
Waiver of Monthly Deductions (WMD) Rider: Waives monthly deduction amounts while
the insured is disabled.
Children's Life Insurance Rider: Provides level term life coverage for each
child of the insured.
Foreign Travel Exclusion Rider: Provides a limited death benefit (Account Value
less indebtedness) if the insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Estate Tax Repeal Benefit Rider: Pays the policy Account Value less indebtedness
if the Federal Estate Tax Law is fully repealed by December 31, 2010, and the
Ceding Company receives a request for this benefit amount from the policy owner.
Modified Surrender Value Rider: Changes the Cash Surrender Value definition (to
equal the Account Value) if the policy is surrendered within 3 years after the
policy issue date.
Cash Surrender Value Endorsement: Provides for enhanced Cash Surrender Value
(equal to the current Account Value) in the event of policy surrender in the
first 4 policy years, unless the policy is exchanged under Section 1035 to
another company's policy.
Automatic Premium Payment Rider: Provides for any Scheduled Premium due and
unpaid by the end of any Policy Grace Period to be paid by an automatic
deduction from the Account Value, if the Account Value exceeds the Guaranteed
Cash Value.
Additional Premium Rider: Allows additional premium amounts to be paid at the
same payment intervals as scheduled premiums.
Qualified Plan Rider: Indicates that the policy is owned by a qualified plan,
details the policy owner's reporting responsibilities to the Ceding Company, and
describes features and activities that are unavailable when the policy is owned
by a Qualified Plan.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
DisabilityAccess Rider (DAR): Pays a monthly benefit upon disability of the
primary insured on the life insurance policy to which it is attached. The amount
of monthly benefit is permanently set at rider issue and is limited to a
24-month benefit period. The maximum monthly benefit amount is $5,000; it is
further limited to 2% of the initial face amount or 30% of monthly income at
policy issue. The minimum monthly benefit is $1,000.
LongevityAccess Rider: Provides for monthly benefits (up to 1% of death benefit)
when the insured reaches age 90 and meets the rider's eligibility requirements.
Includes a residual death benefit of 10% of the death benefit prior to
withdrawals. In accordance with Schedule B, during and after withdrawals, the
Ceding Company shall continue to pay the Reinsurer Reinsurance Premiums on the
Reinsured Net Amount at Risk based on the Death Benefit prior to withdrawals,
and the Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the
death of the insured.
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 9 -- Effective 07/16/2012
6
<Page>
LifeAccess Care Rider: Similar to the LifeAccess Accelerated Benefit Rider, but
filed as a health product in some states. Provides for monthly benefits (up to
2% of death benefit) if insured meets certain ADL and home-care requirements.
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 9 -- Effective 07/16/2012
7
<Page>
LAST SURVIVOR PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
Hartford Leaders VUL Joint Legacy 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Joint Legacy II 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Advanced Last Survivor UL 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint Freedom 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint Freedom II 2001 CSO M/F S/NS Ultimate ANB B*** 10/01/2008
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
*** The version of this product launched on 7/1/2010 used NAR Type A prior to
3/1/2012. As of 3/1/2012, NAR Type B is used prospectively for all in force
and new policies.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Estate Protection Rider (NAR Type is C) 10/01/2008
</Table>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
LS Exchange Option Rider 10/01/2008
Policy Protection Rider 10/01/2008
Estate Tax Repeal Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
Joint LifeAccess Rider 01/31/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Estate Protection Rider: This rider provides last survivor level term life
insurance on the base policy insureds for three years.
RIDERS THAT PROVIDE ADDITIONAL BENEFITS BUT THAT ARE NOT ELIGIBLE FOR
REINSURANCE:
LS Exchange Option Rider: Allows a Last Survivor policy to be split into two
Single Life policies, without new evidence of insurability, if divorce, business
dissolution, or estate-tax repeal or reduction occurs. The face amount of each
new Single Life policy will equal one half of the Last Survivor policy face
amount. Upon a split, reinsurance will continue at point-in-scale rates for each
single life, as documented in Section X.C. (This rider is not available when one
of the insureds is uninsurable or above Table H.)
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 9 -- Effective 07/16/2012
8
<Page>
Policy Protection Rider: Protects the death benefit of the base policy and any
Estate Protection Rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Estate Tax Repeal Rider: Will pay the Account Value less indebtedness if the
Federal Estate Tax Law is fully repealed by December 31, 2010, and the Ceding
Company receives a request for this benefit amount from the policy owner.
Foreign Travel Exclusion: Provides a limited death benefit (Account Value less
indebtedness) if either insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Guaranteed Minimum Accumulation Benefit Rider and Paid-Up Life Insurance Rider:
Same as Single Life riders.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
Joint LifeAccess Rider: Similar to the LifeAccess Accelerated Benefit Rider.
Available only on Last Survivor products where the benefit will be payable for
the last surviving insured if chronically ill or if both insureds are
concurrently chronically ill.
Allocated Retention Pool (Non-Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 9 -- Effective 07/16/2012
9
<Page>
AMENDMENT 4
EFFECTIVE OCTOBER 1, 2008
TO THE
AUTOMATIC AND FACULTATIVE MONTHLY RENEWABLE TERM REINSURANCE
AGREEMENT FOR EXCESS RISKS
EFFECTIVE OCTOBER 1, 2008
("EFFECTIVE DATE")
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
THE CANADA LIFE ASSURANCE COMPANY ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer (collectively, the "Parties")
agree that the Agreement was implemented using YRT Reinsurance Rate Factors
("Factors") which proved to be incorrect; and
WHEREAS, the Parties agreed, in Amendment 1, to incorporate revised Factors in
Exhibit IV "YRT Reinsurance Rate Factors" as of the Effective Date, with the
revised Factors being implemented as follows:
(a) For billing transactions appearing in the November 2010 reinsurance billing
statement and thereafter, the Ceding Company had applied the revised
Factors; and
(b) For billing transactions reported to the Reinsurer prior to the November
2010 reinsurance billing statement, the Ceding Company paid the Reinsurer a
one-time payment in the amount of (ILLEGIBLE) to correct the discrepancy
which resulted from the Ceding Company's application of the initial Factors;
and
WHEREAS, the Ceding Company did remit to the Reinsurer a one-time payment in the
amount of (ILLEGIBLE) to correct the discrepancy and such amount represented the
aggregate amount of correction for the following agreements, all effective
October 1, 2008:
(a) Automatic Monthly Renewable Term Reinsurance for Non-Excess Risks between
Hartford Life and Annuity Insurance Company and The Canada Life Assurance
Company;
(b) Automatic Monthly Renewable Term Reinsurance for Non-Excess Risks between
Hartford Life Insurance Company and The Canada Life Assurance Company;
(c) Automatic and Facultative Monthly Renewable Term Reinsurance Agreement for
Excess Risks between Hartford Life and Annuity Insurance Company and The
Canada Life Assurance Company; and
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 4 -- Effective 10/01/2008
1
<Page>
(d) Automatic and Facultative Monthly Renewable Term Reinsurance Agreement for
Excess Risks between Hartford Life Insurance Company and The Canada Life
Assurance Company; and
WHEREAS, notwithstanding the agreement of the Parties in Amendment 1 that the
above-mentioned one-time payment would be the full and final settlement
regarding this matter, the Parties now wish to recalculate all billing
transactions from the Effective Date using the revised Factors; and
WHEREAS, notwithstanding the agreement of the Parties in Amendment 1 that the
Ceding Company would not alter its administrative systems, the Parties now agree
that the Ceding Company shall alter its administrative systems to enable the
recalculation of premium.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer hereby agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. The Reinsurer shall make a refund to the Ceding Company in the amount of
representing the aggregate amount of correction.
3. The Ceding Company shall recalculate all billing transactions from the
Effective Date and pay the Reinsurer accordingly.
4. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
In witness of the foregoing, the Parties have, by their respective authorized
officers, executed this Amendment in duplicate, each of which shall be deemed an
original but both of which together shall constitute one and the same
instrument, on the dates indicated below, with an effective date of October 1,
2008.
THE CANADA LIFE ASSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ John Occleshaw By: /s/ Jean-Francois Poulin
-------------------------------------- --------------------------------------
Name: John Occleshaw, MA FIA Name: Jean-Francois Poulin, FSA, FCIA
Title: Senior Vice-President Title: Senior Vice President
Reinsurance Life Reinsurance
Date: June 15 2012 Date: 6/18/12
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Donna R. Jarvis
-------------------------------------- --------------------------------------
Name: Paul Fischer, FSA, MAAA Name: Donna R. Jarvis
Title: Assistant Vice President and Actuary Title: Vice President and Actuary
Individual Life Product Management
Date: 7-10-2012 Date: July 10, 2012
</Table>
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 4 -- Effective 10/01/2008
2
<Page>
AMENDMENT 5
EFFECTIVE MARCH 1,2012
TO THE
AUTOMATIC AND FACULTATIVE MONTHLY RENEWABLE TERM
REINSURANCE AGREEMENT FOR EXCESS RISKS
EFFECTIVE OCTOBER 1, 2008
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
THE CANADA LIFE ASSURANCE COMPANY ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer wish to restate the definition of
Working Reserve for the Reinsured Net Amount at Risk to reflect that it is the
approximate value of the reserve net of other reinsurance arrangements held by
the Ceding Company; and
WHEREAS, the Ceding Company and the Reinsurer wish to acknowledge that Hartford
Bicentennial UL Freedom and Hartford Bicentennial UL Joint Freedom II will now
use NAR Type B only.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer hereby agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. Schedule A is hereby deleted in its entirety and replaced with the
attached, revised Schedule A.
3. Schedule B is hereby deleted in its entirety and replaced with the
attached, revised Schedule B.
4. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 5 -- Effective 03/01/2012
1
<Page>
In witness of the foregoing, the Ceding Company and the Reinsurer have, by their
respective officers, executed this Amendment in duplicate on the dates indicated
below.
THE CANADA LIFE ASSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ John Occleshaw By: /s/ Jean-Francois Poulin
-------------------------------- ----------------------------------
Name: John Occleshaw, MA FIA Name: Jean-Francois Poulin FSA, FCIA
Title: Senior Vice-President Title: Senior Vice President
Reinsurance Life Reinsurance
Date: June 15 2012 Date: 6/18/12
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Donna R. Jarvis
----------------------------------- ------------------------------------
Name: Paul Fischer, FSA, MAAA Name: Donna R. Jarvis
Title: Assistant Vice President and Title: Vice President & Actuary
Actuary
Individual Life Product Management
Date: 7-16-12 Date: July 16, 2012
</Table>
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 5 -- Effective 03/01/2012
2
<Page>
SCHEDULE A
PLANS OF INSURANCE COVERED UNDER THIS AGREEMENT
EFFECTIVE MARCH 1,2012
SINGLE LIFE PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
Stag UL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Bicentennial UL Founders 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford UL CV 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Wall Street VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Protector II VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Legacy 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Stag Accumulator II VUL 1980 CSO M/F Unismoke Ultimate ALB A 10/01/2008
Hartford Leaders VUL Liberty (a) 1980 CSO M/F Unismoke Ultimate ANB A 10/01/2008
Hartford Leaders VUL Liberty (b) 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Life Solutions II UL (a) 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Life Solutions II UL (b) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Advanced Universal Life 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Freedom 2001 CSO M/F S/NS Ultimate ANB B*** 10/01/2008
Hartford Quantum II VUL (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Quantum II VUL (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford ExtraOrdinary Whole Life (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford ExtraOrdinary Whole Life (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Bicentennial UL Founders II 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Hartford Bicentennial UL Founders II 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Extended Value Option
Hartford Frontier Indexed Universal Life 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Hartford Frontier Indexed Universal Life 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Extended Value Option
Hartford Founders Plus UL 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Hartford Founders Plus UL Extended Value 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Option
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
*** The version of this product launched on 7/1/2010 used NAR Type A prior to
3/1/2012. As of 3/1/2012, NAR Type B is used prospectively for all in force
and new policies.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Primary Term Insured Rider 10/01/2008
Other Covered Insured Term Life Rider 10/01/2008
Cost of Living Adjustment (COLA) Rider 10/01/2008
</Table>
NOTE: NAR Type for term riders above is C. For COLA Rider, NAR Type follows Base
Policy to which it is attached.
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Accidental Death Benefit (ADB) Rider 10/01/2008
</Table>
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 5 -- Effective 03/01/2012
3
<Page>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE (CONTINUED) DATE**
<S> <C>
--------------------------------------------------------------------------------
Accelerated Benefit Rider (ABR) 10/01/2008
LifeAccess Accelerated Benefit Rider (LAABR) 10/01/2008
Policy Continuation Rider 10/01/2008
Policy Protection Rider (PPR) 10/01/2008
Enhanced No Lapse Guarantee Rider 10/01/2008
Lifetime No Lapse Guarantee Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Conversion Option Rider 10/01/2008
Overloan Protection Rider 10/01/2008
Waiver of Specified Amount (WSA) Rider 10/01/2008
Waiver of Monthly Deductions (WMD) Rider 10/01/2008
Children's Life Insurance Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Estate Tax Repeal Benefit Rider 10/01/2008
Modified Surrender Value Rider 10/01/2008
Cash Surrender Value Endorsement 10/01/2008
Automatic Premium Payment Rider 10/01/2008
Additional Premium Rider 10/01/2008
Qualified Plan Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
DisabilityAccess Rider (DAR) 08/11/2009
LongevityAccess Rider 03/14/2011
LifeAccess Care Rider 04/11/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING ADDITIONAL DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Primary Insured Term Rider: Provides additional level term life coverage on the
base policy insured.
Other Covered Insured Term Life Rider: Provides level term life coverage on an
insured other than the base policy insured.
Cost of Living Adjustment (COLA) Rider: Provides for biennial face amount
increases, without underwriting, based on increases in the Consumer Price Index.
The maximum amount of any single increase is $50,000. Any increase can be
declined by the policyholder, which stops future increases. Available only at
issue and only for non-substandard issue ages 0 through 60.
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 5 -- Effective 03/01/2012
4
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE:
Accidental Death Benefit Rider: Pays an additional death benefit if the death on
the insured is caused by a qualifying accident.
Accelerated Benefit Rider: Provides the policyholder up to 100% of the death
benefit, discounted with interest, if the insured's life expectancy is 12 months
or less. After acceleration, the Ceding Company shall continue to pay the
Reinsurer Reinsurance Premiums on the Reinsured Net Amount at Risk as described
in Schedule B, and the Reinsurer shall be liable for such Reinsured Net Amount
at Risk upon the death of the insured.
LifeAccess Accelerated Benefit Rider (LAABR): Provides for monthly benefits (up
to 2% of death benefit) if insured meets certain ADL and home-care requirements.
In accordance with Schedule B, during and after acceleration, the Ceding Company
shall continue to pay the Reinsurer Reinsurance Premiums on the Reinsured Net
Amount at Risk based on the Death Benefit prior to acceleration, and the
Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the death
of the insured.
Policy Continuation Rider: Intended to prevent the lapse of highly loaned
policies.
Policy Protection Rider: Protects the death benefit of the base policy and any
primary insured term rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Enhanced No Lapse Guarantee Rider: Provides that the policy will not lapse as
long as cumulative premiums paid less indebtedness less withdrawals are greater
than or equal to the cumulative no lapse guarantee premiums. Length of guarantee
varies by issue age.
Lifetime No Lapse Guarantee Rider: Same as Enhanced No Lapse Guarantee Rider but
with lifetime guarantee.
Guaranteed Minimum Accumulation Benefit (GMAB) Rider: Provides, at the end of
the GMAB Guarantee Period (usually 20 years), that the policy Account Value will
be increased, if necessary, to equal the sum of gross premiums paid to that
date. There is a small monthly charge and a minimum cumulative premium
requirement to keep the rider in force.
Paid-Up Life Insurance Rider: Similar to the GMAB rider, with the same Guarantee
Period, a monthly charge, and a cumulative premium requirement. At end of the
Guarantee Period, the owner may elect to change coverage to paid-up life using
the Account Value as a 5% NSP to determine the amount of coverage; however, the
amount of coverage will never be lower than the sum of gross premiums paid to
that date. Once elected, premiums are no longer payable.
Conversion Option Rider: During certain policy years and prior to the insured's
attained age 70, the policy may be converted, without evidence of insurability,
to any permanent plan of life insurance the Ceding Company then makes available
for conversions of this policy.
Overloan Protection Rider: Protects a policy from terminating due to overloan.
Waiver of Specified Amount (WSA) Rider: Waives a specified amount monthly while
the insured is disabled.
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 5 -- Effective 03/01/2012
5
<Page>
Waiver of Monthly Deductions (WMD) Rider: Waives monthly deduction amounts while
the insured is disabled.
Children's Life Insurance Rider: Provides level term life coverage for each
child of the insured.
Foreign Travel Exclusion Rider: Provides a limited death benefit (Account Value
less indebtedness) if the insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Estate Tax Repeal Benefit Rider: Pays the policy Account Value less indebtedness
if the Federal Estate Tax Law is fully repealed by December 31, 2010, and the
Ceding Company receives a request for this benefit amount from the policy owner.
Modified Surrender Value Rider: Changes the Cash Surrender Value definition (to
equal the Account Value) if the policy is surrendered within 3 years after the
policy issue date.
Cash Surrender Value Endorsement: Provides for enhanced Cash Surrender Value
(equal to the current Account Value) in the event of policy surrender in the
first 4 policy years, unless the policy is exchanged under Section 1035 to
another company's policy.
Automatic Premium Payment Rider: Provides for any Scheduled Premium due and
unpaid by the end of any Policy Grace Period to be paid by an automatic
deduction from the Account Value, if the Account Value exceeds the Guaranteed
Cash Value.
Additional Premium Rider: Allows additional premium amounts to be paid at the
same payment intervals as scheduled premiums.
Qualified Plan Rider: Indicates that the policy is owned by a qualified plan,
details the policy owner's reporting responsibilities to the Ceding Company, and
describes features and activities that are unavailable when the policy is owned
by a Qualified Plan.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
DisabilityAccess Rider (DAR): Pays a monthly benefit upon disability of the
primary insured on the life insurance policy to which it is attached. The amount
of monthly benefit is permanently set at rider issue and is limited to a
24-month benefit period. The maximum monthly benefit amount is $5,000; it is
further limited to 2% of the initial face amount or 30% of monthly income at
policy issue. The minimum monthly benefit is $1,000.
Longevity Access Rider: Provides for monthly benefits (up to 1% of death
benefit) when the insured reaches age 90 and meets the rider's eligibility
requirements. Includes a residual death benefit of 10% of the death benefit
prior to withdrawals. In accordance with Schedule B, during and after
withdrawals, the Ceding Company shall continue to pay the Reinsurer Reinsurance
Premiums on the Reinsured Net Amount at Risk based on the Death Benefit prior to
withdrawals, and the Reinsurer shall be liable for such Reinsured Net Amount at
Risk upon the death of the insured.
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 5 -- Effective 03/01/2012
6
<Page>
LifeAccess Care Rider: Similar to the LifeAccess Accelerated Benefit Rider, but
filed as a health product in some states. Provides for monthly benefits (up to
2% of death benefit) if insured meets certain ADL and home-care requirements.
LAST SURVIVOR PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------------------
Hartford Leaders VUL Joint Legacy 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Joint Legacy II 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Advanced Last Survivor UL 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint Freedom 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint Freedom 2001 CSO M/F S/NS Ultimate ANB B*** 10/01/2008
II
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
*** The version of this product launched on 7/1/2010 used NAR Type A prior to
3/1/2012. As of 3/1/2012, NAR Type B is used prospectively for all in force
and new policies.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Estate Protection Rider (NAR Type is C) 10/01/2008
</Table>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
LS Exchange Option Rider 10/01/2008
Policy Protection Rider 10/01/2008
Estate Tax Repeal Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
Joint LifeAccess Rider 01/31/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Estate Protection Rider: This rider provides last survivor level term life
insurance on the base policy insureds for three years.
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 5 -- Effective 03/01/2012
7
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS BUT THAT ARE NOT ELIGIBLE FOR
REINSURANCE:
LS Exchange Option Rider: Allows a Last Survivor policy to be split into two
Single Life policies, without new evidence of insurability, if divorce, business
dissolution, or estate-tax repeal or reduction occurs. The face amount of each
new Single Life policy will equal one half of the Last Survivor policy face
amount. Upon a split, reinsurance will continue at point-in-scale rates for each
single life, as documented in Section X.C. (This rider is not available when one
of the insureds is uninsurable or above Table H.)
Policy Protection Rider: Protects the death benefit of the base policy and any
Estate Protection Rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Estate Tax Repeal Rider: Will pay the Account Value less indebtedness if the
Federal Estate Tax Law is fully repealed by December 31, 2010, and the Ceding
Company receives a request for this benefit amount from the policy owner.
Foreign Travel Exclusion: Provides a limited death benefit (Account Value less
indebtedness) if either insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Guaranteed Minimum Accumulation Benefit Rider and Paid-Up Life Insurance Rider:
Same as Single Life riders.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
Joint LifeAccess Rider: Similar to the LifeAccess Accelerated Benefit Rider.
Available only on Last Survivor products where the benefit will be payable for
the last surviving insured if chronically ill or if both insureds are
concurrently chronically ill.
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 5 -- Effective 03/01/2012
8
<Page>
SCHEDULE B
REINSURANCE SPECIFICATIONS
EFFECTIVE MARCH 1,2012
AUTOMATIC REINSURANCE: The Ceding Company shall retain its available retention
on each risk, defined below as the Retained Net Amount at Risk, subject to the
applicable Ceding Company's Treaty Retention Limit shown in Exhibit II.
The Reinsurer will automatically reinsure a portion of the remainder of the
risk, called the Reinsured Net Amount at Risk, as defined below in this Schedule
B, not to exceed the Reinsurer's Maximum Automatic Participation Limit, as set
forth in Exhibit II.
FACULTATIVE REINSURANCE: The Reinsurer will reinsure X% (as determined at issue)
of the Total Net Amount at Risk for the risk.
TOTAL ALLOCATION LIMIT (TAL): As shown in Exhibit II.
CEDING COMPANY'S TREATY RETENTION LIMIT (CCTRL): As shown in Exhibit II.
CEDING COMPANY'S ALLOCATED RETENTION (CCAR): As shown in Exhibit II.
CURRENT RETENTION (CURRRET) = Current amount of life insurance retained by the
Ceding Company and its affiliated companies on the life for in-force life
insurance coverage. (For Last Survivor risks, see the Last Survivor Limits and
Retention Worksheet in Exhibit II.)
REINSURER'S ALLOCATED RETENTION (REINSARET): As shown in Exhibit II.
REINSURER'S ATTACHMENT POINT (REINSAPT): As shown in Exhibit II.
NAR TYPE for the Plan of Insurance to be reinsured under this Agreement, as
shown in Schedule A.
STEP 1 -- DETERMINE TOTAL NET AMOUNT AT RISK FOR THE COVERAGE
TOTAL NET AMOUNT AT RISK (TOTNAR)* =
For NAR TYPE A, Death Benefit minus the Account Value.
For NAR TYPE B, Death Benefit minus the Working Reserve, where
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 5 -- Effective 03/01/2012
9
<Page>
For NAR TYPE C, Death Benefit.
* In cases where the current Working Reserve is not available, the Ceding
Company may estimate such amount using either a previously defined Working
Reserve or the Account Value.
STEP 2 -- DETERMINE NET AMOUNT AT RISK FOR EACH "LAYER" OF COVERAGE
STEP 3 -- DETERMINE THE NAR FOR THE CEDING COMPANY AND THEN FOR THE REINSURER
REINSURER'S QUOTA SHARE PERCENTAGE FOR NAR3 (REINSQS3%)
For risks reinsured under this Agreement where the death benefit has been
reduced as a result of acceleration or withdrawal in accordance with Riders, the
Ceding Company shall use commercially reasonable efforts to eliminate the impact
of acceleration on the Reinsured Net Amount at Risk.
NOTE: For ReinsQS2% and ReinsQS3%, round percentages to 2 decimal places. (This
rounding may cause slight increases or decreases in the amounts allocated to
each Party.)
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 5 -- Effective 03/01/2012
10
<Page>
MINIMUM AUTOMATIC REINSURANCE CESSION:
MINIMUM FACULTATIVE REINSURANCE APPLICATION:
LEAD REINSURER:
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 5 -- Effective 03/01/2012
11
<Page>
AMENDMENT 6
EFFECTIVE JULY 16, 2012
TO THE
AUTOMATIC AND FACULTATIVE MONTHLY RENEWABLE TERM
REINSURANCE AGREEMENT FOR EXCESS RISKS
EFFECTIVE OCTOBER 1, 2008
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
THE CANADA LIFE ASSURANCE COMPANY ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer wish to amend the Agreement to
reflect that the following Products will be added to the Agreement and the
Effective Dates shown in Schedule A are the dates the products will become
reinsured:
- Hartford Frontier 2012 Indexed UL,
- Hartford Frontier 2012 Indexed UL Extended Value Option,
- Hartford Leaders VUL Liberty 2012, and
- Hartford Leaders VUL Liberty 2012 Extended Value Option.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer hereby agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. Schedule A is deleted in its entirety and replaced with the attached
revised Schedule A.
3. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 6 -- Effective 07/16/2012
1
<Page>
In witness of the foregoing, the Ceding Company and the Reinsurer have, by their
respective officers, executed this Amendment in duplicate on the dates indicated
below.
THE CANADA LIFE ASSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ John Occleshaw By: /s/ Jean-Francois Poulin
-------------------------------------- ---------------------------------------
Name: John Occleshaw, MA FIA Name: Jean-Francois Poulin, FSA, FCIA
Title: Senior Vice-President Title: Senior Vice President
Reinsurance Life Reinsurance
Date: October 18, 2012 Date: October 24, 2012
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Michael Roscoe
-------------------------------------- ---------------------------------------
Name: Paul Fischer, FSA, MAAA Name: Michael Roscoe, FSA, MAAA
Title: Assistant Vice President and Actuary Title: Senior Vice President
Individual Life Product Management Individual Life Product Management
Date: 10-26-2012 Date: 10/31/12
</Table>
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 6 -- Effective 07/16/2012
2
<Page>
SCHEDULE A
PLANS OF INSURANCE COVERED UNDER THIS AGREEMENT
EFFECTIVE JULY 16, 2012
SINGLE LIFE PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
Stag UL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Bicentennial UL Founders 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford UL CV 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Wall Street VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Protector II VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Legacy 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Stag Accumulator II VUL 1980 CSO M/F Unismoke Ultimate ALB A 10/01/2008
Hartford Leaders VUL Liberty (a) 1980 CSO M/F Unismoke Ultimate ANB A 10/01/2008
Hartford Leaders VUL Liberty (b) 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Life Solutions II UL (a) 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Life Solutions II UL (b) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Advanced Universal Life 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Freedom 2001 CSO M/F S/NS Ultimate ANB B*** 10/01/2008
Hartford Quantum II VUL (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Quantum II VUL (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford ExtraOrdinary Whole Life (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford ExtraOrdinary Whole Life (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Bicentennial UL Founders II 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Hartford Bicentennial UL Founders II 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Extended Value Option
Hartford Frontier Indexed Universal 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Life
Hartford Frontier Indexed Universal 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Life
Extended Value Option
Hartford Founders Plus UL 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Hartford Founders Plus UL 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Extended Value Option
Hartford Frontier 2012 Indexed UL 2001 CSO M/F S/NS Ultimate ANB A 07/16/2012
Hartford Frontier 2012 Indexed UL 2001 CSO M/F S/NS Ultimate ANB A 07/16/2012
Extended Value Option
Hartford Leaders VUL Liberty 2012 2001 CSO M/F Composite Ultimate ANB A 08/06/2012
Hartford Leaders VUL Liberty 2012 2001 CSO M/F Composite Ultimate ANB A 08/06/2012
Extended Value Option
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
*** The version of this product launched on 7/1/2010 used NAR Type A prior to
3/1/2012. As of 3/1/2012, NAR Type B is used prospectively for all in force
and new policies.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Primary Term Insured Rider 10/01/2008
Other Covered Insured Term Life Rider 10/01/2008
Cost of Living Adjustment (COLA) Rider 10/01/2008
</Table>
NOTE: NAR Type for term riders above is C. For COLA Rider, NAR Type follows Base
Policy to which it is attached.
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 6 -- Effective 07/16/2012
3
<Page>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Accidental Death Benefit (ADB) Rider 10/01/2008
Accelerated Benefit Rider (ABR) 10/01/2008
LifeAccess Accelerated Benefit Rider (LAABR) 10/01/2008
Policy Continuation Rider 10/01/2008
Policy Protection Rider (PPR) 10/01/2008
Enhanced No Lapse Guarantee Rider 10/01/2008
Lifetime No Lapse Guarantee Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Conversion Option Rider 10/01/2008
Overloan Protection Rider 10/01/2008
Waiver of Specified Amount (WSA) Rider 10/01/2008
Waiver of Monthly Deductions (WMD) Rider 10/01/2008
Children's Life Insurance Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Estate Tax Repeal Benefit Rider 10/01/2008
Modified Surrender Value Rider 10/01/2008
Cash Surrender Value Endorsement 10/01/2008
Automatic Premium Payment Rider 10/01/2008
Additional Premium Rider 10/01/2008
Qualified Plan Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
DisabilityAccess Rider (DAR) 08/11/2009
LongevityAccess Rider 03/14/2011
LifeAccess Care Rider 04/11/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING ADDITIONAL DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Primary Insured Term Rider: Provides additional level term life coverage on the
base policy insured.
Other Covered Insured Term Life Rider: Provides level term life coverage on an
insured other than the base policy insured.
Cost of Living Adjustment (COLA) Rider: Provides for biennial face amount
increases, without underwriting, based on increases in the Consumer Price Index.
The maximum amount of any single increase is $50,000. Any increase can be
declined by the policyholder, which stops future increases. Available only at
issue and only for non-substandard issue ages 0 through 60.
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 6 -- Effective 07/16/2012
4
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE:
Accidental Death Benefit Rider: Pays an additional death benefit if the death on
the insured is caused by a qualifying accident.
Accelerated Benefit Rider: Provides the policyholder up to 100% of the death
benefit, discounted with interest, if the insured's life expectancy is 12 months
or less. After acceleration, the Ceding Company shall continue to pay the
Reinsurer Reinsurance Premiums on the Reinsured Net Amount at Risk as described
in Schedule B, and the Reinsurer shall be liable for such Reinsured Net Amount
at Risk upon the death of the insured.
LifeAccess Accelerated Benefit Rider (LAABR): Provides for monthly benefits (up
to 2% of death benefit) if insured meets certain ADL and home-care requirements.
In accordance with Schedule B, during and after acceleration, the Ceding Company
shall continue to pay the Reinsurer Reinsurance Premiums on the Reinsured Net
Amount at Risk based on the Death Benefit prior to acceleration, and the
Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the death
of the insured.
Policy Continuation Rider: Intended to prevent the lapse of highly loaned
policies.
Policy Protection Rider: Protects the death benefit of the base policy and any
primary insured term rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Enhanced No Lapse Guarantee Rider: Provides that the policy will not lapse as
long as cumulative premiums paid less indebtedness less withdrawals are greater
than or equal to the cumulative no lapse guarantee premiums. Length of guarantee
varies by issue age.
Lifetime No Lapse Guarantee Rider: Same as Enhanced No Lapse Guarantee Rider but
with lifetime guarantee.
Guaranteed Minimum Accumulation Benefit (GMAB) Rider: Provides, at the end of
the GMAB Guarantee Period (usually 20 years), that the policy Account Value will
be increased, if necessary, to equal the sum of gross premiums paid to that
date. There is a small monthly charge and a minimum cumulative premium
requirement to keep the rider in force.
Paid-Up Life Insurance Rider: Similar to the GMAB rider, with the same Guarantee
Period, a monthly charge, and a cumulative premium requirement. At end of the
Guarantee Period, the owner may elect to change coverage to paid-up life using
the Account Value as a 5% NSP to determine the amount of coverage; however, the
amount of coverage will never be lower than the sum of gross premiums paid to
that date. Once elected, premiums are no longer payable.
Conversion Option Rider: During certain policy years and prior to the insured's
attained age 70, the policy may be converted, without evidence of insurability,
to any permanent plan of life insurance the Ceding Company then makes available
for conversions of this policy.
Overloan Protection Rider: Protects a policy from terminating due to overloan.
Waiver of Specified Amount (WSA) Rider: Waives a specified amount monthly while
the insured is disabled.
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 6 -- Effective 07/16/2012
5
<Page>
Waiver of Monthly Deductions (WMD) Rider: Waives monthly deduction amounts while
the insured is disabled.
Children's Life Insurance Rider: Provides level term life coverage for each
child of the insured.
Foreign Travel Exclusion Rider: Provides a limited death benefit (Account Value
less indebtedness) if the insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Estate Tax Repeal Benefit Rider: Pays the policy Account Value less indebtedness
if the Federal Estate Tax Law is fully repealed by December 31, 2010, and the
Ceding Company receives a request for this benefit amount from the policy owner.
Modified Surrender Value Rider: Changes the Cash Surrender Value definition (to
equal the Account Value) if the policy is surrendered within 3 years after the
policy issue date.
Cash Surrender Value Endorsement: Provides for enhanced Cash Surrender Value
(equal to the current Account Value) in the event of policy surrender in the
first 4 policy years, unless the policy is exchanged under Section 1035 to
another company's policy.
Automatic Premium Payment Rider: Provides for any Scheduled Premium due and
unpaid by the end of any Policy Grace Period to be paid by an automatic
deduction from the Account Value, if the Account Value exceeds the Guaranteed
Cash Value.
Additional Premium Rider: Allows additional premium amounts to be paid at the
same payment intervals as scheduled premiums.
Qualified Plan Rider: Indicates that the policy is owned by a qualified plan,
details the policy owner's reporting responsibilities to the Ceding Company, and
describes features and activities that are unavailable when the policy is owned
by a Qualified Plan.
Owner Designated Settlement Option Rider: Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
DisabilityAccess Rider (DAR): Pays a monthly benefit upon disability of the
primary insured on the life insurance policy to which it is attached. The amount
of monthly benefit is permanently set at rider issue and is limited to a
24-month benefit period. The maximum monthly benefit amount is $5,000; it is
further limited to 2% of the initial face amount or 30% of monthly income at
policy issue. The minimum monthly benefit is $1,000.
LongevityAccess Rider: Provides for monthly benefits (up to 1% of death benefit)
when the insured reaches age 90 and meets the rider's eligibility requirements.
Includes a residual death benefit of 10% of the death benefit prior to
withdrawals. In accordance with Schedule B, during and after withdrawals, the
Ceding Company shall continue to pay the Reinsurer Reinsurance Premiums on the
Reinsured Net Amount at Risk based on the Death Benefit prior to withdrawals,
and the Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the
death of the insured.
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 6 -- Effective 07/16/2012
6
<Page>
LifeAccess Care Rider: Similar to the LifeAccess Accelerated Benefit Rider, but
filed as a health product in some states. Provides for monthly benefits (up to
2% of death benefit) if insured meets certain ADL and home-care requirements.
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 6 -- Effective 07/16/2012
7
<Page>
LAST SURVIOR PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
Hartford Leaders VUL Joint Legacy 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Joint Legacy II 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Advanced Last Survivor UL 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint Freedom 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint Freedom 2001 CSO M/F S/NS Ultimate ANB B*** 10/01/2008
II
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
*** The version of this product launched on 7/1/2010 used NAR Type A prior to
3/1/2012. As of 3/1/2012, NAR Type B is used prospectively for all in force
and new policies.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Estate Protection Rider (NAR Type is C) 10/01/2008
</Table>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
LS Exchange Option Rider 10/01/2008
Policy Protection Rider 10/01/2008
Estate Tax Repeal Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
Joint LifeAccess Rider 01/31/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Estate Protection Rider: This rider provides last survivor level term life
insurance on the base policy insureds for three years.
RIDERS THAT PROVIDE ADDITIONAL BENEFITS BUT THAT ARE NOT ELIGIBLE FOR
REINSURANCE:
LS Exchange Option Rider: Allows a Last Survivor policy to be split into two
Single Life policies, without new evidence of insurability, if divorce, business
dissolution, or estate-tax repeal or reduction occurs. The face amount of each
new Single Life policy will equal one half of the Last Survivor policy face
amount. Upon a split, reinsurance will continue at point-in-scale rates for each
single life, as documented in Section X.C. (This rider is not available when one
of the insureds is uninsurable or above Table H.)
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 6 -- Effective 07/16/2012
8
<Page>
Policy Protection Rider: Protects the death benefit of the base policy and any
Estate Protection Rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Estate Tax Repeal Rider: Will pay the Account Value less indebtedness if the
Federal Estate Tax Law is fully repealed by December 31, 2010, and the Ceding
Company receives a request for this benefit amount from the policy owner.
Foreign Travel Exclusion: Provides a limited death benefit (Account Value less
indebtedness) if either insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Guaranteed Minimum Accumulation Benefit Rider and Paid-Up Life Insurance Rider:
Same as Single Life riders.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
Joint LifeAccess Rider: Similar to the LifeAccess Accelerated Benefit Rider.
Available only on Last Survivor products where the benefit will be payable for
the last surviving insured if chronically ill or if both insureds are
concurrently chronically ill.
Allocated Retention Pool (Excess Risks) -- Effective 10/01/2008
Between HLAIC and Canada Life
Amendment 6 -- Effective 07/16/2012
9
<Page>
AMENDMENT 10
EFFECTIVE MARCH 1, 2012
TO THE
AUTOMATIC AND FACULTATIVE MONTHLY RENEWABLE TERM
REINSURANCE AGREEMENT
EFFECTIVE OCTOBER 1, 2008
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
SWISS RE LIFE & HEALTH AMERICA INC. ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer wish to restate the definition of
Working Reserve for the Reinsured Net Amount at Risk to reflect that it is the
approximate value of the reserve net of other reinsurance arrangements held by
the Ceding Company; and
WHEREAS, the Ceding Company and the Reinsurer wish to acknowledge that Hartford
Bicentennial UL Freedom and Hartford Bicentennial UL Joint Freedom II will now
use NAR Type B only.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer hereby agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. Article III is hereby amended to include the following paragraph preceding
Section III.A:
The Ceding Company will notify the Reinsurer if it intends to change the
components used for the calculation of the Working Reserve, as outlined in
Schedule B. Changes to existing definitions of the Working Reserve will be
handled in accordance with Section XXII.L.
3. Schedule A is hereby deleted in its entirety and replaced with the
attached, revised Schedule A.
4. Schedule B is hereby deleted in its entirety and replaced with the
attached, revised Schedule B.
5. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
Allocated Retention Pool -- Effective 10/1/2008
Between HLAIC and Swiss Re
Amendment #10 -- Effective 3/1/2012
1
<Page>
In witness of the foregoing, the Ceding Company and the Reinsurer have, by their
respective officers, executed this Amendment in duplicate on the dates indicated
below.
SWISS RE LIFE & HEALTH AMERICA INC.
<Table>
<S> <C> <C> <C>
By: /s/ Jeremy Lane Attest: /s/ Kyle Bauer
-------------------------------------- --------------------------------------
Name: Jeremy Lane Name: Kyle Bauer
Title: Vice President Title: Vice President
Date: 5/9/2012 Date: 5/9/2012
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Michael Roscoe
-------------------------------------- --------------------------------------
Name: Paul Fischer, FSA, MAAA Name: Michael Roscoe, FSA, MAAA
Title: Assistant Vice President and Actuary Title: Senior Vice President
Individual Life Product Management Individual Life Product Management
Date: May 21, 2012 Date: 5/22/2012
</Table>
Allocated Retention Pool -- Effective 10/1/2008
Between HLAIC and Swiss Re
Amendment #10 -- Effective 3/1/2012
2
<Page>
SCHEDULE A
PLANS OF INSURANCE COVERED UNDER THIS AGREEMENT
EFFECTIVE MARCH 1, 2012
SINGLE LIFE PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
Stag UL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Bicentennial UL Founders 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford UL CV 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Wall Street VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Protector II VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Legacy 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Stag Accumulator II VUL 1980 CSO M/F Unismoke Ultimate ALB A 10/01/2008
Hartford Leaders VUL Liberty (a) 1980 CSO M/F Unismoke Ultimate ANB A 10/01/2008
Hartford Leaders VUL Liberty (b) 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Life Solutions II UL (a) 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Life Solutions II UL (b) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Advanced Universal Life 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Freedom 2001 CSO M/F S/NS Ultimate ANB B*** 10/01/2008
Hartford Quantum II VUL (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Quantum II VUL (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford ExtraOrdinary Whole Life (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford ExtraOrdinary Whole Life (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Bicentennial UL Founders II 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Hartford Bicentennial UL Founders II 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Extended Value Option
Annually Renewable Term (ART) 2001 CSO M/F S/NS Ultimate ANB C 10/01/2008
Hartford Frontier Indexed Universal Life 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Hartford Frontier Indexed Universal Life 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Extended Value Option
Hartford Founders Plus UL 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Hartford Founders Plus UL 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Extended Value Option
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
*** The version of this product launched on 7/1/2010 used NAR Type A prior to
3/1/2012. As of 3/1/2012, NAR Type B is used prospectively for all in force
and new policies.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Primary Term Insured Rider 10/01/2008
Other Covered Insured Term Life Rider 10/01/2008
Cost of Living Adjustment (COLA) Rider 10/01/2008
</Table>
NOTE: NAR Type for term riders above is C. For COLA Rider, NAR Type follows Base
Policy to which it is attached.
Allocated Retention Pool -- Effective 10/1/2008
Between HLAIC and Swiss Re
Amendment #10 -- Effective 3/1/2012
3
<Page>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Accidental Death Benefit (ADB) Rider 10/01/2008
Accelerated Benefit Rider (ABR) 10/01/2008
LifeAccess Accelerated Benefit Rider (LAABR) 10/01/2008
Policy Continuation Rider 10/01/2008
Policy Protection Rider (PPR) 10/01/2008
Enhanced No Lapse Guarantee Rider 10/01/2008
Lifetime No Lapse Guarantee Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Conversion Option Rider 10/01/2008
Overloan Protection Rider 10/01/2008
Waiver of Specified Amount (WSA) Rider 10/01/2008
Waiver of Monthly Deductions (WMD) Rider 10/01/2008
Children's Life Insurance Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Estate Tax Repeal Benefit Rider 10/01/2008
Modified Surrender Value Rider 10/01/2008
Cash Surrender Value Endorsement 10/01/2008
Automatic Premium Payment Rider 10/01/2008
Additional Premium Rider 10/01/2008
Qualified Plan Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
DisabilityAccess Rider (DAR) 08/11/2009
LongevityAccess Rider 03/14/2011
LifeAccess Care Rider 04/11/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING ADDITIONAL DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Primary Insured Term Rider: Provides additional level term life coverage on the
base policy insured.
Other Covered Insured Term Life Rider: Provides level term life coverage on an
insured other than the base policy insured.
Cost of Living Adjustment (COLA) Rider: Provides for biennial face amount
increases, without underwriting, based on increases in the Consumer Price Index.
The maximum amount of any single increase is $50,000. Any increase can be
declined by the policyholder, which stops future increases. Available only at
issue and only for non-substandard issue ages 0 through 60.
Allocated Retention Pool -- Effective 10/1/2008
Between HLAIC and Swiss Re
Amendment #10 -- Effective 3/1/2012
4
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE:
Accidental Death Benefit Rider: Pays an additional death benefit if the death on
the insured is caused by a qualifying accident.
Accelerated Benefit Rider: Provides the policyholder up to 100% of the death
benefit, discounted with interest, if the insured's life expectancy is 12 months
or less. After acceleration, the Ceding Company shall continue to pay the
Reinsurer Reinsurance Premiums on the Reinsured Net Amount at Risk as described
in Schedule B, and the Reinsurer shall be liable for such Reinsured Net Amount
at Risk upon the death of the insured.
LifeAccess Accelerated Benefit Rider (LAABR): Provides for monthly benefits (up
to 2% of death benefit) if insured meets certain ADL and home-care requirements.
In accordance with Schedule B, during and after acceleration, the Ceding Company
shall continue to pay the Reinsurer Reinsurance Premiums on the Reinsured Net
Amount at Risk based on the Death Benefit prior to acceleration, and the
Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the death
of the insured.
Policy Continuation Rider: Intended to prevent the lapse of highly loaned
policies.
Policy Protection Rider: Protects the death benefit of the base policy and any
primary insured term rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Enhanced No Lapse Guarantee Rider: Provides that the policy will not lapse as
long as cumulative premiums paid less indebtedness less withdrawals are greater
than or equal to the cumulative no lapse guarantee premiums. Length of guarantee
varies by issue age.
Lifetime No Lapse Guarantee Rider: Same as Enhanced No Lapse Guarantee Rider but
with lifetime guarantee.
Guaranteed Minimum Accumulation Benefit (GMAB) Rider: Provides, at the end of
the GMAB Guarantee Period (usually 20 years), that the policy Account Value will
be increased, if necessary, to equal the sum of gross premiums paid to that
date. There is a small monthly charge and a minimum cumulative premium
requirement to keep the rider in force.
Paid-Up Life Insurance Rider: Similar to the GMAB rider, with the same Guarantee
Period, a monthly charge, and a cumulative premium requirement. At end of the
Guarantee Period, the owner may elect to change coverage to paid-up life using
the Account Value as a 5% NSP to determine the amount of coverage; however, the
amount of coverage will never be lower than the sum of gross premiums paid to
that date. Once elected, premiums are no longer payable.
Conversion Option Rider: During certain policy years and prior to the insured's
attained age 70, the policy may be converted, without evidence of insurability,
to any permanent plan of life insurance the Ceding Company then makes available
for conversions of this policy.
Overloan Protection Rider: Protects a policy from terminating due to overloan.
Waiver of Specified Amount (WSA) Rider: Waives a specified amount monthly while
the insured is disabled.
Allocated Retention Pool -- Effective 10/1/2008
Between HLAIC and Swiss Re
Amendment #10 -- Effective 3/1/2012
5
<Page>
Waiver of Monthly Deductions (WMD) Rider: Waives monthly deduction amounts while
the insured is disabled.
Children's Life Insurance Rider: Provides level term life coverage for each
child of the insured.
Foreign Travel Exclusion Rider: Provides a limited death benefit (Account Value
less indebtedness) if the insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Estate Tax Repeal Benefit Rider: Pays the policy Account Value less indebtedness
if the Federal Estate Tax Law is fully repealed by December 31, 2010, and the
Ceding Company receives a request for this benefit amount from the policy owner.
Modified Surrender Value Rider: Changes the Cash Surrender Value definition (to
equal the Account Value) if the policy is surrendered within 3 years after the
policy issue date.
Cash Surrender Value Endorsement: Provides for enhanced Cash Surrender Value
(equal to the current Account Value) in the event of policy surrender in the
first 4 policy years, unless the policy is exchanged under Section 1035 to
another company's policy.
Automatic Premium Payment Rider: Provides for any Scheduled Premium due and
unpaid by the end of any Policy Grace Period to be paid by an automatic
deduction from the Account Value, if the Account Value exceeds the Guaranteed
Cash Value.
Additional Premium Rider: Allows additional premium amounts to be paid at the
same payment intervals as scheduled premiums.
Qualified Plan Rider: Indicates that the policy is owned by a qualified plan,
details the policy owner's reporting responsibilities to the Ceding Company, and
describes features and activities that are unavailable when the policy is owned
by a Qualified Plan.
Owner Designated Settlement Option Rider: Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
DisabilityAccess Rider (DAR): Pays a monthly benefit upon disability of the
primary insured on the life insurance policy to which it is attached. The amount
of monthly benefit is permanently set at rider issue and is limited to a
24-month benefit period. The maximum monthly benefit amount is $5,000; it is
further limited to 2% of the initial face amount or 30% of monthly income at
policy issue. The minimum monthly benefit is $1,000.
LongevityAccess Rider: Provides for monthly benefits (up to 1% of death benefit)
when the insured reaches age 90 and meets the rider's eligibility requirements.
Includes a residual death benefit of 10% of the death benefit prior to
withdrawals. In accordance with Schedule B, during and after withdrawals, the
Ceding Company shall continue to pay the Reinsurer Reinsurance Premiums on the
Reinsured Net Amount at Risk based on the Death Benefit prior to withdrawals,
and the Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the
death of the insured.
Allocated Retention Pool -- Effective 10/1/2008
Between HLAIC and Swiss Re
Amendment #10 -- Effective 3/1/2012
6
<Page>
LifeAccess Care Rider: Similar to the LifeAccess Accelerated Benefit Rider, but
filed as a health product in some states. Provides for monthly benefits (up to
2% of death benefit) if insured meets certain ADL and home-care requirements.
LAST SURVIVOR PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
Hartford Leaders VUL Joint Legacy 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Joint Legacy II 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Advanced Last Survivor UL 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint Freedom 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint Freedom II 2001 CSO M/F S/NS Ultimate ANB B*** 10/01/2008
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
*** The version of this product launched on 7/1/2010 used NAR Type A prior to
3/1/2012. As of 3/1/2012, NAR Type B is used prospectively for all in force
and new policies.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Estate Protection Rider (NAR Type is C) 10/01/2008
</Table>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
LS Exchange Option Rider 10/01/2008
Policy Protection Rider 10/01/2008
Estate Tax Repeal Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
Joint LifeAccess Rider 01/31/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Estate Protection Rider: This rider provides last survivor level term life
insurance on the base policy insureds for three years.
Allocated Retention Pool -- Effective 10/1/2008
Between HLAIC and Swiss Re
Amendment #10 -- Effective 3/1/2012
7
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS BUT THAT ARE NOT ELIGIBLE FOR
REINSURANCE:
LS Exchange Option Rider: Allows a Last Survivor policy to be split into two
Single Life policies, without new evidence of insurability, if divorce, business
dissolution, or estate-tax repeal or reduction occurs. The face amount of each
new Single Life policy will equal one half of the Last Survivor policy face
amount. Upon a split, reinsurance will continue at point-in-scale rates for each
single life, as documented in Section X.C. (This rider is not available when one
of the insureds is uninsurable or above Table H.)
Policy Protection Rider: Protects the death benefit of the base policy and any
Estate Protection Rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Estate Tax Repeal Rider: Will pay the Account Value less indebtedness if the
Federal Estate Tax Law is fully repealed by December 31, 2010, and the Ceding
Company receives a request for this benefit amount from the policy owner.
Foreign Travel Exclusion: Provides a limited death benefit (Account Value less
indebtedness) if either insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Guaranteed Minimum Accumulation Benefit Rider and Paid-Up Life Insurance Rider:
Same as Single Life riders.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
Joint LifeAccess Rider: Similar to the LifeAccess Accelerated Benefit Rider.
Available only on Last Survivor products where the benefit will be payable for
the last surviving insured if chronically ill or if both insureds are
concurrently chronically ill.
Allocated Retention Pool -- Effective 10/1/2008
Between HLAIC and Swiss Re
Amendment #10 -- Effective 3/1/2012
8
<Page>
SCHEDULE B
REINSURANCE SPECIFICATIONS
EFFECTIVE MARCH 1, 2012
AUTOMATIC REINSURANCE: The Ceding Company shall retain its available retention
on each risk, defined below as the Retained Net Amount at Risk, subject to the
applicable Ceding Company's Treaty Retention Limit shown in Exhibit II.
The Reinsurer will automatically reinsure a portion of the remainder of the
risk, called the Reinsured Net Amount at Risk, as defined below in this Schedule
B.
FACULTATIVE REINSURANCE: The Reinsurer will reinsure X% (as determined at issue)
of the Total Net Amount at Risk for the risk.
TOTAL ALLOCATION LIMIT (TAL): As shown in Exhibit II.
CEDING COMPANY'S TREATY RETENTION LIMIT (CCTRL): As shown in Exhibit II.
CEDING COMPANY'S ALLOCATED RETENTION (CCAR): As shown in Exhibit II.
CURRENT RETENTION (CURRRET) = Current amount of life insurance retained by the
Ceding Company and its affiliated companies on the life for in-force life
insurance coverage. (For Last Survivor risks, see the Last Survivor Limits and
Retention Worksheet in Exhibit II.)
REINSURER'S ALLOCATED RETENTION (REINSARET): As shown in Exhibit II.
REINSURER'S ATTACHMENT POINT (REINSAPT): As shown in Exhibit II.
NAR TYPE for the Plan of Insurance to be reinsured under this Agreement, as
shown in Schedule A.
STEP 1 -- DETERMINE TOTAL NET AMOUNT AT RISK FOR THE COVERAGE*
TOTAL NET AMOUNT AT RISK (TOTNAR) =
Allocated Retention Pool -- Effective 10/1/2008
Between HLAIC and Swiss Re
Amendment #10 -- Effective 3/1/2012
9
<Page>
STEP 2 -- DETERMINE NET AMOUNT AT RISK FOR EACH "LAYER" OF COVERAGE
STEP 3 -- DETERMINE THE NAR FOR THE CEDING COMPANY AND THEN FOR THE REINSURER
Allocated Retention Pool -- Effective 10/1/2008
Between HLAIC and Swiss Re
Amendment #10 -- Effective 3/1/2012
10
<Page>
MINIMUM REINSURANCE APPLICATION:
LEAD REINSURER:
Allocated Retention Pool -- Effective 10/1/2008
Between HLAIC and Swiss Re
Amendment #10 -- Effective 3/1/2012
11
<Page>
AMENDMENT 11
EFFECTIVE OCTOBER 1, 2008
TO THE
AUTOMATIC AND FACULTATIVE MONTHLY RENEWABLE TERM REINSURANCE AGREEMENT
EFFECTIVE OCTOBER 1, 2008
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
SWISS RE LIFE & HEALTH AMERICA INC. ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer (collectively, the "Parties")
agree that the Agreement was implemented using YRT Reinsurance Guaranteed Rates
("Annual Rates") and Allowance Percentages ("Allowances") which proved to be
incorrect; and
WHEREAS, the Parties have agreed to incorporate revised Annual Rates and
Allowances as shown in the attached Exhibit III and Exhibit IV as of October 1,
2008; and
WHEREAS, the Parties now wish to recalculate all billing transactions from
October 1, 2008 using the revised Annual Rates and Allowances; and
WHEREAS, the Ceding Company shall alter its administrative systems to enable the
recalculation of premium.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer hereby agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. Exhibit III is deleted in its entirety and replaced with the attached
revised Exhibit III.
3. Exhibit IV is deleted in its entirety and replaced with the attached
revised Exhibit IV.
4. The Ceding Company shall recalculate all billing transactions from October
1, 2008 and pay the Reinsurer accordingly.
5. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 11 -- Effective 10/01/2008
1
<Page>
In witness of the foregoing, the Ceding Company and the Reinsurer have, by their
respective officers, executed this Amendment in duplicate on the dates indicated
below.
SWISS RE LIFE & HEALTH AMERICA INC.
<Table>
<S> <C> <C> <C>
By: /s/ Kenneth Thieme Attest: /s/ [ILLEGIBLE]
-------------------------------------- --------------------------------------
Name: Kenneth Thieme Name: [ILLEGIBLE]
Title: Vice President Title: Vice President
Date: 10-11-12 Date: 10/11/12
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Michael Roscoe
-------------------------------------- --------------------------------------
Name: Paul Fischer, FSA, MAAA Name: Michael Roscoe, FSA, MAAA
Title: Assistant Vice President and Actuary Title: Senior Vice President
Individual Life Product Management Individual Life Product Management
Date: 10-19-12 Date: 10/19/12
</Table>
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 11 -- Effective 10/01/2008
2
<Page>
EXHIBIT III
ANNUAL RATES PER $1,000 OF REINSURED NET AMOUNT AT RISK
EFFECTIVE OCTOBER 1, 2008
FOR SINGLE LIFE AND LAST SURVIVOR PLANS OF INSURANCE
AND
FOR AUTOMATIC AND FACULTATIVE REINSURANCE
Annual Rates per $1,000 of Reinsured Net Amount at Risk are included in the
Excel file titled "Master File -- Guaranteed Rates -- Rev ANB-ALB
Correction.xls" sent from Nathan Hill at the Ceding Company to Kenneth Thieme at
the Reinsurer on February 3, 2012 at 1:00 P.M. They are provided on a Select &
Ultimate basis and vary by:
1. Age basis (Age Nearest Birthday or Age Last Birthday), to align with the
Valuation Mortality Table for the Plan of Insurance;
2. Gender (Male, Female); and
3. Rate class --
a. Non-Nicotine;
b. Nicotine;
All risks insured by the Ceding Company on a Unisex basis will be reinsured
using gender-specific rates.
Allocated Retention Pool -- Effective 10/01/2008
Between HLA1C and Swiss Re
Amendment 11 -- Effective 10/01/2008
3
<Page>
EXHIBIT IV
ALLOWANCE PERCENTAGES TO BE APPLIED TO THE ANNUAL RATES PER $1,000
EFFECTIVE OCTOBER 1, 2008
FOR SINGLE LIFE AND LAST SURVIVOR PLANS OF INSURANCE
AND
FOR AUTOMATIC AND FACULTATIVE REINSURANCE
Allowance Percentages to be applied to the Annual Rates per $1,000 of Reinsured
Net Amount at Risk are included in the Excel file titled "Master File --
Allowances -- Rev ANB-ALB Correction.xls" sent from Nathan Hill at the Ceding
Company to Kenneth Thieme at the Reinsurer on February 3, 2012 at 1:00 P.M. They
are provided on a Select & Ultimate basis and vary by:
1. Whether the Plan of Insurance is a Single Life or Last Survivor Plan;
2. Age basis (Age Nearest Birthday or Age Last Birthday), to align with the
Valuation Mortality Table for the Plan of Insurance;
3. Gender (Male, Female); and
4. Rate class --
a. Preferred Plus Non-Nicotine (PPNN);
b. Preferred Non-Nicotine (PNN);
c. Standard Non-Nicotine (SNN);
d. Preferred Nicotine (PN); and
e. Standard Nicotine (SN).
For Life Solutions II UL plans, allowance percentages will be determined as
follows:
(1) For "Preferred" policies, use the SNN rate class; and
(2) For "Standard" policies, use the SN rate class.
All risks insured by the Ceding Company on a Unisex basis will be reinsured
using gender-specific allowance percentages.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 11 -- Effective 10/01/2008
4
<Page>
AMENDMENT 12
EFFECTIVE OCTOBER 15, 2012
TO THE
AUTOMATIC AND FACULTATIVE MONTHLY RENEWABLE TERM REINSURANCE AGREEMENT
EFFECTIVE OCTOBER 1, 2008
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
SWISS RE LIFE & HEALTH AMERICA INC. ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer wish to amend the Agreement to
reflect that the following Products will be added to the Agreement and the
Effective Dates shown in Schedule A are the dates the products will become
reinsured:
- Hartford Joint Founders Plus UL,
- Hartford Bicentennial UL Freedom 2013, and
- Hartford Bicentennial UL Joint Freedom II 2013.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer hereby agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. Schedule A is deleted in its entirety and replaced with the attached
revised Schedule A.
3. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 12 -- Effective 10/15/2012
1
<Page>
In witness of the foregoing, the Ceding Company and the Reinsurer have, by their
respective officers, executed this Amendment in duplicate on the dates indicated
below.
SWISS RE LIFE & HEALTH AMERICA INC.
<Table>
<S> <C> <C> <C>
By: /s/ Jeremy Lane Attest: /s/ Timothy J. Grusenmeyer
-------------------------------------- --------------------------------
Name: Jeremy Lane Name: Timothy J. Grusenmeyer
Title: Vice President Title: Vice President
Date: 10/26/2012 Date: 10/26/12
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Michael Roscoe
-------------------------------------- --------------------------------
Name: Paul Fischer, FSA, MAAA Name: Michael Roscoe, FSA, MAAA
Title: Assistant Vice President and Actuary Title: Senior Vice President
Individual Life Product Management Individual Life Product
Management
Date: 10/30/12 Date: 10/31/12
</Table>
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 12 -- Effective 10/15/2012
2
<Page>
SCHEDULE A
PLANS OF INSURANCE COVERED UNDER THIS AGREEMENT
EFFECTIVE OCTOBER 15, 2012
SINGLE LIFE PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
Stag UL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Bicentennial UL Founders 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford UL CV 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Wall Street VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Protector II VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Legacy 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Stag Accumulator II VUL 1980 CSO M/F Unismoke Ultimate ALB A 10/01/2008
Hartford Leaders VUL Liberty (a) 1980 CSO M/F Unismoke Ultimate ANB A 10/01/2008
Hartford Leaders VUL Liberty (b) 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Life Solutions II UL (a) 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Life Solutions II UL (b) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Advanced Universal Life 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Freedom 2001 CSO M/F S/NS Ultimate ANB B*** 10/01/2008
Hartford Quantum II VUL (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Quantum II VUL (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford ExtraOrdinary Whole Life (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford ExtraOrdinary Whole Life (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Bicentennial UL Founders II 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Hartford Bicentennial UL Founders II Extended 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Value Option
Annually Renewable Term (ART) 2001 CSO M/F S/NS Ultimate ANB C 10/01/2008
Hartford Frontier Indexed Universal Life 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Hartford Frontier Indexed Universal Life 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Extended Value Option
Hartford Founders Plus UL 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Hartford Founders Plus UL Extended Value 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Option
Hartford Frontier 2012 Indexed UL 2001 CSO M/F S/NS Ultimate ANB A 07/16/2012
Hartford Frontier 2012 Indexed UL Extended 2001 CSO M/F S/NS Ultimate ANB A 07/16/2012
Value Option
Hartford Leaders VUL Liberty 2012 2001 CSO M/F Composite Ultimate ANB A 08/06/2012
Hartford Leaders VUL Liberty 2012 Extended 2001 CSO M/F Composite Ultimate ANB A 08/06/2012
Value Option
Hartford Bicentennial UL Freedom 2013 2001 CSO M/F S/NS Ultimate ANB B 11/12/2012
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
*** The version of this product launched on 7/1/2010 used NAR Type A prior to
3/1/2012. As of 3/1/2012, NAR Type B is used prospectively for all in force
and new policies.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 12 -- Effective 10/15/2012
3
<Page>
SINGLE LIFE PLANS OF INSURANCE
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Primary Term Insured Rider 10/01/2008
Other Covered Insured Term Life Rider 10/01/2008
Cost of Living Adjustment (COLA) Rider 10/01/2008
</Table>
NOTE: NAR Type for term riders above is C. For COLA Rider, NAR Type follows Base
Policy to which it is attached.
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Accidental Death Benefit (ADB) Rider 10/01/2008
Accelerated Benefit Rider (ABR) 10/01/2008
LifeAccess Accelerated Benefit Rider (LAABR) 10/01/2008
Policy Continuation Rider 10/01/2008
Policy Protection Rider (PPR) 10/01/2008
Enhanced No Lapse Guarantee Rider 10/01/2008
Lifetime No Lapse Guarantee Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Conversion Option Rider 10/01/2008
Overloan Protection Rider 10/01/2008
Waiver of Specified Amount (WSA) Rider 10/01/2008
Waiver of Monthly Deductions (WMD) Rider 10/01/2008
Children's Life Insurance Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Estate Tax Repeal Benefit Rider 10/01/2008
Modified Surrender Value Rider 10/01/2008
Cash Surrender Value Endorsement 10/01/2008
Automatic Premium Payment Rider 10/01/2008
Additional Premium Rider 10/01/2008
Qualified Plan Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
DisabilityAccess Rider (DAR) 08/11/2009
LongevityAccess Rider 03/14/2011
LifeAccess Care Rider 04/11/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 12 -- Effective 10/15/2012
4
<Page>
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING ADDITIONAL DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Primary Insured Term Rider: Provides additional level term life coverage on the
base policy insured.
Other Covered Insured Term Life Rider: Provides level term life coverage on an
insured other than the base policy insured.
Cost of Living Adjustment (COLA) Rider: Provides for biennial face amount
increases, without underwriting, based on increases in the Consumer Price Index.
The maximum amount of any single increase is $50,000. Any increase can be
declined by the policyholder, which stops future increases. Available only at
issue and only for non-substandard issue ages 0 through 60.
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE:
Accidental Death Benefit Rider: Pays an additional death benefit if the death on
the insured is caused by a qualifying accident.
Accelerated Benefit Rider: Provides the policyholder up to 100% of the death
benefit, discounted with interest, if the insured's life expectancy is 12 months
or less. After acceleration, the Ceding Company shall continue to pay the
Reinsurer Reinsurance Premiums on the Reinsured Net Amount at Risk as described
in Schedule B, and the Reinsurer shall be liable for such Reinsured Net Amount
at Risk upon the death of the insured.
LifeAccess Accelerated Benefit Rider (LAABR): Provides for monthly benefits (up
to 2% of death benefit) if insured meets certain ADL and home-care requirements.
In accordance with Schedule B, during and after acceleration, the Ceding Company
shall continue to pay the Reinsurer Reinsurance Premiums on the Reinsured Net
Amount at Risk based on the Death Benefit prior to acceleration, and the
Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the death
of the insured.
Policy Continuation Rider: Intended to prevent the lapse of highly loaned
policies.
Policy Protection Rider: Protects the death benefit of the base policy and any
primary insured term rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Enhanced No Lapse Guarantee Rider: Provides that the policy will not lapse as
long as cumulative premiums paid less indebtedness less withdrawals are greater
than or equal to the cumulative no lapse guarantee premiums. Length of guarantee
varies by issue age.
Lifetime No Lapse Guarantee Rider: Same as Enhanced No Lapse Guarantee Rider but
with lifetime guarantee.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 12 -- Effective 10/15/2012
5
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE
(CONTINUED):
Guaranteed Minimum Accumulation Benefit (GMAB) Rider: Provides, at the end of
the GMAB Guarantee Period (usually 20 years), that the policy Account Value will
be increased, if necessary, to equal the sum of gross premiums paid to that
date. There is a small monthly charge and a minimum cumulative premium
requirement to keep the rider in force.
Paid-Up Life Insurance Rider: Similar to the GMAB rider, with the same Guarantee
Period, a monthly charge, and a cumulative premium requirement. At end of the
Guarantee Period, the owner may elect to change coverage to paid-up life using
the Account Value as a 5% NSP to determine the amount of coverage; however, the
amount of coverage will never be lower than the sum of gross premiums paid to
that date. Once elected, premiums are no longer payable.
Conversion Option Rider: During certain policy years and prior to the insured's
attained age 70, the policy may be converted, without evidence of insurability,
to any permanent plan of life insurance the Ceding Company then makes available
for conversions of this policy.
Overloan Protection Rider: Protects a policy from terminating due to overloan.
Waiver of Specified Amount (WSA) Rider: Waives a specified amount monthly while
the insured is disabled.
Waiver of Monthly Deductions (WMD) Rider: Waives monthly deduction amounts while
the insured is disabled.
Children's Life Insurance Rider: Provides level term life coverage for each
child of the insured.
Foreign Travel Exclusion Rider: Provides a limited death benefit (Account Value
less indebtedness) if the insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Estate Tax Repeal Benefit Rider: Pays the policy Account Value less indebtedness
if the Federal Estate Tax Law is fully repealed by December 31, 2010, and the
Ceding Company receives a request for this benefit amount from the policy owner.
Modified Surrender Value Rider: Changes the Cash Surrender Value definition (to
equal the Account Value) if the policy is surrendered within 3 years after the
policy issue date.
Cash Surrender Value Endorsement: Provides for enhanced Cash Surrender Value
(equal to the current Account Value) in the event of policy surrender in the
first 4 policy years, unless the policy is exchanged under Section 1035 to
another company's policy.
Automatic Premium Payment Rider: Provides for any Scheduled Premium due and
unpaid by the end of any Policy Grace Period to be paid by an automatic
deduction from the Account Value, if the Account Value exceeds the Guaranteed
Cash Value.
Additional Premium Rider: Allows additional premium amounts to be paid at the
same payment intervals as scheduled premiums.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 12 -- Effective 10/15/2012
6
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE
(CONTINUED):
Qualified Plan Rider: Indicates that the policy is owned by a qualified plan,
details the policy owner's reporting responsibilities to the Ceding Company, and
describes features and activities that are unavailable when the policy is owned
by a Qualified Plan.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
DisabilityAccess Rider (DAR): Pays a monthly benefit upon disability of the
primary insured on the life insurance policy to which it is attached. The amount
of monthly benefit is permanently set at rider issue and is limited to a
24-month benefit period. The maximum monthly benefit amount is $5,000; it is
further limited to 2% of the initial face amount or 30% of monthly income at
policy issue. The minimum monthly benefit is $1,000.
LongevityAccess Rider: Provides for monthly benefits (up to 1% of death benefit)
when the insured reaches age 90 and meets the rider's eligibility requirements.
Includes a residual death benefit of 10% of the death benefit prior to
withdrawals. In accordance with Schedule B, during and after withdrawals, the
Ceding Company shall continue to pay the Reinsurer Reinsurance Premiums on the
Reinsured Net Amount at Risk based on the Death Benefit prior to withdrawals,
and the Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the
death of the insured.
LifeAccess Care Rider: Similar to the LifeAccess Accelerated Benefit Rider, but
filed as a health product in some states. Provides for monthly benefits (up to
2% of death benefit) if insured meets certain ADL and home-care requirements.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 12 -- Effective 10/15/2012
7
<Page>
LAST SURVIVOR PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
Hartford Leaders VUL Joint Legacy 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Joint Legacy II 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Advanced Last Survivor UL 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint Freedom 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint Freedom II 2001 CSO M/F S/NS Ultimate ANB B*** 10/01/2008
Hartford Joint Founders Plus UL 2001 CSO M/F S/NS Ultimate ANB A 10/15/2012
Hartford Bicentennial UL Joint 2001 CSO M/F S/NS Ultimate ANB B 11/12/2012
Freedom II 2013
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
*** The version of this product launched on 7/1/2010 used NAR Type A prior to
3/1/2012. As of 3/1/2012, NAR Type B is used prospectively for all in force
and new policies.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Estate Protection Rider (NAR Type is C) 10/01/2008
</Table>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
LS Exchange Option Rider 10/01/2008
Policy Protection Rider 10/01/2008
Estate Tax Repeal Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
Joint LifeAccess Rider 01/31/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Estate Protection Rider: This rider provides last survivor level term life
insurance on the base policy insureds for three years.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 12 -- Effective 10/15/2012
8
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS BUT THAT ARE NOT ELIGIBLE FOR
REINSURANCE:
LS Exchange Option Rider: Allows a Last Survivor policy to be split into two
Single Life policies, without new evidence of insurability, if divorce, business
dissolution, or estate-tax repeal or reduction occurs. The face amount of each
new Single Life policy will equal one half of the Last Survivor policy face
amount. Upon a split, reinsurance will continue at point-in-scale rates for each
single life, as documented in Section X.C. (This rider is not available when one
of the insureds is uninsurable or above Table H.)
Policy Protection Rider: Protects the death benefit of the base policy and any
Estate Protection Rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Estate Tax Repeal Rider: Will pay the Account Value less indebtedness if the
Federal Estate Tax Law is fully repealed by December 31, 2010, and the Ceding
Company receives a request for this benefit amount from the policy owner.
Foreign Travel Exclusion: Provides a limited death benefit (Account Value less
indebtedness) if either insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Guaranteed Minimum Accumulation Benefit Rider and Paid-Up Life Insurance Rider:
Same as Single Life riders.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
Joint LifeAccess Rider: Similar to the LifeAccess Accelerated Benefit Rider.
Available only on Last Survivor products where the benefit will be payable for
the last surviving insured if chronically ill or if both insureds are
concurrently chronically ill.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 12 -- Effective 10/15/2012
9
<Page>
AMENDMENT 13
EFFECTIVE JULY 16, 2012
TO THE
AUTOMATIC AND FACULTATIVE MONTHLY RENEWABLE TERM REINSURANCE AGREEMENT
EFFECTIVE OCTOBER 1, 2008
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
SWISS RE LIFE & HEALTH AMERICA INC. ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer wish to amend the Agreement to
reflect that the following Products will be added to the Agreement and the
Effective Dates shown in Schedule A are the dates the products will become
reinsured:
- Hartford Frontier 2012 Indexed UL,
- Hartford Frontier 2012 Indexed UL Extended Value Option,
- Hartford Leaders VUL Liberty 2012, and
- Hartford Leaders VUL Liberty 2012 Extended Value Option.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer hereby agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. Schedule A is deleted in its entirety and replaced with the attached
revised Schedule A.
3. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 13 -- Effective 07/16/2012
1
<Page>
In witness of the foregoing, the Ceding Company and the Reinsurer have, by their
respective officers, executed this Amendment in duplicate on the dates indicated
below.
SWISS RE LIFE & HEALTH AMERICA INC.
<Table>
<S> <C> <C> <C>
By: /s/ Jeremy Lane Attest: /s/ [ILLEGIBLE]
-------------------------------------- --------------------------------------
Name: Jeremy Lane Name: [ILLEGIBLE]
Title: Vice President Title: Vice President
Date: 9/7/2012 Date: 9/7/12
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Donna R. Jarvis
-------------------------------------- --------------------------------------
Name: Paul Fischer, FSA, MAAA Name: Donna R. Jarvis
Title: Assistant Vice President and Actuary Title: Vice President and Actuary
Individual Life Product Management
Date: 9-24-12 Date: 9-24-12
</Table>
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 13 -- Effective 07/16/2012
2
<Page>
SCHEDULE A
PLANS OF INSURANCE COVERED UNDER THIS AGREEMENT
EFFECTIVE JULY 16, 2012
SINGLE LIFE PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* 1DATE**
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
Stag UL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Bicentennial UL Founders 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford UL CV 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Wall Street VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Protector II VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Legacy 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Stag Accumulator II VUL 1980 CSO M/F Unismoke Ultimate ALB A 10/01/2008
Hartford Leaders VUL Liberty (a) 1980 CSO M/F Unismoke Ultimate ANB A 10/01/2008
Hartford Leaders VUL Liberty (b) 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Life Solutions II UL (a) 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Life Solutions II UL (b) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Advanced Universal Life 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Freedom 2001 CSO M/F S/NS Ultimate ANB B*** 10/01/2008
Hartford Quantum II VUL (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Quantum II VUL (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford ExtraOrdinary Whole Life (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford ExtraOrdinary Whole Life (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Bicentennial UL Founders II 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Hartford Bicentennial UL Founders II 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Extended Value Option
Annually Renewable Term (ART) 2001 CSO M/F S/NS Ultimate ANB C 10/01/2008
Hartford Frontier Indexed Universal Life 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Hartford Frontier Indexed Universal Life 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Extended Value Option
Hartford Founders Plus UL 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Hartford Founders Plus UL 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Extended Value Option
Hartford Frontier 2012 Indexed UL 2001 CSO M/F S/NS Ultimate ANB A 07/16/2012
Hartford Frontier 2012 Indexed UL 2001 CSO M/F S/NS Ultimate ANB A 07/16/2012
Extended Value Option
Hartford Leaders VUL Liberty 2012 2001 CSO M/F Composite Ultimate ANB A 08/06/2012
Hartford Leaders VUL Liberty 2012 2001 CSO M/F Composite Ultimate ANB A 08/06/2012
Extended Value Option
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
*** The version of this product launched on 7/1/2010 used NAR Type A prior to
3/1/2012. As of 3/1/2012, NAR Type B is used prospectively for all in force
and new policies.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Primary Term Insured Rider 10/01/2008
Other Covered Insured Term Life Rider 10/01/2008
Cost of Living Adjustment (COLA) Rider 10/01/2008
</Table>
NOTE: NAR Type for term riders above is C. For COLA Rider, NAR Type follows Base
Policy to which it is attached.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 13 -- Effective 07/16/2012
3
<Page>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Accidental Death Benefit (ADB) Rider 10/01/2008
Accelerated Benefit Rider (ABR) 10/01/2008
LifeAccess Accelerated Benefit Rider (LAABR) 10/01/2008
Policy Continuation Rider 10/01/2008
Policy Protection Rider (PPR) 10/01/2008
Enhanced No Lapse Guarantee Rider 10/01/2008
Lifetime No Lapse Guarantee Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Conversion Option Rider 10/01/2008
Overloan Protection Rider 10/01/2008
Waiver of Specified Amount (WSA) Rider 10/01/2008
Waiver of Monthly Deductions (WMD) Rider 10/01/2008
Children's Life Insurance Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Estate Tax Repeal Benefit Rider 10/01/2008
Modified Surrender Value Rider 10/01/2008
Cash Surrender Value Endorsement 10/01/2008
Automatic Premium Payment Rider 10/01/2008
Additional Premium Rider 10/01/2008
Qualified Plan Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
DisabilityAccess Rider (DAR) 08/11/2009
LongevityAccess Rider 03/14/2011
LifeAccess Care Rider 04/11/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING ADDITIONAL DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Primary Insured Term Rider: Provides additional level term life coverage on the
base policy insured.
Other Covered Insured Term Life Rider: Provides level term life coverage on an
insured other than the base policy insured.
Cost of Living Adjustment (COLA) Rider: Provides for biennial face amount
increases, without underwriting, based on increases in the Consumer Price Index.
The maximum amount of any single increase is $50,000. Any increase can be
declined by the policyholder, which stops future increases. Available only at
issue and only for non-substandard issue ages 0 through 60.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 13 -- Effective 07/16/2012
4
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE:
Accidental Death Benefit Rider: Pays an additional death benefit if the death on
the insured is caused by a qualifying accident.
Accelerated Benefit Rider: Provides the policyholder up to 100% of the death
benefit, discounted with interest, if the insured's life expectancy is 12 months
or less. After acceleration, the Ceding Company shall continue to pay the
Reinsurer Reinsurance Premiums on the Reinsured Net Amount at Risk as described
in Schedule B, and the Reinsurer shall be liable for such Reinsured Net Amount
at Risk upon the death of the insured.
LifeAccess Accelerated Benefit Rider (LAABR): Provides for monthly benefits (up
to 2% of death benefit) if insured meets certain ADL and home-care requirements.
In accordance with Schedule B, during and after acceleration, the Ceding Company
shall continue to pay the Reinsurer Reinsurance Premiums on the Reinsured Net
Amount at Risk based on the Death Benefit prior to acceleration, and the
Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the death
of the insured.
Policy Continuation Rider: Intended to prevent the lapse of highly loaned
policies.
Policy Protection Rider: Protects the death benefit of the base policy and any
primary insured term rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Enhanced No Lapse Guarantee Rider: Provides that the policy will not lapse as
long as cumulative premiums paid less indebtedness less withdrawals are greater
than or equal to the cumulative no lapse guarantee premiums. Length of guarantee
varies by issue age.
Lifetime No Lapse Guarantee Rider: Same as Enhanced No Lapse Guarantee Rider but
with lifetime guarantee.
Guaranteed Minimum Accumulation Benefit (GMAB) Rider: Provides, at the end of
the GMAB Guarantee Period (usually 20 years), that the policy Account Value will
be increased, if necessary, to equal the sum of gross premiums paid to that
date. There is a small monthly charge and a minimum cumulative premium
requirement to keep the rider in force.
Paid-Up Life insurance Rider: Similar to the GMAB rider, with the same Guarantee
Period, a monthly charge, and a cumulative premium requirement. At end of the
Guarantee Period, the owner may elect to change coverage to paid-up life using
the Account Value as a 5% NSP to determine the amount of coverage; however, the
amount of coverage will never be lower than the sum of gross premiums paid to
that date. Once elected, premiums are no longer payable.
Conversion Option Rider: During certain policy years and prior to the insured's
attained age 70, the policy may be converted, without evidence of insurability,
to any permanent plan of life insurance the Ceding Company then makes available
for conversions of this policy.
Overloan Protection Rider: Protects a policy from terminating due to overloan.
Waiver of Specified Amount (WSA) Rider: Waives a specified amount monthly while
the insured is disabled.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 13 -- Effective 07/16/2012
5
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE
(CONTINUED):
Waiver of Monthly Deductions (WMD) Rider: Waives monthly deduction amounts while
the insured is disabled.
Children's Life Insurance Rider: Provides level term life coverage for each
child of the insured.
FOREIGN TRAVEL EXCLUSION RIDER: Provides a limited death benefit (Account Value
less indebtedness) if the insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Estate Tax Repeal Benefit Rider: Pays the policy Account Value less indebtedness
if the Federal Estate Tax Law is fully repealed by December 31, 2010, and the
Ceding Company receives a request for this benefit amount from the policy owner.
Modified Surrender Value Rider: Changes the Cash Surrender Value definition (to
equal the Account Value) if the policy is surrendered within 3 years after the
policy issue date.
Cash Surrender Value Endorsement: Provides for enhanced Cash Surrender Value
(equal to the current Account Value) in the event of policy surrender in the
first 4 policy years, unless the policy is exchanged under Section 1035 to
another company's policy.
Automatic Premium Payment Rider: Provides for any Scheduled Premium due and
unpaid by the end of any Policy Grace Period to be paid by an automatic
deduction from the Account Value, if the Account Value exceeds the Guaranteed
Cash Value.
Additional Premium Rider: Allows additional premium amounts to be paid at the
same payment intervals as scheduled premiums.
Qualified Plan Rider: Indicates that the policy is owned by a qualified plan,
details the policy owner's reporting responsibilities to the Ceding Company, and
describes features and activities that are unavailable when the policy is owned
by a Qualified Plan.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
DisabilityAccess Rider (DAR): Pays a monthly benefit upon disability of the
primary insured on the life insurance policy to which it is attached. The amount
of monthly benefit is permanently set at rider issue and is limited to a
24-month benefit period. The maximum monthly benefit amount is $5,000; it is
further limited to 2% of the initial face amount or 30% of monthly income at
policy issue. The minimum monthly benefit is $1,000.
LongevityAccess Rider: Provides for monthly benefits (up to 1% of death benefit)
when the insured reaches age 90 and meets the rider's eligibility requirements.
Includes a residual death benefit of 10% of the death benefit prior to
withdrawals. In accordance with Schedule B, during and after withdrawals, the
Ceding Company shall continue to pay the Reinsurer Reinsurance Premiums on the
Reinsured Net Amount at Risk based on the Death Benefit prior to withdrawals,
and the Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the
death of the insured.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 13 -- Effective 07/16/2012
6
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE
(CONTINUED):
LifeAccess Care Rider: Similar to the LifeAccess Accelerated Benefit Rider, but
filed as a health product in some states. Provides for monthly benefits (up to
2% of death benefit) if insured meets certain ADL and home-care requirements.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 13 -- Effective 07/16/2012
7
<Page>
LAST SURVIVOR PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
Hartford Leaders VUL Joint Legacy 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Joint Legacy II 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Advanced Last Survivor UL 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint Freedom 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint Freedom II 2001 CSO M/F S/NS Ultimate ANB B*** 10/01/2008
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
*** The version of this product launched on 7/1/2010 used NAR Type A prior to
3/1/2012. As of 3/1/2012, NAR Type B is used prospectively for all in force
and new policies.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Estate Protection Rider (NAR Type is C) 10/01/2008
</Table>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
LS Exchange Option Rider 10/01/2008
Policy Protection Rider 10/01/2008
Estate Tax Repeal Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
Joint LifeAccess Rider 01/31/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Estate Protection Rider: This rider provides last survivor level term life
insurance on the base policy insureds for three years.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 13 -- Effective 07/16/2012
8
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS BUT THAT ARE NOT ELIGIBLE FOR
REINSURANCE:
LS Exchange Option Rider: Allows a Last Survivor policy to be split into two
Single Life policies, without new evidence of insurability, if divorce, business
dissolution, or estate-tax repeal or reduction occurs. The face amount of each
new Single Life policy will equal one half of the Last Survivor policy face
amount. Upon a split, reinsurance will continue at point-in-scale rates for each
single life, as documented in Section X.C. (This rider is not available when one
of the insureds is uninsurable or above Table H.)
Policy Protection Rider: Protects the death benefit of the base policy and any
Estate Protection Rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Estate Tax Repeal Rider: Will pay the Account Value less indebtedness if the
Federal Estate Tax Law is fully repealed by December 31, 2010, and the Ceding
Company receives a request for this benefit amount from the policy owner.
Foreign Travel Exclusion: Provides a limited death benefit (Account Value less
indebtedness) if either insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Guaranteed Minimum Accumulation Benefit Rider and Paid-Up Life Insurance Rider:
Same as Single Life riders.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
Joint LifeAccess Rider: Similar to the LifeAccess Accelerated Benefit Rider.
Available only on Last Survivor products where the benefit will be payable for
the last surviving insured if chronically ill or if both insureds are
concurrently chronically ill.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and Swiss Re
Amendment 13 -- Effective 07/16/2012
9
<Page>
AMENDMENT 7
EFFECTIVE OCTOBER 1, 2008
TO THE
AUTOMATIC AND FACULTATIVE MONTHLY RENEWABLE TERM
REINSURANCE AGREEMENT
EFFECTIVE OCTOBER 1, 2008
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
TRANSAMERICA LIFE INSURANCE COMPANY ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer wish to clarify Section III. A.1
to indicate that the insured must satisfy only one of the requirements listed;
and
WHEREAS, the Ceding Company and the Reinsurer wish to amend the Agreement to
correct Section III. A.6 to state that the Automatic Binding Limit only applies
to Excess Risks; and
WHEREAS, the Ceding Company and the Reinsurer wish to clarify the administrative
implications of the Reinsurer's liability for riders or policy features that
accelerate the death benefit; and
WHEREAS, the Ceding Company and the Reinsurer wish to outline how Reinsurance
Premiums will be calculated in the event of a specific option's election under
the Conversion Option Rider; and
WHEREAS, the Ceding Company and the Reinsurer wish to confirm the Reinsurer's
liability for policy increases not subject to new underwriting; and
WHEREAS, the Ceding Company and the Reinsurer wish to reaffirm the basis for the
minimum amount for a facultative reinsurance application; and
WHEREAS, the Ceding Company and the Reinsurer wish to correct drafting errors in
Schedule F; and
WHEREAS, the Ceding Company and the Reinsurer wish to replace Exhibit VII to
reflect updated definitions and references.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. Article III is hereby deleted in its entirety and replaced with the
attached, revised Article III.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 7 -- Effective 10/01/2008
1
<Page>
3. Section IV.F is hereby deleted in its entirety and replaced with the
following Section IV.F:
F. The Reinsurer's liability for reinsurance on each risk will
terminate when the Ceding Company's liability terminates, unless it
terminates earlier as specified otherwise in this Agreement or later
as a result of the full acceleration of the death benefit.
4. Article X is hereby deleted in its entirety and replaced with the attached,
revised Article X.
5. Schedule B is hereby deleted in its entirety and replaced with the
attached, revised Schedule B.
6. Schedule F is hereby deleted in its entirety and replaced with the
attached, revised Schedule F.
7. Exhibit VII is hereby deleted in its entirety and replaced with the
attached, revised Exhibit VII.
8. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
In witness of the foregoing, the Ceding Company and the Reinsurer have, by their
respective officers, executed this Amendment in duplicate on the dates indicated
below.
TRANSAMERICA LIFE INSURANCE COMPANY
by its Administrator and Attorney-in-Fact
SCOR Global Life US Re Insurance Company
<Table>
<S> <C> <C> <C>
on September 12, 2011
Signature /s/ Glenn Cunningham Signature /s/ Robin S. Blackwell
----------------------------------------- -----------------------------------------
Name in Text Glenn Cunningham Name in Text Robin S. Blackwell
Title: Executive Vice President Title: Assistant Vice President
SCOR Global Life US Re Insurance Company SCOR Global Life US Re Insurance Company
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Michael Roscoe
----------------------------------------- -----------------------------------------
Name: Paul Fischer, FSA, MAAA Name: Michael Roscoe, FSA, MAAA
Title: Assistant Vice President and Actuary Title: Senior Vice President
Individual Life Product Management Individual Life Product Management
Date: May 23, 2012 Date: 5/31/12
</Table>
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendent 7 -- Effective 10/01/2008
2
<Page>
ARTICLE III
REINSURANCE COVERAGE
Reinsurance under this Agreement will apply to those Plans of Insurance and
Riders set forth in Schedule A that also fall within a category of policies
eligible for reinsurance under this Agreement as described in Schedule F. Such
reinsurance shall be either on an automatic basis, subject to the requirements
set forth in Section A below, on an automatic processing basis, subject to the
requirements set forth in Section B below, or on a facultative basis, subject to
the requirements set forth in Section C below. Notwithstanding the foregoing,
reinsurance coverage on a facultative basis may also apply on plans of insurance
not listed in Schedule A, with the agreement of the Reinsurer. The
specifications for all reinsurance under this Agreement are provided in Schedule
B.
The term "Excess Risk," as used in this Agreement, shall mean a risk for which
the amount to be written on a life by the Ceding Company, when added to any
other amounts of risk for that life already in the Automatic Pool and any
amounts not in the Automatic Pool that are retained by the Ceding Company or its
affiliated companies, exceeds, either in whole or in part, the Total Allocation
Limit for that life shown in Exhibit II.
A. Automatic Reinsurance
For each risk that meets the requirements for Automatic Reinsurance as set forth
below, the Reinsurer will participate in a reinsurance pool whereby the
Reinsurer will automatically reinsure a portion of the risk as indicated in
Schedule B ("Automatic Pool"). The requirements for Automatic Reinsurance are as
follows:
1. Each life, at the time of application, must satisfy one of the following
requirements:
a. have been a legal resident of the United States or Canada for at
least six months; or
b. be a citizen of the United States or Canada; or
c. qualify for the Foreign National Underwriting Program as specified
in Schedule C.
2. Each risk must be underwritten according to the Ceding Company's Standard
Underwriting Practices and Guidelines or one of the special underwriting
programs. The Ceding Company's Standard Underwriting Practices and
Guidelines as of the Effective Date are described in Schedule E, and the
Ceding Company's special underwriting programs as of the Effective Date are
described in Schedule C and Schedule D. Changes to such documents will be
handled in accordance with Section XXII.M.
If the Ceding Company would like to offer coverage at a risk class more
favorable than the True Assessed Risk Class, the Ceding Company may:
a. Reinsure the risk automatically under this Agreement with
Reinsurance Premiums based on the True Assessed Risk Class; or
b. Seek to reinsure the risk facultatively under this Agreement at rates
more favorable than the True Assessed Risk Class; or
c. Decide not to reinsure the risk under this Agreement.
For purposes of this Agreement, "True Assessed Risk Class" shall mean the risk
class assessed by the Ceding Company prior to any adjustments made as a result
of the
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendent 7 -- Effective 10/01/2008
3
<Page>
Ceding Company's Enhanced Standard or similar special underwriting program.
3. For any Excess Risk, if a risk on the life of a proposed insured was
previously submitted by the Ceding Company on a facultative basis to the
Reinsurer or to any other reinsurer, at least three (3) years must have
elapsed since that previous risk was submitted facultatively, unless the
original reason for submitting facultatively no longer applies.
4. The maximum issue age for each life is 85. For Last Survivor policies, the
minimum issue age is 18, for all other policies, the minimum age is 0.
5. The mortality rating on each life does not exceed Table P. However, for
Last Survivor policies, one life may be uninsurable if the other life does
not exceed Table F.
6. For any Excess Risk, the total amount of risk on that life to be reinsured
in the Automatic Pool and under any other individual life reinsurance
agreement with any reinsurer does not exceed the Automatic Binding Limit
for that life shown in Exhibit II.
7. For any Excess Risk, the total amount of risk on that life in force and
applied for in all companies must not exceed the Jumbo Limit for that life
shown in Exhibit II. (For Last Survivor risks, see the Last Survivor Limits
and Retention Worksheet in Exhibit II.) Any amounts of risk being replaced
by the Ceding Company may be deducted from this total amount of risk only
under the following conditions:
a. Existing permanent insurance is being replaced by the Ceding
Company, with or without a Section 1035 exchange, and the Ceding
Company has obtained a duly executed absolute assignment of the
insurance being replaced; or
b. Existing term insurance is being replaced by the Ceding Company, and
the Ceding Company has obtained a duly executed absolute assignment
of the insurance being replaced; or
c. An internal replacement is being made, where the Ceding Company is
replacing an in-force policy with a new policy of equal or greater
death benefit.
When the total amount in force and applied for, that is to be compared with the
applicable Jumbo Limit, is reduced due to the above conditions, the Ceding
Company assumes full responsibility to effect the cancellation of life insurance
coverage under the replaced insurance concurrently with the commencement of
coverage under the new policy. If the cancellation does not occur in a timely
manner and the failure to cancel results in the new policy causing reinsurance
coverage to exceed the applicable Jumbo Limit, then the Reinsurer may (when the
Reinsurer becomes aware of the Jumbo Limit violation) decline reinsurance
coverage on the new policy during the period of time while both policy coverages
are in effect, by written notice to the Ceding Company. Once this notice has
been given, the Reinsurer will have no liability for reinsurance coverage on the
new policy while both policy coverages are in effect and shall refund to the
Ceding Company all related Reinsurance Premiums for the new policy. However, if
reinsurance coverage on the new policy is declined for this reason and the
cancellation of life insurance coverage under the replaced insurance is later
effected, then, upon receipt of the Ceding Company's written notice to this
effect, the Reinsurer will again become liable for reinsurance coverage on the
new policy as of the effective date of cancellation of coverage under the
replaced policy, and Reinsurance Premiums for the new policy will again be
payable.
8. If all the other requirements for Automatic Reinsurance are met and the
life is a player or
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendent 7 -- Effective 10/01/2008
4
<Page>
coach on a team in the National Hockey League, the National Football
League, the National Basketball Association or Major League Baseball, and:
a. The risk is not an Excess Risk, then the Ceding Company shall notify
the Reinsurer of this fact at the time of issue of the risk; or
b. The risk is an Excess Risk, then, prior to ceding the risk
automatically under this Agreement, the Ceding Company must confirm
the Reinsurer's available capacity for that risk. The Ceding Company,
by telephone call or electronic mail, shall: (1) notify the
Reinsurer's Chief Underwriter, or designee, of the life's name, date
of birth, sport and team affiliation, the total life insurance in
force and to be placed on the life, and the amount of new reinsurance
coverage required from the Reinsurer; and (2) confirm that an
application for insurance on the life has been completed. The
Reinsurer shall endeavor to inform the Ceding Company of its
available capacity for the risk within two business days after such
notification and confirmation. After the Reinsurer has advised the
Ceding Company of the amount of its available capacity, the Ceding
Company may then cede to the Reinsurer no more than that amount on an
automatic basis under this Agreement.
9. The Ceding Company, or one of its affiliates, shall retain its share of
each risk on a life, as described in this Agreement and in any other life
reinsurance agreement applicable to risk on that life. However, the Ceding
Company reserves the right to separately reinsure any amount of the
retained risk on a life reinsured under this Agreement with these
conditions:
a. This right, as it pertains to such lives, applies only to groups of
risks defined as cohorts of risks reinsured for at least five (5)
years and issued either during a continuous period (such as one or
more years) or under one or more Plans of Insurance shown in
Schedule A, and does not apply to individual lives or to small,
non-homogeneous groups of risks;
b. The remaining amount of risk retained on that life by the Ceding
Company,
c. Any amounts of retention separately reinsured in this manner shall
not reduce the amount of the Ceding Company's retention on that life
for the purpose of any other terms of this Agreement.
B. Automatic Processing
If the requirements for Automatic Reinsurance are met for a life except for the
requirement stated above in Section A.6, but the total amount of risk on that
life to be reinsured in the Automatic Pool and under any other individual life
reinsurance agreement with any reinsurer does not exceed the Automatic
Processing Limit for that life shown in Exhibit II, then the Ceding Company may
submit to the Lead Reinsurer (designated in Schedule B) all information relating
to the insurability of that life. For Last Survivor policies where one life is
deemed uninsurable, only the information for the other life needs to be
submitted.
The Lead Reinsurer shall review the submitted information to determine if the
life should be reinsured by the Automatic Pool and, if so, on what basis. The
Lead Reinsurer shall endeavor to provide the Ceding Company with a response
within 72 hours of receipt of such information. Approval by the Lead Reinsurer
shall be binding on all other current Automatic Pool reinsurers.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendent 7 -- Effective 10/01/2008
5
<Page>
This process shall be known as Automatic Processing and shall be subject to
Exhibit II.
Hereinafter, all references to Automatic Reinsurance, coverage automatically
reinsured, and the Automatic Pool will include coverage reinsured through
Automatic Processing.
C. Facultative Reinsurance
If the requirements for Automatic Reinsurance are not met and the Ceding Company
applies for Facultative Reinsurance with the Reinsurer, or if the requirements
for Automatic Reinsurance are met but the Ceding Company prefers to apply for
Facultative Reinsurance with the Reinsurer, then the Ceding Company shall submit
to the Reinsurer sufficient evidence agreed upon between the Ceding Company and
the Reinsurer, relating to the insurability of each life submitted for
Facultative Reinsurance. For Last Survivor policies where one life is deemed
uninsurable, only the information for the ther life needs to be submitted.
The Reinsurer shall promptly notify the Ceding Company in writing of its
declination to offer, its underwriting offer subject to additional requirements,
or its final underwriting offer. The final underwriting offer will automatically
expire upon the earliest of: (1) the date the policy application is withdrawn;
(2) the expiration date specified in the final offer; (3) the date one hundred
twenty (120) days after the date of the final offer; and (4) the date the final
offer is accepted, provided such offer is accepted within the lifetime of the
proposed insured(s).
Once the Ceding Company has accepted the Reinsurer's final underwriting offer,
then Facultative Reinsurance for the risk under this Agreement will become
effective under this Agreement as described below in Article IV.C or Article
IV.E, as applicable.
ARTICLE X
POLICY CONVERSIONS, OTHER CHANGES, AND TERMINATIONS
A. Conversions
A conversion is a policyholder's exercise of a contractual right to replace
in-force coverage with a new permanent policy without evidence of insurability.
Conversions from a policy reinsured under this Agreement will continue to be
reinsured under this Agreement as follows:
1. The converted coverage under the new policy will be reinsured with the
Reinsurer in the same proportion as was determined for the in-force
coverage converted; and
2. Reinsurance Premiums for such converted coverage shall be calculated on a
point-in-scale basis.
If the new policy was converted under the Conversion Option Rider from either
(a) two single life policies reinsured under this Agreement; or (b) one single
life policy reinsured under this Agreement and one newly underwritten life, to a
last survivor policy, Reinsurance Premiums for both lives shall be calculated on
a point-in-scale basis. The Reinsurance Premiums for both lives shall be
calculated using the tables of Annual Rates per $1,000 of Reinsured Net Amount
at Risk and table of YRT Reinsurance Rate Factors applicable to the earliest
original coverage in accordance with the procedures set out in Exhibit I.
Conversions from a policy not reinsured under this Agreement shall not be
reinsured under this Agreement.
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B. Increases and Decreases in Policy Face Amount
1. If the face amount of a policy reinsured under this Agreement increases
and:
a. The increase is subject to full underwriting, then the provisions of
Article III shall apply to the increase in reinsurance and
Reinsurance Premiums for the increase shall be based on new-business
rates; or
b. The increase is not subject to full underwriting, the Reinsurer will
accept the increase, provided that:
(1) If the policy was ceded automatically, the Ceding Company
underwrote the full face amount (including all scheduled
increases) in accordance with the terms of this Agreement (whether
through Automatic Reinsurance or Automatic Processing); or
(2) If the policy was ceded facultatively, the Ceding Company received
approval from the Reinsurer for the full face amount (including
all scheduled increases) at the time of facultative application.
Reinsurance Premiums for increases not subject to full underwriting shall be
calculated on a point-in-scale basis.
c. For increases in accordance with B.1.b, the Ceding Company's
retention and the amount of risk ceded to the Reinsurer shall be
determined for the increase at the time the increase goes into
effect, as follows:
(1) For increases in accordance with B.1.b (1), in accordance with
Schedule B; or
(2) For increases in accordance with B.1.b (2), the Ceding Company's
retention and the amount of risk ceded to the Reinsurer shall be
determined by mutual agreement of the Parties.
2. If the face amount of a policy reinsured under this Agreement decreases
and:
a. If the face amount of a policy that was previously increased is
subsequently decreased, the decrease will be applied first to the
increase with the latest effective date, and then to the increase
with the next earlier effective date, and so forth as necessary,
until applying any remaining decrease to the initial face amount of
the policy.
b. The Ceding Company's retention and the amount of risk ceded to the
Reinsurer shall be determined at the time the decrease goes into
effect, as follows:
(1) For decreases under policies ceded automatically, in accordance
with Schedule B; or
(2) For decreases under policies ceded facultatively, the amount of
the risk reinsured to the Reinsurer shall be reduced
proportionately.
C. Policy Exchanges and Other Changes
A policy exchange is a new policy replacing an existing policy where the new
policy is not fully
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underwritten. Exchanges from one single life policy reinsured under this
Agreement to a different single life policy will be reinsured on a
point-in-scale basis. Likewise, exchanges from one last survivor policy
reinsured under this Agreement to a different last survivor policy will be
reinsured on a point-in-scale basis.
Exchanges from a last survivor policy reinsured under this Agreement with the
Last Survivor Exchange Option Rider or Twenty-Four (24) Month Exchange Rider to
two single life policies will be reinsured, if both risks under the Last
Survivor policy were fully underwritten (and neither was deemed to be
uninsurable) and the total face amount of the two new Single Life policies does
not exceed the face amount of the Last Survivor policy. In this event, the new
Single Life policies shall be reinsured on a point-in-scale basis at the
applicable single life rates. For each new policy after the exchange, the
insurance will continue to be reinsured by the Reinsurer in the same proportions
as set at issue of the original coverage.
If there is a contractual change in a policy reinsured under this Agreement that
is not subject to full underwriting, other than the changes described above in
Sections A and B, the insurance shall continue to be reinsured with the
Reinsurer in the same proportions as the original coverage and Reinsurance
Premiums for contractual changes shall be calculated on a point-in scale basis.
The Ceding Company shall notify the Reinsurer of any such changes in policies
reinsured under this Agreement in its monthly reinsurance reports.
Exchanges made from a policy not reinsured under this Agreement shall not be
reinsured under this Agreement.
D. Policy Terminations and Lapses
If a policy reinsured under this Agreement terminates, the reinsurance for the
risk will terminate as of the effective date of policy termination. For a policy
terminated due to the expiry of any grace period for an unpaid amount, the
effective date of termination for such policy will be the date such unpaid
amount was first due.
Notwithstanding the foregoing, if a policy is deemed to have terminated as a
result of full acceleration of the death benefit, the corresponding reinsurance
on the policy will continue as specified in Section IV.F.
If a policy reinsured under this Agreement lapses to extended term insurance
under the terms of that policy, the corresponding reinsurance on the reinsured
policy will continue on the same basis as the original reinsurance until the
expiry of the extended term period.
If a policy reinsured under this Agreement lapses to reduced paid-up insurance
under the terms of that policy, the amount of the corresponding reinsurance on
the reinsured policy will be reduced according to the terms of Section 8.2.
If the Ceding Company allows a policy reinsured under this Agreement to remain
in force under its automatic premium loan provisions, the corresponding
reinsurance on the reinsured policy will continue unchanged and in force as long
as such provisions remain in effect, except as otherwise provided in this
Agreement.
E. Reduction in Retained Coverage on a Life
If any portion of the aggregate amount of insurance retained by the Ceding
Company or its affiliates on an individual life reduces or terminates, the
Ceding Company or its affiliates will
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recalculate its retention on any remaining risk(s) in force on that life. The
Ceding Company or its affiliates will not be required to retain an amount in
excess of its retention limit for the age, mortality rating, and risk
classification based on the applicable retention limit that was in effect at the
time of issue for any risk. Unless provided for otherwise in the applicable
reinsurance agreements, the Ceding Company or its affiliates will first
recalculate the retention on the risk(s) having the same mortality rating as the
terminated risk(s). Order of recalculation will secondarily be determined by
effective date of the risk, oldest first.
F. Multiple Reinsurers
If reinsurance of a risk is shared by more than one reinsurer, the Reinsurer's
percentage of any increased or reduced reinsurance will be the same as its
initial percentage of the reinsurance for that risk unless specified otherwise
in Schedule B or agreed upon by the Reinsurer.
G. Mortality Rating Changes
On Facultative Reinsurance, if the Ceding Company wishes to reduce the mortality
rating or otherwise improve the risk class, such change shall be subject to the
Reinsurer's approval. On Automatic Reinsurance, the Reinsurer shall accept this
change if the change qualifies under the underwriting practices and guidelines
described in Schedules C, D, or E, as applicable.
H. Rescission of Policy Coverage Prior to Death Claim
If a misrepresentation, misstatement, or omission on an application results in
the Ceding Company's rescission of coverage, the Reinsurer shall refund to the
Ceding Company any Reinsurance Premiums it received on that coverage. This
refund shall be in lieu of any and all other reinsurance benefits payable on
that coverage under this Agreement. The Reinsurer shall also reimburse the
Ceding Company for its proportionate share of any non-routine expenses incurred
by the Ceding Company in connection with the rescission. Such non-routine
expenses shall include the costs of investigations and of obtaining financial
and medical reports; they would not include the compensation of salaried
officers and employees of the Ceding Company.
The Ceding Company shall promptly notify the Reinsurer in the event a rescission
is challenged by legal action. The Ceding Company shall also furnish to the
Reinsurer copies of all information related to such action.
Recognizing the urgent nature of these communications, within eight (8) business
days of receipt of such information, the Reinsurer shall notify the Ceding
Company in writing of the Reinsurer's decision whether or not it shall
participate in the defense of the rescission. If the Reinsurer does not respond
to the Ceding Company within such eight (8) business day period, the Reinsurer
will be deemed to have elected to participate in the defense of the rescission.
If the Reinsurer elects or is deemed to have elected to participate in the
defense of the rescission, the Reinsurer shall also reimburse the Ceding Company
for its proportionate share of court costs and legal expenses incurred by the
Ceding Company in connection with the defense of the rescission of coverage.
If a rescission of policy coverage is reversed and the policy coverage is
restored to in-force status, any related reinsurance coverage under this
Agreement shall also be restored upon the Ceding Company's payment to the
Reinsurer of all applicable Reinsurance Premiums.
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SCHEDULE B
REINSURANCE SPECIFICATIONS
EFFECTIVE OCTOBER 1, 2008
AUTOMATIC REINSURANCE: The Ceding Company shall retain its available retention
on each risk, defined below as the Retained Net Amount at Risk, subject to the
applicable Ceding Company's Treaty Retention Limit shown in Exhibit II.
The Reinsurer will automatically reinsure a portion of the remainder of the
risk, called the Reinsured Net Amount at Risk, as defined below in this Schedule
B.
FACULTATIVE REINSURANCE: The Reinsurer will reinsure X% (as determined at issue)
of the Total Net Amount at Risk for the risk.
TOTAL ALLOCATION LIMIT (TAL): As shown in Exhibit II.
CEDING COMPANY'S TREATY RETENTION LIMIT (CCTRL): As shown in Exhibit II.
CEDING COMPANY'S ALLOCATED RETENTION (CCAR): As shown in Exhibit II.
CURRENT RETENTION (CURRRET) = Current amount of life insurance retained by the
Ceding Company and its affiliated companies on the life for in-force life
insurance coverage. (For Last Survivor risks, see the Last Survivor Limits and
Retention Worksheet in Exhibit II.)
REINSURER'S ALLOCATED RETENTION (REINSARET): As shown in Exhibit II.
REINSURER'S ATTACHMENT POINT (REINSAPT): As shown in Exhibit II.
NAR TYPE for the Plan of Insurance to be reinsured under this Agreement, as
shown in Schedule A.
STEP 1 -- DETERMINE TOTAL NET AMOUNT AT RISK FOR THE COVERAGE*
TOTAL NET AMOUNT AT RISK (TOTNAR) =
For NAR TYPE A, Death Benefit minus the Account Value.
For NAR TYPE B, Death Benefit minus the Working Reserve, where
Working Reserve = (i) x (ii) / (iii), and
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STEP 1 -- DETERMINE TOTAL NET AMOUNT AT RISK FOR THE COVERAGE* (CONTINUED)
STEP 2 -- DETERMINE NET AMOUNT AT RISK FOR EACH "LAYER" OF COVERAGE
STEP 3 -- DETERMINE THE NAR FOR THE CEDING COMPANY AND THEN FOR THE REINSURER
REINSURED NET AMOUNT AT RISK (REINSNAR) = REINSQS2% X NAR2 + REINSQS3% X NAR3
NOTE: For ReinsQS2% and ReinsQS3%, round percentages to 2 decimal places. (This
rounding may cause slight increases or decreases in the amounts allocated to
each Party.)
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MINIMUM FACULTATIVE REINSURANCE APPLICATION:
LEAD REINSURER:
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SCHEDULE F
POLICIES ELIGIBLE FOR REINSURANCE UNDER THIS AGREEMENT
EFFECTIVE OCTOBER 1, 2008
The following categories of policies are eligible for reinsurance under this
Agreement:
<Table>
<Caption>
CATEGORY # CATEGORY DESCRIPTION
<S> <C> <C>
--------------------------------------------------------------------------------------------------------
1 Policies issued on or after March 1, 2009
2 Policies issued from the Effective Date of this Agreement through February 28, 2009 that
were eligible for automatic reinsurance under one of the following Ceding Company
reinsurance pools:
i. Single Life Excess Pool effective November 1, 2002
ii. Advanced UL Pool effective September 1, 2004;
iii. Last Survivor Excess Pool effective January 1, 2002; and
iv. Advanced Last Survivor UL Pool effective January 1, 2005,
but that were fully retained by the Ceding Company at the time of processing (see Note
below).
Notwithstanding the foregoing, fully retained policies issued during this period in which
the insured has a subsequent policy that is partially or fully ceded to another pool
(including the Hartford Term Pool effective April 10, 2006) will not be eligible for
reinsurance under this Agreement.
</Table>
NOTE:
The Ceding Company completed the processing of Category 2 business in July 2009.
At the time of processing, the Ceding Company paid the Reinsurer Reinsurance
Premiums for all policies in Category 2 back to each policy's effective date.
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EXHIBIT VII
REINSURANCE REPORTS
EFFECTIVE OCTOBER 1, 2008
<Table>
<Caption>
REPORT ACCOUNTING PERIOD DUE DATE
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
1. New Business* Monthly 30th day after month end
(New issues only -- first time
policy reported to the Reinsurer)
2. Renewal Business* Monthly 30th day after month end
(Policies with renewal dates
within the Accounting Period)
3. Changes & Terminations* Monthly 30th day after month end
(includes conversions, replacements
reinstatements, increases, decreases,
recaptures, lapses, claims, etc.)
4. lnforce List Monthly 30th day after month end
(Listing of each policy in force)
5. Statutory Reserves Quarterly 30th day after quarter end
6. Policy Exhibit Monthly 30th day after month end
</Table>
------------
* Policy record details for new business, renewal business, and changes and
terminations (Reports 1, 2, and 3 above) may be reported as separate reports
or combined into one report, provided the required data elements continue to
be satisfied.
REPORTING SYSTEM:
The system used by the Ceding Company to administer its reinsurance is: TAI.
NOTE:
Certain policy transactions, such as increases, are coded in the policy
administration system as riders, although they do not correspond to filed rider
forms.
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MINIMUM DATA REQUIREMENTS
INFORCE AND TRANSACTION FILE
<Table>
<Caption>
COMPANY IDENTIFIES THE CEDING COMPANY
<S> <C>
-----------------------------------------------------------------------------------------------------------------
Policy Policy number which is part of the policy key
Coverage/rider Coverage number which is part of the policy key. This number is used to identify
specific policy coverage.
Cession ID This field contains the number assigned to this cession by the Reinsurer
Transaction Sequence This field indicates the transaction record(s) created during the month.
Line of Business This field indicates the line of business the policy falls under.
Reinsurance Company Two character reinsurance company ID code that identifies the Reinsurer.
Reporting Company Identifies the company used for reporting purposes. Will be the same as the
Reinsurance Company.
Transaction Type Identifies the type of transaction being reported on the Transaction extract.
Transaction Count This field is used on the Transaction extract to identify the addition or
termination of a cession.
Reinsurance From Date This field contains the beginning date of the period covered by this record. The
premiums on the Transaction record cover the period beginning with the From Date
through the To Date.
Reinsurance To Date This field contains the end date of the period covered by a record.
Date Reported On the Transaction extract, this is the month the transaction was reported.
Mode Identifies the mode of reinsurance premium payment.
Policy Duration The duration at issue is 01.
Reinsurance Duration Contains the reinsurance duration. It may differ from the policy duration if the
cession is a continuation.
Cession Number Hartford does not currently use. Defaults to spaces.
Policy Date This field contains the effective date of the policy.
Reinsurance Date This field contains the effective date of the reinsurance. For most cessions it
is the same as the Policy Date. For continuations, it contains the effective date
of the original coverage.
Issue State This field contains a two-letter abbreviation of the state or province of issue.
Used to determine unisex rates.
Resident State This field contains a two-letter abbreviation of the state or province of issue.
Used to compute premium tax reimbursement if applicable.
Joint Type Identifies Joint business type
</Table>
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<Page>
<Table>
<Caption>
COMPANY IDENTIFIES THE CEDING COMPANY
<S> <C>
-----------------------------------------------------------------------------------------------------------------
Joint Age Used for joint coverages using a joint equivalent age for rate searches.
Auto/Fac Indicator Indicates whether the policy is ceded on an Automatic or Facultative basis.
Death Benefit Option This field contains the option chosen by the insured for death proceeds payment.
Participation code This field indicates whether the business is Non Participating (N) or
Participating (P).
Issue Type Identifies how a cession was issued. (New business or Continuation)
Underwriting Method Identifies the type of underwriting used to issue the coverage.
Treaty Number This field contains the TAI system treaty number
Reinsurance Type This field is a one-character code that identifies the type of reinsurance.
(Y=YRT, C=Coinsurance & M=Modco.)
Plan This field contains the coverage plan code.
Product code This field contains the product type code.
Product code 1 For Joint Life policies, this field contains the product type code for Insured 1.
Product code 2 For Joint Life policies, this field contains the product type code for Insured 2.
(If this is not a Joint Life policy, this field will be blank.)
Currency Code This field identifies the currency. (USD or CND if applicable)
Last Name -- 1 This field contains the insured's last name. For Joint Life policies, this field
contains the last name for Insured 1. (Maximum of 20 characters)
First Name -- 1 This field contains the insured's first name. For Joint Life policies, this field
contains the first name for Insured 1. (Maximum of 15 characters)
Middle Initial -- 1 This field contains the insured's middle initial. For Joint Life policies, this
field contains the middle initial for Insured 1. (1 character)
Client ID -- 1 This field contains the unique client ID for an insured used to connect lives
when calculating retention on a life. For Joint Life policies, this field
indicates the client ID for Insured 1. (Maximum of 20 characters)
Insured Status -- 1 This field indicates the insured's coverage status. For Joint Life policies, this
field indicates the insured's coverage status for Insured 1.
DOB -- 1 This field contains the insured's date of birth. For Joint Life policies, this
field contains the date of birth for Insured 1.
Sex -- 1 This field is used to identify the sex of the insured. For Joint Life policies,
this field contains the sex of Insured 1.
Pricing Sex -- 1 This field contains the sex used to compute premiums and allowances. For Joint
Life policies, this field contains the pricing sex of Insured 1.
Age -- 1 This field contains the insured's issue age. For Joint Life policies, this field
contains the issue age for Insured 1.
</Table>
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<Page>
<Table>
<Caption>
COMPANY IDENTIFIES THE CEDING COMPANY
<S> <C>
-----------------------------------------------------------------------------------------------------------------
Class -- 1 This field contains the company's rating of standard or preferred and the smoker
class. For Joint Life policies, this field contains the class for Insured 1.
Mortality -- 1 This field contains the insured's mortality rating. For Joint Life policies, this
field contains the mortality rating for Insured 1.
Mortality Duration -- 1 This field contains the duration of the insured's mortality rating. For Joint
Life policies, this field contains the duration of the mortality rating for
Insured 1.
Temp Flat -- 1 This field contains the temporary flat extra per 1000. For Joint Life policies,
this field contains the temporary flat extra per 1000 for Insured 1.
Temp Duration -- 1 This field contains the number of years that the temporary flat extra rating is
being charged. For Joint Life policies, this field contains the number of years
that the flat extra rating is being charged for Insured 1.
Perm Flat -- 1 This field contains the permanent flat extra per 1000. For Joint Life policies,
this field contains the permanent flat extra per 1000 for Insured 1.
Perm Duration -- 1 This field contains the number of years that the permanent flat extra rating is
being charged. For Joint Life policies, this field contains the number of years
that the flat extra rating is being charged for Insured 1.
Last Name -- 2 This field contains the insured's last name. For Joint Life policies, this field
contains the last name for Insured 2. (If this is not a Joint Life policy, this
field will be blank.) (Maximum of 20 characters)
First Name -- 2 This field contains the insured's first name. For Joint Life policies, this field
contains the first name for Insured 2. (If this is not a Joint Life policy, this
field will be blank.) (Maximum of 15 characters)
Middle Initial -- 2 This field contains the insured's middle initial. For Joint Life policies, this
field contains the middle initial for Insured 2. (If this is not a Joint Life
policy, this field will be blank.) (1 character)
Client ID -- 2 This field contains the unique client ID for an insured used to connect lives
when calculating retention on a life. For Joint Life policies, this field
indicates the client ID for Insured 2. (If this is not a Joint Life policy, this
field will be blank.) (Maximum of 20 characters)
Insured Status -- 2 This field indicates the insured's coverage status. For Joint Life policies, this
field indicates the insured's coverage status for Insured 2. (If this is not a
Joint Life policy, this field will be blank.)
DOB -- 2 This field contains the insured's date of birth. For Joint Life policies, this
field contains the date of birth for Insured 2. (If this is not a Joint Life
policy, this field will be blank.)
Sex -- 2 This field is used to identify the sex of the insured. For Joint Life policies,
this field contains the sex of Insured 2. (If this is not a Joint Life policy,
this field will be blank.)
</Table>
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<Page>
<Table>
<Caption>
COMPANY IDENTIFIES THE CEDING COMPANY
<S> <C>
-----------------------------------------------------------------------------------------------------------------
Pricing Sex -- 2 This field contains the sex used to compute premiums and allowances. For Joint
Life policies, this field contains the pricing sex of Insured 2. (If this is not
a Joint Life policy, this field will be blank.)
Age -- 2 This field contains the insured's issue age. For Joint Life policies, this field
contains the issue age for Insured 2. (If this is not a Joint Life policy, this
field will be blank.)
Class -- 2 This field contains the company's rating of standard or preferred and the smoker
class. For Joint Life policies, this field contains the class for Insured 2. (If
this is not a Joint Life policy, this field will be blank.)
Mortality -- 2 This field contains the insured's mortality rating. For Joint Life policies, this
field contains the mortality rating for Insured 2. (If this is not a Joint Life
policy, this field will be blank.)
Mortality Duration -- 2 This field contains the duration of the insured's mortality rating. For Joint
Life policies, this field contains the duration of the mortality rating for
Insured 2. (If this is not a Joint Life policy, this field will be blank.)
Temp Flat -- 2 This field contains the temporary flat extra per 1000. For Joint Life policies,
this field contains the temporary flat extra per 1000 for Insured 2. (If this is
not a Joint Life policy, this field will be blank.)
Temp Duration -- 2 This field contains the number of years that the temporary flat extra rating is
being charged. For Joint Life policies, this field contains the number of years
that the flat extra rating is being charged for Insured 2. (If this is not a
Joint Life policy, this field will be blank.)
Perm Flat -- 2 This field contains the permanent flat extra per 1000. For Joint Life policies,
this field contains the permanent flat extra per 1000 for Insured 2. (If this is
not a Joint Life policy, this field will be blank.)
Perm Duration -- 2 This field contains the number of years that the permanent flat extra rating is
being charged. For Joint Life policies, this field contains the number of years
that the flat extra rating is being charged for Insured 2. (If this is not a
Joint Life policy, this field will be blank.)
Policy Face Amount Indicates the face amount of the total policy.
Retained Amount This field contains the amount retained on this policy coverage, not on the life.
Ceded Amount This field contains the policy amount ceded to a specific reinsurer.
Net Amount at Risk This field contains the reinsured net amount at risk (NAR) for a specific
reinsurer.
Benefit Mortality ADB or Waiver mortality.
Premium This field contains the reinsurance premium.
Allowance This field contains the reinsurance allowance.
Flat extra type This field indicates whether there is a temporary flat extra (T) or a permanent
flat extra (P) being charged.
Premium Tax If premium tax is reimbursed, this field contains the tax amount.
Cash Value If applicable, this field is used to recover coinsured cash values from the
Reinsurer.
Benefit If applicable, this field is used to recover benefits from the Reinsurer.
</Table>
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<Page>
<Table>
<Caption>
COMPANY IDENTIFIES THE CEDING COMPANY
<S> <C>
----------------------------------------------------------------------------------------------------------------
Dividend If applicable, this field contains the reinsurer's share of the direct
dividend.
Policy Fee This field contains the reinsurance policy fee.
Continuation Original Company This field indicates the ceding company on the original policy. (Used for
conversions only.)
Continuation Original Policy This field indicates the policy number for the original policy. (Used for
conversions only.)
Continuation Original Coverage/Rider This field indicates the coverage/rider for the original policy. (Used
for conversions only.)
Message An informational message may be manually added to a policy by the Ceding
Company.
Image switch Hartford does not currently use. Defaults to spaces.
Policy Fee Allowance This field contains the reinsurance policy fee allowance.
Location Code Hartford does not currently use. Defaults to spaces.
Treaty Reference Number Upon request, this field contains the Reinsurer's treaty number.
Claim Hartford does not currently use. Defaults to spaces.
Policy Status This field identifies the status of the cession.
Policy Master Smoker -- 1 Policy smoker class on direct policy. For Joint Life policies, this field
contains the policy master smoker class for Insured 1.
Policy Master Smoker -- 2 Policy smoker class on direct policy. For Joint Life policies, this field
contains the policy master smoker class for Insured 2. (If this is not a
Joint Life policy, this field will be blank.)
Policy Effective Date This field contains the issue date of the policy.
Policy Application Date This field indicates the date the insured signed the application.
NAR Type This field indicates the method used in determining the Total Net Amount
at Risk (as defined in Schedule B).
</Table>
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<Page>
POLICY EXHIBIT FILE*
<Table>
<Caption>
COMPANY IDENTIFIES THE CEDING COMPANY
<S> <C>
----------------------------------------------------------------------------------------------------------------
Policy Policy number which is part of the policy key.
Coverage/rider Coverage number which is part of the policy key. This number is used to identify
a specific policy coverage.
Cession ID This field contains the number assigned to this cession by the Reinsurer.
Line of Business This field indicates the line of business the policy falls under.
Report Date This is the month the transaction was reported.
Reinsurance Company Two character reinsurance company ID code that identifies the Reinsurer.
Reporting Company Identifies the company used for reporting purposes. Will be the same as the
Reinsurance Company.
Treaty Number This field contains the TAI system treaty number.
Transaction Type Identifies the type of transaction being reported on the Transaction extract.
Policy Count Each New Business, Continuation & Reinstatement will be assigned a count of 1,
Terminations will be assigned -- 1 and Renewals/NAR changes will be assigned 0.
Base Ceded Amount This field contains the policy base amount ceded.
ADB ceded Amount This field contains the policy ADB amount ceded.
Waiver Ceded Amount This field contains the policy waiver amount ceded.
Net Amount at Risk The reinsured net amount at risk (NAR).
Plan This field contains the coverage plan code.
Auto/Fac Indicator Indicates whether the policy is ceded on an Automatic or Facultative basis.
Reinsurance Type This field is a one-character code that identifies the type of reinsurance.
(Y=YRT, C=Coinsurance & M=Modco.)
Currency Code This field identifies the currency. (USD or CND if applicable)
</Table>
------------
* The Policy Exhibit will include a summary of reinsurance movement for a
given period categorized by transactions type. This summary provides the
Cession Count, Ceded Amount and Net Amount at Risk at the beginning of the
reporting period, a summary of the transactions occurring during the report
period as well as what is in force as of the ending of the report period.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 7 -- Effective 10/01/2008
20
<Page>
RESERVE FILE
<Table>
<Caption>
COMPANY IDENTIFIES THE CEDING COMPANY
<S> <C>
----------------------------------------------------------------------------------------------------------------
Policy Policy number which is part of the policy key
Coverage/rider Coverage number which is part of the policy key. This number is used to identify
a specific policy coverage.
Cession ID This field contains the number assigned to this cession by the Reinsurer
Benefit Type This field is the reserve type. 1 = Life, 2=ADB, 3=Waiver, 4=Flat Extras,
5=Substandard
Calc Method Hartford's TAI Valuation Method 1=Frasier Reserve+ 1/2 cx, E=Coinsurance
Reserve, H=Half Premium, L=Factor FLX1, X=1/2 cx
Reinsurance Company Two character reinsurance company ID code that identifies the Reinsurer.
Reporting Company Identifies the company used for reporting purposes. Will be the same as the
Reinsurance Company.
Line of Business This field indicates the line of business the policy falls under. (L=Life)
Treaty Number This field contains the TAI system treaty number
Plan This field contains the coverage plan code.
Auto/Fac Indicator Indicates whether the policy is ceded on an Automatic or Facultative basis.
Product code This field contains the product type code.
Joint Type Identifies Joint business Type
Joint Method Switch Identifies TAI Frasier method calculation
Mode Identifies the mode of reinsurance premium payment.
Cession Status This field identifies the status of the cession.
Reinsurance Type This field is a one-character code that identifies the type of reinsurance.
Duration Contains the reinsurance duration. It may differ from the policy duration if the
cession is a continuation.
Participation code This field indicates whether the business is Non participating (N) or
Participating (P).
Issue Date This field contains the effective date of the policy.
Reinsurance To Date This field contains the end date of the period covered by a record.
Policy Face Amount Indicates the face amount of the total policy.
Ceded Amount This field contains the policy amount ceded to a specific reinsurer
Net Amount at Risk This field contains the reinsured net amount at risk (NAR) for a specific
reinsurer.
Premium This field contains the reinsurance premium.
Reserve Percent Value appears on Coinsurance business only
Cession Count Cession count only appears under Life (Base), not benefits.
Age Basis Nearest/Closest (C), Last (L), Next (N)
Insured Status -- 1 This field indicates the insured's coverage status. For Joint Life policies,
this field indicates the insured's coverage status for Insured 1.
</Table>
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 7 -- Effective 10/01/2008
21
<Page>
<Table>
<Caption>
COMPANY IDENTIFIES THE CEDING COMPANY
<S> <C>
----------------------------------------------------------------------------------------------------------------
Age -- 1 This field contains the insured's issue age. For Joint Life policies, this field
contains the issue age for Insured 1.
Class -- 1 This field contains the company's rating of standard or preferred and the smoker
class. For Joint Life policies, this field contains the class for Insured 1.
Sex -- 1 This field is used to identify the sex of the insured. For Joint Life policies,
this field contains the sex of Insured 1.
Mortality -- 1 This field contains the insured's mortality rating. For Joint Life policies,
this field contains the mortality rating for Insured 1.
Insured Status -- 2 This field indicates the insured's coverage status. For Joint Life policies,
this field indicates the insured's coverage status for Insured 2. (If this is
not a Joint Life policy, this field will be blank.)
Age -- 2 This field contains the insured's issue age. For Joint Life policies, this field
contains the issue age for Insured 2. (If this is not a Joint Life policy, this
field will be blank.)
Class -- 2 This field contains the company's rating of standard or preferred and the smoker
class. For Joint Life policies, this field contains the class for Insured 2. (If
this is not a Joint Life policy, this field will be blank.)
Sex -- 2 This field is used to identify the sex of the insured. For Joint Life policies,
this field contains the sex of Insured 2. (If this is not a Joint Life policy,
this field will be blank.)
Mortality -- 2 This field contains the insured's mortality rating. For Joint Life policies,
this field contains the mortality rating for Insured 2. (If this is not a Joint
Life policy, this field will be blank.)
Reserve Statutory or Tax Reserve for each coverage.
Reserve Interest Rate This field identifies the Interest Rate used when calculating reserves.
Reserve Factor App1icable Mortality Basis YRT Factor
Factor Pointer TAI specific field to identify applicable mortality table used when calculating
reserves.
Attained Age TAI specific field. Default is 1
Setback TAI specific field. Default is zero
Class Switch TAI specific field. Valuation Class (D=Distinct)
Curtate Switch This field indicates whether reserves are on a curtate or continuous basis.
Caption Hartford's TAI Valuation Method
Error Code Informational field used by Hartford -- Usually Blank
Reserve Class 1 This field contains insured's smoker class. For Joint Life policies, this field
contains the class for Insured 1.
Reserve Class 2 This field contains insured's smoker class. For Joint Life policies, this field
contains the class for Insured 2. (If this is not a Joint Life policy, this
field will be blank.)
Currency Code This field identifies the currency. (USD or CND if applicable)
Valuation Interest Pointer TAI assigned field that is used to read applicable interest rates when
calculating 1/2 cx reserves.
NAR Type This field indicates the method used in determining the Total Net Amount at Risk
(as defined in Schedule B).
</Table>
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 7 -- Effective 10/01/2008
22
<Page>
AMENDMENT 8
EFFECTIVE SEPTEMBER 1, 2010
TO THE
AUTOMATIC AND FACULTATIVE MONTHLY RENEWABLE TERM
REINSURANCE AGREEMENT
EFFECTIVE OCTOBER 1, 2008
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
TRANSAMERICA LIFE INSURANCE COMPANY ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer wish to confirm the Reinsurer's
coverage for policies issued under the Issue First policy issuance program.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer hereby agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. Article III is hereby amended to include the following paragraph following
Section III.A.:
Notwithstanding the above, all policies issued under the Issue First
program shall be deemed automatically reinsured. Issue First is a policy
issuance program administered by the Ceding Company, under which a policy
can be issued before the underwriting process has been completed. The
Ceding Company shall provide notice to the Reinsurer of any material
changes to the program.
3. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
Allocated Retention Pool -- Effective 10/01/2008
Between ILA and TLIC
Amendment 8 -- Effective 09/01/2010
1
<Page>
In witness of the foregoing, the Ceding Company and the Reinsurer have, by their
respective officers, executed this Amendment in duplicate on the dates indicated
below.
TRANSAMERICA LIFE INSURANCE COMPANY
(As Successor to Transamerica Occidental Life lnsurance Company)
by its Administrator and Attorney-in-Fact
SCOR Global Life Americas Reinsurance Company
<Table>
<S> <C> <C> <C>
on January 25, 2012
Signature /s/ Glenn Cunningham Signature /s/ Robin S. Blackwell
-------------------------------- --------------------------
Name in Text Glenn Cunningham Name in Text Robin S. Blackwell
Title: Executive Vice President Title: Assistant Vice President
SCOR Global Life Americas SCOR Global Life Americas
Reinsurance Company Reinsurance Company
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Michael J. Roscoe
-------------------------------------- --------------------------------
Name: Paul Fischer Name: Michael J. Roscoe
Title: Assistant Vice President and Actuary Title: Senior Vice President and
Actuary
Date: May 23, 2012 Date: 6/5/2012
</Table>
Allocated Retention Pool -- Effective 10/01/2008
Between ILA and TLIC
Amendment 8 -- Effective 09/01/2010
2
<Page>
AMENDMENT 9
EFFECTIVE OCTOBER 1, 2008
TO THE
AUTOMATIC AND FACULTATIVE MONTHLY RENEWABLE TERM REINSURANCE AGREEMENT
EFFECTIVE OCTOBER 1, 2008
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
TRANSAMERICA LIFE INSURANCE COMPANY ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer now wish to amend the Agreement to
include certain policies which
- Were issued between October 1, 2008 and February 28, 2009; and
- Were part of replacement transactions; and
- At time of issue did not satisfy the criteria for rollover processing and
did not qualify for reinsurance under the Agreement; and
- Now qualify for reinsurance under the Agreement.
NOW, THEREFORE for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer hereby agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. The Ceding Company shall cede and the Reinsurer shall accept, on an
Automatic Reinsurance basis, the risk on the policies listed in the table,
below, effective as of the reinsurance effective dates specified, in
accordance with the terms of this Agreement; and
3. Reinsurance Premiums for such policies shall be calculated from their
effective dates in accordance with Exhibit 1.
4. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment # 9 -- Effective 10/1/2008
1
<Page>
In witness of the foregoing, the Ceding Company and the Reinsurer have, by their
respective officers, executed this Amendment in duplicate on the dates indicated
below, with an effective date of October 1, 2008.
TRANSAMERICA LIFE INSURANCE COMPANY
by its Administrator and Attorney-in-Fact
SCOR Global Life US Re Insurance Company
<Table>
<S> <C> <C> <C>
on August 31, 2011
Signature /s/ Glenn Cunningham Signature /s/ Robin S. Blackwell
----------------------------------------- -----------------------------------------
Name in Text Glenn Cunningham Name in Text Robin S. Blackwell
Title: Executive Vice President Title: Assistant Vice President
SCOR Global Life US Re Insurance Company SCOR Global Life US Re Insurance Company
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Michael Roscoe
----------------------------------------- -----------------------------------------
Name: Paul Fischer, FSA, MAAA Name: Michael Roscoe, FSA, MAAA
Title: Assistant Vice President and Actuary Title: Senior Vice President
Individual Life Product Management Individual Life Product Management
Date: May 21, 2012 Date: 5/22/2012
</Table>
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment # 9 -- Effective 10/1/2008
2
<Page>
AMENDMENT 10
EFFECTIVE OCTOBER 3, 2011
TO THE
AUTOMATIC AND FACULTATIVE MONTHLY RENEWABLE TERM REINSURANCE AGREEMENT
EFFECTIVE OCTOBER 1, 2008
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
TRANSAMERICA LIFE INSURANCE COMPANY ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer wish to amend the Agreement to
reflect that the following Products and Riders were added to the Agreement as of
the Effective Date shown for each on Schedule A:
- Hartford Founders Plus UL
- Hartford Founders Plus UL Extended Value Option
- DisabilityAccess Rider
- LongevityAccess Rider
- LifeAccess Care Rider
- Joint LifeAccess Rider, and
WHEREAS, the Ceding Company and the Reinsurer wish to revise Schedule A to
include the effective date on which each Base Policy and Rider was added to the
Agreement and to amend the description of certain Riders with such descriptions
being effective from the Effective Date shown for each on Schedule A.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer hereby agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. Schedule A is deleted in its entirety and replaced with the attached
revised Schedule A.
3. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 10 -- Effective 10/03/2011
1
<Page>
In witness of the foregoing, the Ceding Company and the Reinsurer have, by their
respective officers, executed this Amendment in duplicate on the dates indicated
below.
TRANSAMERICA LIFE INSURANCE COMPANY
by its Administrator and Attorney-in-Fact
SCOR Global Life US Re Insurance Company
<Table>
<S> <C> <C> <C>
on September 12, 2011
Signature /s/ Glenn Cunningham Signature /s/ Robin S. Blackwell
----------------------------------------- -----------------------------------------
Name in Text Glenn Cunningham Name in Text Robin S. Blackwell
Title: Executive Vice President Title: Assistant Vice President
SCOR Global Life US Re Insurance Company SCOR Global Life US Re Insurance Company
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Michael Roscoe
----------------------------------------- -----------------------------------------
Name: Paul Fischer, FSA, MAAA Name: Michael Roscoe, FSA, MAAA
Title: Assistant Vice President and Actuary Title: Senior Vice President
Individual Life Product Management Individual Life Product Management
Date: May 23, 2012 Date: 5/31/12
</Table>
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 10 -- Effective 10/03/2011
2
<Page>
SCHEDULE A
PLANS OF INSURANCE COVERED UNDER THIS AGREEMENT
EFFECTIVE OCTOBER 3, 2011
SINGLE LIFE PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
Stag UL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Bicentennial UL Founders 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford UL CV 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Wall Street VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Protector II VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Legacy 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Stag Accumulator II VUL 1980 CSO M/F Unismoke Ultimate ALB A 10/01/2008
Hartford Leaders VUL Liberty (a) 1980 CSO M/F Unismoke Ultimate ANB A 10/01/2008
Hartford Leaders VUL Liberty (b) 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Life Solutions II UL (a) 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Life Solutions II UL (b) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Advanced Universal Life 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Freedom (a) 2001 CSO M/F S/NS Ultimate ANB B 10/01/2008
Hartford Bicentennial UL Freedom (b) 2001 CSO M/F S/NS Ultimate ANB A 07/01/2010
Hartford Quantum II VUL (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Quantum II VUL (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford ExtraOrdinary Whole Life (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford ExtraOrdinary Whole Life (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Bicentennial UL Founders II 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Hartford Bicentennial UL Founders II 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Extended Value Option
Hartford Frontier Indexed Universal Life 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Hartford Frontier Indexed Universal Life 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Extended Value Option
Hartford Founders Plus UL 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Hartford Founders Plus UL Extended Value 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Option
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Primary Term Insured Rider 10/01/2008
Other Covered Insured Term Life Rider 10/01/2008
Cost of Living Adjustment (COLA) Rider 10/01/2008
</Table>
NOTE: NAR Type for term riders above is C. For COLA Rider, NAR Type follows Base
Policy to which it is attached.
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Accidental Death Benefit (ADB) Rider 10/01/2008
Accelerated Benefit Rider (ABR) 10/01/2008
</Table>
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 10 -- Effective 10/03/2011
3
<Page>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE (CONTINUED) DATE**
<S> <C>
--------------------------------------------------------------------------------
LifeAccess Accelerated Benefit Rider (LAABR) 10/01/2008
Policy Continuation Rider 10/01/2008
Policy Protection Rider (PPR) 10/01/2008
Enhanced No Lapse Guarantee Rider 10/01/2008
Lifetime No Lapse Guarantee Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Conversion Option Rider 10/01/2008
Overloan Protection Rider 10/01/2008
Waiver of Specified Amount (WSA) Rider 10/01/2008
Waiver of Monthly Deductions (WMD) Rider 10/01/2008
Children's Life Insurance Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Estate Tax Repeal Benefit Rider 10/01/2008
Modified Surrender Value Rider 10/01/2008
Cash Surrender Value Endorsement 10/01/2008
Automatic Premium Payment Rider 10/01/2008
Additional Premium Rider 10/01/2008
Qualified Plan Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
DisabilityAccess Rider (DAR) 08/11/2009
LongevityAccess Rider 03/14/2011
LifeAccess Care Rider 04/11/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING ADDITIONAL DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Primary Insured Term Rider: Provides additional level term life coverage on the
base policy insured.
Other Covered Insured Term Life Rider: Provides level term life coverage on an
insured other than the base policy insured.
Cost of Living Adjustment (COLA) Rider: Provides for biennial face amount
increases, without underwriting, based on increases in the Consumer Price Index.
The maximum amount of any single increase is $50,000. Any increase can be
declined by the policyholder, which stops future increases. Available only at
issue and only for non-substandard issue ages 0 through 60.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 10 -- Effective 10/03/2011
4
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE:
Accidental Death Benefit Rider: Pays an additional death benefit if the death on
the insured is caused by a qualifying accident.
Accelerated Benefit Rider: Provides the policyholder up to 100% of the death
benefit, discounted with interest, if the insured's life expectancy is 12 months
or less. After acceleration, the Ceding Company shall continue to pay the
Reinsurer Reinsurance Premiums on the Reinsured Net Amount at Risk as described
in Schedule B, and the Reinsurer shall be liable for such Reinsured Net Amount
at Risk upon the death of the insured.
LifeAccess Accelerated Benefit Rider (LAABR): Provides for monthly benefits (up
to 2% of death benefit) if insured meets certain ADL and home-care requirements.
In accordance with Schedule B, during and after acceleration, the Ceding Company
shall continue to pay the Reinsurer Reinsurance Premiums on the Reinsured Net
Amount at Risk based on the Death Benefit prior to acceleration, and the
Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the death
of the insured.
Policy Continuation Rider: Intended to prevent the lapse of highly loaned
policies.
Policy Protection Rider: Protects the death benefit of the base policy and any
primary insured term rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Enhanced No Lapse Guarantee Rider: Provides that the policy will not lapse as
long as cumulative premiums paid less indebtedness less withdrawals are greater
than or equal to the cumulative no lapse guarantee premiums. Length of guarantee
varies by issue age.
Lifetime No Lapse Guarantee Rider: Same as Enhanced No Lapse Guarantee Rider but
with lifetime guarantee.
Guaranteed Minimum Accumulation Benefit (GMAB) Rider: Provides, at the end of
the GMAB Guarantee Period (usually 20 years), that the policy Account Value will
be increased, if necessary, to equal the sum of gross premiums paid to that
date. There is a small monthly charge and a minimum cumulative premium
requirement to keep the rider in force.
Paid-Up Life Insurance Rider: Similar to the GMAB rider, with the same Guarantee
Period, a monthly charge, and a cumulative premium requirement. At end of the
Guarantee Period, the owner may elect to change coverage to paid-up life using
the Account Value as a 5% NSP to determine the amount of coverage; however, the
amount of coverage will never be lower than the sum of gross premiums paid to
that date. Once elected, premiums are no longer payable.
Conversion Option Rider: During certain policy years and prior to the insured's
attained age 70, the policy may be converted, without evidence of insurability,
to any permanent plan of life insurance the Ceding Company then makes available
for conversions of this policy.
Overloan Protection Rider: Protects a policy from terminating due to overloan.
Waiver of Specified Amount (WSA) Rider: Waives a specified amount monthly while
the insured is disabled.
Waiver of Monthly Deductions (WMD) Rider: Waives monthly deduction amounts while
the insured is disabled.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 10 -- Effective 10/03/2011
5
<Page>
Children's Life Insurance Rider: Provides level term life coverage for each
child of the insured.
Foreign Travel Exclusion Rider: Provides a limited death benefit (Account Value
less indebtedness) if the insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Estate Tax Repeal Benefit Rider: Pays the policy Account Value less indebtedness
if the Federal Estate Tax Law is fully repealed by December 31, 2010, and the
Ceding Company receives a request for this benefit amount from the policy owner.
Modified Surrender Value Rider: Changes the Cash Surrender Value definition (to
equal the Account Value) if the policy is surrendered within 3 years after the
policy issue date.
Cash Surrender Value Endorsement: Provides for enhanced Cash Surrender Value
(equal to the current Account Value) in the event of policy surrender in the
first 4 policy years, unless the policy is exchanged under Section 1035 to
another company's policy.
Automatic Premium Payment Rider: Provides for any Scheduled Premium due and
unpaid by the end of any Policy Grace Period to be paid by an automatic
deduction from the Account Value, if the Account Value exceeds the Guaranteed
Cash Value.
Additional Premium Rider: Allows additional premium amounts to be paid at the
same payment intervals as scheduled premiums.
Qualified Plan Rider: Indicates that the policy is owned by a qualified plan,
details the policy owner's reporting responsibilities to the Ceding Company, and
describes features and activities that are unavailable when the policy is owned
by a Qualified Plan.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
DisabilityAccess Rider (DAR): Pays a monthly benefit upon disability of the
primary insured on the life insurance policy to which it is attached. The amount
of monthly benefit is permanently set at rider issue and is limited to a
24-month benefit period. The maximum monthly benefit amount is $5,000; it is
further limited to 2% of the initial face amount or 30% of monthly income at
policy issue. The minimum monthly benefit is $1,000.
LongevityAccess Rider: Provides for monthly benefits (up to 1% of death benefit)
when the insured reaches age 90 and meets the rider's eligibility requirements.
Includes a residual death benefit of 10% of the death benefit prior to
withdrawals. In accordance with Schedule B, during and after withdrawals, the
Ceding Company shall continue to pay the Reinsurer Reinsurance Premiums on the
Reinsured Net Amount at Risk based on the Death Benefit prior to withdrawals,
and the Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the
death of the insured.
LifeAccess Care Rider: Similar to the LifeAccess Accelerated Benefit Rider, but
filed as a health product in some states. Provides for monthly benefits (up to
2% of death benefit) if insured meets certain ADL and home-care requirements.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 10 -- Effective 10/03/2011
6
<Page>
LAST SURVIVOR PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
Hartford Leaders VUL Joint Legacy 2001 CSO MIF SINS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Joint Legacy II 2001 CSO MIF SINS Ultimate ANB A 10/01/2008
Hartford Advanced Last Survivor UL 2001 CSO MIF SINS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint Freedom 2001 CSO MIF SINS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint Freedom II (a) 2001 CSO MIF SINS Ultimate ANB B 10/01/2008
Hartford Bicentennial UL Joint Freedom II (b) 2001 CSO MIF SINS Ultimate ANB A 07/01/2010
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Estate Protection Rider (NAR Type is C) 10/01/2008
</Table>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
LS Exchange Option Rider 10/01/2008
Policy Protection Rider 10/01/2008
Estate Tax Repeal Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
Joint LifeAccess Rider 01/31/2011
</Table>
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Estate Protection Rider: This rider provides last survivor level term life
insurance on the base policy insureds for three years.
RIDERS THAT PROVIDE ADDITIONAL BENEFITS BUT THAT ARE NOT ELIGIBLE FOR
REINSURANCE:
LS Exchange Option Rider: Allows a Last Survivor policy to be split into two
Single Life policies, without new evidence of insurability, if divorce, business
dissolution, or estate-tax repeal or reduction occurs. The face amount of each
new Single Life policy will equal one half of the Last Survivor policy face
amount. Upon a split, reinsurance will continue at point-in-scale rates for each
single life, as documented in Section X.C. (This rider is not available when one
of the insureds is uninsurable or above Table H.)
Policy Protection Rider: Protects the death benefit of the base policy and any
Estate Protection Rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 10 -- Effective 10/03/2011
7
<Page>
Estate Tax Repeal Rider: Will pay the Account Value less indebtedness if the
Federal Estate Tax Law is fully repealed by December 31, 2010, and the Ceding
Company receives a request for this benefit amount from the policy owner.
Foreign Travel Exclusion: Provides a limited death benefit (Account Value less
indebtedness) if either insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Guaranteed Minimum Accumulation Benefit Rider and Paid-Up Life Insurance Rider:
Same as Single Life riders.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
Joint LifeAccess Rider: Similar to the LifeAccess Accelerated Benefit Rider.
Available only on Last Survivor products where the benefit will be payable for
the last surviving insured if chronically ill or if both insureds are
concurrently chronically ill.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 10 -- Effective 10/03/2011
8
<Page>
AMENDMENT 11
EFFECTIVE OCTOBER 1, 2008
TO THE
AUTOMATIC AND FACULTATIVE MONTHLY RENEWABLE TERM REINSURANCE AGREEMENT
EFFECTIVE OCTOBER 1, 2008
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
TRANSAMERICA LIFE INSURANCE COMPANY ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer (collectively, the "Parties")
agree that the Agreement was implemented using YRT Reinsurance Rate Factors
("Factors") which proved to be incorrect; and
WHEREAS, the Parties have agreed to incorporate revised Factors as shown in the
attached Exhibit IV as of October 1, 2008; and
WHEREAS, the Parties now wish to recalculate all billing transactions from
October 1, 2008 using the revised Factors; and
WHEREAS, the Ceding Company shall alter its administrative systems to enable the
recalculation of premium.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer hereby agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. Exhibit IV is deleted in its entirety and replaced with the attached
revised Exhibit IV.
3. The Ceding Company shall recalculate all billing transactions from October
1, 2008 and pay the Reinsurer accordingly.
4. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 11 -- Effective 10/01/2008
1
<Page>
In witness of the foregoing, the Ceding Company and the Reinsurer have, by their
respective officers, executed this Amendment in duplicate on the dates indicated
below.
TRANSAMERICA LIFE INSURANCE COMPANY
by its Administrator and Attorney-in-Fact
SCOR Global Life Americas Reinsurance Company
<Table>
<S> <C> <C> <C>
By: /s/ Glenn Cunningham Attest: /s/ Robin S. Blackwell
---------------------------------------------- ----------------------------------------------
Name: Glenn Cunningham Name: Robin S. Blackwell
Title: Executive Vice President Title: Assistant Vice President
SCOR Global Life Americas Reinsurance Company SCOR Global Life Americas Reinsurance Company
Date: April 4, 2012 Date: April 6, 2012
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Michael Roscoe
---------------------------------------------- ----------------------------------------------
Name: Paul Fischer, FSA, MAAA Name: Michael Roscoe, FSA, MAAA
Title: Assistant Vice President and Actuary Title: Senior Vice President
Individual Life Product Management Individual Life Product Management
Date: May 21, 2012 Date: 5/22/2012
</Table>
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 11 -- Effective 10/01/2008
2
<Page>
EXHIBIT IV
YRT REINSURANCE RATE FACTORS
EFFECTIVE OCTOBER 1, 2008
FOR SINGLE LIFE AND LAST SURVIVOR PLANS OF INSURANCE
AND
FOR AUTOMATIC AND FACULTATIVE REINSURANCE
YRT REINSURANCE RATE FACTORS (SEE EXHIBIT I FOR USAGE)
FOR YEARS OF COVERAGE 1-10
FOR YEARS OF COVERAGE 11-20
FOR YEARS OF COVERAGE 21 AND LATER
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 11 -- Effective 10/01/2008
3
<Page>
AMENDMENT 12
EFFECTIVE MARCH 1, 2012
TO THE
AUTOMATIC AND FACULTATIVE MONTHLY RENEWABLE TERM
REINSURANCE AGREEMENT
EFFECTIVE OCTOBER 1, 2008
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
TRANSAMERICA LIFE INSURANCE COMPANY ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer wish to restate the definition of
Working Reserve for the Reinsured Net Amount at Risk to reflect that it is the
approximate value of the reserve net of other reinsurance arrangements held by
the Ceding Company; and
WHEREAS, the Ceding Company and the Reinsurer wish to acknowledge that Hartford
Bicentennial UL Freedom and Hartford Bicentennial UL Joint Freedom II will now
use NAR Type B only.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer hereby agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. Schedule A is hereby deleted in its entirety and replaced with the
attached, revised Schedule A.
3. Schedule B is hereby deleted in its entirety and replaced with the
attached, revised Schedule B.
4. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 12 -- Effective 03/01/2012
1
<Page>
In witness of the foregoing, the Ceding Company and the Reinsurer have, by their
respective officers, executed this Amendment in duplicate on the dates indicated
below.
TRANSAMERICA LIFE INSURANCE COMPANY
by its Administrator and Attorney-in-Fact
SCOR Global Life Americas Reinsurance Company
<Table>
<S> <C> <C> <C>
By: /s/ Glenn Cunningham Attest: /s/ Robin S. Blackwell
-------------------------------------- --------------------------------
Name: Glenn Cunningham Name: Robin S. Blackwell
Title: Executive Vice President Title: Assistant Vice President
SCOR Global Life Americas Reinsurance SCOR Global Life Americas
Company Reinsurance Company
Date: September 20, 2012 Date: September 25, 2012
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Michael Roscoe
-------------------------------------- ---------------------------------------
Name: Paul Fischer, FSA, MAAA Name: Michael Roscoe, FSA, MAAA
Title: Assistant Vice President and Actuary Title: Senior Vice President
Individual Life Product Management Individual Life Product Management
Date: October 8, 2012 Date: 10/11/2012
</Table>
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 12 -- Effective 03/01/2012
2
<Page>
SCHEDULE A
PLANS OF INSURANCE COVERED UNDER THIS AGREEMENT
EFFECTIVE MARCH 1, 2012
SINGLE LIFE PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
Stag UL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Bicentennial UL Founders 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford UL CV 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Wall Street VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Protector II VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Legacy 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Stag Accumulator II VUL 1980 CSO M/F Unismoke Ultimate ALB A 10/01/2008
Hartford Leaders VUL Liberty (a) 1980 CSO M/F Unismoke Ultimate ANB A 10/01/2008
Hartford Leaders VUL Liberty (b) 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Life Solutions II UL (a) 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Life Solutions II UL (b) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Advanced Universal Life 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Freedom 2001 CSO M/F S/NS Ultimate ANB B 10/01/2008
Hartford Quantum II VUL (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Quantum II VUL (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford ExtraOrdinary Whole Life (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford ExtraOrdinary Whole Life (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Bicentennial UL Founders II 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Hartford Bicentennial UL Founders II Extended 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Value Option
Hartford Frontier Indexed Universal Life 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Hartford Frontier Indexed Universal Life 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Extended Value Option
Hartford Founders Plus UL 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Hartford Founders Plus UL Extended Value 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Option
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Primary Term Insured Rider 10/01/2008
Other Covered Insured Term Life Rider 10/01/2008
Cost of Living Adjustment (COLA) Rider 10/01/2008
</Table>
NOTE: NAR Type for term riders above is C. For COLA Rider, NAR Type follows Base
Policy to which it is attached.
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Accidental Death Benefit (ADB) Rider 10/01/2008
Accelerated Benefit Rider (ABR) 10/01/2008
</Table>
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 12 -- Effective 03/01/2012
3
<Page>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE (CONTINUED) DATE**
<S> <C>
--------------------------------------------------------------------------------
LifeAccess Accelerated Benefit Rider (LAABR) 10/01/2008
Policy Continuation Rider 10/01/2008
Policy Protection Rider (PPR) 10/01/2008
Enhanced No Lapse Guarantee Rider 10/01/2008
Lifetime No Lapse Guarantee Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Conversion Option Rider 10/01/2008
Overloan Protection Rider 10/01/2008
Waiver of Specified Amount (WSA) Rider 10/01/2008
Waiver of Monthly Deductions (WMD) Rider 10/01/2008
Children's Life Insurance Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Estate Tax Repeal Benefit Rider 10/01/2008
Modified Surrender Value Rider 10/01/2008
Cash Surrender Value Endorsement 10/01/2008
Automatic Premium Payment Rider 10/01/2008
Additional Premium Rider 10/01/2008
Qualified Plan Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
DisabilityAccess Rider (DAR) 08/11/2009
LongevityAccess Rider 03/14/2011
LifeAccess Care Rider 04/11/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING ADDITIONAL DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Primary Insured Term Rider: Provides additional level term life coverage on the
base policy insured.
Other Covered Insured Term Life Rider: Provides level term life coverage on an
insured other than the base policy insured.
Cost of Living Adjustment (COLA) Rider: Provides for biennial face amount
increases, without underwriting, based on increases in the Consumer Price Index.
The maximum amount of any single increase is $50,000. Any increase can be
declined by the policyholder, which stops future increases. Available only at
issue and only for non-substandard issue ages 0 through 60.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 12 -- Effective 03/01/2012
4
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE:
Accidental Death Benefit Rider: Pays an additional death benefit if the death on
the insured is caused by a qualifying accident.
Accelerated Benefit Rider: Provides the policyholder up to 100% of the death
benefit, discounted with interest, if the insured's life expectancy is 12 months
or less. After acceleration, the Ceding Company shall continue to pay the
Reinsurer Reinsurance Premiums on the Reinsured Net Amount at Risk as described
in Schedule B, and the Reinsurer shall be liable for such Reinsured Net Amount
at Risk upon the death of the insured.
LifeAccess Accelerated Benefit Rider (LAABR): Provides for monthly benefits (up
to 2% of death benefit) if insured meets certain ADL and home-care requirements.
In accordance with Schedule B, during and after acceleration, the Ceding Company
shall continue to pay the Reinsurer Reinsurance Premiums on the Reinsured Net
Amount at Risk based on the Death Benefit prior to acceleration, and the
Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the death
of the insured.
Policy Continuation Rider: Intended to prevent the lapse of highly loaned
policies.
Policy Protection Rider: Protects the death benefit of the base policy and any
primary insured term rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Enhanced No Lapse Guarantee Rider: Provides that the policy will not lapse as
long as cumulative premiums paid less indebtedness less withdrawals are greater
than or equal to the cumulative no lapse guarantee premiums. Length of guarantee
varies by issue age.
Lifetime No Lapse Guarantee Rider: Same as Enhanced No Lapse Guarantee Rider but
with lifetime guarantee.
Guaranteed Minimum Accumulation Benefit (GMAB) Rider: Provides, at the end of
the GMAB Guarantee Period (usually 20 years), that the policy Account Value will
be increased, if necessary, to equal the sum of gross premiums paid to that
date. There is a small monthly charge and a minimum cumulative premium
requirement to keep the rider in force.
Paid-Up Life Insurance Rider: Similar to the GMAB rider, with the same Guarantee
Period, a monthly charge, and a cumulative premium requirement. At end of the
Guarantee Period, the owner may elect to change coverage to paid-up life using
the Account Value as a 5% NSP to determine the amount of coverage; however, the
amount of coverage will never be lower than the sum of gross premiums paid to
that date. Once elected, premiums are no longer payable.
Conversion Option Rider: During certain policy years and prior to the insured's
attained age 70, the policy may be converted, without evidence of insurability,
to any permanent plan of life insurance the Ceding Company then makes available
for conversions of this policy.
Overloan Protection Rider: Protects a policy from terminating due to overloan.
Waiver of Specified Amount (WSA) Rider: Waives a specified amount monthly while
the insured is disabled.
Waiver of Monthly Deductions (WMD) Rider: Waives monthly deduction amounts while
the insured is disabled.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 12 -- Effective 03/01/2012
5
<Page>
Children's Life Insurance Rider: Provides level term life coverage for each
child of the insured.
Foreign Travel Exclusion Rider: Provides a limited death benefit (Account Value
less indebtedness) if the insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Estate Tax Repeal Benefit Rider: Pays the policy Account Value less indebtedness
if the Federal Estate Tax Law is fully repealed by December 31, 2010, and the
Ceding Company receives a request for this benefit amount from the policy owner.
Modified Surrender Value Rider: Changes the Cash Surrender Value definition (to
equal the Account Value) if the policy is surrendered within 3 years after the
policy issue date.
Cash Surrender Value Endorsement: Provides for enhanced Cash Surrender Value
(equal to the current Account Value) in the event of policy surrender in the
first 4 policy years, unless the policy is exchanged under Section 1035 to
another company's policy.
Automatic Premium Payment Rider: Provides for any Scheduled Premium due and
unpaid by the end of any Policy Grace Period to be paid by an automatic
deduction from the Account Value, if the Account Value exceeds the Guaranteed
Cash Value.
Additional Premium Rider: Allows additional premium amounts to be paid at the
same payment intervals as scheduled premiums.
Qualified Plan Rider: Indicates that the policy is owned by a qualified plan,
details the policy owner's reporting responsibilities to the Ceding Company, and
describes features and activities that are unavailable when the policy is owned
by a Qualified Plan.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
DisabilityAccess Rider (DAR): Pays a monthly benefit upon disability of the
primary insured on the life insurance policy to which it is attached. The amount
of monthly benefit is permanently set at rider issue and is limited to a
24-month benefit period. The maximum monthly benefit amount is $5,000; it is
further limited to 2% of the initial face amount or 30% of monthly income at
policy issue. The minimum monthly benefit is $1,000.
LongevityAccess Rider: Provides for monthly benefits (up to 1% of death benefit)
when the insured reaches age 90 and meets the rider's eligibility requirements.
Includes a residual death benefit of 10% of the death benefit prior to
withdrawals. In accordance with Schedule B, during and after withdrawals, the
Ceding Company shall continue to pay the Reinsurer Reinsurance Premiums on the
Reinsured Net Amount at Risk based on the Death Benefit prior to withdrawals,
and the Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the
death of the insured.
LifeAccess Care Rider: Similar to the LifeAccess Accelerated Benefit Rider, but
filed as a health product in some states. Provides far monthly benefits (up to
2% of death benefit) if insured meets certain ADL and home-care requirements.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 12 -- Effective 03/01/2012
6
<Page>
LAST SURVIVOR PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------
Hartford Leaders VUL Joint Legacy 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Joint Legacy 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
II
Hartford Advanced Last Survivor UL 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Freedom
Hartford Bicentennial UL Joint 2001 CSO M/F S/NS Ultimate ANB B 10/01/2008
Freedom II
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Estate Protection Rider (NAR Type is C) 10/01/2008
</Table>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
LS Exchange Option Rider 10/01/2008
Policy Protection Rider 10/01/2008
Estate Tax Repeal Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
Joint LifeAccess Rider 01/31/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Estate Protection Rider: This rider provides last survivor level term life
insurance on the base policy insureds for three years.
RIDERS THAT PROVIDE ADDITIONAL BENEFITS BUT THAT ARE NOT ELIGIBLE FOR
REINSURANCE:
LS Exchange Option Rider: Allows a Last Survivor policy to be split into two
Single Life policies, without new evidence of insurability, if divorce, business
dissolution, or estate-tax repeal or reduction occurs. The face amount of each
new Single Life policy will equal one half of the Last Survivor policy face
amount. Upon a split, reinsurance will continue at point-in-scale rates for each
single life, as documented in Section X.C. (This rider is not available when one
of the insureds is uninsurable or above Table H.)
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 12 -- Effective 03/01/2012
7
<Page>
Policy Protection Rider: Protects the death benefit of the base policy and any
Estate Protection Rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Estate Tax Repeal Rider: Will pay the Account Value less indebtedness if the
Federal Estate Tax Law is fully repealed by December 31, 2010, and the Ceding
Company receives a request for this benefit amount from the policy owner.
Foreign Travel Exclusion: Provides a limited death benefit (Account Value less
indebtedness) if either insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Guaranteed Minimum Accumulation Benefit Rider and Paid-Up Life Insurance
Rider: Same as Single Life riders.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
Joint LifeAccess Rider: Similar to the LifeAccess Accelerated Benefit Rider.
Available only on Last Survivor products where the benefit will be payable for
the last surviving insured if chronically ill or if both insureds are
concurrently chronically ill.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 12 -- Effective 03/01/2012
8
<Page>
SCHEDULE B
REINSURANCE SPECIFICATIONS
EFFECTIVE MARCH 1, 2012
AUTOMATIC REINSURANCE: The Ceding Company shall retain its available retention
on each risk, defined below as the Retained Net Amount at Risk, subject to the
applicable Ceding Company's Treaty Retention Limit shown in Exhibit II.
The Reinsurer will automatically reinsure a portion of the remainder of the
risk, called the Reinsured Net Amount at Risk, as defined below in this Schedule
B.
FACULTATIVE REINSURANCE: The Reinsurer will reinsure X% (as determined at issue)
of the Total Net Amount at Risk for the risk.
TOTAL ALLOCATION LIMIT (TAL): As shown in Exhibit II.
CEDING COMPANY'S TREATY RETENTION LIMIT (CCTRL): As shown in Exhibit II.
CEDING COMPANY'S ALLOCATED RETENTION (CCAR): As shown in Exhibit II.
CURRENT RETENTION (CURRRET) = Current amount of life insurance retained by the
Ceding Company and its affiliated companies on the life for in-force life
insurance coverage. (For Last Survivor risks, see the Last Survivor Limits and
Retention Worksheet in Exhibit II.)
REINSURER'S ALLOCATED RETENTION (REINSARET): As shown in Exhibit II.
REINSURER'S ATTACHMENT POINT (REINSAPT): As shown in Exhibit II.
NAR TYPE for the Plan of Insurance to be reinsured under this Agreement, as
shown in Schedule A.
STEP 1 -- DETERMINE TOTAL NET AMOUNT AT RISK FOR THE COVERAGE*
TOTAL NET AMOUNT AT RISK (TOTNAR) =
For NAR TYPE A, Death Benefit minus the Account Value.
For NAR TYPE B, Death Benefit minus the Working Reserve, where
Working Reserve = (i) x (ii) / (iii), and
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 12 -- Effective 03/01/2012
9
<Page>
STEP 2 -- DETERMINE NET AMOUNT AT RISK FOR EACH "LAYER" OF COVERAGE
STEP 3 -- DETERMINE THE NAR FOR THE CEDING COMPANY AND THEN FOR THE REINSURER
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 12 -- Effective 03/01/2012
10
<Page>
MINIMUM AUTOMATIC REINSURANCE CESSION:
MINIMUM FACULTATIVE REINSURANCE APPLICATION:
LEAD REINSURER:
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 12 -- Effective 03/01/2012
11
<Page>
AMENDMENT 13
EFFECTIVE OCTOBER 15, 2012
TO THE
AUTOMATIC AND FACULTATIVE MONTHLY RENEWABLE TERM REINSURANCE AGREEMENT
EFFECTIVE OCTOBER 1, 2008
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
TRANSAMERICA LIFE INSURANCE COMPANY ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer wish to amend the Agreement to
include Hartford Joint Founders Plus UL as Base Policy under the Agreement, for
policies issued on or after the Effective Date shown in Schedule A.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer hereby agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. Schedule A is deleted in its entirety and replaced with the attached
revised Schedule A.
3. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 13 -- Effective 10/15/2012
1
<Page>
In witness of the foregoing, the Ceding Company and the Reinsurer have, by their
respective officers, executed this Amendment in duplicate on the dates indicated
below.
TRANSAMERICA LIFE INSURANCE COMPANY
BY ITS ADMINISTRATOR AND ATTORNEY-IN-FACT
SCOR GLOB LIFE AMERICAS REINSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Glenn Cunningham Attest: /s/ Robin Blackwell
-------------------------------------- -------------------------------------
Name: Glenn Cunningham Name: Robin Blackwell
Title: Executive Vice President Title: Assistant Vice President
Date: November 5, 2012 Date: November 8, 2012
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Michael Roscoe
-------------------------------------- -------------------------------------
Name: Paul Fischer, FSA, MAAA Name: Michael Roscoe, FSA, MAAA
Title: Assistant Vice President and Actuary Title: Senior Vice President
Individual Life Product Management Individual Life Product Management
Date: November 27, 2012 Date: 11/29/2012
</Table>
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 13 -- Effective 10/15/2012
2
<Page>
SCHEDULE A
PLANS OF INSURANCE COVERED UNDER THIS AGREEMENT
Effective October 15, 2012
SINGLE LIFE PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
Stag UL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Bicentennial UL Founders 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford UL CV 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Wall Street VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Protector II VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Legacy 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Stag Accumulator II VUL 1980 CSO M/F Unismoke Ultimate ALB A 10/01/2008
Hartford Leaders VUL Liberty (a) 1980 CSO M/F Unismoke Ultimate ANB A 10/01/2008
Hartford Leaders VUL Liberty (b) 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Life Solutions II UL (a) 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Life Solutions II UL (b) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Advanced Universal Life 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Freedom 2001 CSO M/F S/NS Ultimate ANB B*** 10/01/2008
Hartford Quantum II VUL (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Quantum II VUL (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford ExtraOrdinary Whole Life (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford ExtraOrdinary Whole Life (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Bicentennial UL Founders II 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Hartford Bicentennial UL Founders II Extended Value Option 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Hartford Frontier Indexed Universal Life 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Hartford Frontier Indexed Universal Life Extended Value 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Option
Hartford Founders Plus UL 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Hartford Founders Plus UL Extended Value Option 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Hartford Frontier 2012 Indexed UL 2001 CSO M/F S/NS Ultimate ANB A 07/16/2012
Hartford Frontier 2012 Indexed UL Extended Value Option 2001 CSO M/F S/NS Ultimate ANB A 07/16/2012
Hartford Leaders VUL Liberty 2012 2001 CSO M/F Composite Ultimate ANB A 08/06/2012
Hartford Leaders VUL Liberty 2012 Extended Value Option 2001 CSO M/F Composite Ultimate ANB A 08/06/2012
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
*** The version of this product launched on 7/1/2010 used NAR Type A prior to
3/1/2012. As of 3/1/2012, NAR Type B is used prospectively for all in force
and new policies.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 13 -- Effective 10/15/2012
3
<Page>
<Table>
<Caption>
SINGLE LIFE PLANS OF INSURANCE RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Primary Term Insured Rider 10/01/2008
Other Covered Insured Term Life Rider 10/01/2008
Cost of Living Adjustment (COLA) Rider 10/01/2008
</Table>
NOTE: NAR Type for term riders above is C. For COLA Rider, NAR Type follows Base
Policy to which it is attached.
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Accidental Death Benefit (ADB) Rider 10/01/2008
Accelerated Benefit Rider (ABR) 10/01/2008
LifeAccess Accelerated Benefit Rider (LAABR) 10/01/2008
Policy Continuation Rider 10/01/2008
Policy Protection Rider (PPR) 10/01/2008
Enhanced No Lapse Guarantee Rider 10/01/2008
Lifetime No Lapse Guarantee Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Conversion Option Rider 10/01/2008
Overloan Protection Rider 10/01/2008
Waiver of Specified Amount (WSA) Rider 10/01/2008
Waiver of Monthly Deductions (WMD) Rider 10/01/2008
Children's Life Insurance Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Estate Tax Repeal Benefit Rider 10/01/2008
Modified Surrender Value Rider 10/01/2008
Cash Surrender Value Endorsement 10/01/2008
Automatic Premium Payment Rider 10/01/2008
Additional Premium Rider 10/01/2008
Qualified Plan Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
DisabilityAccess Rider (DAR) 08/11/2009
LongevityAccess Rider 03/14/2011
LifeAccess Care Rider 04/11/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 13 -- Effective 10/15/2012
4
<Page>
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING ADDITIONAL DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Primary Insured Term Rider: Provides additional level term life coverage on the
base policy insured.
Other Covered Insured Term Life Rider: Provides level term life coverage on an
insured other than the base policy insured.
Cost of Living Adjustment (COLA) Rider: Provides for biennial face amount
increases, without underwriting, based on increases in the Consumer Price Index.
The maximum amount of any single increase is $50,000. Any increase can be
declined by the policyholder, which stops future increases. Available only at
issue and only for non-substandard issue ages 0 through 60.
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE:
Accidental Death Benefit Rider: Pays an additional death benefit if the death on
the insured is caused by a qualifying accident.
Accelerated Benefit Rider: Provides the policyholder up to 100% of the death
benefit, discounted with interest, if the insured's life expectancy is 12 months
or less. After acceleration, the Ceding Company shall continue to pay the
Reinsurer Reinsurance Premiums on the Reinsured Net Amount at Risk as described
in Schedule B, and the Reinsurer shall be liable for such Reinsured Net Amount
at Risk upon the death of the insured.
LifeAccess Accelerated Benefit Rider (LAABR): Provides for monthly benefits (up
to 2% of death benefit) if insured meets certain ADL and home-care requirements.
In accordance with Schedule B, during and after acceleration, the Ceding Company
shall continue to pay the Reinsurer Reinsurance Premiums on the Reinsured Net
Amount at Risk based on the Death Benefit prior to acceleration, and the
Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the death
of the insured.
Policy Continuation Rider: Intended to prevent the lapse of highly loaned
policies.
Policy Protection Rider: Protects the death benefit of the base policy and any
primary insured term rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Enhanced No Lapse Guarantee Rider: Provides that the policy will not lapse as
long as cumulative premiums paid less indebtedness less withdrawals are greater
than or equal to the cumulative no lapse guarantee premiums. Length of guarantee
varies by issue age.
Lifetime No Lapse Guarantee Rider: Same as Enhanced No Lapse Guarantee Rider but
with lifetime guarantee.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 13 -- Effective 10/15/2012
5
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE
(CONTINUED):
Guaranteed Minimum Accumulation Benefit (GMAB)Rider: Provides, at the end of the
GMAB Guarantee Period (usually 20 years), that the policy Account Value will be
increased, if necessary, to equal the sum of gross premiums paid to that date.
There is a small monthly charge and a minimum cumulative premium requirement to
keep the rider in force.
Paid-Up Life Insurance Rider: Similar to the GMAB rider, with the same Guarantee
Period, a monthly charge, and a cumulative premium requirement. At end of the
Guarantee Period, the owner may elect to change coverage to paid-up life using
the Account Value as a 5% NSP to determine the amount of coverage; however, the
amount of coverage will never be lower than the sum of gross premiums paid to
that date. Once elected, premiums are no longer payable.
Conversion Option Rider: During certain policy years and prior to the insured's
attained age 70, the policy may be converted, without evidence of insurability,
to any permanent plan of life insurance the Ceding Company then makes available
for conversions of this policy.
Overloan Protection Rider: Protects a policy from terminating due to overloan.
Waiver of Specified Amount (WSA) Rider: Waives a specified amount monthly while
the insured is disabled.
Waiver of Monthly Deductions (WMD) Rider: Waives monthly deduction amounts while
the insured is disabled.
Children's Life Insurance Rider: Provides level term life coverage for each
child of the insured.
Foreign Travel Exclusion Rider: Provides a limited death benefit (Account Value
less indebtedness) if the insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Estate Tax Repeal Benefit Rider: Pays the policy Account Value less indebtedness
if the Federal Estate Tax Law is fully repealed by December 31, 2010, and the
Ceding Company receives a request for this benefit amount from the policy owner.
Modified Surrender Value Rider: Changes the Cash Surrender Value definition (to
equal the Account Value) if the policy is surrendered within 3 years after the
policy issue date.
Cash Surrender Value Endorsement: Provides for enhanced Cash Surrender Value
(equal to the current Account Value) in the event of policy surrender in the
first 4 policy years, unless the policy is exchanged under Section 1035 to
another company's policy.
Automatic Premium Payment Rider: Provides for any Scheduled Premium due and
unpaid by the end of any Policy Grace Period to be paid by an automatic
deduction from the Account Value, if the Account Value exceeds the Guaranteed
Cash Value.
Additional Premium Rider: Allows additional premium amounts to be paid at the
same payment intervals as scheduled premiums.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 13 -- Effective 10/15/2012
6
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE
(CONTINUED):
Qualified Plan Rider: Indicates that the policy is owned by a qualified plan,
details the policy owner's reporting responsibilities to the Ceding Company, and
describes features and activities that are unavailable when the policy is owned
by a Qualified Plan.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
DisabilityAccess Rider (DAR): Pays a monthly benefit upon disability of the
primary insured on the life insurance policy to which it is attached. The amount
of monthly benefit is permanently set at rider issue and is limited to a
24-month benefit period. The maximum monthly benefit amount is $5,000; it is
further limited to 2% of the initial face amount or 30% of monthly income at
policy issue. The minimum monthly benefit is $1,000.
LongevityAccess Rider: Provides for monthly benefits (up to 1% of death benefit)
when the insured reaches age 90 and meets the rider's eligibility requirements.
Includes a residual death benefit of 10% of the death benefit prior to
withdrawals. In accordance with Schedule B, during and after withdrawals, the
Ceding Company shall continue to pay the Reinsurer Reinsurance Premiums on the
Reinsured Net Amount at Risk based on the Death Benefit prior to withdrawals,
and the Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the
death of the insured.
LifeAccess Care Rider: Similar to the LifeAccess Accelerated Benefit Rider, but
filed as a health product in some states. Provides for monthly benefits (up to
2% of death benefit) if insured meets certain ADL and home-care requirements.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 13 -- Effective 10/15/2012
7
<Page>
LAST SURVIVOR PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
Hartford Leaders VUL Joint Legacy 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Joint Legacy II 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Advanced Last Survivor UL 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint Freedom 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint Freedom II 2001 CSO M/F S/NS Ultimate ANB B*** 10/01/2008
Hartford Joint Founders Plus UL 2001 CSO M/F S/NS Ultimate ANB A 10/15/2012
</Table>
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
*** The version of this product launched on 7/1/2010 used NAR Type A prior to
3/1/2012. As of 3/1/2012, NAR Type B is used prospectively for all in force
and new policies.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Estate Protection Rider (NAR Type is C) 10/01/2008
</Table>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
LS Exchange Option Rider 10/01/2008
Policy Protection Rider 10/01/2008
Estate Tax Repeal Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
Joint LifeAccess Rider 01/31/2011
</Table>
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Estate Protection Rider: This rider provides last survivor level term life
insurance on the base policy insureds for three years.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 13 -- Effective 10/15/2012
8
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS BUT THAT ARE NOT ELIGIBLE FOR
REINSURANCE:
LS Exchange Option Rider: Allows a Last Survivor policy to be split into two
Single Life policies, without new evidence of insurability, if divorce, business
dissolution, or estate-tax repeal or reduction occurs. The face amount of each
new Single Life policy will equal one half of the Last Survivor policy face
amount. Upon a split, reinsurance will continue at point-in-scale rates for each
single life, as documented in Section X.C. (This rider is not available when one
of the insureds is uninsurable or above Table H.)
Policy Protection Rider: Protects the death benefit of the base policy and any
Estate Protection Rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Estate Tax Repeal Rider: Will pay the Account Value less indebtedness if the
Federal Estate Tax Law is fully repealed by December 31, 2010, and the Ceding
Company receives a request for this benefit amount from the policy owner.
Foreign Travel Exclusion: Provides a limited death benefit (Account Value less
indebtedness) if either insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Guaranteed Minimum Accumulation Benefit Rider and Paid-Up Life Insurance Rider:
Same as Single Life riders.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
Joint LifeAccess Rider: Similar to the LifeAccess Accelerated Benefit Rider.
Available only on Last Survivor products where the benefit will be payable for
the last surviving insured if chronically ill or if both insureds are
concurrently chronically ill.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 13 -- Effective 10/15/2012
9
<Page>
AMENDMENT 14
EFFECTIVE JULY 16, 2012
TO THE
AUTOMATIC AND FACULTATIVE MONTHLY RENEWABLE TERM REINSURANCE AGREEMENT
EFFECTIVE OCTOBER 1, 2008
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY ("CEDING COMPANY")
AND
TRANSAMERICA LIFE INSURANCE COMPANY ("REINSURER")
("AGREEMENT")
WHEREAS, the Reinsurer currently reinsures the Ceding Company's plans or
policies under the Agreement; and
WHEREAS, the Ceding Company and the Reinsurer wish to amend the Agreement to
reflect that the following Products will be added to the Agreement and the
Effective Dates shown in Schedule A are the dates the products will become
reinsured:
- Hartford Frontier 2012 Indexed UL,
- Hartford Frontier 2012 Indexed UL Extended Value Option,
- Hartford Leaders VUL Liberty 2012, and
- Hartford Leaders VUL Liberty 2012 Extended Value Option.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Ceding Company and the Reinsurer hereby agree as follows:
1. The above recitals are true and accurate and are incorporated herein.
2. Schedule A is deleted in its entirety and replaced with the attached
revised Schedule A.
3. Except as herein amended, all other terms and conditions of the Agreement
shall remain in full force and effect and unchanged.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 14 -- Effective 07/16/2012
1
<Page>
In witness of the foregoing, the Ceding Company and the Reinsurer have, by their
respective officers, executed this Amendment in duplicate on the dates indicated
below.
TRANSAMERICA LIFE INSURANCE COMPANY
by its Administrator and Attorney-in-Fact
SCOR Global Life Americas Reinsurance Company
<Table>
<S> <C> <C> <C>
By: /s/ Glenn Cunningham Attest: /s/ Robin S. Blackwell
---------------------------------------- ------------------------------
Name: Glenn Cunningham Name: Robin S. Blackwell
Title: Executive Vice President Title: Assistant Vice President
SCOR Global Life Americas Reinsurance SCOR Global Life Americas
Company Reinsurance Company
Date: August 13, 2012 Date: August 27, 2012
</Table>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
<Table>
<S> <C> <C> <C>
By: /s/ Paul Fischer Attest: /s/ Donna R. Jarvis
---------------------------------------- ------------------------------
Name: Paul Fischer, FSA, MAAA Name: Donna R. Jarvis
Title: Assistant Vice President and Actuary Title: Vice President and Actuary
Individual Life Product Management
Date: 9-24-12 Date: 9-24-12
</Table>
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 14 -- Effective 07/16/2012
2
<Page>
SCHEDULE A
PLANS OF INSURANCE COVERED UNDER THIS AGREEMENT
EFFECTIVE JULY 16, 2012
SINGLE LIFE PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
Stag UL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Bicentennial UL Founders 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford UL CV 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Wall Street VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Stag Protector II VUL 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Legacy 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Stag Accumulator II VUL 1980 CSO M/F Unismoke Ultimate ALB A 10/01/2008
Hartford Leaders VUL Liberty (a) 1980 CSO M/F Unismoke Ultimate ANB A 10/01/2008
Hartford Leaders VUL Liberty (b) 2001 CSO M/F Composite Ultimate ANB A 10/01/2008
Life Solutions II UL (a) 1980 CSO M/F S/NS Ultimate ALB A 10/01/2008
Life Solutions II UL (b) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Advanced Universal Life 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Freedom 2001 CSO M/F S/NS Ultimate ANB B*** 10/01/2008
Hartford Quantum II VUL (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Quantum II VUL (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford ExtraOrdinary Whole Life (a) 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford ExtraOrdinary Whole Life (b) 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
Hartford Bicentennial UL Founders II 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Hartford Bicentennial UL Founders II Extended Value Option 2001 CSO M/F S/NS Ultimate ANB A 03/05/2010
Hartford Frontier Indexed Universal Life 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Hartford Frontier Indexed Universal Life Extended Value 2001 CSO M/F S/NS Ultimate ANB A 09/07/2010
Option
Hartford Founders Plus UL 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Hartford Founders Plus UL Extended Value Option 2001 CSO M/F S/NS Ultimate ANB A 10/03/2011
Hartford Frontier 2012 Indexed UL 2001 CSO M/F S/NS Ultimate ANB A 07/16/2012
Hartford Frontier 2012 Indexed UL Extended Value Option 2001 CSO M/F S/NS Ultimate ANB A 07/16/2012
Hartford Leaders VUL Liberty 2012 2001 CSO M/F Composite Ultimate ANB A 08/06/2012
Hartford Leaders VUL Liberty 2012 Extended Value Option 2001 CSO M/F Composite Ultimate ANB A 08/06/2012
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
*** The version of this product launched on 7/1/2010 used NAR Type A prior to
3/1/2012. As of 3/1/2012, NAR Type B is used prospectively for all in force
and new policies.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
---------------------------------------------------------------------------
Primary Term Insured Rider 10/01/2008
Other Covered Insured Term Life Rider 10/01/2008
Cost of Living Adjustment (COLA) Rider 10/01/2008
</Table>
NOTE: NAR Type for term riders above is C. For COLA Rider, NAR Type follows Base
Policy to which it is attached.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 14 -- Effective 07/16/2012
3
<Page>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEF EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
---------------------------------------------------------------------------
Accidental Death Benefit (AOB) Rider 10/01/2008
Accelerated Benefit Rider (ABR) 10/01/2008
LifeAccess Accelerated Benefit Rider (LAABR) 10/01/2008
Policy Continuation Rider 10/01/2008
Policy Protection Rider (PPR) 10/01/2008
Enhanced No Lapse Guarantee Rider 10/01/2008
Lifetime No Lapse Guarantee Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Conversion Option Rider 10/01/2008
Overloan Protection Rider 10/01/2008
Waiver of Specified Amount (WSA) Rider 10/01/2008
Waiver of Monthly Deductions (WMD) Rider 10/01/2008
Children's Life Insurance Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Estate Tax Repeal Benefit Rider 10/01/2008
Modified Surrender Value Rider 10/01/2008
Cash Surrender Value Endorsement 10/01/2008
Automatic Premium Payment Rider 10/01/2008
Additional Premium Rider 10/01/2008
Qualified Plan Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
DisabilityAccess Rider (DAR) 08/11/2009
LongevityAccess Rider 03/14/2011
LifeAccess Care Rider 04/11/2011
</Table>
------------
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING ADDITIONAL DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Primary Insured Term Rider: Provides additional level term life coverage on the
base policy insured.
Other Covered Insured Term Life Rider: Provides level term life coverage on an
insured other than the base policy insured.
Cost of Living Adjustment (COLA) Rider: Provides for biennial face amount
increases, without underwriting, based on increases in the Consumer Price Index.
The maximum amount of any single increase is $50,000. Any increase can be
declined by the policyholder, which stops future increases. Available only at
issue and only for non-substandard issue ages 0 through 60.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 14 -- Effective 07/16/2012
4
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE:
Accidental Death Benefit Rider: Pays an additional death benefit if the death on
the insured is caused by a qualifying accident.
Accelerated Benefit Rider: Provides the policyholder up to 100% of the death
benefit, discounted with interest, if the insured's life expectancy is 12 months
or less. After acceleration, the Ceding Company shall continue to pay the
Reinsurer Reinsurance Premiums on the Reinsured Net Amount at Risk as described
in Schedule B, and the Reinsurer shall be liable for such Reinsured Net Amount
at Risk upon the death of the insured.
LifeAccess Accelerated Benefit Rider (LAABR): Provides for monthly benefits (up
to 2% of death benefit) if insured meets certain ADL and home-care requirements.
In accordance with Schedule B, during and after acceleration, the Ceding Company
shall continue to pay the Reinsurer Reinsurance Premiums on the Reinsured Net
Amount at Risk based on the Death Benefit prior to acceleration, and the
Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the death
of the insured.
Policy Continuation Rider: Intended to prevent the lapse of highly loaned
policies.
Policy Protection Rider: Protects the death benefit of the base policy and any
primary insured term rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Enhanced No Lapse Guarantee Rider: Provides that the policy will not lapse as
long as cumulative premiums paid less indebtedness less withdrawals are greater
than or equal to the cumulative no lapse guarantee premiums. Length of guarantee
varies by issue age.
Lifetime No Lapse Guarantee Rider: Same as Enhanced No Lapse Guarantee Rider but
with lifetime guarantee.
Guaranteed Minimum Accumulation Benefit (GMAB) Rider: Provides, at the end of
the GMAB Guarantee Period (usually 20 years), that the policy Account Value will
be increased, if necessary, to equal the sum of gross premiums paid to that
date. There is a small monthly charge and a minimum cumulative premium
requirement to keep the rider in force.
Paid-Up Life Insurance Rider: Similar to the GMAB rider, with the same Guarantee
Period, a monthly charge, and a cumulative premium requirement. At end of the
Guarantee Period, the owner may elect to change coverage to paid-up life using
the Account Value as a 5% NSP to determine the amount of coverage; however, the
amount of coverage will never be lower than the sum of gross premiums paid to
that date. Once elected, premiums are no longer payable.
Conversion Option Rider: During certain policy years and prior to the insured's
attained age 70, the policy may be converted, without evidence of insurability,
to any permanent plan of life insurance the Ceding Company then makes available
for conversions of this policy.
Overloan Protection Rider: Protects a policy from terminating due to overloan.
Waiver of Specified Amount (WSA) Rider: Waives a specified amount monthly while
the insured is disabled.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 14 -- Effective 07/16/2012
5
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE
(CONTINUED):
Waiver of Monthly Deductions (WMD) Rider: Waives monthly deduction amounts while
the insured is disabled.
Children's Life Insurance Rider: Provides level term life coverage for each
child of the insured.
Foreign Travel Exclusion Rider: Provides a limited death benefit (Account Value
less indebtedness) if the insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Estate Tax Repeal Benefit Rider: Pays the policy Account Value less indebtedness
if the Federal Estate Tax Law is fully repealed by December 31, 2010, and the
Ceding Company receives a request for this benefit amount from the policy owner.
Modified Surrender Value Rider: Changes the Cash Surrender Value definition (to
equal the Account Value) if the policy is surrendered within 3 years after the
policy issue date.
Cash Surrender Value Endorsement: Provides for enhanced Cash Surrender Value
(equal to the current Account Value) in the event of policy surrender in the
first 4 policy years, unless the policy is exchanged under Section 1035 to
another company's policy.
Automatic Premium Payment Rider: Provides for any Scheduled Premium due and
unpaid by the end of any Policy Grace Period to be paid by an automatic
deduction from the Account Value, if the Account Value exceeds the Guaranteed
Cash Value.
Additional Premium Rider: Allows additional premium amounts to be paid at the
same payment intervals as scheduled premiums.
Qualified Plan Rider: Indicates that the policy is owned by a qualified plan,
details the policy owner's reporting responsibilities to the Ceding Company, and
describes features and activities that are unavailable when the policy is owned
by a Qualified Plan.
Owner Designated Settlement Option Rider: Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
DisabilityAccess Rider (DAR): Pays a monthly benefit upon disability of the
primary insured on the life insurance policy to which it is attached. The amount
of monthly benefit is permanently set at rider issue and is limited to a
24-month benefit period. The maximum monthly benefit amount is $5,000; it is
further limited to 2% of the initial face amount or 30% of monthly income at
policy issue. The minimum monthly benefit is $1,000.
LongevityAccess Rider: Provides for monthly benefits (up to 1% of death benefit)
when the insured reaches age 90 and meets the rider's eligibility requirements.
Includes a residual death benefit of 10% of the death benefit prior to
withdrawals. In accordance with Schedule B, during and after withdrawals, the
Ceding Company shall continue to pay the Reinsurer Reinsurance Premiums on the
Reinsured Net Amount at Risk based on the Death Benefit prior to withdrawals,
and the Reinsurer shall be liable for such Reinsured Net Amount at Risk upon the
death of the insured.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 14 -- Effective 07/16/2012
6
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS THAT ARE NOT ELIGIBLE FOR REINSURANCE
(CONTINUED):
LifeAccess Care Rider: Similar to the LifeAccess Accelerated Benefit Rider, but
filed as a health product in some states. Provides for monthly benefits (up to
2% of death benefit) if insured meets certain ADL and home-care requirements.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 14 -- Effective 07/16/2012
7
<Page>
LAST SURVIVOR PLANS OF INSURANCE
<Table>
<Caption>
NAR EFFECTIVE
BASE POLICY VALUATION MORTALITY TABLE(S) TYPE* DATE**
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------
Hartford Leaders VUL Joint Legacy 2001 CSO M/F S/NS Ultimate ALB A 10/01/2008
Hartford Leaders VUL Joint Legacy 2001 CSO M/F S/NS Ultimate ANB A 10/01/2008
II
Hartford Advanced Last Survivor UL 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Hartford Bicentennial UL Joint 2001 CSO M/F S/NS Ultimate ALB B 10/01/2008
Freedom
Hartford Bicentennial UL Joint 2001 CSO M/F S/NS Ultimate ANB B*** 10/01/2008
Freedom II
</Table>
------------
* NAR Type is described in Schedule B.
** Eligibility for new business is based on issue date on or after the
Effective Date shown.
*** The version of this product launched on 7/1/2010 used NAR Type A prior to
3/1/2012. As of 3/1/2012, NAR Type B is used prospectively for all in force
and new policies.
<Table>
<Caption>
RIDERS PROVIDING DEATH BENEFITS EFFECTIVE
THAT ARE ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
Estate Protection Rider (NAR Type is C) 10/01/2008
</Table>
<Table>
<Caption>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS EFFECTIVE
BUT THAT ARE NOT ELIGIBLE FOR REINSURANCE DATE**
<S> <C>
--------------------------------------------------------------------------------
LS Exchange Option Rider 10/01/2008
Policy Protection Rider 10/01/2008
Estate Tax Repeal Rider 10/01/2008
Foreign Travel Exclusion Rider 10/01/2008
Guaranteed Minimum Accumulation Benefit (GMAB) Rider 10/01/2008
Paid-Up Life Insurance Rider 10/01/2008
Owner Designated Settlement Option Rider 03/05/2010
Joint LifeAccess Rider 01/31/2011
</Table>
RIDER DESCRIPTIONS (Rider descriptions are added for convenience. To the extent
the description conflicts with the terms of the rider, the rider will govern.)
RIDERS PROVIDING DEATH BENEFITS THAT ARE ELIGIBLE FOR REINSURANCE:
Estate Protection Rider: This rider provides last survivor level term life
insurance on the base policy insureds for three years.
RIDERS THAT PROVIDE ADDITIONAL BENEFITS BUT THAT ARE NOT ELIGIBLE FOR
REINSURANCE:
LS Exchange Option Rider: Allows a Last Survivor policy to be split into two
Single Life policies, without new evidence of insurability, if divorce, business
dissolution, or estate-tax repeal or reduction occurs. The face amount of each
new Single Life policy will equal one half of the Last Survivor policy face
amount. Upon a split, reinsurance will continue at point-in-scale rates for each
single life, as documented in Section X.C. (This rider is not available when one
of the insureds is uninsurable or above Table H.)
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 14 -- Effective 07/16/2012
8
<Page>
RIDERS THAT PROVIDE ADDITIONAL BENEFITS BUT THAT ARE NOT ELIGIBLE FOR
REINSURANCE (CONTINUED):
Policy Protection Rider: Protects the death benefit of the base policy and any
Estate Protection Rider from lapse as long as the Policy Protection Account
Value ("shadow account") is not negative.
Estate Tax Repeal Rider: Will pay the Account Value less indebtedness if the
Federal Estate Tax Law is fully repealed by December 31, 2010, and the Ceding
Company receives a request for this benefit amount from the policy owner.
Foreign Travel Exclusion: Provides a limited death benefit (Account Value less
indebtedness) if either insured dies due to travel to, from, or within certain
foreign countries, or due directly or indirectly to illness or injury sustained
during such travel.
Guaranteed Minimum Accumulation Benefit Rider and Paid-Up Life Insurance Rider:
Same as Single Life riders.
Owner Designated Settlement Option Rider. Allows the policy owner to designate a
Settlement Option to be used for the payment of Death Proceeds.
Joint LifeAccess Rider: Similar to the LifeAccess Accelerated Benefit Rider.
Available only on Last Survivor products where the benefit will be payable for
the last surviving insured if chronically ill or if both insureds are
concurrently chronically ill.
Allocated Retention Pool -- Effective 10/01/2008
Between HLAIC and TLIC
Amendment 14 -- Effective 07/16/2012
9
<Page>
EXECUTION VERSION
REINSURANCE AGREEMENT
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
(REFERRED TO AS THE CEDING COMPANY)
AND
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
(REFERRED TO AS THE REINSURER)
<Page>
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
<S> <C> <C>
--------------------------------------------------------------------------------
ARTICLE I. DEFINITIONS 1
Section 1.1 Definitions 1
ARTICLE II. BASIS OF REINSURANCE AND BUSINESS REINSURED 20
Section 2.1 Reinsurance 20
Section 2.2 Separate Accounts 20
Section 2.3 Existing Reinsurance 21
Section 2.4 Non-Guaranteed Elements 23
Section 2.5 Reserves and Liabilities Reporting 24
Section 2.6 Insurance Contract Changes 24
Section 2.7 Follow the Fortunes 24
ARTICLE III. TRANSFER OF ASSETS; PAYMENTS; SETTLEMENTS;
ADMINISTRATION
AND ACCOUNTING 25
Section 3.1 Payments by the Ceding Company 25
Section 3.2 Payments by the Reinsurer 26
Section 3.3 Modified Coinsurance 27
Section 3.4 Net Settlement 27
Section 3.5 Delayed Payments 28
Section 3.6 Offset and Recoupment Rights 29
Section 3.7 Administration and Accounting 29
Section 3.8 Certain Reports 29
Section 3.9 Reserved 30
Section 3.10 Books and Records 30
Section 3.11 Lockbox Accounts 31
Section 3.12 Ownership of Recoverables 31
Section 3.13 Reinsurer's Security Interest 32
Section 3.14 Novation of Covered Insurance Policies 33
Section 3.15 Alternative and Additional Structures 34
ARTICLE IV. LICENSES; REINSURANCE CREDIT 35
Section 4.1 Licenses 35
Section 4.2 Security 35
Section 4.3 Investment of Trust Assets 37
Section 4.4 Deposit of Assets 38
Section 4.5 Adjustments and Withdrawals 38
Section 4.6 Withdrawals by the Ceding Company 39
Section 4.7 Reserve Credit 41
Section 4.8 Representations, Warranties, and Covenants of the 41
Reinsurer
Section 4.9 Triggering Event; Custodial Account 42
Section 4.10 Cure of Triggering Event or Recapture Triggering Event 43
Section 4.11 Withdrawal Event 44
Section 4.12 Actions Following Reinvestment Event 45
Section 4.13 Equitable Remedies 45
ARTICLE V. OVERSIGHTS; COOPERATION; REGULATORY MATTERS 45
Section 5.1 Oversights 45
Section 5.2 Cooperation 46
</Table>
i
<Page>
<Table>
<S> <C> <C>
Section 5.3 Regulatory Matters 46
ARTICLE VI. DAC TAX 46
Section 6.1 Election 46
Section 6.2 Definitions 46
Section 6.3 Exchange of Information 47
Section 6.4 Effectiveness 47
Section 6.5 United States Tax Status Representation 47
ARTICLE VII. INSOLVENCY 47
Section 7.1 Insolvency of the Ceding Company 47
ARTICLE VIII. CUT THROUGH AND NOVATIONS UPON RECAPTURE 48
Section 8.1 Direct Payments by the Reinsurer 48
Section 8.2 Satisfaction and Discharge 49
Section 8.3 Redomestication of the Ceding Company 49
Section 8.4 Reinsurer Existing Reinsurance Agreements 49
ARTICLE IX. DURATION; RECAPTURE 51
Section 9.1 Duration 51
Section 9.2 Survival 51
Section 9.3 Termination and Recapture 52
Section 9.4 Payments on Termination or Recapture 53
Section 9.5 Assignment of Reinsurer Existing Reinsurance Agreements
Following Recapture 54
Section 9.6 Equitable Remedies 54
ARTICLE X. INDEMNIFICATION; DISCLAIMER 54
Section 10.1 Reinsurer's Obligation to Indemnify 54
Section 10.2 Ceding Company's Obligation to Indemnify 54
Section 10.3 Notice of Claim; Defense 55
Section 10.4 No Duplication; Exclusive Remedy 56
Section 10.5 Mitigation and Limitation on Set-off 57
Section 10.6 Recovery by Indemnified Party 57
Section 10.7 Waiver of Duty of Utmost Good Faith 58
ARTICLE XI. MISCELLANEOUS 58
Section 11.1 Notices 58
Section 11.2 Entire Agreement 59
Section 11.3 Governing Law and Jurisdiction 59
Section 11.4 No Third Party Beneficiaries 60
Section 11.5 Expenses 60
Section 11.6 Counterparts 60
Section 11.7 Severability 61
Section 11.8 Waiver of Jury Trial; Punitive Damages 61
Section 11.9 Treatment of Confidential Information 61
Section 11.10 Assignment 62
Section 11.11 Waivers 62
Section 11.12 Interpretation 62
</Table>
ii
<Page>
REINSURANCE AGREEMENT
THIS REINSURANCE AGREEMENT (the "Agreement"), is made and entered into on
January 2, 2013 and effective as of the Effective Time by and between Hartford
Life and Annuity Insurance Company, a Connecticut-domiciled life insurance
company (the "Ceding Company") and The Prudential Insurance Company of America,
a New Jersey-domiciled life insurance company (the "Reinsurer"). For purposes of
this Agreement, the Ceding Company and the Reinsurer shall each be deemed a
"Party."
WHEREAS, Hartford Life, Inc. has agreed to sell, and Prudential Financial, Inc.
has agreed to purchase, directly or through one or more Affiliates, the Business
and certain assets of Hartford Financial Services Group, Inc. and its Affiliates
pursuant to a Purchase and Sale Agreement, dated as of September 27, 2012 (the
"Purchase Agreement");
WHEREAS, as contemplated by the Purchase Agreement, the Ceding Company wishes to
cede and retrocede to the Reinsurer, and the Reinsurer wishes to reinsure, on a
one-hundred percent (100%) indemnity reinsurance basis net of Collectible
Reinsurance, on the terms and conditions set forth herein, the risks arising in
respect of the Covered Insurance Policies (as hereinafter defined); and
[REDACTED]
NOW, THEREFORE, in consideration of the mutual and several promises and
undertakings herein contained, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Ceding Company
and the Reinsurer agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1 DEFINITIONS. Any capitalized term used but not defined herein shall
have the meaning set forth in the Purchase Agreement. The following terms have
the respective meanings set forth below throughout this Agreement:
<Page>
"Accounting Period" means each calendar quarter during the term of this
Agreement or any fraction thereof ending on the Recapture Date, the Termination
Date or the date this Agreement is otherwise terminated in accordance with
Section 9.1, as applicable.
"Actual Aggregate New Insurance Policy Reinsured Face Amount" means an amount
equal to the actual aggregate face amount of the New Insurance Policies issued
pursuant to Section 3.1(a)(i) of each Administrative Services Agreement
(excluding, for the avoidance of doubt, Group Conversion Policies, and new
insurance policies issued or reinsured pursuant to contractual commitments or
exchanges, such as term conversions, additional coverage options, and other
conversion rights) ceded under New Reinsurance Agreements as of the last day of
the New Business Period.
"Administrator" has the meaning set forth in the Administrative Services
Agreement.
[REDACTED]
"Agreement" has the meaning set forth in the preamble.
"Beneficiary" has the meaning set forth in Section 8.1.
"Ceding Company" has the meaning set forth in the preamble.
"Ceding Company Collateral" has the meaning set forth in Section 4.2(f).
"Ceding Company Extra-Contractual Obligations" means (i) all Extra-Contractual
Obligations to the extent arising out of, resulting from or related to any act,
error or omission before the Effective Time, whether or not intentional,
negligent, in bad faith or otherwise, by the Ceding Company or any of its
Affiliates, or any service providers or Distributors engaged or compensated by
the Ceding Company or any of its Affiliates or otherwise, (ii) all
Extra-Contractual Obligations to the extent arising out of, resulting from or
related to any act, error or omission on or after the Effective Time, whether or
not intentional, negligent, in bad faith or otherwise, by the Ceding Company or
any of its Affiliates, or any service providers or Distributors engaged or
compensated by the Ceding Company or any of its Affiliates to the extent
attributable to a direction or request of the Ceding Company or any of its
Affiliates
2
<Page>
(including without limitation, in the performance of its services under the
Transition Services Agreement or Administrative Services Agreement), unless such
direction or request of the Ceding Company or any of its Affiliates has been
approved by the Reinsurer in writing, in which case any resulting error or
omission shall not be a Ceding Company Extra-Contractual Obligation, and (iii)
any liability of the Ceding Company as set forth on Schedule 1.1(A). For the
avoidance of doubt, Ceding Company Extra-Contractual Obligations include
"Extra-Contractual Obligations" assumed by the Ceding Company as part of its
reinsured liabilities under the terms of any Underlying Reinsurance Agreements
which such "Extra-Contractual Obligations" arise before or after the Effective
Time out of acts or omissions by the Ceding Company as the reinsurer thereunder
or any of its directors, officers, employees, Affiliates, agents or
representatives relating to the business reinsured under such Underlying
Reinsurance Agreements.
"Ceding Company Indemnified Parties" has the meaning set forth in Section 10.1.
"Claim Notice" has the meaning set forth in Section 10.3(a).
"Collateral" has the meaning set forth in Section 3.13(a).
"Collectible Reinsurance" means all Reinsurance Recoverables other than any
amounts a reinsurer has failed to pay when due under any Existing Reinsurance
Agreement (after giving effect to any cure periods thereunder) where such
non-payment continues 90 days from the date such payment was due (after giving
effect to any applicable cure periods) or, if the reinsurer is contesting such
payment in good faith, the date a final and non-appealable judgment or arbitral
award is entered requiring the reinsurer to pay such Reinsurance Recoverables.
"Company Action Level RBC" means, at any date of determination, two hundred
percent (200%) of the authorized control level risk-based capital of the
Reinsurer (i) determined in accordance with the Applicable Law of the state of
domicile of such entity and (ii) calculated using the risk-based capital factors
and formula prescribed by the National Association of Insurance Commissioners
(or any successor organization) and inclusive of any adjustments to such factors
or formula resulting from prescribed or permitted practices granted by the
applicable state of domicile.
"Confidential Information" means all documents and information concerning one
Party, any of its Affiliates, any Distributor, any mutual fund organization that
has its mutual funds offered as funding vehicles for one or more Separate
Accounts, the Business or the Covered Insurance Policies, including any
information relating to any Person insured directly or indirectly under the
Covered Insurance Policies, furnished to the other Party or such other Party's
Affiliates or Representatives in connection with this Agreement or the
transactions contemplated hereunder, including, without limitation, RBC Ratios
of the Reinsurer reported hereunder, except that Confidential Information does
not include information which: (a) at the time of disclosure or thereafter is
generally available to and known by the public other than by way of a disclosure
by the receiving Party hereunder or by any Representative or Affiliate of such
Party hereto; (b) was in the possession of, or becomes available to, the
receiving Party or such Party's Representatives or Affiliates on a
non-confidential basis, directly or indirectly, from a source other than the
disclosing Party or its Representatives, provided, that such source is not and
was
3
<Page>
not known to the receiving Party or its Representatives or Affiliates to be
prohibited from transmitting the information by a contractual, legal, fiduciary,
or other obligation of confidentiality by the disclosing Party; or (c) was
independently developed without violating any obligations under this Agreement
and without the use of any other Confidential Information or any derivative
thereof.
"Covered Insurance Policies" means (i) any and all binders, endorsements,
riders, policies, certificates, and contracts of individual or group life
insurance, and supplementary contracts of individual or group life insurance
(including retained asset accounts and all other settlement options) issued,
renewed or assumed by the Ceding Company in the United States, the District of
Columbia, Puerto Rico or Guam and that correspond to the policy forms of the
Ceding Company identified by form number on Schedule 1.1(B) (with the group life
items identified under a separate heading on such schedule), (ii) any and all
binders, endorsements, riders, policies, certificates, and contracts of
individual life insurance, and supplementary contracts of individual life
insurance (including retained asset accounts and all other settlement options)
issued in the United States, the District of Columbia, Puerto Rico or Guam that
are reinsured by the Ceding Company from an Underlying Company pursuant to the
Underlying Reinsurance Agreements identified in Schedule 1.1(C) and that
correspond to the policy forms of the Ceding Company (or the Underlying
Companies) identified by form number on Schedule 1.1(B), (iii) all other
binders, endorsements, riders, policies, certificates, and contracts of
individual or group life insurance, and supplementary contracts of individual or
group life insurance (including retained asset accounts and all other settlement
options) issued, renewed, reinsured or assumed by the Ceding Company in the
United States, the District of Columbia, Puerto Rico or Guam on policy forms
that are substantially similar to the policy forms of the Ceding Company
identified on Schedule 1.1(B), (iv) the endorsements and riders to policies of
individual or group life insurance covered by clauses (i) through (iii) above
that are identified on Schedule 1.1(B), in each of clauses (i) through (iv),
issued, renewed, reinsured or assumed by the Ceding Company on or prior to the
Closing Date (including those that have lapsed and terminated with unpaid
claims), provided, that in each of clauses (i) through (iv) such item is
reflected or otherwise taken into account in the Closing Statement of General
Account Net Settlement, and (v) the New Insurance Policies; provided further,
that Covered Insurance Policies shall not include any policies listed on
Schedule 1.1(D).
"Cure Acknowledgement" has the meaning set forth in Section 4.10.
"Cure Event" has the meaning set forth in Section 4.10.
"Cure Notice" has the meaning set forth in Section 4.10.
"Current Policy Loan Amount" means, with respect to the Ceding Company, the
aggregate principal and accrued interest thereon of all policy loans with
respect to the Covered Insurance Policies, determined in accordance with SAP and
appropriately includable on the Contract Loans line of the Asset page in the
Statutory Financial Statements of the Ceding Company (or any successors to such
page).
4
<Page>
"Custodial Account" means an account established in the name of the Reinsurer
with the Custodial Bank pursuant to Section 4.9, which shall be subject to the
terms of the Custodial Account Control Agreement.
"Custodial Account Eligible Assets" has the meaning set forth in Section 4.9(a).
"Custodial Account Control Agreement" means the Account Control Agreement dated
as of the date hereof by and among the Reinsurer, the Ceding Company and the
Custodial Bank, substantially in the form of Exhibit I hereof.
"Custodial Bank" means [REDACTED].
"Custodial Funds" has the meaning set forth in Section 4.9(b).
"Custodial Fund Transfer Date" means, with respect to an Accounting Period, the
latest of (i) the fifth Business Day following delivery of the report
contemplated by Section 4.5(a) for such Accounting Period, (ii) the fifth
Business Day following delivery of the report contemplated by Section 4.5(b) for
such Accounting Period and (iii) the fifth Business Day following delivery of
the Settlement Statement for such Accounting Period.
"Economic Reserves" means, as of any date of determination, the general account
economic reserves with respect to the Covered Insurance Policies as of such date
without netting any reserves ceded to reinsurers under the Existing Reinsurance
Agreements or the Reinsurer Existing Reinsurance Agreements, as determined by
the Reinsurer in accordance with the methodologies and assumptions set forth on
Schedule 1.1(E) consistently applied; provided that the term "Economic Reserves"
shall not include reserves with respect to any Covered Insurance Policies
reinsured on a coinsurance basis under any Underlying Reinsurance Agreement for
which the Ceding Company holds the Trust Withheld Assets.
"Effective Time" means 12:01 a.m. (New York time) on January 1, 2013.
"Eligible Assets" has the meaning set forth in Section 4.3.
"Estimated Aggregate New Insurance Policy Reinsured Face Amount" means, as of
any date of determination, an amount equal to the good faith estimate of the
amount of the New Insurance Policies that will be issued pursuant to Section
3.1(a)(i) of each Administrative Services Agreement (excluding, for the
avoidance of doubt, Group Conversion Policies, and new insurance policies issued
or reinsured pursuant to contractual commitments or exchanges, such as term
conversions, additional coverage options, and other conversion rights) and ceded
under New Reinsurance Agreements as of the last day of the New Business Period.
"Existing Reinsurance Agreements" means (a) the reinsurance agreements listed on
Schedule 1.1(F) under which the Ceding Company has ceded or retroceded to
reinsurers (whether or not affiliated with the Ceding Company) risks arising in
respect of the Covered Insurance Policies and the Ceding Company's interest in
any trust or other agreement or instrument providing security for the Ceding
Company with respect to such reinsurers' reinsurance obligations under such
reinsurance agreement, and (b) any reinsurance agreement, trust or other
agreement or instrument providing security for such reinsurance obligations
entered
5
<Page>
into by the Ceding Company with the prior written consent of the Reinsurer to
replace any of such reinsurance agreements or security arrangements following
any termination or recapture thereof, as all such reinsurance agreements may be
in force and effect from time to time and at any time, in each case that are (i)
in force or are being treated as being in force as of the date hereof or (ii)
terminated but under which there remains any outstanding liability or obligation
from the reinsurer. Any Existing Reinsurance Agreement that is novated to the
Reinsurer shall cease to be an Existing Reinsurance Agreement upon the
effectiveness of such novation.
"Extra-Contractual Obligations" means all Liabilities to any Person arising out
of or relating to the Covered Insurance Policies (other than Liabilities arising
under the express terms and conditions of the Covered Insurance Policies),
including, without limitation, any Liability for fines, penalties, Taxes, fees,
forfeitures, compensatory, punitive, exemplary, special, treble, bad faith, tort
or any other form of extra-contractual damages, as well as all legal fees and
expenses relating thereto, which Liabilities arise out of, result from or relate
to, any act, error or omission, whether or not intentional, negligent, in bad
faith or otherwise, arising out of or relating to the Covered Insurance
Policies, including, without limitation, (i) the form, sale, marketing,
distribution, underwriting, production, issuance, cancellation or administration
of the Covered Insurance Policies, (ii) the investigation, defense, trial,
settlement or handling of claims, benefits, or payments under the Covered
Insurance Policies, or (iii) the failure to pay or the delay in payment or
errors in calculating or administering the payment of benefits, claims or any
other amounts due or alleged to be due under or in connection with the Covered
Insurance Policies.
"Fair Market Value" means (i) as to cash, the amount of it; and (ii) as to an
asset other than cash, the amount at which such asset could be bought or sold in
a current transaction between willing parties, that is, other than in a forced
or liquidation sale.
"General Account Liabilities" means all liabilities and obligations, net of
Collectible Reinsurance under any Existing Reinsurance Agreements (but subject
to Section 2.3(b)), arising under the express terms of the Covered Insurance
Policies whether incurred before, at or after the Effective Time (unless
specified otherwise below), including:
1. all liabilities and obligations for incurred but not reported claims, pending
claims and benefits (including death benefits, waiver of premium benefits,
accident and health benefits, endowments or matured endowments, paid-up
additions, lump sum payments, annuitization payments, deferred payments,
discontinuance disbursements, payments in respect of market value adjustments,
rights to purchase additional coverage and any other settlement options),
unearned premiums, claim expenses, interest on claims or unearned premiums,
interest on policy funds, withdrawals, surrenders, amounts payable for returns
or refunds of premiums, guaranteed minimum death benefits and loans made under
the terms of any Covered Insurance Policy and other contract benefits, in each
case arising under the express terms of the Covered Insurance Policies;
6
<Page>
2. all liabilities and obligations (including any punitive, exemplary or other
extra-contractual damages or obligations other than Ceding Company
Extra-Contractual Obligations) to the extent assumed or reinsured by the Ceding
Company under the terms of any of the Underlying Reinsurance Agreements;
3. Ceding Company's obligations to deliver or maintain collateral security
(whether in trust, through a letter of credit or otherwise) or provide statutory
financial statement credit to counterparties under the terms of any of the
Underlying Reinsurance Agreements;
4. all liabilities and obligations arising out of any changes to the terms and
conditions of the Covered Insurance Policies mandated by Applicable Law or
initiated by the holder of any Covered Insurance Policy pursuant to the terms of
such policy;
5. (i) Taxes due in respect of Premiums received or accrued after the Effective
Time by the Ceding Company (other than Taxes measured by or imposed on the
income of the Ceding Company) and (ii) assessments and similar charges to the
extent attributable to Premiums received or accrued after the Effective Time in
connection with participation by either the Ceding Company or the Reinsurer,
whether voluntary or involuntary, in any guaranty association established or
governed by any Governmental Body; provided, that the amount of any Taxes
described in clause (i) shall be determined without regard to any credits,
deductions or offsets to such Taxes otherwise available to the Ceding Company,
other than any such credits, deductions or offsets that either are attributable
to amounts described in clause (ii) or are reflected as an asset on the Closing
Date Transfer Balance Sheet (calculated as if the Ceding Company issued and
administered the Covered Insurance Policies through a separate legal entity that
conducted no other insurance business); and provided further that, if any such
credit, deduction or offset either attributable to amounts described in clause
(ii) or reflected as an asset on the Closing Date Transfer Balance Sheet is used
by the Ceding Company to offset or otherwise reduce Taxes due in respect of
premiums that are not described in clause (i), the amount of such credit,
deduction or offset shall be applied against, and reduce, reimbursements for
Taxes due in respect of Premiums that are otherwise payable by the Reinsurer
pursuant to this Agreement;
6. Compensation (including both fronted and trail commissions) and other
servicing and administration fees payable with respect to the Covered Insurance
Policies to or for the benefit of the Distributors who marketed or produced the
Covered Insurance Policies, arising at and after the Effective Time;
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7. Subject to Section 2.3(b), amounts payable to reinsurers under the Existing
Reinsurance Agreements arising at and after the Effective Time;
8. all expense allowances payable under the terms of the Underlying Reinsurance
Agreements and all experience refunds payable under the terms of the Underlying
Reinsurance Agreements to the extent reflected in the Closing Statement of
General Account Net Settlement or arising on and after the Effective Time;
9. dividends payable under the Covered Insurance Policies which are attributable
to the operations of the Business or to surplus accumulated with respect to the
Business;
10. all liabilities and obligations which relate to (x) Premiums received by the
Reinsurer (or an Affiliate) or the Ceding Company pending transfer to the
Separate Accounts, and (y) one or more Separate Accounts that are not payable
out of the assets of the Separate Accounts, including any loss to a fund or
product resulting from pricing errors, expense calculation errors or missing
fund activity to the extent not resulting from acts or omission by the Ceding
Company or any of its Affiliates;
11. all escheat or unclaimed property liabilities or obligations arising under
or relating to the Covered Insurance Policies including any claim payment as a
result of procedures implemented by the Ceding Company in connection with
unclaimed property liabilities, whether or not included within the General
Account Reserves; and
12. any other liability or obligation arising out of or relating to the Covered
Insurance Policies for which a reserve or accrual has been established and
reported in a specific line item on the Closing Statement of General Account Net
Settlement applicable to the Ceding Company (after any disputes with respect
thereto have been finally resolved in accordance with the Purchase Agreement);
provided, however, that General Account Liabilities shall not include any
Separate Account Liabilities or Ceding Company Extra-Contractual Obligations or
expenses allocated to the Ceding Company under the Administrative Services
Agreement.
"General Account Modified Coinsurance Adjustment" means, with respect to any
Accounting Period, an amount equal to the General Account Modified Coinsurance
Amount as of the close of such Accounting Period less the General Account
Modified Coinsurance Amount as of the close of the preceding Accounting Period.
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"General Account Modified Coinsurance Amount" means, with respect to any
Accounting Period, collectively (i) the aggregate amount held by Underlying
Companies as modified coinsurance reserves with respect to the general account
liabilities under the Covered Insurance Policies ceded to the Ceding Company on
a modified coinsurance basis under the Underlying Reinsurance Agreements, and
(ii) the aggregate amount of Trust Withheld Assets, in each case of clauses (i)
and (ii) as of the close of such Accounting Period.
"General Account Modified Coinsurance Assets" means the assets held by, or in
trust by the Ceding Company for the benefit of, the Underlying Companies under
the Underlying Reinsurance Agreements in support of the General Account Modified
Coinsurance Amount.
"General Account Modified Coinsurance Investment Income" means an amount equal
to the investment income earned on the General Account Modified Coinsurance
Assets plus the amortization of the Interest Maintenance Reserve on the Trust
Withheld Assets.
"General Account Reserves" means the aggregate amount of general account
reserves (as described in Exhibits 5 and 6 of the Statutory Financial Statements
of the Ceding Company or any successors to such exhibits), deposits (as
described in Exhibit 7 of the Statutory Financial Statements of the Ceding
Company or any successors to such exhibit) and liabilities (as described in
Exhibit 8 of the Statutory Financial Statements of the Ceding Company or any
successors to such exhibit) (in each case, without regard to the transactions
contemplated by this Agreement) with respect to the Covered Insurance Policies,
calculated in accordance with SAP; provided, the term "General Account Reserves"
does not include the Separate Account Reserves.
[REDACTED]
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[REDACTED]
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[REDACTED]
"HLAC" means Hartford Life and Accident Insurance Company.
"HLAC General Account Reserves" has the meaning given to the term "General
Account Reserves" in the HLAC Reinsurance Agreement.
[REDACTED]
"HLAC Reinsurance Agreement" means the Reinsurance Agreement, effective as of
the Effective Time, by and between HLAC and the Reinsurer, as the same may be
amended, modified or supplemented from time to time.
"HLAC Third Party Reinsurance" means collectively Existing Reinsurance
Agreements (as defined in the HLAC Reinsurance Agreement) and Reinsurer Existing
Reinsurance Agreements (as defined in the HLAC Reinsurance Agreement).
"HLIC" means Hartford Life Insurance Company.
"HLIC Covered Insurance Policies" has the meaning given to the term "Covered
Insurance Policies" in the HLIC Reinsurance Agreement.
"HLIC General Account Reserves" has the meaning given to the term "General
Account Reserves" in the HLIC Reinsurance Agreement.
[REDACTED]
"HLIC Reinsurance Agreement" means the Reinsurance Agreement, effective as of
the Effective Time, by and between HLIC and the Reinsurer, as the same may be
amended, modified or supplemented from time to time.
"HLIC Third Party Reinsurance" means collectively Existing Reinsurance
Agreements (as defined in the HLIC Reinsurance Agreement) and Reinsurer Existing
Reinsurance Agreements (as defined in the HLIC Reinsurance Agreement).
"Indemnified Party" has the meaning set forth in Section 10.3(a).
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"Indemnifying Party" has the meaning set forth in Section 10.3(a).
"Interest Maintenance Reserve" means the liability reserve determined in
accordance with SAP, the purpose of which is to amortize realized capital gains
and losses resulting from fluctuations in interest rates.
"Lockbox Account" has the meaning set forth in Section 3.11.
"Lockbox Banks" has the meaning set forth in Section 3.11.
"Lockbox Control Agreement" has the meaning set forth in Section 3.11.
[REDACTED]
"NAIC" means the National Association of Insurance Commissioners or any
successor organization.
[REDACTED]
"Net Settlement" has the meaning set forth in Section 3.4(a).
"New Business Period" means the period from the date hereof to (a) the 18-month
anniversary of the date hereof or (b) the 24-month anniversary of the date
hereof, if the period referred to in clause (i) of Section 3.01(a) of the
Administrative Services Agreement is renewed for an additional 6 months pursuant
to the terms of the Administrative Services Agreement.
"New Insurance Policies" means the individual life insurance policies (including
binders, endorsement, riders and supplementary contracts of individual life
insurance) issued, renewed, reinsured or assumed by the Ceding Company following
the Closing Date in accordance with the Administrative Services Agreement or the
Wholesaling Agreement. New Insurance Policies shall exclude any Group Conversion
Policies that are not reinsured under the Group Conversion Retrocession
Agreement.
"New Insurance Policy Percentage Reinsured" means (i) with respect to any date
of determination prior to the last day of the New Business Period, the amount
expressed as a percentage equal to (x) the Estimated Aggregate New Insurance
Policy Reinsured Face Amount, divided by (y) the Aggregate Unreinsured Face
Amount as of the Effective Time, and (ii) with respect to any date of
determination on or following the last day of the New Business Period, the
amount, expressed as a percentage, equal to (x) the Actual Aggregate New
Insurance Policy Reinsured Face Amount, divided by (y) the Aggregate Unreinsured
Face Amount as of the Effective Time.
"New Reinsurance Agreements" means, collectively, (i) any new reinsurance
agreement entered into by the Reinsurer referred to in clause (c) of the
definition of "Reinsurer Existing Reinsurance Agreements", (ii) any new
reinsurance agreement entered into by the Reinsurer referred to in clause (c) of
the definition of "Reinsurer Existing Reinsurance Agreements" in the
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HLAC Reinsurance Agreement and (iii) any new reinsurance agreement entered into
by the Reinsurer referred to in clause (c) of the definition of "Reinsurer
Existing Reinsurance Agreements" in the HLIC Reinsurance Agreement.
"New Reinsurance Capacity" means, as of any date of determination, the product
of (i) the excess (if any) of (x) [REDACTED] minus (y) the sum of the Percentage
Reinsured for each fiscal year during the term of this Agreement or fraction
thereof ending on or prior to such date minus (z) the New Insurance Policy
Percentage Reinsured and (ii) the Aggregate Unreinsured Face Amount as of such
date.
"Non-Guaranteed Elements" means cost of insurance charges, credited interest
rates, mortality and expense charges, administrative expense risk charges,
policyholder dividends, policy loads and any other policy features that are
subject to change, and those items set forth in Actuarial Standard of Practice
1-Non-Guaranteed Charges or Benefits for Life Insurance Policies and Annuity
Contracts in effect as of the Effective Time and any successor rules for such
Non-Guaranteed Elements as in effect from time to time.
[REDACTED]
"Party" has the meaning set forth in the preamble.
[REDACTED]
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[REDACTED]
"Payee" has the meaning set forth in Section 8.1.
"Percentage Reinsured" means, with respect to any fiscal year during the term of
this Agreement or fraction thereof, the amount, expressed as a percentage, equal
to (i) the aggregate face amount reinsured under each New Reinsurance Agreement
entered into during such fiscal year or fraction thereof as of the effective
date of such New Reinsurance Agreement, divided by (ii) the Aggregate
Unreinsured Face Amount, which for the avoidance of doubt based on the
definition of the "Aggregate Unreinsured Face Amount" will be determined as of
the last day of the fiscal year ending immediately prior to such fiscal year in
question or fraction thereof, or, with respect to the first fiscal year during
the term of this Agreement, the Effective Time.
[REDACTED]
"Policy Loan Recoverables" means all policy loan repayments, policy loan
interest and policy loan fees paid or payable in respect of the Covered
Insurance Policies.
"Premiums" means premiums, considerations, deposits, loan repayments and similar
amounts paid or payable in respect of the Covered Insurance Policies.
"Purchase Agreement" has the meaning set forth in the recitals.
"Qualified Existing Reinsurance Dispute" has the meaning set forth in Section
2.3(b).
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"RBC Ratio" means the percentage equal to (i) the quotient of the Total Adjusted
Capital of the Reinsurer DIVIDED BY the Company Action Level RBC, MULTIPLIED BY
(ii) 100.
"RBC Reporting Deadline" means, as of any date, the date that is either: (i) 75
calendar days after the end of each calendar year, or (ii) 60 calendar days
after the end of any calendar quarter other than the calendar quarter ending on
December 31.
"Recapture Date" has the meaning set forth in Section 9.3(a).
"Recapture Triggering Event" means any of the following occurrences:
[REDACTED]
"Recoverables" has the meaning set forth in Section 3.1(b).
"Reinsurance IMR" means the Interest Maintenance Reserve associated with the
reinsurance by the Ceding Company on a modified coinsurance basis of the General
Account
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Liabilities of certain of the Covered Insurance Policies, determined in
accordance with SAP applicable to the Underlying Companies that issued such
Covered Insurance Policies.
"Reinsurance IMR Investment Income" shall be equal to the investment income
earned on the assets supporting the Reinsurance IMR.
"Reinsurance Recoverables" means all amounts due or payable to the Ceding
Company under the Existing Reinsurance Agreements, including all recoverables,
returns, amounts in respect of profit sharing and all other sums to which the
Ceding Company may be entitled under the Existing Reinsurance Agreements.
[REDACTED]
"Reinsured Liabilities" means the General Account Liabilities, the Separate
Account Liabilities and any Reinsurer Extra-Contractual Obligations.
"Reinsurer" has the meaning set forth in the preamble.
[REDACTED]
"Reinsurer Extra-Contractual Obligations" means all Extra-Contractual
Obligations arising out of, resulting from or relating to any act, error or
omission on and after the Effective Time, whether or not intentional, negligent,
in bad faith or otherwise, by the Reinsurer or any of its Affiliates, or any
service providers or Distributors engaged or compensated by the Reinsurer or its
Affiliates or otherwise other than any Ceding Company Extra-Contractual
Obligations.
"Reinsurer Indemnified Parties" has the meaning set forth in Section 10.2.
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"Reinvestment Event" means the following occurrence at any time following a
Trust Withdrawal Event:
[REDACTED]
"Related Trust" means reserve trust accounts established by the Reinsuer
[REDACTED] in connection with the transactions contemplated by the Purchase
Agreement and related agreements.
"Required Balance" means an amount equal to [REDACTED] of the Net Reserves.
"Reserve Credit" means full Statutory Financial Statement credit for the
reinsurance ceded to the Reinsurer under this Agreement or under any other
Reinsurance Agreement in the relevant company's NAIC Annual Statement Blank and
in all Statutory Financial Statements required to be filed with any Governmental
Body charged with supervision of insurance companies in all United States
jurisdictions in which such company is licensed, authorized or accredited to
transact business.
"Reserve Credit Event" means any event that would cause the Ceding Company to
not be permitted to receive Reserve Credit on any of its Statutory Financial
Statements and that such event has not been remedied prior to the last calendar
day of the calendar quarter in which such event occurs.
"SAP" means, with respect to any insurance company, the statutory accounting
principles prescribed or permitted by the insurance regulatory authorities of
the state of domicile of such insurance company or other applicable
jurisdictions.
"Separate Account Liabilities" means all liabilities, obligations, expenses and
Taxes (for the avoidance of doubt, other than Taxes measured by or imposed on
the income of the Ceding Company) arising out of or relating to the Covered
Insurance Policies, whether incurred before, at or after the Effective Time, to
the extent payable out of the Separate Accounts.
"Separate Account Reserves" means the aggregate amount of reserves and deposits
of the Ceding Company or any applicable Underlying Company attributable to the
Separate Account Liabilities (as would be described in Exhibits 3, 4 and 6 of
the Statutory Financial Statements related to separate accounts of the Ceding
Company or any such Underlying Ceding Company or any successors to such
exhibits), calculated in accordance with SAP.
"Separate Accounts" means the registered and unregistered separate accounts of
the Ceding Company and the Underlying Companies applicable to the Covered
Insurance Policies as identified in Schedule 1.1(H) hereto.
"Settlement Statement" has the meaning set forth in Section 3.4(a).
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"Statutory Book Value" means with respect to any Eligible Asset, the dollar
amount thereof stated on the Statutory Financial Statements as admitted assets
of the Reinsurer, as determined in accordance with the statutory accounting
requirements in the Reinsurer's state of domicile, but disregarding any
permitted practices applicable to the Reinsurer.
"Statutory Financial Statements" means, with respect to any Person, the annual
and quarterly statutory financial statements of such Person filed with the
Governmental Body charged with supervision of insurance companies in the
jurisdiction of domicile of such Person to the extent such Person is required by
Applicable Law to prepare and file such financial statements.
"Terminal Accounting Period" means the Accounting Period during which the
Recapture Date or the Termination Date, as applicable, occurs.
"Terminal Settlement" has the meaning set forth in Section 9.4.
"Terminal Settlement Statement" has the meaning set forth in Section 9.4.
"Termination Date" has the meaning set forth in Section 9.3(b).
"Termination Event" means any failure by the Ceding Company (or any successor by
operation of law of the Ceding Company, including, but not limited to, any
receiver, liquidator, rehabilitator, conservator or similar Person of the Ceding
Company) to pay any material amount due to the Reinsurer under this Agreement
payable by the Ceding Company (including any Recoverables received by the Ceding
Company and payable to the Reinsurer) and such failure has not been cured within
90 calendar days after written notice thereof from the Reinsurer.
"Third-Party Claim" has the meaning set forth in Section 10.3(a).
"Total Adjusted Capital" means, with respect to any insurance company, its total
adjusted capital as calculated in accordance with the most current formula for
calculating such amount adopted by the insurance regulatory authority in such
insurance company's state of domicile.
"Transaction Agreements" means the Purchase Agreement and each of the Ancillary
Agreements other than this Agreement.
"Treasury Regulations" means the Treasury Regulations (including temporary and
proposed Treasury Regulations) promulgated by the United States Department of
Treasury with respect to the Code or other United States federal Tax statutes.
"Triggering Event" shall occur if [REDACTED]
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[REDACTED]
"Trust Account" means the trust account established by the Reinsurer for the
benefit of the Ceding Company under the Trust Agreement.
[REDACTED]
"Trust Withdrawal Event" has the meaning set forth in Section 4.11(a).
"Trust Withdrawal Event Conditions" means [REDACTED]
"Trust Withdrawal Event Acknowledgement" has the meaning set forth in Section
4.11(a).
"Trust Withdrawal Event Notice" has the meaning set forth in Section 4.11(a).
"Trust Withheld Assets" means those assets required to be held by the Ceding
Company in trust for the benefit of any Underlying Company (and not transferred
to the Reinsurer) with respect to any Covered Insurance Policies reinsured on a
coinsurance basis under any Underlying Reinsurance Agreement.
"Trustee" has the meaning set forth in Section 4.2(a).
"UCC" means the Uniform Commercial Code as in effect from time to time in the
Ceding Company's state of domicile.
"Unamortized Portion of the Ceding Commission" means, [REDACTED] If the Parties
cannot agree on the amount of the Unamortized Portion of the Ceding Commission
as of the Termination Date or Recapture Date, as applicable, the issue will be
referred to, and conclusively determined by [REDACTED]
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[REDACTED] whose fees will be shared equally by the Parties.
"Underlying Companies" means the insurance companies that have ceded any
liabilities or obligations under Covered Insurance Policies to the Ceding
Company pursuant to any Underlying Reinsurance Agreement.
"Underlying Reinsurance Agreements" means the reinsurance agreements listed in
Schedule 1.1(C) under which the Underlying Companies have ceded any liabilities
or obligations under Covered Insurance Policies to the Ceding Company.
ARTICLE II.
BASIS OF REINSURANCE AND BUSINESS REINSURED
SECTION 2.1 REINSURANCE.
(a) Subject to the terms and conditions of this Agreement, as of the Effective
Time, the Ceding Company hereby cedes on an indemnity reinsurance basis to the
Reinsurer, and the Reinsurer hereby accepts and agrees to assume and indemnity
reinsure, one hundred percent (100%) of all General Account Liabilities on a
combined coinsurance basis and modified coinsurance basis (net of Collectible
Reinsurance) and one hundred percent (100%) of all Separate Account Liabilities
on a modified coinsurance basis. In addition, on and after the Effective Time,
the Reinsurer hereby assumes all Reinsurer Extra-Contractual Obligations. This
Agreement is solely between the Ceding Company and the Reinsurer and shall not
create any legal relationship whatsoever between the Reinsurer and any Person
other than the Ceding Company. The reinsurance effected under this Agreement
shall be maintained in force, without reduction, unless such reinsurance is
recaptured, terminated or reduced as provided herein. On and after the Effective
Time, the Reinsurer shall be obligated to make payments to or on behalf of the
Ceding Company, as and when due, of all Reinsured Liabilities in accordance with
Article III.
(b) Upon the reinstatement or reissuance of any lapsed or surrendered Covered
Insurance Policy in accordance with the terms thereof, such Covered Insurance
Policy shall be automatically reinsured hereunder.
SECTION 2.2 SEPARATE ACCOUNTS.
(a) For each of the Covered Insurance Policies, the amount to be invested on a
variable basis in accordance with the terms of such Covered Insurance Policy
shall be held by the Ceding Company or the Underlying Companies, as applicable,
in the Separate Accounts, and all Premiums with respect to such Covered
Insurance Policy shall be deposited in the Separate Accounts to the extent
required to be deposited therein by such Covered Insurance Policy.
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From and after the Effective Time, the Ceding Company shall retain, control and
own all assets contained in the Ceding Company's Separate Accounts and shall
hold its Separate Account Reserves with respect to the Covered Insurance
Policies that are funded, in whole or in part, by one or more of the Ceding
Company's Separate Accounts and such Separate Account Reserves shall be reported
by the Ceding Company on its Separate Account balance sheets, consistent with
SAP. The Reinsurer acknowledges that the Underlying Companies will retain,
control and own all assets contained in such Underlying Companies' Separate
Accounts and shall hold such Underlying Companies' Separate Account Reserves
with respect to the Covered Insurance Policies that are funded, in whole or in
part, by one or more such Underlying Companies' Separate Accounts.
(b) For each of the Covered Insurance Policies, the amount to be paid with
respect to surrenders, loans, annuitization payments, death benefits,
Compensation or any other amounts with respect to such Covered Insurance Policy
shall be paid out of the Separate Accounts to the extent required by such
Covered Insurance Policy. For purposes hereof, the Reinsured Liabilities
attributable to the Covered Insurance Policies shall be apportioned between the
General Account Liabilities and the Separate Account Liabilities in a manner
consistent with the applicable Covered Insurance Policies and Applicable Law.
[REDACTED]
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[REDACTED]
SECTION 2.4 NON-GUARANTEED ELEMENTS. The Ceding Company shall set all Non-
Guaranteed Elements under the Covered Insurance Policies from and after the
Effective Time, taking into account the recommendations of the Reinsurer acting
in its capacity as Administrator under the Administrative Services Agreement
with respect thereto, which the Ceding Company shall only reject in good faith
and on a reasonable basis that such recommendations fail to comport with
Applicable Law, applicable Actuarial Standards of Practice or the terms of any
Covered Insurance Policy. The Ceding Company shall, to the extent it has rights
to do so, convey to the Underlying Companies under the Underlying Reinsurance
Agreements the recommendations of the Reinsurer with respect to Non-Guaranteed
Elements as if such recommendations were the Ceding Company's own. The Ceding
Company will indemnify the Reinsurer for Losses arising out of any failure of
the Ceding Company to implement or otherwise put into effect the Reinsurer's
recommendations with respect to Non-Guaranteed
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Elements in accordance with this Section, other than to the extent that
following such recommendation would have violated any Applicable Law, applicable
Actuarial Standards of Practice or the terms of any Covered Insurance Policy.
SECTION 2.5 RESERVES AND LIABILITIES REPORTING. Pursuant to the Administrative
Services Agreement and in accordance with the terms thereof, the Reinsurer
shall, in its capacity as Administrator, provide to the Ceding Company
information relating to the reserves and liabilities in respect of the Covered
Insurance Policies.
SECTION 2.6 INSURANCE CONTRACT CHANGES. Except as directed by the Reinsurer or
as performed by the Reinsurer (or its duly appointed assignee or delegatee)
acting on behalf of the Ceding Company in its capacity as Administrator, the
Ceding Company, on its own initiative, shall not change the terms or conditions
of any Covered Insurance Policy, other than for any change required by the terms
of any Covered Insurance Policies, any Governmental Body or Applicable Law. If
the Reinsured Liabilities under any of the Covered Insurance Policies are
changed (a) because of changes made on or after the Effective Time in the terms
and conditions of the Covered Insurance Policies effected by the Reinsurer,
including in its capacity as Administrator, or (b) pursuant to the terms of any
Covered Insurance Policies or by reason of the requirements of any Governmental
Body or Applicable Law, the Reinsurer will participate, on the reinsurance basis
set forth in Section 2.1, and assume one hundred percent (100%) of all
liabilities and obligations resulting from such changes and shall fully
indemnify the Ceding Company and hold the Ceding Company harmless with respect
to such changes, in each case, subject to the terms and conditions of this
Agreement. With respect to any change that, despite being required by the terms
of any Covered Insurance Policies, any Governmental Body or Applicable Law, the
Reinsurer is not implementing, the Ceding Company shall, to the extent
practicable, prior to the effectiveness of any such change, promptly notify the
Reinsurer of such proposed change and afford the Reinsurer, at the Reinsurer's
expense, the opportunity, to the extent practicable, to object to such change
under applicable administrative procedures (both formal and informal). In the
event the Reinsurer seeks to object as provided in the previous sentence, the
Reinsurer shall indemnify and hold the Ceding Company harmless for any Loss so
suffered by the Ceding Company in accordance with Article X.
SECTION 2.7 FOLLOW THE FORTUNES. The Reinsurer's liability under this Agreement
shall attach simultaneously with that of the Ceding Company under the Covered
Insurance Policies, and the Reinsurer's liability under this Agreement shall be
subject in all respects to the same risks, terms, rates, conditions,
interpretations, assessments, waivers, proportion of Premiums paid to the Ceding
Company without any deductions, and to the same modifications, alterations,
terminations and recaptures, as the respective Covered Insurance Policies and
Reinsured Liabilities to which liability under this Agreement attaches, the true
intent of this Agreement being that the Reinsurer shall, subject to the terms,
conditions, and limits of this Agreement, follow the fortunes of the Ceding
Company under the Covered Insurance Policies, and the Reinsurer shall be bound,
without limitation, by all payments and settlements under the Covered Insurance
Policies.
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ARTICLE III.
TRANSFER OF ASSETS; PAYMENTS; SETTLEMENTS; ADMINISTRATION AND ACCOUNTING
SECTION 3.1 PAYMENTS BY THE CEDING COMPANY.
(a) As consideration for the Reinsurer's agreement to provide reinsurance
pursuant to this Agreement, the Ceding Company hereby sells, assigns, transfers
and delivers to the Reinsurer, effective as of the Effective Time, in accordance
with the Purchase Agreement, to the Reinsurer, (i) Investment Assets selected in
accordance with the Purchase Agreement with a Statutory Book Value (as such term
is defined in the Purchase Agreement) equal to (A) the Initial Reinsurance
Premium, MINUS (B) the value of Policy Loans assigned to the Reinsurer
hereunder, MINUS (C) the Accrued Investment Income transferred to the Reinsurer
hereunder and MINUS (D) the Tax Gross-Up Change in IMR, in each case determined
by reference to the Estimated Statement of General Account Net Settlement for
the Ceding Company with respect to the Covered Insurance Policies hereunder
pursuant to the Purchase Agreement, (ii) the Policy Loans identified on line B.2
of the Statement of General Account Net Settlement, (iii) the Accrued Investment
Income identified on line B.1 of the Statement of General Account Net Settlement
and (iv) cash in an amount equal to the Tax Gross-Up Change in IMR. Such
transfer shall be adjusted following the date hereof in accordance with the
procedures set forth therefor in the Purchase Agreement.
(b) As additional consideration for the reinsurance provided herein, subject to
Section 2.3(b), the Ceding Company hereby sells, assigns, transfers and delivers
to the Reinsurer, effective as of the Effective Time, all of the Ceding
Company's (or any of its Affiliates') right, title and interest in the following
with respect to the Covered Insurance Policies or the Existing Reinsurance
Agreements receivable by the Ceding Company and attributable to periods on and
after the Effective Time (items (i) through (iv), collectively, the
"Recoverables"):
(i) Premiums;
(ii) Reinsurance Recoverables, but not including any amounts to the
extent attributable to any Excluded Liabilities retained by the
Ceding Company including the Ceding Company Extra-Contractual
Obligations;
(iii) Without duplication, all charges and fees, including, management
fees, marketing and distribution fees, cost of insurance charges,
premium loads, record-keeping fees, policy loan fees, mortality and
expense risk charges, administrative expense charges, rider
charges, contract maintenance charges, back-end sales loads and
other considerations billed separately, and amounts for the pre-Tax
amount of any expense reimbursement (other than "soft dollars"),
indemnification, revenue-sharing or other payments paid or payable
to the Ceding Company or any of its Affiliates by any mutual fund
organization attributable to the use of such
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organization's mutual funds as funding vehicles to the extent
attributable to the Covered Insurance Policies, but not including
any amounts to the extent attributable to any Excluded Liabilities
retained by the Ceding Company including the Ceding Company
Extra-Contractual Obligations; and
(iv) Without duplication, all other payments, collections, releases of
funds paid or payable to the Ceding Company or any of its Affiliates
and recoveries relating to the Reinsured Liabilities or the Covered
Insurance Policies (including releases of funds (including releases
of investment income to the Ceding Company) out of the Separate
Accounts) but not including any amounts recovered to the extent
attributable to any Excluded Liabilities retained by the Ceding
Company including the Ceding Company Extra-Contractual Obligations.
To the extent the foregoing sentences are ineffective to transfer ownership of
the type of asset described, the Ceding Company agrees to execute and record or
cause its Affiliates to execute and record all additional instruments, bills of
sale, deeds and other documents necessary to transfer such asset as soon
practicable after the Effective Time. Direct receipt by the Reinsurer or any of
its Affiliates of any such amounts shall satisfy any obligation of the Ceding
Company to transfer any such amount to the Reinsurer hereunder. Any Recoverables
paid to, or received by, any Affiliate of the Ceding Company shall be deemed to
have been received by the Ceding Company and shall be payable hereunder as if
received directly by the Ceding Company.
(c) The Ceding Company hereby appoints the Reinsurer as its agent to collect all
Recoverables in the Ceding Company's name for the account of the Reinsurer. The
Ceding Company agrees and acknowledges that the Reinsurer and its permitted
assigns and delegatees are entitled to enforce, in the name of the Ceding
Company, all rights at law or in equity or good faith claims of the Ceding
Company with respect to such Recoverables. If necessary for such collection, the
Ceding Company shall reasonably cooperate, at the Reinsurer's expense, in any
litigation or other dispute resolution mechanism relating to such collection.
The Parties acknowledge and agree that the Ceding Company shall have no
obligation to seek collection of any Recoverables and that the Reinsurer shall
be responsible for and has hereby assumed the financial risk of any uncollected
or uncollectible Recoverables from any payors thereof (other than the Ceding
Company or any of its Affiliates). To the extent that the Ceding Company
recovers any Recoverables from any third party attributable to the Covered
Insurance Policies, the Ceding Company shall, in accordance with Section 3.4,
transfer such amounts to the Reinsurer, together with any pertinent information
that the Ceding Company may have relating thereto.
SECTION 3.2 PAYMENTS BY THE REINSURER. In consideration of the reinsurance by
the Ceding Company of the Covered Insurance Policies, the Reinsurer shall pay to
the Ceding Company, on the Closing Date, its share of the Ceding Commission
attributable to the reinsurance hereunder in the manner contemplated in Section
3.3(b) of the Purchase Agreement. In addition, the Reinsurer shall pay and
discharge all payments made under or as a result of the Reinsured Liabilities
which are or which become due and payable at or at any time after the Effective
Time.
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SECTION 3.3 MODIFIED COINSURANCE.
(a) The Reinsurer agrees that the Ceding Company shall retain, maintain, and
own, and shall permit the Underlying Companies under the Covered Insurance
Policies to retain, maintain, and own, their respective General Account Modified
Coinsurance Assets collectively equal to the General Account Modified
Coinsurance Amount.
(b) Simultaneously with the payment of the Initial Reinsurance Premium pursuant
to Section 3.1(a), the Ceding Company shall withhold from the Reinsurer an
amount equal to the General Account Modified Coinsurance Amount, if any, as at
the Effective Time as an initial General Account Modified Coinsurance
Adjustment.
SECTION 3.4 NET SETTLEMENT.
(a) During the term of this Agreement, a settlement amount between the Ceding
Company and the Reinsurer as of the last day of each Accounting Period or other
shorter period as agreed upon by the Parties (the "Net Settlement") shall be
calculated by the Reinsurer in accordance with clause (b) below, and a statement
setting forth details of such calculation (the "Settlement Statement")
containing the information set forth in Exhibit B hereto shall be delivered by
the Reinsurer to the Ceding Company in accordance with the Administrative
Services Agreement. If the amount of the Net Settlement for an Accounting Period
is positive, the Ceding Company shall pay such amount to the Reinsurer within 5
Business Days of its receipt of the Settlement Statement for such Accounting
Period. If the amount of the Net Settlement for an Accounting Period is
negative, the Reinsurer shall pay the absolute value of such amount to the
Ceding Company within 5 Business Days from the date it delivers the Settlement
Statement for such Accounting Period to the Ceding Company.
(b) The Net Settlement with respect to any Accounting Period for the reinsurance
covered hereunder is equal to the following:
(i) the Recoverables actually received by the Ceding Company or the
Reinsurer with respect to the Covered Insurance Policies during such
Accounting Period (without duplication for amounts under clauses
(iv), (v) and (vi) below); MINUS
(ii) the General Account Liabilities payable by the Reinsurer on a cash
basis in respect of the Covered Insurance Policies during such
Accounting Period; MINUS
(iii) the Separate Account Liabilities payable out of the Separate
Accounts in respect of the Covered Insurance Policies during such
Accounting Period; MINUS
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(iv) the Reinsurance IMR as of the close of such Accounting Period less
the Reinsurance IMR as of the close of the preceding Accounting
Period; PLUS
(v) the General Account Modified Coinsurance Investment Income and the
Reinsurance IMR Investment Income, in each case, received with
respect to such Accounting Period; MINUS
(vi) the General Account Modified Coinsurance Adjustment with respect to
such Accounting Period.
(c) To the extent that the Reinsurer makes any direct payments from its own
funds or out of any Separate Account to or on behalf of the Ceding Company in
respect of Reinsured Liabilities in respect of an Accounting Period, whether in
its capacity as Administrator or otherwise, the amount of any such payments
shall be deducted from the amount payable included in clause (ii) or clause
(iii), as applicable, of Section 3.4(b) for such Accounting Period. In addition,
to the extent Recoverables are actually received by, and are available to, the
Reinsurer (or one of its Affiliates) in respect of an Accounting Period, whether
in its capacity as Administrator or otherwise, the amount of any such
Recoverables received shall be deducted from the amount of Recoverables included
in clause (i) of Section 3.4(b) for such Accounting Period. To the extent that
the Reinsurer makes any payments under the Hold Harmless and Indemnification
Agreement, the amount of such payments shall be deducted from the amount payable
included in clause (ii) or clause (iii), as applicable, of Section 3.4(b) and
the Reinsurer shall be discharged of any obligation hereunder with respect
thereto to the extent of such payment.
(d) With respect to the General Account Modified Coinsurance Investment Income,
the Reinsurance IMR Investment Income, the Reinsurance IMR and the General
Account Modified Coinsurance Adjustment (in each case that are not with respect
to the Trust Withheld Assets) for an Accounting Period, to the extent that the
calculation of any of such items would result in an amount payable to the
Reinsurer, only such amounts as are actually received by the Ceding Company from
the Underlying Companies under the Covered Insurance Policies by way of payment
or offset or otherwise shall be included in such Net Settlement.
SECTION 3.5 DELAYED PAYMENTS. If there is a delayed settlement of any payment
due hereunder, interest will accrue on such payment at the then applicable prime
rate of interest, as reported by The Wall Street Journal (or, if The Wall Street
Journal has ceased or suspended regular publication, another nationally
distributed newspaper of general circulation reasonably selected by the Ceding
Company) until settlement is made. For purposes of this Section 3.5, a payment
will be considered overdue, and such interest will begin to accrue, on the 10th
day immediately following the date such payment is due. For greater clarity, (i)
a payment shall be deemed to be due hereunder on the last date on which such
payment may be timely made under the applicable provision, and (ii) interest
will not accrue on any payment due to a Party hereunder unless the delayed
settlement thereof was caused by the other Party.
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SECTION 3.6 OFFSET AND RECOUPMENT RIGHTS. Any debits or credits incurred on or
after the Effective Time in favor of or against either the Ceding Company or the
Reinsurer with respect to this Agreement are deemed mutual debits or credits and
may be set off and recouped, and only the net balance shall be allowed or paid.
In the event of any liquidation, rehabilitation, conservation, supervision,
receivership or similar proceeding by or against the Ceding Company or the
Reinsurer, the rights of offset and recoupment set forth in this Section 3.6
shall apply to the fullest extent permitted by Applicable Law.
SECTION 3.7 ADMINISTRATION AND ACCOUNTING. Pursuant to the terms of the
Administrative Services Agreement but subject to the Transition Services
Agreement, the Reinsurer (or one of its Affiliates), in its capacity as
Administrator, will administer the Covered Insurance Policies and the related
administrative services agreements.
SECTION 3.8 CERTAIN REPORTS.
(a) At each RBC Reporting Deadline that pertains to a calendar year end, the
Reinsurer shall provide to the Ceding Company the RBC Ratio of the Reinsurer as
of the last day of such calendar year. At each RBC Reporting Deadline that
pertains to a calendar quarter other than the calendar quarter ending on
December 31, the Reinsurer shall provide to the Ceding Company: [REDACTED]
(b) During the term of this Agreement, regardless of whether the Reinsurer is
required by Applicable Law to calculate its RBC Ratio, it shall calculate its
RBC Ratio in accordance with the factors and formulae prescribed by the
applicable Governmental Body with respect to a standalone life insurance company
domiciled in the Reinsurer's jurisdiction of domicile as if the RBC Ratio
calculation were still in effect with respect to the Reinsurer. In the
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event of an elimination by Applicable Law of the requirement for the Reinsurer
to calculate risk based capital or a material change in the factors and formulae
prescribed by the insurance regulatory authority in the Reinsurer's state of
domicile with respect to the components and methodologies contained in the
calculation of the RBC Ratio (including material changes to the calculation of
Total Adjusted Capital), the Parties shall amend this Agreement to incorporate
an alternative calculation that is reasonably equivalent to the components of
and methodologies contained in the calculation of the Reinsurer's RBC Ratio in
effect as of the Effective Time within 30 calendar days after the implementation
of such change, and if the Parties cannot agree on any such alternative, the
Reinsurer shall continue to calculate the RBC Ratio as if such material change
had not occurred.
(c) The Reinsurer shall provide written notice of the occurrence of any
Triggering Event or a Recapture Triggering Event (i) within 2 Business Days
after becoming aware of its occurrence or (ii) in connection with its reporting
of the RBC Ratio to the Governmental Body charged with supervision of insurance
companies in the Reinsurer's jurisdiction of domicile or its good faith estimate
of its RBC Ratio in connection with a confirmation under clause (a) above which
would result in a Triggering Event or a Recapture Triggering Event. In addition,
the Reinsurer shall cooperate fully with the Ceding Company and promptly respond
to the Ceding Company's reasonable inquiries from time to time concerning the
determination of whether a Triggering Event or a Recapture Triggering Event has
occurred.
(d) The Reinsurer shall provide the Ceding Company with its annual and quarterly
Statutory Financial Statements and a copy of its annual audited Statutory
Financial Statements along with the audit report thereon, in each case to the
extent not publicly available.
SECTION 3.9 RESERVED.
SECTION 3.10 BOOKS AND RECORDS. The Reinsurer shall, and shall cause its
Affiliates to, preserve, until such date as may be required by the Reinsurer's
standard document retention policies (or such other later date as may be
required by Applicable Law), all books and records related to the Business.
During such period, upon any reasonable request from the Ceding Company or its
Representatives, the Reinsurer shall (a) provide to the Ceding Company and its
Representatives reasonable access to such books and records during normal
business hours; provided that such access shall not unreasonably interfere with
the conduct of the business of the Reinsurer, and (b) permit the Ceding Company
and its Representatives to make copies of such records, in each case, at no cost
to the Ceding Company or its Representatives (other than for reasonable
out-of-pocket expenses). Such books and records may be sought under this Section
3.10 by the Ceding Company for any reasonable purpose, including to the extent
reasonably required in connection with accounting, litigation, federal
securities disclosure or other similar purpose. Notwithstanding the foregoing,
any and all such books and records may be destroyed by the Reinsurer if the
Reinsurer sends to the Ceding Company written notice of its intent to destroy
such records, specifying in reasonable detail the contents of the records to be
destroyed; such records may then be destroyed after the 60th day following such
notice unless the Ceding Company notifies the Reinsurer that it desires to
obtain possession of such records, in which event the Reinsurer shall transfer
the records to the Ceding Company and the Ceding Company
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shall pay all reasonable expenses of the Reinsurer in connection therewith.
Nothing herein shall require the Reinsurer to disclose any information to the
Ceding Company or its Representatives if such disclosure would jeopardize any
attorney-client privilege, the work product immunity or any other legal
privilege or similar doctrine or contravene any Applicable Law, Court Order or
Regulatory Agreement (including any confidentiality agreement with an
unaffiliated litigant or regulator to which the Reinsurer or any of its
Affiliates is a party) or require the Reinsurer to disclose its Tax records or
any personnel or related records.
SECTION 3.11 LOCKBOX ACCOUNTS. The Reinsurer shall establish one or more
lockboxes and accounts in the name of the Reinsurer to be used solely with
respect to the Recoverables (each lockbox and related account, a "Lockbox
Account"). The Lockbox Accounts shall be owned by the Reinsurer and all
Recoverables received directly by the Reinsurer or any of its Affiliates shall
be deposited in the Lockbox Accounts. The Reinsurer may, and at the request of
the Reinsurer the Ceding Company shall, give written notice to each Person
responsible for payment of any Recoverables after the Effective Time that such
Recoverables have been sold and assigned to the Reinsurer and that payment
thereof is to be made to the Reinsurer at the Lockbox Account designated by the
Reinsurer. The Parties acknowledge that the Lockbox Accounts shall be subject to
the terms of the Account Control Agreement (the "Lockbox Control Agreement")
being entered into concurrently herewith by the Ceding Company, the Reinsurer
and each bank with which a Lockbox Account is maintained (the "Lockbox Banks").
On and after the date hereof, if the Reinsurer establishes any additional
Lockbox Account, upon the establishment of such Lockbox Account, it shall be
subject to an account control agreement with the relevant lockbox bank
substantially similar to the Lockbox Control Agreement entered into by the
Ceding Company, the Reinsurer and each bank with which such Lockbox Account is
maintained.
(a) Prior to the occurrence of a Triggering Event or a Recapture Triggering
Event, the disposition of assets in the Lockbox Accounts shall be at the sole
direction and discretion of the Reinsurer. Subject to Section 3.11(b) below,
upon the occurrence, and during the continuance, of a Triggering Event or a
Recapture Triggering Event, Recoverables collected in the Lockbox Accounts shall
be transferred by the Reinsurer directly to the Custodial Account on a daily
basis.
(b) Upon the occurrence, and during the continuance, of a Recapture Triggering
Event and upon notice by the Ceding Company to the Reinsurer and the Lockbox
Banks, (x) the Reinsurer shall cease to be entitled to direct the disposition of
assets in the Lockbox Accounts and (y) the Ceding Company shall be entitled,
without the consent of the Reinsurer, to direct the Lockbox Banks to transfer
assets in the Lockbox Accounts to the Custodial Account. During any period in
which the Ceding Company is entitled to give the direction referred to in clause
(y) of the preceding sentence, the Ceding Company shall cause Recoverables
collected in the Lockbox Accounts to be transferred to the Custodial Account on
a daily basis.
SECTION 3.12 OWNERSHIP OF RECOVERABLES. The Parties intend that the Ceding
Company's assignment pursuant to Section 3.1(b) to be a present sale and
assignment of all of
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the Ceding Company's rights, title and interest in the Recoverables and not an
assignment for security. All monies, checks, drafts, money orders, postal notes
and other instruments that may be received after the Effective Time by the
Ceding Company for Recoverables shall be held in trust by the Ceding Company for
the benefit of the Reinsurer and shall be promptly transferred and delivered to
the Reinsurer, and any such instruments when so delivered shall bear all
endorsements required to effect the transfer of same to the Reinsurer. The
Reinsurer is hereby authorized to endorse for payment to the Reinsurer any such
checks, drafts, money orders and other instruments pertaining to the
Recoverables that are payable to, or to the order of, the Ceding Company and
received by the Reinsurer under this Agreement, whether they are delivered to
the Lockbox or otherwise transferred and delivered by the Ceding Company to the
Reinsurer.
SECTION 3.13 REINSURER'S SECURITY INTEREST.
(a) To the extent that the assignment of Recoverables pursuant to Section 3.1(b)
is not recognized as a present sale and assignment, is not valid or is
recharacterized as a pledge rather than a lawful conveyance of ownership to the
Reinsurer, the Ceding Company hereby grants to the Reinsurer a security interest
in (i) all of the Ceding Company's right, title and interest (legal, equitable
or otherwise), if any, to all Recoverables and all amounts and assets (including
the Custodial Funds) held in, or investments thereof credited to, the Lockbox
Accounts and the Custodial Account that are assigned to the Reinsurer hereunder
as Recoverables and all proceeds of any and all of the foregoing and (ii) to the
extent the Ceding Company is deemed to be the owner thereof, the Lockbox
Accounts and the Custodial Account (collectively, the "Collateral") to secure
all of the Ceding Company's obligations under this Agreement (including without
limitation any obligation of the Ceding Company to pay the Terminal Settlement
under Article IX). All costs and expenses incurred in connection with obtaining
a first priority perfected security interest shall be borne by the Reinsurer.
The Ceding Company hereby represents to the Reinsurer that as of the date hereof
it has not granted any security interest in any Collateral to any Person other
than as contemplated under this Section and during the term of this Agreement
the Ceding Company will not grant any security interest in any Collateral to any
Person other than the Reinsurer.
(b) Upon the failure of the Ceding Company to fully perform and comply with any
of its material obligations under this Agreement (including, without limitation,
under Sections 3.4 and 9.4), which failure is not caused by the Reinsurer (or
one of its Affiliates) as Administrator and remains uncured 10 days after
written notice thereof is received by the Ceding Company, and subject to Section
3.13(c), the Reinsurer shall have, in addition to all other rights under this
Agreement or under Applicable Law, the following rights:
(i) the right to exercise all rights and remedies granted a secured party
under the UCC, as though all the Collateral constituted property subject to
a security interest under Article 9 thereof;
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(ii) the right to set off against any and all of the Collateral any amounts
owed by the Ceding Company hereunder;
(iii) the right to intercept and retain monies and property in the Lockbox
Account and otherwise;
(iv) without giving rise to any right to double recovery under this Section
3.13 and Section 10.2, the right to reasonable attorneys' fees incurred
in connection with the enforcement of this Agreement or in connection
with disposition of the Collateral; and
(v) the right to dispose of the Collateral in accordance with the UCC.
(c) This Section 3.13 is being included in this Agreement to ensure that, if an
insolvency or other court determines that, notwithstanding the provisions of
this Agreement and the express intent of the Parties, the Ceding Company
retained ownership of, or any rights in the Collateral, the Reinsurer's rights
to the Collateral are protected with a first priority, perfected security
interest, and it is the intent of the Parties that this Section 3.13 be
interpreted as such. Upon the occurrence and during the continuation of a
Triggering Event or a Recapture Triggering Event, Sections 3.11 and 4.9 shall
apply.
(d) Nothing contained herein shall be construed to support the conclusion that
the Ceding Company will retain any ownership of or any rights in the Collateral
after the Effective Time or to support the conclusion that the Reinsurer will
not acquire full ownership thereof as of the Effective Time.
(e) On or prior to the Closing Date, the Ceding Company shall execute and
deliver and the Reinsurer is authorized to execute and deliver any and all
financing statements reasonably requested by the Reinsurer in order to perfect
the Reinsurer's title and security interest under Article 9 of the UCC to any
and all Recoverables and all other Collateral. From and after the Effective
Time, the Ceding Company shall do such further acts and things as the Reinsurer
may request in order that the security interest granted hereunder may be
maintained as a first perfected security interest, including, without
limitation, entry into a control agreement with each bank at which the Lockbox
is maintained.
SECTION 3.14 NOVATION OF COVERED INSURANCE POLICIES. Following the Effective
Time, if requested by the Reinsurer and subject to obtaining all applicable
approvals from any Person, the Ceding Company shall cooperate with the Reinsurer
and use its commercially reasonable efforts to novate any Covered Insurance
Policies or the Underlying Reinsurance Agreements, other than any Covered
Insurance Policies with amounts invested in Separate Accounts, from the Ceding
Company to the Reinsurer or a designated Affiliate of the Reinsurer. The Ceding
Company shall promptly advise the Reinsurer of any communications with respect
to any such
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proposed novation. All correspondence from either the Ceding Company or the
Reinsurer to any policyholder under any Covered Insurance Policy or to any
Underlying Company under any Underlying Reinsurance Agreement as applicable, in
connection with any such proposed novation shall be in a form approved by the
other Party; provided that any such approval shall not be unreasonably withheld,
conditioned or delayed. At the Reinsurer's instruction and expense and subject
to obtaining all applicable approvals from any Person, the Ceding Company shall
effect any such action with respect to any such proposed novation as the
Reinsurer shall reasonably request, including sending correspondence requesting
that a Covered Insurance Policy or Underlying Reinsurance Agreement be novated
to the Reinsurer or a designated Affiliate of the Reinsurer in a form approved
by the Reinsurer. The Parties shall share the cost of obtaining any consents
required for any novations of any of the Underlying Reinsurance Agreements
listed on Schedule 8.13(b) of the Business Disclosure Schedule delivered
pursuant to the Purchase Agreement on the same basis as provided in Section
8.13(b) of the Purchase Agreement and taking into account any amounts paid by
the parties to the Purchase Agreement under Section 8.13(b) of the Purchase
Agreement for purposes of applying any applicable caps to the parties
obligations in connection thereto. Reinsurer shall be responsible for the cost
of obtaining any other consents for the novations contemplated by this Section
3.14. Any Covered Insurance Policy or Underlying Reinsurance Agreement that is
novated to the Reinsurer pursuant to this Section shall cease to be a Covered
Insurance Policy or an Underlying Reinsurance Agreement upon the effectiveness
of such novation.
[REDACTED]
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[REDACTED]
ARTICLE IV.
LICENSES; REINSURANCE CREDIT
SECTION 4.1 LICENSES. At all times during the term of this Agreement, the
Reinsurer shall hold and maintain all licenses and authorizations required under
Applicable Law and otherwise take all action that may be necessary (i) so that
the Ceding Company may receive Reserve Credit, and (ii) to perform its
obligations hereunder.
[REDACTED]
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[REDACTED]
ARTICLE V.
OVERSIGHTS; COOPERATION; REGULATORY MATTERS
SECTION 5.1 OVERSIGHTS. Unintentional or inadvertent delays, errors or
omissions made in connection with this Agreement or any transaction hereunder
(i) shall not relieve either Party from any liability or obligation which would
have attached had such delay, error or omission not occurred; and (ii) both
Parties shall be restored as closely as possible to the positions they would
have occupied if no delay, error or omission had occurred, provided that, in all
cases, such error or omission is rectified as soon as reasonably practicable
after discovery by the Party making such error or omission or responsible for
such delay, and provided, further, that said responsible Party shall be
responsible for any additional liability or obligation which attaches as a
result.
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SECTION 5.2 COOPERATION. Each Party hereto shall cooperate fully with the other
in all reasonable respects in order to accomplish the objectives of this
Agreement, including making available to each their respective officers,
employees and agents for interviews and meetings with Governmental Bodies and
furnishing any additional assistance, information and documents as may be
reasonably requested by a party from time to time.
SECTION 5.3 REGULATORY MATTERS. Subject to the provisions of Article X and
solely to the extent not otherwise covered by the Administrative Services
Agreement, if the Ceding Company or the Reinsurer receives notice of, or
otherwise becomes aware of, any inquiry, investigation or proceeding from or at
the direction of a Governmental Body relating to or affecting the Covered
Insurance Policies that would reasonably be expected to have an adverse effect
on the other Party, the Ceding Company or the Reinsurer, as applicable, shall
promptly notify the other Party thereof, whereupon the Parties, at their own
expense, shall cooperate in good faith and use their respective commercially
reasonable efforts to resolve such matter in a mutually satisfactory manner, in
light of all the relevant business, regulatory and legal facts and
circumstances.
ARTICLE VI.
DAC TAX
SECTION 6.1 ELECTION. The Ceding Company and the Reinsurer jointly agree to the
deferred acquisition cost Tax election pursuant to Section 1.848-2(g)(8) of the
Treasury Regulations issued under Section 848 of the Code, each as in effect as
of the Effective Time. In accordance with, and in furtherance of, that election:
(a) The Party with the net positive consideration for this Agreement for each
taxable year shall capitalize specified policy acquisition expenses with respect
to this Agreement without regard to the general deductions limitation of Code
Section 848(c)(1); and
(b) Both Parties shall exchange information pertaining to the amount of net
consideration under this Agreement each year to ensure consistency or as
otherwise required by the Internal Revenue Service.
(c) Both Parties agree to make such election by timely attaching to their
federal income Tax Returns the schedule contemplated by Treasury Regulation
Section 1.848-2(g)(8)(ii).
SECTION 6.2 DEFINITIONS. As used in this Article, the terms "net
consideration," "net positive consideration," "specified policy acquisition
expenses," and "general deductions limitation" are defined by reference to
Treasury Regulation Section 1.848-2 and Code Section 848, in effect as of the
Effective Time.
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SECTION 6.3 EXCHANGE OF INFORMATION. The method and timing of the exchange of
information contemplated by Section 6.1(b) shall be as follows:
(a) The Reinsurer shall submit a schedule to the Ceding Company by May 1 of each
year of its calculation of the net consideration for the preceding calendar
year.
(b) The Ceding Company may contest such calculation by providing an alternative
calculation to the Reinsurer in writing within 30 days of the Ceding Company's
receipt of the Reinsurer's calculation. If the Ceding Company does not so notify
the Reinsurer, the Ceding Company shall report the net consideration as
determined by the Reinsurer.
(c) If the Ceding Company contests the Reinsurer's calculation of the net
consideration, the Parties shall act in good faith to reach an agreement as to
the correct amount within 30 days of the date the Ceding Company submits its
alternative calculation. If the Reinsurer and the Ceding Company do not reach
agreement on the net consideration within such 30-day period, then the net
consideration for such year shall be determined by an independent accounting
firm acceptable to both the Reinsurer and the Ceding Company within 20 days
after the expiration of such 30-day period.
(d) The Parties shall attach the final schedule to their respective federal
income Tax Returns for each taxable year in which consideration is transferred
under this Agreement. The schedule shall identify this Agreement and restate the
election described in this Article and shall be signed by both Parties.
SECTION 6.4 EFFECTIVENESS. The Tax election described in Section 6.1 shall
first become effective for the taxable year that includes the Effective Time and
shall remain in effect for all years for which this Agreement remains in effect.
SECTION 6.5 UNITED STATES TAX STATUS REPRESENTATION. Each of the Parties
represents and warrants that it is subject to United States taxation under the
provisions of Subchapter L of Chapter 1 of Subtitle A of the Code.
ARTICLE VII.
INSOLVENCY
SECTION 7.1 INSOLVENCY OF THE CEDING COMPANY.
(a) In the event of the insolvency of the Ceding Company, all reinsurance made,
ceded, renewed or otherwise becoming effective under this Agreement shall be
payable by the Reinsurer directly to the Ceding Company or to its statutory
liquidator, receiver or statutory successor on the basis of the liability of the
Ceding Company under the
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Covered Insurance Policies without diminution because of the insolvency of the
Ceding Company, except to the extent (i) paid by the Reinsurer to a Payee in
accordance with Section 8.1 or (ii) the Reinsurer has, with the consent of the
applicable policyholder or Underlying Company, assumed any such Covered
Insurance Policy or Underlying Reinsurance Agreement in substitution for the
obligations of the Ceding Company to such Person.
(b) It is understood, however, that in the event of the insolvency of the Ceding
Company, the liquidator, receiver or statutory successor of the Ceding Company
shall give written notice of the pendency of a claim against the Ceding Company
on a Covered Insurance Policy within a reasonable period of time after such
claim is filed in the insolvency proceedings and that during the pendency of
such claim the Reinsurer may investigate such claim and interpose, at its own
expense, in the proceeding where such claim is to be adjudicated, any defense or
defenses which it may deem available to the Ceding Company or its liquidator,
receiver or statutory successor. It is further understood that the expense thus
incurred by the Reinsurer shall be chargeable, subject to Applicable Law,
against the Ceding Company as part of the expense of liquidation to the extent
of a proportionate share of the benefit which may accrue to the Ceding Company
solely as a result of the defense undertaken by the Reinsurer.
ARTICLE VIII.
CUT THROUGH AND NOVATIONS UPON RECAPTURE
SECTION 8.1 DIRECT PAYMENTS BY THE REINSURER. Subject to Applicable Law, in the
event of the insolvency of the Ceding Company, the Reinsurer shall pay, in
accordance with the Covered Insurance Policies or the Underlying Reinsurance
Agreements, directly to the named insureds, Underlying Company or their
designees entitled to receive payment thereunder (a "Beneficiary"), in each case
in accordance with and as required by the applicable Covered Insurance Policy or
Underlying Reinsurance Agreement (any such Beneficiary, a "Payee"), 100% of the
General Account Liabilities due and payable by the Reinsurer to the Ceding
Company under this Agreement with respect to such Covered Insurance Policy or
Underlying Reinsurance Agreement, subject to the terms, conditions, exclusions
and limitations of such Covered Insurance Policy or Underlying Reinsurance
Agreement, in each case without duplication of any amounts paid by any reinsurer
under any Reinsurer Existing Reinsurance Agreement directly to the Ceding
Company with respect to such Covered Insurance Policy or Underlying Reinsurance
Agreement pursuant to any endorsement or other provisions of the type
contemplated in Section 8.4(b). Any such payment by the Reinsurer shall
discharge the Ceding Company from its related payment obligation under the
subject Covered Insurance Policy or Underlying Reinsurance Agreement to the
extent of such payment and shall be treated as a payment by the Ceding Company
for all purposes of such Covered Insurance Policy or Underlying Reinsurance
Agreement and related documentation and otherwise. In the event of a payment by
the Reinsurer pursuant to this Article VIII, the Reinsurer shall be entitled to
all rights of the Ceding Company under the Covered Insurance Policy, in each
case to the extent of payments under this Article VIII. The Ceding Company shall
use commercially reasonable efforts to assist the Reinsurer in pursuing such
rights.
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SECTION 8.2 SATISFACTION AND DISCHARGE. Any payment by the Reinsurer pursuant
to this Article VIII shall be, to the extent of the payment, in substitution,
satisfaction and discharge of the Reinsurer's obligations to the Ceding Company,
or to its receiver, liquidator, rehabilitator, conservator or similar Person or
statutory successor, under this Agreement. Neither this Article VIII, nor any
other provision of this Agreement nor any applicable Covered Insurance Policy or
Underlying Reinsurance Agreement, shall be construed in a manner which would
subject the Ceding Company or the Reinsurer to liability for duplicative payment
of Reinsured Liabilities reinsured under this Agreement. When there is a payment
made by the Reinsurer under this Article VIII, the Reinsurer shall promptly
furnish the Ceding Company with a report as to all Reinsured Liabilities paid
pursuant to this Article VIII in connection with delivery of the Settlement
Statement under Section 3.4. It is the intent of the Parties to comply with
Section 38a-88-10 of the Connecticut Insurance Regulations and any successor
statute or amendments thereto. To the extent Section 8.1 or Section 8.2 is
deemed to be inconsistent with such regulation, Section 7.1(a) shall be amended
and restated without any further action by the Parties as follows:
"(a) In the event of the insolvency of the Ceding Company, all reinsurance
made, ceded, renewed or otherwise becoming effective under this Agreement
shall be payable by the Reinsurer directly to the Ceding Company or to its
statutory liquidator, receiver or statutory successor on the basis of the
liability of the Ceding Company under the Covered Insurance Policies
without diminution because of the insolvency of the Ceding Company, except
to the extent the Reinsurer has, with the consent of the applicable
policyholder or Underlying Company, assumed any such Covered Insurance
Policy or Underlying Reinsurance Agreement in substitution for the
obligations of the Ceding Company to such Person."
SECTION 8.3 REDOMESTICATION OF THE CEDING COMPANY. The Ceding Company covenants
and agrees that it shall not redomesticate to a state unless the Applicable Laws
of such state contain an insolvency clause substantially similar to Connecticut
Insurance Regulation Section 38a-88-10.
[REDACTED]
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[REDACTED]
ARTICLE IX.
DURATION; RECAPTURE
SECTION 9.1 DURATION. This Agreement shall continue in force until such time as
(i) the Ceding Company's liabilities and obligations arising out of or related
to all Covered Insurance Policies reinsured hereunder are terminated in
accordance with their respective terms, or (ii) the Ceding Company has elected
to recapture the reinsurance of Covered Insurance Policies in full in accordance
with Section 9.3(a) and the Terminal Settlement has been completed in accordance
with Section 9.4, or (iii) the Reinsurer has elected to terminate this Agreement
in accordance with Section 9.3(b) and the Terminal Settlement has been completed
in accordance with Section 9.4.
SECTION 9.2 SURVIVAL. Notwithstanding the other provisions of this Article IX,
the terms and conditions of Articles I, IX and X and the provisions of Sections
11.1, 11.3, 11.5, 11.8 and 11.9 shall remain in full force and effect after the
termination or recapture of this Agreement. In no event shall the termination of
this Agreement affect the status of any Recoverables received and attributable
to any Accounting Period (or a portion thereof) prior to such termination as
provided in Sections 3.12 and 3.13.
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SECTION 9.3 TERMINATION AND RECAPTURE.
(a) Upon the occurrence of a Recapture Triggering Event, the Ceding Company
shall have the right, but not the obligation, to recapture all, and not less
than all, of the reinsurance ceded under this Agreement, by providing the
Reinsurer with written notice of its intent to effect recapture. Recapture of
the Covered Insurance Policies shall be effective on the 10th day following the
day on which the Ceding Company has provided the Reinsurer with such notice (the
"Recapture Date").
(b) Upon the occurrence of a Termination Event, the Reinsurer shall have the
right, but not the obligation, to terminate this Agreement by providing the
Ceding Company with written notice of its intent to terminate. Termination of
this Agreement shall be effective on the date specified in such notice (the
"Termination Date"). Upon termination of this Agreement pursuant to this Section
9.3(b), the Ceding Company shall be deemed to have recaptured all Reinsured
Liabilities. Recapture of the Covered Insurance Policies shall be effective on
the Termination Date.
(c) Upon recapture by the Ceding Company pursuant to Section 9.3(a) or Section
9.3(b), the Ceding Company will only recapture liabilities and obligations
arising under the express terms of the Covered Insurance Policies and will not
be liable for any Reinsurer Extra-Contractual Obligations arising before the
Recapture Date or Termination Date, as applicable or if arising after the
Recapture Date or Termination Date, as applicable, to the extent attributable to
a direction or request of the Reinsurer or any of its Affiliates.
(d) Following a termination or recapture pursuant to this Section 9.3, subject
to the payment obligations described in Section 9.4, both the Ceding Company and
the Reinsurer will be fully and finally released from all rights and obligations
under this Agreement in respect of the Covered Insurance Policies, other than
any payment obligations incurred hereunder prior to the Recapture Date or
Termination Date but still unpaid on such date. Following the consummation of
the recapture or termination, (i) no additional Recoverables or other amounts
payable under such Covered Insurance Policies shall be payable to the Reinsurer
hereunder nor, for the avoidance of doubt, shall the Reinsurer have any further
right to receive any Recoverables, (ii) the Reinsurer (including in its capacity
as Administrator) shall be relieved of on-going responsibilities for servicing
the Covered Insurance Policies in accordance with the terms of the
Administrative Services Agreement, and (iii) the Reinsurer shall have no further
obligations with respect to payment of claims, reinsurance of Reinsured
Liabilities or any other obligations whatsoever under this Agreement except for
obligations under the provisions that expressly survive termination as provided
in Section 9.2. Upon a recapture or termination pursuant to this Section 9.3,
the Reinsurer will sell, assign, transfer and deliver to the Ceding Company,
effective as of the Recapture Date or Termination Date, as applicable, all of
Reinsurer's right, title and interest in the Recoverables and the security
interest granted pursuant to Section 3.13 shall be automatically released.
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(e) Notwithstanding the remedies contemplated by this Article IX, Article IV or
elsewhere in this Agreement or the other Transaction Agreements, if a Recapture
Triggering Event has occurred, the Ceding Company may, in its sole discretion,
require direct payment by the Reinsurer of any sum in default under this
Agreement or any other Transaction Agreement in lieu of exercising its recapture
rights under this Article IX, and it shall be no defense to any such claim that
the Ceding Company might have had other recourse.
SECTION 9.4 PAYMENTS ON TERMINATION OR RECAPTURE. In connection with a
termination or recapture pursuant to Section 9.3, the Reinsurer shall prepare a
settlement statement within 15 calendar days of the Recapture Date or the
Termination Date (the "Terminal Settlement Statement") setting forth the
terminal settlement for the Terminal Accounting Period (the "Terminal
Settlement"). In the case of recapture by the Ceding Company pursuant to Section
9.3(a), the Terminal Settlement shall be calculated in accordance with Exhibit
C-1. In the case of a termination by the Reinsurer pursuant to Section 9.3(b),
the Terminal Settlement shall be calculated in accordance with Exhibit C-2.
[REDACTED]
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SECTION 9.5 ASSIGNMENT OF REINSURER EXISTING REINSURANCE AGREEMENTS FOLLOWING
RECAPTURE. In connection with the recapture under Section 9.3 of this Agreement,
to the extent any Reinsurer Existing Reinsurance Agreements are assignable
without consent of the reinsurer thereof, effective as of the Termination Date
or Recapture Date, as applicable, each such Reinsurer Existing Reinsurance
Agreement shall be assigned automatically to the Ceding Company so that the
Ceding Company shall have the benefits and obligations under each such Reinsurer
Existing Reinsurance Agreement. In addition, as soon as practicable after
receipt of a notice of termination or recapture pursuant to Section 9.3 and
following the Termination Date or Recapture Date, as applicable, the Parties
shall cooperate and use commercially reasonable efforts to seek to novate or
assign the Reinsurer Existing Reinsurance Agreements to the Ceding Company with
effect as of the Termination Date or Recapture Date, as applicable, whereupon
the Ceding Company shall have the benefits and obligations under such Reinsurer
Existing Reinsurance Agreements, in each case as of the Termination Date or
Recapture Date, as applicable.
SECTION 9.6 EQUITABLE REMEDIES. The Parties agree that irreparable harm for
which damages will not provide a full and effective remedy will result if the
provisions of this Article IX are not strictly and timely enforced and that, in
addition to the rights under this Article IX, the rights under Article X, and
any legal remedies the Parties may have, equitable remedies including but not
limited to prohibitory injunction, mandatory injunction, preliminary injunction,
emergency injunction, restraining order and specific performance shall be
appropriate relief in enforcing these provisions and maintaining this Agreement
in full force and effect. The Parties expressly waive the defense that a remedy
in damages alone will be adequate or that equitable remedies, including
injunction and specific performance are not appropriate for any reason at law or
equity. For purposes of enforcing the provisions of this Article IX, the Parties
agree that the appropriate forum for determining such matters shall be the
courts of the Ceding Company's state of domicile, and the Parties hereby submit
to the jurisdiction and venue of such courts.
ARTICLE X.
INDEMNIFICATION; DISCLAIMER
SECTION 10.1 REINSURER'S OBLIGATION TO INDEMNIFY. The Reinsurer hereby agrees
to indemnify, defend and hold harmless the Ceding Company and its Affiliates and
their respective officers, directors, stockholders, employees, authorized
Representatives, successors and assigns (collectively, the "Ceding Company
Indemnified Parties") from and against and pay and reimburse any and all Losses
imposed on, sustained, incurred or suffered by any of the Ceding Company
Indemnified Parties resulting from, arising out of or relating to (whether or
not arising from a Third-Party Claim) (i) any breach, violation or
non-fulfillment by the Reinsurer of the covenants and agreements of the
Reinsurer contained in this Agreement, (ii) the Reinsured Liabilities and (iii)
any successful enforcement of this indemnity.
SECTION 10.2 CEDING COMPANY'S OBLIGATION TO INDEMNIFY. The Ceding Company
hereby agrees to indemnify, defend and hold harmless the Reinsurer and its
Affiliates and their respective officers, directors, stockholders, employees,
authorized Representatives, successors
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and assigns (collectively, the "Reinsurer Indemnified Parties") from and against
and pay and reimburse any and all Losses imposed on, sustained, incurred or
suffered by any of the Reinsurer Indemnified Parties resulting from, arising out
of or relating to (whether or not arising from a Third-Party Claim) to the
extent arising from (i) any breach, violation or non-fulfillment by the Ceding
Company of the covenants and agreements of the Ceding Company contained in this
Agreement, (ii) any Ceding Company Extra-Contractual Obligations, or (iii) any
successful enforcement of this indemnity; provided that any indemnification of
the Reinsurer Indemnified Parties with respect to Product Tax Non-Compliance
shall be solely as provided in Section 12.6 of the Purchase Agreement.
SECTION 10.3 NOTICE OF CLAIM; DEFENSE.
(a) If (i) any non-affiliated third party or Governmental Body institutes or
asserts any Action that may give rise to Losses for which a Party (an
"Indemnifying Party") may be liable for indemnification under this Article X (a
"Third-Party Claim") or (ii) any Person that may be entitled to indemnification
under this Agreement (an "Indemnified Party") desires to make a claim not
involving a Third-Party Claim to be indemnified by an Indemnifying Party that
does not involve a Third-Party Claim, then the Indemnified Party shall promptly
send to the Indemnifying Party a written notice specifying the nature of such
claim and a good faith estimate of the amount of all related Losses to the
extent they are ascertainable (a "Claim Notice"). The Indemnifying Party shall
not be relieved from any of its indemnification obligations under this Article X
as a result of a failure of the Indemnified Party to provide a Claim Notice,
except to the extent that it is materially prejudiced by such failure.
(b) The Indemnifying Party may, by notice delivered within 20 Business Days of
the receipt of a Claim Notice with respect to a Third-Party Claim, assume the
defense and control of such Third-Party Claim (at the expense of such
Indemnifying Party). The Indemnified Party may take any actions reasonably
necessary to defend any Third-Party Claim prior to the time that it receives
notice from the Indemnifying Party as contemplated by the preceding sentence.
The Indemnifying Party shall not be entitled to assume or maintain control of
the defense of any Third-Party Claim and shall pay the reasonable fees and
expenses of counsel retained by the Indemnified Party if (i) the Third-Party
Claim relates to or arises in connection with any criminal proceeding, action,
indictment, allegation or investigation against the Indemnified Party or (ii)
the Third-Party Claim would reasonably be expected to result in an injunction or
equitable relief against the Indemnified Party that would, in each case, have a
material effect on the operation of the business of such Indemnified Party or
any of its Affiliates.
(c) Subject to Section 10.3(b), in the event of a Third-Party Claim, if the
Indemnifying Party assumes the defense of a Third-Party Claim, the Indemnifying
Party may elect to retain counsel reasonably acceptable to the Indemnified
Parties to represent such Indemnified Parties in connection with such Action and
shall pay the fees, charges and disbursements of such counsel. Subject to
Section 10.3(b), if the Indemnifying Party so elects, the Indemnified Parties
may participate, at their own expense and through legal counsel of their choice,
in any such Action; provided that (i) the Indemnifying Party shall control the
defense of
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the Indemnified Parties in connection with such Action and (ii) the Indemnified
Parties and their counsel shall reasonably cooperate with the Indemnifying Party
and its counsel in connection with such Action. To the extent such action can be
taken in a way that does not unreasonably jeopardize the attorney-client
privilege: (i) the Indemnified Party's right to participate in the defense of
any Action shall include the right to attend all significant internal meetings,
all meetings with representatives of plaintiffs, hearings and the like; and (ii)
counsel for an Indemnified Party also shall be given a reasonable opportunity to
comment upon all memoranda of law, pleadings and briefs and other documents
relating to the Third-Party Claim, and the Indemnifying Party and its counsel
shall give reasonable consideration to the comments of counsel for the
Indemnified Party. The Indemnifying Party shall not settle any such Action
without the relevant Indemnified Parties' prior written consent, unless the
terms of such settlement (A) provide for no relief other than the payment of
monetary damages, (B) involve no finding or admission of any breach or violation
by any Indemnified Party and (C) include an express unconditional release of
each Indemnified Party from all Liability arising from such Action.
Notwithstanding the foregoing, if the Indemnifying Party does not promptly
retain counsel and assume control of such defense, then the Indemnified Parties
may retain counsel reasonably acceptable to the Indemnifying Party in connection
with such Action and assume control of the defense in connection with such
Action. Under no circumstances will the Indemnifying Party have any liability in
connection with any settlement of any Action that is entered into without its
prior written consent (such consent not to be unreasonably withheld, delayed or
conditioned).
(d) From and after the delivery of a Claim Notice involving a Third-Party Claim,
at the reasonable request of the Indemnifying Party, each Indemnified Party
shall grant the Indemnifying Party and its counsel, experts and Representatives
full access, during normal business hours, to the books, records, personnel and
properties of the Indemnified Party to the extent reasonably related to such
Claim Notice at no cost to the Indemnifying Party (other than for reasonable
out-of-pocket expenses of the Indemnified Parties).
(e) In the event any Indemnifying Party receives a Claim Notice from an
Indemnified Party that does not involve a Third-Party Claim, the Indemnifying
Party shall notify the Indemnified Party within 20 Business Days following its
receipt of such notice whether the Indemnifying Party disputes its liability to
the Indemnified Party under this Article X.
SECTION 10.4 NO DUPLICATION; EXCLUSIVE REMEDY.
(a) To the extent that a Reinsurer Indemnified Party or a Ceding Company
Indemnified Party has received payment in respect of a Loss pursuant to the
provisions of any other Transaction Agreement, such Reinsurer Indemnified Party
or Ceding Company Indemnified Party shall not be entitled to indemnification for
such Loss under this Agreement to the extent of such payment.
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(b) Except (i) with respect to claims alleging fraud, (ii) as otherwise provided
under this Agreement (including the right to recapture and equitable remedies in
addition to the indemnification under Article X) or (iii) the provisions of any
Transaction Agreement, from and after the Closing, the exclusive remedy of the
Reinsurer, the Reinsurer Indemnified Parties, the Ceding Company and the Ceding
Company Indemnified Parties in connection with this Agreement (and any
certificate or instrument delivered hereunder) and the transactions contemplated
hereby (whether under this Agreement or arising under Applicable Law) shall be
as provided in this Article X. In furtherance of the foregoing, each of the
Reinsurer, on behalf of itself and each other Reinsurer Indemnified Party, and
the Ceding Company, on behalf of itself and each other Ceding Company
Indemnified Party, hereby waives, from and after the Closing, to the fullest
extent permitted under Applicable Law, any and all rights, claims and causes of
action (other than claims of, or causes of action arising from, fraud) it may
have against the Ceding Company or any of its Affiliates or Representatives and
the Reinsurer or any of its Affiliates or Representatives, as the case may be,
arising under or based upon this Agreement or any certificate or instrument
delivered in connection herewith, except (x) pursuant to the indemnification
provisions set forth in this Article X or (y) as otherwise provided under this
Agreement or the provisions of any Transaction Agreement.
SECTION 10.5 MITIGATION AND LIMITATION ON SET-OFF. The Reinsurer and the Ceding
Company shall cooperate with each other with respect to resolving any claim or
liability with respect to which one Party is obligated to indemnify the other
Party under this Article X, including by making commercially reasonable efforts
to mitigate such claim or liability, to the extent required by Applicable Law.
Neither the Reinsurer nor the Ceding Company shall have any right to set off any
unresolved indemnification claim pursuant to this Article X against any payment
due pursuant to Article III and Section 9.4 or any Transaction Agreement.
SECTION 10.6 RECOVERY BY INDEMNIFIED PARTY.
(a) In any case where an Indemnified Party recovers from a third party not
affiliated with such Indemnified Party any amount in respect of any Loss for
which an Indemnifying Party has actually reimbursed it pursuant to this Article
X, such Indemnified Party shall promptly pay over to the Indemnifying Party the
amount so recovered (net of any out-of-pocket expenses incurred by such
Indemnified Party in collecting such amount), but not in excess of the sum of
(i) any amount previously paid by the Indemnifying Party to or on behalf of the
Indemnified Party in respect of such claim and (ii) any amount expended by the
Indemnifying Party in pursuing or defending any claim arising out of such
matter.
(b) If any portion of Losses to be reimbursed by the Indemnifying Party pursuant
to this Article X could be recovered from a third party not affiliated with the
relevant Indemnified Party (including under any applicable third-party insurance
coverage) based on the underlying claim or demand asserted against such
Indemnifying Party, then the Indemnified Party shall promptly give notice
thereof to the Indemnifying Party and, upon the request of the Indemnifying
Party, shall use commercially reasonable efforts to collect the maximum amount
recoverable from such third party, in which event the Indemnifying Party shall
reimburse the
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Indemnified Party for all reasonable costs incurred in connection with such
collection. If any portion of Losses actually paid by the Indemnifying Party
pursuant to this Article X could have been recovered from a third party not
affiliated with the relevant Indemnified Party (including under any applicable
third-party insurance coverage) based on the underlying claim or demand asserted
against such Indemnifying Party, then the Indemnified Party shall transfer, to
the extent transferable, such of its rights to proceed against such third party
as are necessary to permit the Indemnifying Party to recover from such third
party any amount actually paid by the Indemnifying Party pursuant to this
Article X.
SECTION 10.7 WAIVER OF DUTY OF UTMOST GOOD FAITH. In recognition that each
Party has consummated the transactions contemplated by this Agreement and the
Transaction Agreements to which it is a party, based on mutually negotiated
representations, warranties, covenants, remedies and other terms and conditions
as are fully set forth herein and therein, the Ceding Company and the Reinsurer
absolutely and irrevocably waive resort to the duty of "utmost good faith" or
any similar principle in connection with the formation or performance of this
Agreement.
ARTICLE XI.
MISCELLANEOUS
SECTION 11.1 NOTICES. Except as otherwise agreed by the Parties, all notices,
requests, demands and other communications under this Agreement shall be in
writing and shall be deemed to have been duly given (a) on the date of service
if served personally on the Party to whom notice is to be given, (b) on the day
of transmission if sent via facsimile transmission to the facsimile number given
below, and telephonic confirmation of receipt is obtained promptly after
completion of transmission, or (c) on the Business Day after delivery to an
overnight courier (such as Federal Express) or an overnight mail service (such
as the Express Mail service) maintained by the United States Postal Service, to
the Party as follows:
To the Ceding Company:
Hartford Life and Annuity Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089
Fax: (866) 522-0308
Attention: President
With concurrent copies (which will not constitute notice) to:
The Hartford
One Hartford Plaza
Hartford, CT 06155
Fax: (860) 547-6959
Attention: Ceded Reinsurance & General Counsel
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Sutherland Asbill & Brennan LLP
999 Peachtree Street, NE
Atlanta, GA 30309
Fax: (404) 853-8806
Attention: B. Scott Burton
To the Reinsurer:
The Prudential Insurance Company of America
213 Washington Street
Newark, NJ 07102
Attention: Chief Legal Officer, Individual Life Insurance
Fax: (973) 367-8920
With a concurrent copy (which will not constitute notice) to:
Debevoise & Plimpton LLP
919 Third Avenue
New York, NY 10022
Fax: (212) 909-6836
Attention: John M. Vasily
or to such other address as such Party may indicate by a notice delivered to the
other Party hereto.
SECTION 11.2 ENTIRE AGREEMENT. This Agreement, together with the Exhibits and
Schedules referred to herein, the Purchase Agreement, the Administrative
Services Agreement, the Transition Services Agreement, the Trust Agreement and
the other documents delivered pursuant hereto and thereto, constitute the entire
agreement among the Parties hereto with respect to the subject matter hereof and
supersede all prior representations, warranties, negotiations, discussions,
writings, agreements, understandings and letters of intent between them with
respect thereto, none of which shall have any further force and effect for any
purpose. This Agreement may not be amended, modified or supplemented except by a
written instrument signed by an authorized Representative of each of the Parties
hereto or their respective successors in interest.
SECTION 11.3 GOVERNING LAW AND JURISDICTION. This Agreement shall be governed
in all respects, including validity, interpretation and effect, by the laws of
the Ceding Company's state of domicile, without regard to principles of
conflicts of law thereof that would result in the application of the laws of a
different jurisdiction. Except as contemplated in the definition of Unamortized
Portion of the Ceding Commission, Articles IV and IX or in Section 2.4 of the
Purchase Agreement, each of the Parties irrevocably agrees that any and all
Actions arising out of, relating to or in connection with this Agreement or its
subject matter and the rights and obligations arising hereunder, or for
recognition and enforcement of any settlement or judgment in respect of this
Agreement and the rights and obligations arising hereunder brought by the other
Party or its successors or assigns, shall be brought and determined exclusively
in the courts of the State of New York located in the Borough of Manhattan, The
City of New York or in the
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courts of the United States of America for the Southern District of New York.
Each of the Parties agrees that mailing of process or other papers in connection
with any such Action in the manner provided in Section 11.1 or in such other
manner as may be permitted by Applicable Laws, will be valid and sufficient
service thereof. Each of the Parties hereby irrevocably submits with regard to
any such Action for itself and in respect of its property, generally and
unconditionally, to the personal jurisdiction of the aforesaid courts and agrees
that it will not bring any Action relating to this Agreement or any of the
transactions contemplated by this Agreement in any court or tribunal other than
the aforesaid courts. Each of the Parties hereto hereby irrevocably waives, and
agrees not to assert, by way of motion, as a defense, counterclaim or otherwise,
in any Action with respect to this Agreement and the rights and obligations
arising hereunder, or for recognition and enforcement of any judgment in respect
of this Agreement and the rights and obligations arising hereunder (a) any claim
that it is not personally subject to the jurisdiction of the above named courts
for any reason other than the failure to serve process in accordance with this
Agreement, (b) any claim that it or its property is exempt or immune from
jurisdiction of any such court or from any legal process commenced in such
courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise)
and (c) to the fullest extent permitted by Applicable Law, any claim that (i)
the Action in such court is brought in an inconvenient forum, (ii) the venue of
such Action is improper or (iii) this Agreement, or the subject matter hereof,
may not be enforced in or by such courts. In order to facilitate the
comprehensive resolution of related disputes, and upon request of any Party to
any Action, the court may consolidate the Action with any other Action relating
to this Agreement, the Purchase Agreement or any other Ancillary Agreement and
the Parties hereby agree not to oppose any request by the other Party to
consolidate any such Action with another Action relating to this Agreement, the
Purchase Agreement or any other Ancillary Agreement.
SECTION 11.4 NO THIRD PARTY BENEFICIARIES. Except as otherwise expressly set
forth in any provision of this Agreement, including with respect to the Ceding
Company Indemnified Parties and the Reinsurer Indemnified Parties, nothing in
this Agreement, expressed or implied, is intended or shall be construed to
confer upon any Person, other than the Parties and their respective successors
and permitted assigns, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
SECTION 11.5 EXPENSES. Except as otherwise provided herein, the Parties hereto
shall each bear their respective expenses incurred in connection with the
negotiation, preparation, execution, and performance of this Agreement and the
transactions contemplated hereby, including all fees and expenses of counsel,
actuaries and other Representatives.
SECTION 11.6 COUNTERPARTS. This Agreement may be executed by the Parties hereto
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one and the
same instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the Parties hereto. Each
counterpart may be delivered by facsimile or electronic mail transmission, which
transmission shall be deemed delivery of an originally executed document.
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SECTION 11.7 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, that provision shall be
interpreted to be only so broad as is enforceable.
SECTION 11.8 WAIVER OF JURY TRIAL; PUNITIVE DAMAGES. EACH PARTY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND
WHETHER MADE BY CLAIM, COUNTERCLAIM, THIRD-PERSON CLAIM OR OTHERWISE. EACH PARTY
HERETO ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS IN THIS
SECTION. EACH PARTY ALSO IRREVOCABLY WAIVES ANY RIGHT TO PUNITIVE DAMAGES,
EITHER PURSUANT TO COMMON LAW OR STATUTE, IN EACH CASE IN ANY LEGAL PROCEEDINGS
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (BUT NOT AS TO ANY ACTION BY ONE PARTY AGAINST THE OTHER SEEKING
INDEMNIFICATION FOR A THIRD PARTY CLAIM AGAINST THE PARTY INITIATING THE ACTION,
TO THE EXTENT THAT SUCH DAMAGES MAY BE RECOVERABLE AS PART OF THE
INDEMNIFICATION BY THE INDEMNIFIED PARTY).
SECTION 11.9 TREATMENT OF CONFIDENTIAL INFORMATION.
(a) The Parties agree that, other than as contemplated by this Agreement or any
Transaction Agreement and to the extent permitted or required to implement the
transactions contemplated by this Agreement and the other Transaction
Agreements, the Parties will keep confidential and will not use or disclose the
other Party's Confidential Information and the terms and conditions of this
Agreement, including the exhibits and schedules hereto, except (x) as otherwise
required by Applicable Law or any order or ruling of any state insurance
regulatory authority or any other Governmental Body, (y) as may be required to
be disclosed in the financial statements of such Party or any of its Affiliates
or (z) such disclosure as may be required in connection with any dispute
resolution proceeding between the Parties in respect hereof. For clarity,
Business Records shall be deemed to be Confidential Information of the Reinsurer
and its Affiliates and subject to the confidentiality obligations in Section 8.6
of the Purchase Agreement.
(b) The confidentiality obligations contained in this Agreement shall not apply
to the federal Tax structure or federal Tax treatment of this Agreement and each
Party hereto may disclose to any and all persons, without limitation of any
kind, the federal Tax structure and federal Tax treatment of this Agreement;
provided, that such disclosure may not be
61
<Page>
made until the earliest of (x) the date of the public announcement of
discussions relating to this Agreement, (y) the date of the public announcement
of this Agreement, or (z) the date of the execution of this Agreement. The
preceding sentence is intended to cause this Agreement to be treated as not
having been offered under conditions of confidentiality for purposes of Section
1.6011-4(b)(3) (or any successor provision) of the Treasury Regulations
promulgated under Section 6011 of the Code, and shall be construed in a manner
consistent with such purpose. Subject to the provision with respect to
disclosure in the first sentence of this subsection (b), each Party hereto
acknowledges that it has no proprietary or exclusive rights to the federal Tax
structure of this Agreement or any federal Tax matter or federal Tax idea
related to this Agreement.
SECTION 11.10 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective successors and permitted
assigns. Except as provided below in this Section 11.10, neither Party may
assign any of its rights, duties or obligations hereunder without the prior
written consent of the other Party and any attempted assignment in violation of
this provision shall be invalid AB INITIO; provided, however, that this
Agreement shall inure to the benefit and bind those who, by operation of law,
become successors to the Parties, including any receiver or any successor,
merged or consolidated entity.
SECTION 11.11 WAIVERS. Any term or provision of this Agreement may be waived,
or the time for its performance may be extended, in writing at any time by the
Party or Parties entitled to the benefit thereof. Any such waiver shall be
validly and sufficiently authorized for the purposes of this Agreement if, as to
any Party, it is authorized in writing by an authorized Representative of such
Party. The failure of any Party hereto to enforce at any time any provision of
this Agreement shall not be construed to be a waiver of such provision, nor in
any way to affect the validity of this Agreement or any part hereof or the right
of any Party thereafter to enforce each and every such provision. No waiver of
any breach of this Agreement shall be held to constitute a waiver of any
preceding or subsequent breach.
SECTION 11.12 INTERPRETATION. The table of contents, articles, titles, captions
and headings to sections herein are inserted for convenience of reference only
and are not intended to be a part of or to affect the meaning or interpretation
of this Agreement. The Schedules and Exhibits referred to herein are to be
construed with and as an integral part of this Agreement to the same extent as
if they were set forth verbatim herein. All references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they are deemed
to be followed by the words "without limitation". Unless the context otherwise
requires, the words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. All terms defined in this Agreement
have the defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. The definitions in
this Agreement are applicable to the singular as well as the plural forms of
such terms and to the masculine as well as to the feminine genders of such term.
Any agreement or instrument defined or referred to herein or any
62
<Page>
agreement or instrument that is referred to herein means such agreement or
instrument as from time to time amended, modified or supplemented, including by
waiver or consent and references to all attachments thereto and instruments
incorporated therein. Any statute or regulation referred to herein means such
statute or regulation as amended, modified, supplemented or replaced from time
to time (and, in the case of statutes, includes any rules and regulations
promulgated under the statute), and references to any section of any statute or
regulation include any successor to the section. Any agreement referred to
herein include reference to all Exhibits, Schedules and other documents or
agreements attached thereto.
[The rest of this page intentionally left blank.]
63
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
on this 2 day of January, 2013.
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
By: /s/ [ILLEGIBLE]
-----------------------------------
Name: Mark M [ILLEGIBLE]
Title: Vice President
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ Gaurav Wadhwa
-----------------------------------
Name: Gaurav Wadhwa
Title: Second Vice President
[SIGNATURE PAGE TO ILA REINSURANCE AGREEMENT]
<Page>
SCHEDULE 1.1(A)
SCHEDULED EXTRA-CONTRACTUAL OBLIGATIONS
[REDACTED]
<Page>
SCHEDULE 1.1(B)
COVERED INSURANCE POLICY FORMS
[REDACTED]
<Page>
SCHEDULE 1.1(C)
UNDERLYING REINSURANCE AGREEMENTS
KEY: ILA = HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
[REDACTED]
<Page>
SCHEDULE 1.1(D)
EXCLUDED INSURANCE POLICIES
[Please see attached]
<Page>
SCHEDULE 1.1(E)
ECONOMIC RESERVES ASSUMPTIONS AND METHODOLOGIES
[REDACTED]
<Page>
SCHEDULE 1.1(F)
EXISTING REINSURANCE AGREEMENTS
[REDACTED]
1
<Page>
SCHEDULE 1.1(G)
GUL BUSINESS COVERED INSURANCE POLICIES
The Covered Insurance Policies subject to NAIC Actuarial Guideline 38 "The
Application of the Valuation of Life Insurance Policies Model Regulation",
commonly known as "AXXX", as set forth below:
[REDACTED]
<Page>
SCHEDULE 1.1(H)
SEPARATE ACCOUNTS
[REDACTED]
<Page>
EXHIBIT A
FORM OF TRUST AGREEMENT
<Page>
EXHIBIT B
SETTLEMENT STATEMENT
<Page>
EXHIBIT C-1
TERMINAL SETTLEMENT UNDER SECTION 9.4 -- RECAPTURE BY CEDING COMPANY
[REDACTED]
<Page>
EXHIBIT C-2
TERMINAL SETTLEMENT UNDER SECTION 9.4 -- TERMINATION BY REINSURER
[REDACTED]
<Page>
EXHIBIT D
INVESTMENT GUIDELINES
[REDACTED]
1
<Page>
EXHIBIT E
FORM OF CURE NOTICE
[REDACTED]
<Page>
EXHIBIT F
FORM OF CURE ACKNOWLEDGMENT
[REDACTED]
<Page>
EXHIBIT G
FORM OF TRUST /GUL TRUST WITHDRAWAL EVENT NOTICE
[REDACTED]
<Page>
EXHIBIT H
FORM OF TRUST / GUL TRUST WITHDRAWAL EVENT ACKNOWLEDGEMENT
[REDACTED]
<Page>
EXHIBIT I
FORM OF CUSTODIAL ACCOUNT CONTROL AGREEMENT
<Page>
EXHIBIT J
FORM OF GUL TRUST AGREEMENT
<Page>
AMENDMENT NO. 6 DATED JANUARY 28, 2013
TO THE FUND PARTICIPATION AGREEMENT EFFECTIVE JULY 1, 2000
(AS AMENDED FROM TIME TO TIME, THE "AGREEMENT")
BETWEEN
HARTFORD LIFE INSURANCE COMPANY
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
AMERICAN FUNDS INSURANCE SERIES AND
CAPITAL RESEARCH AND MANAGEMENT COMPANY
All defined terms in the Agreement are applicable to this Amendment.
WHEREAS, Hartford, CRMC and American Funds Insurance Series, entered into the
Agreement, whereby the Series offers the "Funds" to the Account(s) for variable
life insurance policies made available by the Hartford;
WHEREAS, Hartford and CRMC are members of the National Securities Clearing
Corporation ("NSCC") or otherwise have access to the NSCC's Networking System
("Networking") through a registered clearing agency;
WHEREAS, Networking permits the transmission of shareholder data between
Hartford and the Series or CRMC pursuant to certain processes established by the
NSCC's Defined Contribution Clearing & Settlement ("DCC&S") FundSERV system and
pursuant to certain Networking levels ("Networking Matrix Level") established by
the NSCC;
WHEREAS, American Funds Service Company ("Transfer Agent"), an affiliate of
CRMC, serves as transfer agent, dividend-disbursing agent and shareholder
servicing agent, acting under the control of CRMC, and American Funds
Distributors, Inc. ("AFD") serves as distributor, for the Funds; and
WHEREAS, Hartford and CRMC desire to facilitate the purchase and sale of shares
of the Funds by the Accounts via the NSCC as described herein.
NOW, THEREFORE, the parties hereto agree that effective January 28, 2013, the
Agreement is amended as follows:
1. Schedule A shall be deleted in its entirety and replaced with the attached
Schedule A.
2. Section 4 shall be deleted in its entirety and replaced with the following;
4. The Series agrees to make Class 1 and Class 2 shares of all of its
Funds available to the Contract. To the extent Hartford uses Class 2
shares, it will be entitled to a Rule 12b-1 service fee paid by the
Series and to be accrued daily and paid monthly at an annual rate of
0.25% of the average daily net assets of the Class 2 shares of each
Fund attributable to the Contracts for personal services and account
maintenance services for Contract owners with investments in
subaccounts corresponding to the Class 2 shares of each Fund (each,
a "Subaccount") for as long as the Series' Plan of Distribution
pursuant to Rule 12b-l under the 1940 Act (the "12b-l plan") remains
in effect.
1
<Page>
For purposes of this section 4, HL and HL&A each shall be a designee of the
Series for receipt of orders from each Account.
Pricing and settlement of Fund transactions shall be governed by the following:
(a) Pricing Information. The Series or CRMC, or its designee, will compute the
closing net asset value, and any distribution information (including the
applicable ex-date, record date, payable date, distribution rate per share,
income accrual and capital gains information) for each Fund as of the close
of regular trading on the New York Stock Exchange (normally 4:00 p.m.
Eastern Time) on each day the New York Stock Exchange is open for business
(a "Business Day") or at such other time as the net asset value of a Fund
is calculated, as disclosed in the relevant Funds' current prospectuses.
The Series or CRMC, or its designee, will use their best efforts to
communicate to Hartford (whether through the Fund/SERV system or manually)
such information by 6:30 p.m. Eastern Time on each Business Day. Such
information shall be accurate and true in all respects and updated
continuously.
(b) Pricing Adjustments
a. In the event an adjustment is made to the computation of the net
asset value of Fund shares as reported to Hartford under paragraph
4, (1) the correction will be handled in a manner consistent with
SEC guidelines and the Investment Company Act of 1940, as amended
and (2) the Series or CRMC, or its designee, shall notify Hartford
as soon as practicable after discovering the need for any such
adjustment. Notification may be made in the following manner:
Method of Communication
(i) Fund/SERV Transactions. The parties agree that they will
ordinarily choose to use the National Securities Clearing
Corporation's Mutual Fund Settlement, Entry and Registration
Verification ("Fund/SERV") system, and if Fund/SERV is used, any
corrections to the fund prices for the prior trade date will be
submitted through the Mutual Fund Profile with the correct fund
prices and applicable date.
(ii) Manual Transactions. If there are technical problems with
Fund/SERV, or if the parties are not able to transmit or receive
information through Fund/ SERV, any corrections to the fund prices
should be communicated by facsimile or by electronic transmission
acceptable to CRMC, or its designee, and will include for each day
on which an adjustment has occurred the incorrect Fund price, the
correct price, and, to the extent communicated to the applicable
Fund's shareholders, the reason for the adjustment. The Series and
CRMC agree that Hartford may send this notification or a
derivation thereof (so long as such derivation is approved in
advance by the Series or CRMC, as applicable) to Contract owners
whose accounts are affected by the adjustment.
2
<Page>
b. To the extent a price adjustment results in a deficiency or excess to
a Contract owner's account, Hartford and CRMC agree to evaluate the
situation together on a case-by-case basis with the goal towards
pursuing an appropriate course of action. To the extent the price
adjustment was due to CRMC's, or its designee's, error, CRMC, or its
designee, shall reimburse Contract owner's account. Any
administrative costs incurred for correcting Contract owner accounts
will be at Hartford's expense.
(c) Purchases and Redemption Orders; Settlement of Transactions
a. Fund/SERV Transactions. The parties will ordinarily use the
Fund/SERV system, and if used, the following provisions shall apply:
(i) Without limiting the generality of the following provisions of
this section, Hartford and Transfer Agent each will perform any
and all duties, functions, procedures and responsibilities
assigned to it and as otherwise established by the NSCC applicable
to Fund/SERV and the Networking Matrix Level then being utilized.
(ii) Any information transmitted through Networking by any party to the
other and pursuant to this Agreement will be accurate, complete,
and in the format prescribed by the NSCC. Each party will adopt,
implement and maintain procedures reasonably designed to ensure
the accuracy of all transmissions through Networking and to limit
the access to, and the inputting of data into, Networking to
persons specifically authorized by such party.
(iii) Same Day Trades. On each Business Day, Hartford shall aggregate
and calculate the purchase orders and redemption orders for each
Account received by Hartford prior to the Close of Trading on
each Business Day. Hartford shall communicate to Transfer Agent
for that Business Day, by Fund/SERV, the aggregate purchase
orders and redemption orders (if any) for each Account received
by the Close of Trading such Business Day (the "Trade Date") by
the DCC&S Cycle 8 (generally, 6:30 a.m. Eastern time) on the
following Business Day. Transfer Agent shall treat all trades
communicated to Transfer Agent in accordance with the foregoing
as if received prior to the Close of Trading on the Trade Date.
All orders received by Hartford after the close of trading on a
Business Day shall not be transmitted to NSCC prior to the
conclusion of the DCC&S Cycle 8 on the following Business Day,
and Hartford represents that orders received by it after 4:00
p.m. Eastern time on any given Business Day will be transmitted
to the Transfer Agent using the following Business Day's net
asset value. Transfer Agent may process orders it receives after
the DCC&S Cycle 8 deadline using the net asset value determined
on the Business Day following the Trade Date.
(iv) When transmitting instructions for the purchase and/or redemption
of shares of the Funds, Hartford shall submit one order for all
contractholder purchase transactions and one order for all
contractholder redemption transactions, unless otherwise agreed to
by the Hartford and the Transfer Agent.
3
<Page>
b. Manual Transactions. Manual transactions via facsimile shall be used by
Hartford only in the event that Hartford is in receipt of orders for
purchase or redemption of shares and is unable to transmit the orders to
the Transfer Agent due to unforeseen circumstances such as system wide
computer failures experienced by Hartford or the NSCC or other events
beyond the Hartford's reasonable control. In the event manual
transactions are used, the following provisions shall apply:
(i) Next Day Transmission of Orders. Hartford will notify the Transfer
Agent by 9:00 a.m. Eastern Time, on the next Business Day the
aggregate amounts of purchase orders and redemption orders, that
were placed by Contract owners in each Account by 4:00 p.m.
Eastern time on the prior Business Day (the "Trade Date").
Hartford represents that orders it receives after 4:00 p.m.
Eastern time on any given Business Day will be transmitted to the
Transfer Agent using the following Business Day's net asset value.
Transfer Agent may process orders it receives after the 9:00 a.m.
deadline using the net asset value next determined.
(ii) Purchases. All orders received by Hartford by 4:00 p.m. on a
Business Day and communicated to the Transfer Agent by 9:00 a.m.
deadline shall be treated by the Transfer Agent as if received as
of the close of trading on the Trade Date and the Transfer Agent
will therefore execute orders at the net asset values determined
as of the close of trading on the Trade Date. Hartford will
initiate payment by wire transfer to a custodial account
designated by the Funds for the aggregate purchase amounts prior
to 4:00 p.m. Eastern time on the next Business Day following Trade
Date.
(iii) Redemptions. Aggregate orders for redemption of shares of the
Funds will be paid in cash and wired from the Funds' custodial
account to an account designated by the Hartford. Transfer Agent
will initiate payment by wire to Hartford or its designee
proceeds of such redemptions two Business Days following the
Trade Date (T+2).
c. Contingencies. All orders are subject to acceptance by Transfer
Agent and become effective only upon confirmation by Transfer Agent.
Upon confirmation, the Transfer Agent will verify total purchases
and redemptions and the closing share position for each
fund/account. In the case of delayed settlement, Transfer Agent and
Hartford shall make arrangements for the settlement of redemptions
by wire no later than the time permitted for settlement of
redemption orders by the Investment Company Act of 1940. Such wires
for Hartford should be sent to:
If to HL: If to HL&A
BANK OF AMERICA BANK OF AMERICA
100 N. TRYON STREET 100 N. TRYON STREET
CHARLOTTE, NC 28255 CHARLOTTE, NC 28255
ACCT. #: 5034-7095 ACCT. #: 5035-3970
4
<Page>
ROUTING #: 0260-0959-3 ROUTING #: 0260-0959-3
EXTERNAL COMMENTS: EXTERNAL COMMENTS:
FOR THE BENEFIT OF FOR THE BENEFIT OF
HLIC SEPARATE ACCOUNT HLA SEPARATE ACCOUNTS
Such wires for Transfer Agent should be sent to:
WELLS FARGO BANK
707 WILSHIRE BLVD. 13TH FLOOR
LOS ANGELES, CA 90017
ABA#: 121000248
AFS ACCOUNT#: 4100060532
FOR CREDIT TO AFS ACCT. NO. (ACCOUNT NUMBER AND
FUND) FBO
HARTFORD [(PRIVATE ACCOUNTS)]
d. Processing Errors. Processing errors which result from any delay or
error caused by Hartford may be adjusted through the NSCC System by
Hartford by the necessary transactions on a current basis.
e. Coding. If applicable, orders for the purchase of Fund shares shall
include the appropriate coding to enable Transfer Agent to properly
calculate commission payments to any broker-dealer firm assigned to the
Account.
f. Reconciliation. Hartford shall reconcile share positions with respect
to each Fund for each Account as reflected on its records to those
reflected on statements from Transfer Agent and shall, on request,
certify that each Account's share positions with respect to each Fund
reported by Transfer Agent reconcile with Hartford's share positions
for that Account. Hartford shall promptly inform Transfer Agent of any
record differences and shall identify and resolve all non-reconciling
items within five business days.
g. Verification. Within a reasonable period of time after receipt of a
confirmation relating to an instruction, Hartford shall verify its
accuracy in terms of such instruction and shall notify Transfer Agent
of any errors appearing on such confirmation.
h. Order Processing. Any order by Hartford for the purchase of shares of
the respective Funds through CRMC, or its designee, shall be accepted at
the time when it is received by CRMC, or its designee, (or any
clearinghouse agency that CRMC, or its designee, may designate from time
to time), and at the offering and sale price determined in accordance
with this Agreement, unless rejected by CRMC, its designee, or the
respective Funds. In addition to the right to reject any order, the
Funds have reserved the right to withhold shares from sale temporarily
or permanently. CRMC, or its designee, will not accept any order from
Hartford that is placed on a conditional basis or subject to any delay
or contingency prior to execution. The procedure relating to the
handling of orders shall be subject to instructions that CRMC, or its
designee, shall forward from time to time. The shares purchased will be
issued by the respective Funds only against receipt of the purchase
price, in collected New York or Los Angeles Clearing House funds. If
payment for the shares purchased is not received within three days after
the date
5
<Page>
of confirmation, the sale may be cancelled by CRMC, or its designee,
or by the respective Funds without any responsibility or liability on
the part of CRMC, its designee, or the Funds, and CRMC, its designee,
and/or the respective Funds may hold the Hartford responsible for any
loss, expense, liability or damage, including loss of profit suffered
by CRMC, its designee, and/or the respective Funds, resulting from
Hartford's delay or failure to make payment as aforesaid.
i. Right to Suspend. The Series reserves the right to temporarily
suspend sales if the Board of Trustees of the Series, acting in good
faith and in light of its fiduciary duties under federal and any
applicable state laws, deems it appropriate and in the best
interests of shareholders or in response to the order of an
appropriate regulatory authority. Hartford shall abide by
requirements of the Funds' frequent trading policy as described in
the Series' prospectus and statement of additional information.
3. The following sentence is added to Section 7: "All such dividends and
distributions shall be automatically reinvested at the ex-dividend date net
asset value."
4. Section 8 shall be deleted in its entirety.
5. The following paragraphs shall be added to the Agreement as Sections 27 and
28:
27. Books and Records. Each party hereto shall cooperate with the other
parties and all appropriate governmental authorities and shall
permit such authorities reasonable access to its books and records
relating to this Agreement upon proper notice in connection with any
investigation or inquiry relating to this Agreement or the
transactions contemplated hereby. Each party shall maintain and
preserve all records relating to this Agreement in its possession as
required by law to be maintained and preserved in connection with
the provision of the services contemplated hereunder. Upon the
request of a party, the other party shall provide copies of all
records relating to this Agreement as may be necessary to (a)
monitor and review the performance of either party's activities, (b)
assist either party in resolving disputes, reconciling records or
responding to auditor's inquiries, (c) comply with any request of a
governmental body or self-regulatory organization, (d) verify
compliance by a party with the terms of this Agreement, (e) make
required regulatory reports, or (f) perform general customer
service. The parties agree to cooperate in good faith in providing
records to one another under this provision.
28. Independent Audit. In the event Transfer Agent determines, based on
a review of complaints received in accordance with paragraph 27,
above, that Hartford is not processing Contract owner transactions
accurately, Transfer Agent reserves the right to require that
Hartford's data processing activities as they relate to this
Agreement be subject to an audit by an independent accounting firm,
at Transfer Agent's expense, to ensure the existence of, and
adherence to, proper operational controls. Hartford shall make
available upon Transfer Agent's request a copy of any report created
by such accounting firm as a result of said audit. Hartford shall
immediately notify Transfer Agent in the event of a material breach
of operational controls.
6
<Page>
All other terms and provisions of the Agreement not amended herein shall remain
in full force and effect.
In Witness Whereof, the parties hereto have caused this Amendment No. 6 to the
Agreement to be duly executed as of the date first above written.
HARTFORD LIFE INSURANCE AMERICAN FUNDS INSURANCE
COMPANY SERIES (FKA AMERICAN VARIABLE
INSURANCE SERIES)
By its authorized officer, By its authorized officer,
<Table>
<S> <C> <C> <C>
By: /s/ Lisa Proch By: /s/ Steven I. Koszalka
---------------------------- ------------------------------
Name: Lisa Proch Name: Steven I. Koszalka
Its: Vice President Its: Secretary
</Table>
<Table>
<S> <C>
HARTFORD LIFE AND ANNUITY CAPITAL RESEARCH AND
INSURANCE COMPANY MANAGEMENT COMPANY
</Table>
By its authorized officer, By its authorized officer,
<Table>
<S> <C> <C> <C>
By: /s/ Lisa Proch By: /s/ Michael J. Downer
---------------------------- ------------------------------
Name: Lisa Proch Name: Michael J. Downer
Its: Vice President Its: Senior Vice President and
Secretary
</Table>
Approved for Signature
by CRMC Legal Dept. [LOGO MCJT]
7
<Page>
SCHEDULE A
ACCOUNTS AND CONTRACTS SUBJECT TO THE PARTICIPATION AGREEMENT
<Table>
<Caption>
NAME OF SEPARATE ACCOUNT CONTRACTS FUNDED BY SEPARATE ACCOUNT
<S> <C>
------------------------------------------------------------------------------------------------------
Separate Account ICMG Series II (December 12, GVL-93P, IVL-97P
1997)
Separate Account ICMG Series II-C (December 12, GVL-93P, IVL-97P
1997)
Separate Account ICMG Series II-D (June 7, 1999) GVL-93P, IVL-97P
Separate Account ICMG Series III-B (February 8, GVL-93P, IVL-97P
1996)
Separate Account ICMG Series VII (April 1, 1999) IVL-99P
Separate Account VLI (September 30, 1992) HL-15486 (00), HL-15471 (99), HL-13865, HL-
14875, HL-15898 (03), HL-15894 (03)
Separate Account VL II (September 30, 1994) HL-15441 (98) (NY), HL-14623
Separate Account VL I (June 8, 1995) LA-1200 (02), LA-1154 (99), LA-1158 (00), ILA-
1098, ILA-1007, LA-1155 (99),
LA-1238 (03), LA-1240 (03)
Separate Account VL II (September 30, 1994) LA-1151 (98), ILA-1020
Separate Account One (May 20, 1991) VA03, VA99, ASHARE03, ASHARE98,
NCDSC98, NCDSC03, VAXC99, VAXC03
Separate Account Two (June 2, 1986) HV-1442-0,HV-1499-0
Separate Account Three HL (June 22, 1994) HL-VA03
Separate Account Three HLA (June 22, 1994) LA-VA03
Separate Account Seven HL (December 8, 1996) HL-VA03
Separate Account Seven HLA (April 1, 1999) LA-VA03
ICMG Registered Variable Life Sep. Account A HL-GVL95(P)NY
(April 14, 1998)
ICMG Registered Variable Life Sep. Account One GVL95(P)
(October 9, 1995)
</Table>
8
<Page>
[LOGO]
CAPITAL RESEARCH AND MANAGEMENT(SM)
CAPITAL RESEARCH
AND MANAGEMENT COMPANY
333 South Hope Street
Los Angeles, California 90071-1406
February 7, 2013
The Hartford
2000 Hopmeadow Street
LawDrpt. B1-E
Simsbury, CT 06089
Attention: James Bronsdon
Dear Mr. Bronsdon,
Enclosed is one executed original American Funds FPA Amendment No. 6 for your
records.
If you have any questions please contact Michael Triessl at (213) 615-4024.
Sincerely,
/s/ Kathy Grogan
----------------------------------------
Kathy Grogan
Assistant to Michael Triessl
THE CAPITAL GROUP COMPANIES
American Funds Capital Research and Management Capital
International Capital Guardian Capital Bank and Trust
<Page>
EXECUTION VERSION
ADMINISTRATIVE SERVICES AGREEMENT
BY AND BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
AND
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
DATED JANUARY 2, 2013
<Page>
TABLE OF CONTENTS
PAGE
--------------------------------------------------------------------------------
Article I DEFINITIONS 1
Section 1.01 Definitions 1
Article II APPOINTMENT; NOTIFICATION OF INTERESTED PARTIES 9
Section 2.01 Appointment 9
Section 2.02 Provision of Services Subject to the Transition Services 10
Agreement
Section 2.03 ILA Services 10
Section 2.04 Power of Attorney 10
Section 2.05 Notification of Interested Parties 11
Section 2.06 Ongoing Communications 11
Section 2.07 Coordinators 11
Article III NEW INSURANCE POLICIES 12
Section 3.01 New Insurance Policies 12
Section 3.02 Guidelines 13
Section 3.03 Termination of Authority 13
Section 3.04 ILA Licenses; Certain Actions 13
Section 3.05 Marketing Activities 13
Article IV SERVICES PROVIDED BY ADMINISTRATOR 14
Section 4.01 Services 14
Section 4.02 Standards and Licenses 14
Section 4.03 Subcontracting 15
Section 4.04 Recommendations 15
Section 4.05 Decision Authority 15
Section 4.06 Non-Guaranteed Elements 16
Section 4.07 Additional Covenants of ILA 16
Section 4.08 Certain Actions with Respect to Recoverables 17
Section 4.09 Product Filings 17
[REDACTED]
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[REDACTED]
Article V FEES FOR SERVICES 20
Section 5.01 Fees for Services 20
Article VI CERTAIN REPORTS; BOOKS AND RECORDS; 20
BANK ACCOUNTS AND REMITTANCES 20
Section 6.01 Reports 20
Section 6.02 Books and Records and Access to Books and Records 21
Section 6.03 Disbursing Accounts 22
Section 6.04 Remittances 23
Section 6.05 Audit Rights 23
Section 6.06 Internal Controls Over Financial Reporting 24
Article VII INABILITY TO PERFORM SERVICES; ERRORS 24
Section 7.01 Inability to Perform Services 24
Section 7.02 Errors 25
Article VIII REGULATORY COMPLAINTS AND LEGAL ACTIONS 25
Section 8.01 Routine Complaints 25
Section 8.02 Regulatory Actions 25
Section 8.03 Legal Actions 26
Section 8.04 Cooperation 27
Section 8.05 Reporting 28
Section 8.06 Relationship with Other Agreements 28
Section 8.07 Taxes 28
[REDACTED]
Article X DURATION; TERMINATION 30
Section 10.01 Duration 30
Section 10.02 Termination 30
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Section 10.03 Survival 31
Article XI CUSTOMER INFORMATION 31
Section 11.01 Customer Information 31
Article XII DISASTER RECOVERY 32
Section 12.01 Disaster Recovery 32
Article XIII INDEMNIFICATION 32
Section 13.01 Indemnification by ILA 32
Section 13.02 Indemnification by the Administrator 32
Section 13.03 Notice of Claim; Defense 33
Section 13.04 No Duplication; Exclusive Remedy 35
Section 13.05 Limitation on Set-off 36
Section 13.06 Mitigation 36
Section 13.07 Recovery by Indemnified Party 36
Section 13.08 Relationship with Reinsurance Agreement 36
Article XIV COOPERATION 37
Section 14.01 Cooperation 37
Article XV TRADEMARK LICENSE 37
Section 15.01 Trademark License 37
Article XVI FIDELITY BOND 37
Section 16.01 Fidelity Bond 37
Article XVII TAX MATTERS 37
Section 17.01 Premium Taxes 37
Section 17.02 Tax Information Reporting, Withholding, and Depositing 40
Section 17.03 Sales Taxes 40
Section 17.04 Reinsurer Product Tax Liabilities 40
Section 17.05 Conflicts 41
Article XVIII MISCELLANEOUS 41
Section 18.01 Notices 41
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Section 18.02 Entire Agreement 42
Section 18.03 Dispute Escalation; Governing Law and Jurisdiction 42
Section 18.04 No Third Party Beneficiaries 43
Section 18.05 Expenses 43
Section 18.06 Counterparts 44
Section 18.07 Severability 44
Section 18.08 Waiver of Jury Trial; Multiplied and Punitive Damages 44
Section 18.09 Treatment of Confidential Information 44
Section 18.10 Assignment 45
Section 18.11 Waivers 45
Section 18.12 Relationship 45
Section 18.13 Interpretation 46
Section 18.14 Conflict 46
Section 18.15 Force Majeure 46
SCHEDULES AND EXHIBITS
Schedule I Scheduled Reports
Schedule II Services
Schedule III Information Security Requirements
Schedule IV Investment Accounting
Exhibit A Form of Trademark License Agreement
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This ADMINISTRATIVE SERVICES AGREEMENT (this "Agreement") is made and entered
into on January 2, 2013 by and between HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY, a Connecticut-domiciled life insurance company ("ILA"), and THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey-domiciled life insurance
company (the "Administrator").
RECITALS
WHEREAS, pursuant to that certain Purchase and Sale Agreement, dated September
27, 2012 (the "Purchase Agreement"), by and among Hartford Life, Inc., a
Delaware corporation (the "Seller"), and Prudential Financial, Inc., a New
Jersey corporation (the "Buyer"), and for purposes of Sections 8.4, 8.5 and
14.16 of the Purchase Agreement, The Hartford Financial Services Group, Inc., a
Delaware corporation, Seller and Buyer are required to cause the execution and
delivery of this Agreement in connection with the closing of the transactions
contemplated thereunder;
WHEREAS, pursuant to that certain Reinsurance Agreement, dated the date hereof
(the "Reinsurance Agreement"), between ILA and the Administrator, ILA has agreed
to cede to the Administrator and the Administrator has agreed to assume from
ILA, on a one-hundred percent (100%) indemnity reinsurance basis, on the terms
and conditions set forth in the Reinsurance Agreement, certain liabilities
arising in respect of the Covered Insurance Policies (as hereinafter defined);
WHEREAS, pursuant to the Reinsurance Agreement, the Administrator has purchased
from ILA, and ILA has sold and assigned to the Administrator, all Recoverables
(as hereinafter defined); and
[REDACTED]
WHEREAS, ILA wishes to appoint the Administrator to provide administrative and
other services as specified in this Agreement with respect to the Administered
Business (as hereinafter defined), and the Administrator desires to provide such
administrative and other services in consideration for ILA entering into the
Reinsurance Agreement.
NOW, THEREFORE, in consideration of the mutual and several promises and
undertakings herein contained, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Parties agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Capitalized terms not defined herein and which are
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defined in the Purchase Agreement or Reinsurance Agreement, as applicable, shall
have the meanings ascribed to them in the Purchase Agreement or Reinsurance
Agreement, as applicable. As used herein, the following terms have the
respective meanings set forth in this Section 1.01:
"Accounting Firm" has the meaning set forth in Schedule IV.
"Accounting Period" has the meaning set forth in the Reinsurance Agreement.
"Action" has the meaning set forth in the Purchase Agreement.
"Additional Restrictions" has the meaning set forth in the Investment
Guidelines.
"Administered Business" means the Business of ILA with respect to the Covered
Insurance Policies, the Separate Accounts, the Existing Reinsurance Agreements
and any Reinsured Liabilities. For the avoidance of doubt, the Administered
Business does not include any Discovered Policies unless otherwise agreed to by
the parties.
"Administrator" has the meaning set forth in the preamble.
"Administrator Disbursing Accounts" has the meaning set forth in Section
6.03(a).
"Administrator Indemnified Parties" has the meaning set forth in Section 13.01.
"Affiliate" has the meaning set forth in the Purchase Agreement.
"Agreement" has the meaning set forth in the preamble.
"Ancillary Agreement Covered Contracts" has the meaning set forth in the
Purchase Agreement.
"Ancillary Agreements" has the meaning set forth in the Purchase Agreement.
"Applicable Law" has the meaning set forth in the Purchase Agreement.
"Applicable Privacy Laws" means Applicable Laws relating to privacy, data
protection and the collection and use of an individual's personal information
and user information gathered, accessed, collected or used by ILA or any of its
Affiliates in the course of the operations of the Business, including any
applicable provisions of state insurance privacy laws and state privacy
regulations.
"Authorized Persons" has the meaning set forth in Schedule III.
"Broker Price" has the meaning set forth in Schedule IV.
"Business" has the meaning set forth in the Purchase Agreement.
"Business Day" has the meaning set forth in the Purchase Agreement.
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"Buyer" has the meaning set forth in the recitals.
"Claim Notice" has the meaning set forth in Section 13.03(a).
"Closing" has the meaning set forth in the Purchase Agreement.
"Compliance Program" has the meaning set forth in Schedule II.
"Confidential Information" has the meaning set forth in the Reinsurance
Agreement.
"Contract" has the meaning set forth in the Purchase Agreement.
"Coordinators" means the two (2) individuals, one designated by ILA and the
other designated by the Administrator, who are primarily responsible for
managing performance with respect to this Agreement as described in Section
2.07.
"Covered Insurance Policies" has the meaning set forth in the Reinsurance
Agreement.
"Court Order" has the meaning set forth in the Purchase Agreement.
"Custodial Account" has the meaning set forth in the Reinsurance Agreement.
"Custodial Funds" has the meaning set forth in the Reinsurance Agreement.
"Customer Information" means any financial or personal information about a
policyholder, insured or beneficiary under any Covered Insurance Policy,
including, but not limited to, such policyholder's, insured's or beneficiary's
name, street or mailing address, electronic mail address, telephone or other
contact information, employer, social security or tax identification number,
date of birth, driver's license number, state identification card number,
financial account, credit or debit card number, health and medical information
or photograph or documentation of identity or residency (whether independently
disclosed or contained in any disclosed document) and any other information of
such policyholder, insured or beneficiary deemed "nonpublic" and protected by
any Applicable Privacy Law.
"Data" has the meaning set forth in Schedule III.
"Data Provider" has the meaning set forth in Schedule III.
"Data Recipient" has the meaning set forth in Schedule III.
"Disbursing Accounts" has the meaning set forth in Section 6.03(a).
"Discovered Policies" has the meaning set forth in the Purchase Agreement.
"Distributor" has the meaning set forth in the Purchase Agreement.
"Distribution Intermediaries" has the meaning set forth in the Wholesaling
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Agreement.
"DRP" has the meaning set forth in Section 12.01.
"Effective Time" means the effective time of the Closing under the Purchase
Agreement.
"Eligible Assets" has the meaning set forth in the Reinsurance Agreement.
"Existing Reinsurance Agreements" has the meaning set forth in the Reinsurance
Agreement.
"Filings" means all documents (including electronic media) required to be filed
with the SEC relating to any Separate Account, including, but not limited to,
registration statements, policyholder proxy materials and filings on Form N-6,
Form NSAR and Form 24 F-2 or any successor forms.
[REDACTED]
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[REDACTED]
"GAAP" has the meaning set forth in the Purchase Agreement.
"General Account Liabilities" has the meaning set forth in the Reinsurance
Agreement.
"General Account Reserves" has the meaning set forth in the Reinsurance
Agreement.
"Governmental Body" has the meaning set forth in the Purchase Agreement.
"HESCO" has the meaning set forth in the Purchase Agreement.
"HFIC" means Hartford Fire Insurance Company.
"ILA" has the meaning set forth in the preamble.
"ILA Indemnified Parties" has the meaning set forth in Section 13.02.
"ILA NAV Reports" has the meaning set forth in Schedule IV.
"ILA Services" has the meaning set forth in Section 2.03.
"Indemnified Party" has the meaning set forth in Section 13.03(a).
"Indemnifying Party" has the meaning set forth in Section 13.03(a).
"Information Security Requirements" has the meaning set forth in Schedule III.
"Information Security Safeguards" has the meaning set forth in Schedule III.
"Investment Company Act" means the Investment Company Act of 1940, as amended.
"Investment Guidelines" has the meaning set forth in the Investment Management
Agreement.
"Investment Management Agreement" means that certain Investment Management
Agreement dated as of the date hereof by and between ILA and Prudential
Investment Management, Inc. (the "Investment Manager"), [REDACTED]
"Investment Manager" has the meaning set forth in the definition of Investment
Management Agreement.
[REDACTED]
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[REDACTED]
"Legal Action" has the meaning set forth in Section 8.03(a).
"Losses" has the meaning set forth in the Purchase Agreement.
"Material Breach" has the meaning set forth in Section 7.01(b).
"Material Threshold Variance" has the meaning set forth in Schedule IV.
"Modco Assets" has the meaning set forth in Section 4.11(a).
"New Business Period" has the meaning set forth in Section 3.01(a).
"New Insurance Policies" means any and all binders, endorsements, riders,
policies, certificates and contracts of individual life insurance, and
supplementary contracts of individual life insurance (including retained asset
accounts and all other settlement options) issued, renewed, reinsured or assumed
by ILA following the Closing Date in accordance with Article III of this
Agreement.
"Non-Guaranteed Elements" has the meaning set forth in the Reinsurance
Agreement.
"Non-Guaranteed Elements Policy" means the policy of the Administrator (in its
capacity as the "Reinsurer" under the Reinsurance Agreement) as in effect from
time to time with respect to the Non-Guaranteed Elements relating to the Covered
Insurance Policies.
"Party" means each of ILA and the Administrator.
"Person" has the meaning set forth in the Purchase Agreement.
"Portfolio" has the meaning set forth in the Investment Management Agreement.
"Premium Taxes" shall mean any Taxes that constitute General Account Liabilities
as provided for in the Reinsurance Agreement.
"Premiums" has the meaning set forth in the Reinsurance Agreement.
"Product Tax IT" has the meaning set forth in the Purchase Agreement.
"Private Securities Material Threshold Variance" has the meaning set forth in
Schedule IV.
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"Public Securities Material Threshold Variance" has the meaning set forth in
Schedule IV.
"Purchase Agreement" has the meaning set forth in the recitals.
"Purchase Agreement Amendment" means that certain Amendment to the Purchase
Agreement by and among Buyer, Seller and The Hartford Financial Services Group,
Inc. dated as of the date hereof.
"Recapture Triggering Event" has the meaning set forth in the Reinsurance
Agreement.
"Recoverables" has the meaning set forth in the Reinsurance Agreement.
"Regulatory Action" has the meaning set forth in Section 8.02.
"Reinsurance Agreement" has the meaning set forth in the recitals.
"Reinsured Liabilities" has the meaning set forth in the Reinsurance Agreement.
"Reinsured Portfolio" has the meaning set forth in Section 4.10(a).
"Reinsurance Recoverables" has the meaning set forth in the Reinsurance
Agreement.
"Reinsurer Existing Reinsurance Agreements" has the meaning set forth in the
Reinsurance Agreement.
"Reinsurer Extra-Contractual Obligations" has the meaning set forth in the
Reinsurance Agreement.
"Reinsurer Product Tax Liabilities" has the meaning set forth in Section 17.04.
"Representative" has the meaning set forth in the Purchase Agreement.
"Required Balance" has the meaning set forth in the Reinsurance Agreement.
"Retained Portfolio" has the meaning set forth Section 4.10(b).
"Routine Complaints" has the meaning set forth in Section 8.01.
"SAP" has the meaning set forth in the Reinsurance Agreement.
"Schedule T" shall mean Schedule T, Premiums and Other Considerations, of the
NAIC Annual Statement or any successor schedule.
"SEC" means the United States Securities and Exchange Commission.
"Security Incident" has the meaning set forth in Schedule III.
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"Seller" has the meaning set forth in the recitals.
"Specified Action" has the meaning set forth in the Purchase Agreement.
"Separate Accounts" has the meaning set forth in the Reinsurance Agreement.
"Separate Account Reserves" has the meaning set forth in the Reinsurance
Agreement.
"Services" has the meaning set forth in Section 2.01.
"Settlement Statement" has the meaning set forth in the Reinsurance Agreement.
"Statutory Book Value" has the meaning set forth in the Reinsurance Agreement.
"Subcontractor" has the meaning set forth in Section 4.03.
"Taxes" has the meaning set forth in the Purchase Agreement.
"Tax Returns" has the meaning set forth in the Purchase Agreement.
"Terminal Settlement Statement" has the meaning set forth in the Reinsurance
Agreement.
"Third-Party Claim" has the meaning set forth in Section 13.03(a).
[REDACTED]
"Trademark License Agreement" has the meaning set forth in Section 15.01.
"Transaction Agreements" means the Purchase Agreement and each of the Ancillary
Agreements other than this Agreement.
"Transferred Contract" has the meaning set forth in the Purchase Agreement.
"Transferred Disbursing Accounts" has the meaning set forth in Section 6.03(a).
"Transition Services Agreement" has the meaning set forth in the Purchase
Agreement.
"Treasury Regulations" has the meaning set forth in the Reinsurance Agreement.
"Triggering Event" has the meaning set forth in the Reinsurance Agreement.
"Underlying Companies" means the insurance companies that have ceded any
liabilities or obligations under Covered Insurance Policies to ILA pursuant to
any Underlying Reinsurance Agreement.
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"Underlying Reinsurance Agreements" has the meaning set forth in the Reinsurance
Agreement.
[REDACTED]
"Virus" means any computer code (a) designed to disrupt, disable, harm, or
otherwise impede in any manner, including aesthetical disruptions or
distortions, the operation thereof, of any other associated software, firmware,
hardware, computer system or network (sometimes referred to as "viruses" or
"worms"), (b) that would disable or impair in any way the operation thereof
based on the elapsing of a period of time, the exceeding of an authorized number
of users or copies, or the advancement to a particular date or other numeral
(sometimes referred to as "time bombs", "time locks", or "drop dead" devices),
or (c) that would permit access by the Administrator or any third party to cause
such disablement or impairment (sometimes referred to as "traps", "access codes"
or "trap door" devices), or any other similar harmful, malicious or hidden
procedures, routines or mechanisms that would cause the Services, systems or
software to malfunction or to damage or corrupt data, storage media, programs,
equipment or communications, or otherwise interfere with operations.
"Wholesaling Agreement" means that certain Wholesaling Agreement dated as of the
date hereof by and among HESCO, Hartford Securities Distribution Company, Inc.,
HLIC, ILA, Hartford Life and Accident Insurance Company, Pruco Securities, LLC
and Prudential Insurance Agency, LLC.
ARTICLE II
APPOINTMENT; NOTIFICATION OF INTERESTED PARTIES
Section 2.01 Appointment. On the terms and subject to the limitations and
conditions set forth herein, ILA hereby appoints the Administrator as of the
Effective Time as its agent to provide, as an independent contractor of ILA, all
required, necessary and appropriate administrative and other services, including
the services set forth in Section 4.01 and Schedule II, with respect to the
Administered Business (other than those services to be provided by HFIC and its
Affiliates pursuant to the terms of the Transition Services Agreement for so
long as such services are required to be provided by HFIC and its Affiliates
under the Transition Services Agreement and the ILA Services) (collectively, the
"Services"), and the Administrator hereby accepts such appointment and shall
perform such Services at and following the Effective Time on behalf of and in
the name of ILA. At all times during the term of this Agreement, the
Administrator shall hold and maintain any and all licenses, permits and
authorizations required in any state in the United States and in Guam and Puerto
Rico to perform its duties and obligations under this Agreement on behalf of
ILA. For purposes of this Agreement, the intention of the Parties is that the
Administrator shall perform all Services in such a manner as to minimize the
involvement of ILA and its Affiliates, subject to (a) Section 2.02 below and (b)
Section 2.03 below. Except for the ILA Services, as between ILA and the
Administrator, neither ILA nor any of its Affiliates shall be obligated to
provide any services under this Agreement relating to the Administered Business.
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Section 2.02 Provision of Services Subject to the Transition Services
Agreement. The Parties hereby agree that to the extent any Service is provided
by ILA or its Affiliate pursuant to the Transition Services Agreement, the
Administrator shall have no obligation to provide such Service pursuant hereto
until ILA's or its Affiliate's obligation to provide such Service pursuant to
the Transition Services Agreement has terminated in accordance with the terms of
such agreement. If Administrator relies on a service that is provided by ILA or
its Affiliate pursuant to the Transition Services Agreement to provide a Service
hereunder, Administrator shall have no obligation to provide such Service, or
have any liability in connection with the provision of that Service, to the
extent ILA or its Affiliate has failed to provide a required service under the
Transition Services Agreement.
Section 2.03 ILA Services. The Parties hereby agree that, notwithstanding
anything herein to the contrary, ILA shall, for the term of this Agreement,
continue to take those actions (i) that ILA is required by Applicable Law to
take without the Administrator or any other third party acting on its behalf, if
any, but only to the extent such actions are to be taken from and after the
Effective Time and are necessary or appropriate with respect to the Administered
Business and (ii) that do not exclusively relate to the Administered Business
and are performed on the entity level, including with respect to accounting
reports, tax returns, guaranty fund reports, actuarial reports and other reports
and certifications, in each instance, if and to the extent relevant, based on
information and statements provided by the Administrator as contemplated therein
(collectively with the actions that are identified to be taken by ILA set forth
in Section 4.11(a) through (f), the "ILA Services"), in each case, in accordance
with Applicable Law, and that the Administrator shall have no obligation to
provide such services; provided, that the Administrator shall be obligated to
provide Services to ILA that the Administrator is permitted to take under
Applicable Law to allow ILA to perform the ILA Services; provided, further; that
all reasonable and necessary out-of-pocket costs and expenses incurred by ILA in
connection with any ILA Services that exclusively relate to the Administered
Business shall be paid or reimbursed by the Administrator. To the extent either
Party becomes aware of any ILA Services, such Party shall give the other Party
notice of such ILA Services, and the Parties shall reasonably cooperate in
performing such ILA Services.
Section 2.04 Power of Attorney. Subject to the terms and conditions herein and
in Section 12.2(c) of the Purchase Agreement, ILA hereby appoints and names the
Administrator, acting through its authorized officers and employees, as ILA's
lawful attorney-in-fact, from and after the Effective Time for so long as the
Administrator is authorized to perform the Services and solely to the extent
necessary to provide the Services (all on terms and subject to the limitations
set forth herein), (a) to do any and all lawful acts that ILA might have done
with respect to the Administered Business, and (b) to proceed by all lawful
means (i) to perform any and all of ILA's obligations with respect to the
Administered Business, (ii) to enforce any right and defend (in the name of ILA,
when necessary) against any liability arising with respect to the Administered
Business, (iii) to sue or defend (in the name of ILA, when necessary) any Action
arising from or relating to the Administered Business, (iv) to sign (in ILA's
name, when necessary) vouchers, receipts, releases and other papers in
connection with any of the foregoing matters, (v) to take actions necessary, as
may be reasonably determined, to maintain the Administered Business in
compliance with Applicable Law, (vi) to sign any and all documents necessary to
carry out its obligations under this Agreement in accordance with the terms and
conditions of this Agreement, including without limitation, Section 4.07(a), and
(vii) to do
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everything lawful in connection with the satisfaction of the Administrator's
obligations and the exercise of its rights under this Agreement. ILA shall
execute such powers of attorney and other documents as may be required or are
reasonably necessary or appropriate in furtherance of the foregoing. For the
avoidance of doubt, the powers of attorney set forth in this Section 2.04 shall
not apply to any Intellectual Property Rights held by ILA or its Affiliates,
except as expressly set forth in the Ancillary Agreements (excluding this
Agreement).
Section 2.05 Notification of Interested Parties. The Administrator shall send
to (a) the policyholders of the Covered Insurance Policies and (b) any
applicable service providers, reinsurers, Underlying Companies, custodians,
Distributors, mutual fund organizations or other counterparties, in each case of
(a) and (b), to the extent required by Applicable Law or any Transferred
Contract or Ancillary Agreement Covered Contract, a written notice prepared by
the Administrator and reasonably acceptable to ILA, advising that the
Administrator has been appointed by ILA to provide the Services. Such notices
shall be sent to such Persons' last known address of record as furnished by ILA
to the Administrator. ILA shall cooperate in the preparation and mailing of any
such required notices, including by providing the names and addresses of the
relevant Persons to whom such notices are to be sent in an agreed upon
electronic format. The Administrator may include such notice in a regularly
scheduled mailing to such Persons in lieu of a separate mailing.
Section 2.06 Ongoing Communications.
The Administrator shall comply with the terms of the Trademark License Agreement
and all Applicable Laws with respect to the use of ILA's name in communications
with policyholders, insureds and beneficiaries of the Covered Insurance
Policies. ILA shall cooperate with the Administrator in connection therewith,
including by providing sample forms (both hard copies and electronic copies) of
the ILA stationary used in communications with policyholders, insureds and
beneficiaries of the Covered Insurance Policies and the Administrator's use of
trademarks on the stationary will be governed by the terms of the Trademark
License Agreement.
Section 2.07 Coordinators. ILA and the Administrator shall each appoint a
Coordinator, each of whom will serve as the primary contact point for their
respective Party with respect to issues that may arise out of the performance of
this Agreement. ILA and the Administrator may replace their respective
Coordinator by giving notice pursuant to Section 18.01 to the other Party
stating the name, title and contact information for the new Coordinator. The
Parties shall cause the Coordinators to meet, either in person or
telephonically, at least once quarterly, or more frequently if mutually agreed
upon, to discuss the status of the Services, and to manage open issues related
to this Agreement and performance hereunder. In addition, either Coordinator may
call a meeting with the other Coordinator upon five (5) Business Days' prior
written notice to address any time critical (in the reasonable judgment of the
requesting Coordinator) issues related to the Services.
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ARTICLE III
NEW INSURANCE POLICIES
Section 3.01 New Insurance Policies.
(a) Subject to Section 3.02 and 3.03, ILA hereby authorizes and grants the
Administrator the authority, [REDACTED] to (x) new insurance policies to be
issued or reinsured pursuant to contractual commitments or exchanges under
certain insurance contracts of ILA, such as term conversions, additional
coverage options, and other conversion rights written by ILA or its Affiliates
with respect to the Business or (y) as required to replace or remediate Covered
Insurance Policies in order to comply with Applicable Law or to terms of such
policies or as required to resolve or remediate a complaint, lawsuit or
regulatory matter involving a Covered Insurance Policy (such period, the "New
Business Period"), to quote, market, sell, underwrite, issue, renew, reinsure or
assume in the name of ILA, binders, endorsements, riders, policies, certificates
and contracts of individual life insurance, and supplementary contracts of
individual life insurance (including retained asset accounts and all other
settlement options). [REDACTED] In no event shall the authority granted
hereunder be deemed to authorize the Administrator to quote, market, sell,
underwrite, issue, renew, reinsure or assume any insurance policies in
jurisdictions where ILA does not hold the required licenses therefore.
(b) Subject to Sections 3.01(a)(ii) and 3.01(a)(iii), the Administrator shall
have the sole and exclusive right to make decisions with respect to the
issuance, renewal, non-renewal, reinsurance, cancellation or termination of the
Covered Insurance Policies, subject to compliance with Applicable Law and the
terms and conditions set forth in the applicable Covered Insurance Policies, the
Reinsurance Agreement and this Agreement. [REDACTED]
(c) Subject to the Reinsurance Agreement and in accordance with the terms
thereof, all New Insurance Policies shall be automatically ceded (effective
immediately upon issuance thereof) by ILA to the Administrator (in its capacity
as "Reinsurer" under the Reinsurance Agreement), and reinsured by the
Administrator (in its capacity as "Reinsurer" under the Reinsurance Agreement)
from ILA, on a one hundred percent (100%) indemnity reinsurance basis in
accordance with the terms of the Reinsurance Agreement.
(d) All costs and expenses associated with the quotation, marketing, sale,
underwriting, issuance, renewal and reinsurance of New Insurance Policies,
including surcharges and assessments imposed on the basis of Premiums or
otherwise with respect to the New Insurance Policies, shall be borne by the
Administrator.
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Section 3.02 Guidelines. Any and all New Insurance Policies shall be (a)
quoted, marketed, sold, underwritten, issued, renewed and reinsured in
accordance with standards, guidelines, procedures and practices consistent with
those utilized by the Administrator in its business and in accordance with (i)
the Existing Reinsurance Agreements, (ii) Applicable Law and (iii) in the case
of conversions, the Contract and related practices giving rise to the conversion
right and (b) written on policy forms and using the rating plans in effect for
ILA for such type of business at the Effective Time, except for, in the case of
both (a) and (b), changes required by Applicable Law or changes that have been
approved in advance and in writing by ILA, such approval not to be unreasonably
withheld, delayed or conditioned.
Section 3.03 Termination of Authority. The authority granted to the
Administrator under Sections 3.01(a) and (b) may be terminated by ILA upon
written notice to the Administrator: (i) in the event that the Administrator
assigns or delegates its underwriting authority with respect to such New
Insurance Policies to be issued pursuant to sub-clause (i) of Section 3.01 to
any Person without the prior written consent of ILA (which consent may be
withheld in ILA's sole discretion), (ii) upon termination of the Reinsurance
Agreement or the inability of the Administrator under the Reinsurance Agreement,
to reinsure New Insurance Policies under the Reinsurance Agreement, (iii) in the
event that the Administrator becomes insolvent or is placed into liquidation,
rehabilitation, conservation, supervision, receivership or similar proceedings
(whether voluntary or involuntary), or there is instituted against the
Administrator proceedings for the appointment of a receiver, liquidator,
rehabilitator, conservator or trustee in bankruptcy, or other agent known by
whatever name, to take possession of its assets or assume control of its
operations, or (iv) if a Recapture Triggering Event has occurred under the
Reinsurance Agreement and the business reinsured thereunder is recaptured by ILA
under the Reinsurance Agreement pursuant to its terms.
Section 3.04 ILA Licenses; Certain Actions. ILA shall, until and including the
last calendar day of the New Business Period:
(a) hold and maintain all material licenses, permits and authorizations
required under Applicable Law to issue New Insurance Policies during the New
Business Period in accordance with Section 3.01; provided, that notwithstanding
the foregoing, in no event shall ILA be required to maintain any given license,
permit or authorization to the extent that there is a change in Applicable Law
or issuance of a binding order from a Governmental Body that prohibits ILA from
maintaining such license, permit or authorization; and
(b) take no action within ILA's actual control and without the Administrator's
consent (which consent shall not be unreasonably withheld, delayed or
conditioned) that would adversely affect in any material respect the ability of
the Administrator to quote, market, sell, issue, renew or reinsure New Insurance
Policies during the New Business Period in accordance with the terms and
conditions of Section 3.01; provided, that this Section 3.04(b) shall in no
event be construed to require ILA to maintain any insurance financial strength
or similar rating.
Section 3.05 Marketing Activities.
(a) Subject to the terms and conditions set forth in the Trademark
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License Agreement and the Wholesaling Agreement, the Administrator may develop
and use new marketing and sales materials for the New Insurance Policies in
accordance with Applicable Law. To the extent not otherwise provided to ILA
pursuant to the Trademark License Agreement or the Wholesaling Agreement, the
Administrator shall provide ILA with copies of all such materials prior to use
for ILA's prompt review. Administrator shall not use such new marketing and
sales material until ILA provides Administrator written approval (such approval
not to be unreasonably withheld or delayed).
(b) The Administrator shall have responsibility for, and shall bear all costs,
expenses and liabilities associated with, all activities relating to the
marketing and sale of the New Insurance Policies by the Administrator, in the
name of ILA, including, without limitation, developing, printing and
distributing marketing materials, and training agents and other Distributors.
ARTICLE IV
SERVICES PROVIDED BY ADMINISTRATOR
Section 4.01 Services. During the term of this Agreement and except as
otherwise provided in the Transition Services Agreement or in Sections 2.02 and
2.03, the Services to be provided by the Administrator hereunder shall include
all services that are required, necessary or appropriate for the administration,
handling and performance of the Administered Business and any other
administrative services (including reporting services) that are reasonably
required, necessary or appropriate under Applicable Law, the terms of the
Covered Insurance Policies, the Separate Accounts, the Existing Reinsurance
Agreements [REDACTED] or otherwise in connection with, or incidental to, the
administration of the Administered Business. Without limiting the generality of
the foregoing, the Services to be provided by the Administrator hereunder shall
include the Services set forth on Schedule II hereto.
Section 4.02 Standards and Licenses.
(a) The Administrator acknowledges that the performance of the Services in an
accurate and timely manner is of paramount importance to ILA. Administrator
shall provide each of the Services: (i) with the same priority it accords its
own operations, (ii) in substantially the same manner and using at least the
same standard of care and degree of efficiency and quality that Seller, its
Affiliates and their subcontractors used during the twelve (12)-month period
immediately prior to the Effective Time in performing such Services or similar
services (to the extent such Services were provided by Seller prior to the
Effective Time) for the Business and (iii) in compliance with (A) Applicable
Law, (B) the Covered Insurance Policies [REDACTED] ILA understands and agrees
that Administrator is not in the business of providing Services to third
parties, and under no circumstances shall Administrator be held accountable to a
higher standard of care than that set forth herein.
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(b) For the duration of this Agreement, the Administrator hereby covenants that
it shall, at its sole cost and expense, as an independent contractor:
(i) subject to the Administrator's right to delegate or subcontract its
responsibility to perform any portion of the Services, in accordance with
and subject to the terms hereof, employ and retain staff with the requisite
experience, skill and expertise to perform the Services it is obligated to
perform hereunder, in a manner consistent with the standards set forth in
Section 4.02(a) and using the Administrator's facilities, systems and
equipment; and
(ii) own, hold, possess and maintain all licenses, franchises, permits,
privileges, immunities, approvals and other authorizations from any
Governmental Body in any state in the United States and in Puerto Rico and
Guam that are necessary for the provision by the Administrator of the
Services.
(c) The Administrator shall not be liable to ILA for any acts, errors or
omissions in performing the Services to the extent such acts, errors or
omissions were directed by ILA in writing or caused by any act or omission of
ILA or any of its Affiliates or resulted from a breach of any of the Transaction
Agreements by ILA or any of its Affiliates.
Section 4.03 Subcontracting. The Administrator may delegate or subcontract the
performance of any Service (or any portion thereof) to another Person (the
"Subcontractor"); provided, that the Administrator shall provide ILA with
reasonable advance written notice of its intention to delegate or subcontract to
an unaffiliated third party any Service or portion thereof; provided, further,
that no such subcontracting or delegation shall relieve the Administrator from
any of its obligations or liabilities hereunder, and the Administrator shall
remain responsible for all obligations or liabilities of such Subcontractor with
respect to the provision of such Service or Services as if provided by the
Administrator. ILA shall cooperate in good faith with the Administrator's
efforts to, and take all actions reasonably requested by the Administrator to,
delegate or subcontract the performance of any Service or portion thereof to any
Subcontractor. The Administrator shall reimburse ILA for any reasonable and
necessary out-of-pocket costs associated with such cooperation.
Section 4.04 Recommendations. The Administrator may recommend to ILA amendments
to the products, benefits, forms, rating plans and prospectuses in use for the
Covered Insurance Policies, including the New Insurance Policies. With ILA's
prior consent, which may not be unreasonably withheld, the Administrator may
make such amendments on behalf of ILA.
Section 4.05 Decision Authority.
(a) Notwithstanding any other provision of this Agreement to the contrary, ILA
shall have the right to direct the Administrator to perform any action necessary
with respect to the Administered Business or the administration thereof to
comply with Applicable Law, or to cease performing any action that constitutes a
violation of Applicable Law to the extent such action, inaction or
administration is within the control of the Administrator, in each case, taking
into account the recommendations of the Administrator provided to ILA
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hereunder, which ILA shall only reject in good faith and in light of the intent
of the parties to, and the stated purposes of, the Purchase Agreement, the
Ancillary Agreements and this Agreement. The Administrator shall have the right
to request ILA to perform any action necessary for the Covered Insurance
Policies, the Separate Accounts, and Existing Reinsurance Agreements or the
administration thereof to comply with Applicable Law, or to cease performing any
action that constitutes a violation of Applicable Law and ILA shall use
commercially reasonable efforts to comply with such request.
(b) In the event of any dispute as to whether or not an action is required or
should be suspended in order to comply with Applicable Law, such dispute shall
be referred to the Coordinators, pursuant to Section 18.03.
Section 4.06 Non-Guaranteed Elements. ILA shall set all Non-Guaranteed Elements
under the Covered Insurance Policies from and after the Effective Time, taking
into account the recommendations of the Administrator, which ILA shall only
reject in good faith and on a reasonable basis that such recommendations fail to
comport with Applicable Law, applicable Actuarial Standards of Practice or the
terms of any Covered Insurance Policy. ILA shall convey to the Underlying
Companies under the Underlying Reinsurance Agreements the recommendations of the
Administrator with respect to Non-Guaranteed Elements as if such recommendations
were the ILA's own. In connection with any recommendation by the Administrator
with respect to any Non-Guaranteed Elements under this Section, the
Administrator shall provide ILA a copy of its Non-Guaranteed Elements Policy in
effect as of the Closing Date and from time to time thereafter upon a change or
amendment to the Non-Guaranteed Elements Policy.
Section 4.07 Additional Covenants of ILA.
[REDACTED]
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[REDACTED]
(b) The Administrator may make recommendations to ILA as to fund options for
the Separate Accounts and ILA shall not unreasonably reject or delay such
recommendations. If the Administrator makes a change in the Covered Insurance
Policies or the Separate Accounts in connection with the change of a fund option
as permitted above, the Administrator shall, at its own expense, prepare for
signature by ILA and transmit on behalf of ILA to the appropriate Governmental
Body any SEC exemptive application, no-action letter or other regulatory filing
necessary to reflect or implement such change.
(c) ILA shall take all actions necessary to execute amendments to the Ancillary
Agreement Covered Contracts, prepared from time to time by the Administrator to
conform such Ancillary Agreement Covered Contracts to the extent required by any
changes in Applicable Law.
(d) ILA shall take all actions necessary to execute agreements to facilitate
trading via National Securities Clearing Corporation (NSCC) with respect to the
Administered Business.
[REDACTED]
Section 4.08 Certain Actions with Respect to Recoverables. The Administrator
shall (i) deposit in the applicable Separate Account any Recoverables
attributable to such Separate Account to the extent required to be deposited
therein by such Covered Insurance Policy and (ii) on behalf of ILA, pay out of
the applicable Separate Account any amounts to be paid out of such Separate
Account in accordance with the terms of the applicable Covered Insurance Policy.
If any Recoverables attributable to a Separate Account are received by ILA, such
amounts shall be paid to the Administrator for deposit into such Separate
Account.
Section 4.09 Product Filings. The Administrator shall have the exclusive
authority to make filings with respect to the Covered Insurance Policies with
applicable Governmental Bodies, in the name of and on behalf of ILA, to apply
for amendments to any policy form or any other document related to the Covered
Insurance Policies, including, without limitation, any application, sales
illustration related to new business, marketing material, endorsement or rider;
provided that the Administrator shall deliver to ILA copies of any filings it
makes with Governmental Bodies relating to the Covered Insurance Policies prior
to or contemporaneously with making such filings. ILA shall use commercially
reasonable efforts to assist the Administrator in seeking approval of any filing
made pursuant to this Section 4.09.
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The Administrator shall reimburse ILA for any reasonable and necessary
out-of-pocket costs associated with such assistance.
[REDACTED]
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[REDACTED]
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[REDACTED]
ARTICLE V
FEES FOR SERVICES
Section 5.01 Fees for Services. Except as otherwise provided for in this
Agreement, the Administrator shall provide Services with respect to the
Administered Business pursuant to this Agreement at its sole cost and expense
(including payment of all necessary fees to any third parties) in consideration
for the promises made by ILA and its Affiliates under this Agreement and the
Transaction Agreements, and shall not receive any separate fee from ILA for the
provision of the Services.
ARTICLE VI
CERTAIN REPORTS; BOOKS AND RECORDS;
BANK ACCOUNTS AND REMITTANCES
Section 6.01 Reports.
[REDACTED]
(b) As of and following the Effective Time, the Administrator shall prepare and
furnish the reports identified in Schedule I (the "Scheduled Reports") on the
dates set forth on Schedule I (or such later dates as mutually agreed upon by
the parties).
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(c) To the extent additional reports are requested by ILA under this Agreement,
the Administrator shall provide such reports in a form and manner as is
reasonably requested by ILA; provided, that ILA shall reimburse the
Administrator for the reasonable costs and expenses incurred by the
Administrator in the preparation of such reports.
(d) The Parties acknowledge and agree that changes in Applicable Law may make
delivery of Scheduled Reports and other reports on the timeframes contemplated
herein and in the Schedules hereto impracticable. In such case, the Parties
shall cooperate in good faith to revise such deadlines.
Section 6.02 Books and Records and Access to Books and Records.
(a) As of and following the Effective Time, to the extent not otherwise
maintained by the Administrator under the Reinsurance Agreement and except as
provided under the Transition Services Agreement, the Administrator shall assume
responsibility for maintaining accurate and complete books and records of all
transactions pertaining to the Administered Business and all data used by the
Administrator in the performance of Services required under this Agreement,
including claims filed in respect of the Covered Insurance Policies and any
documents relating thereto, any communications with any Governmental Body,
complaint logs, billing and collection files, files containing actuarial data
and all other data used by the Administrator in performance of the Services. All
such books and records shall be maintained by the Administrator (i) in
accordance with any and all Applicable Laws, (ii) in accordance with the
Administrator's record retention procedures and policies and (iii) in a format
accessible by ILA and its Representatives.
(b) During the term of this Agreement, upon any reasonable request from ILA or
its Representatives, the Administrator shall (i) provide to ILA and its
Representatives reasonable access during normal business hours to the books and
records (including any such materials developed after the Effective Time by a
Party hereto or its Affiliates) under the control of the Administrator
pertaining to the Administered Business and the Services to be provided under
this Agreement and the reinsurance to be provided under the Reinsurance
Agreement; provided that such access shall not unreasonably interfere with the
conduct of the business of the Administrator, and (ii) permit ILA and its
Representatives to make copies of such records, in each case, at no cost to ILA
(other than for reasonable out-of-pocket expenses). Nothing herein shall require
the Administrator to disclose any information to ILA or its Representatives if
such disclosure would jeopardize any attorney-client privilege, the work product
immunity or any other legal privilege or similar doctrine or contravene any
Applicable Law or any Contract (including any confidentiality agreement to which
the Administrator or any of its Affiliates is a party) (it being understood that
the Administrator shall use commercially reasonable efforts to obtain waivers or
make other arrangements (including redacting information or entering into joint
defense agreements) that would enable otherwise required disclosure to ILA or
its Representatives to occur without so jeopardizing privilege or contravening
such Applicable Law, Court Order or Contract, or require the Administrator to
disclose its tax records or tax returns of the Administrator or any of its
Affiliates or any personnel or related records.
(c) During the term of this Agreement, upon any reasonable request
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from the Administrator or its Representatives, ILA shall (i) provide to the
Administrator and its Representatives reasonable access during normal business
hours to the books and records (including any such materials developed after the
Effective Time by a Party hereto or its Affiliates) under the control of ILA or
any of its Affiliates pertaining to the Administered Business and the Services
to be provided under this Agreement and the reinsurance to be provided under the
Reinsurance Agreement (including the books and records of HESCO); provided that
such access shall not unreasonably interfere with the conduct of the business of
ILA, and (ii) permit the Administrator and its Representatives to make copies of
such records, in each case, at no cost to the Administrator (other than for
reasonable out-of-pocket expenses). Nothing herein shall require ILA to disclose
any information to the Administrator or its Representatives if such disclosure
would jeopardize any attorney-client privilege, the work product immunity or any
other legal privilege or similar doctrine or contravene any Applicable Law or
any Contract (including any confidentiality agreement to which ILA or any of its
Affiliates is a party) (it being understood that ILA shall use commercially
reasonable efforts to obtain waivers or make other arrangements (including
redacting information or entering into joint defense or common interest
agreements) that would enable otherwise required disclosure to the Administrator
or its Representatives to occur without so jeopardizing privilege or
contravening such Applicable Law, Court Order or Contract) or require ILA to
disclose its tax records (except as otherwise provided under the Purchase
Agreement or Article XVII of this Agreement) or any personnel or related
records.
(d) The Parties shall maintain facilities and procedures that are in accordance
with Applicable Law and commercially reasonable standards of insurance
recordkeeping for safekeeping the books and records maintained by the applicable
Party or its Affiliates that pertain to the Administered Business.
(e) The Administrator shall cooperate with any Governmental Body having
jurisdiction over ILA in providing access to the books and records referenced in
this Section 6.02.
Section 6.03 Disbursing Accounts.
(a) During the term of this Agreement, the Administrator shall maintain one or
more accounts (which may be zero balance accounts) in the name of the
Administrator with banking institutions as necessary to allow the Administrator
to make or direct all payments required to be made or directed by the
Administrator on behalf of ILA with respect to the Administered Business (the
"Administrator Disbursing Accounts"); provided, that the Parties acknowledge and
agree that disbursement accounts maintained by ILA may be used on a transitional
basis until relevant functions are migrated to the Administrator Disbursing
Accounts. If requested by the Administrator, ILA, in its sole discretion, shall
assign and transfer to the Administrator, and the Administrator shall accept and
acquire, one or more additional accounts held in the name of ILA with banking
institutions and related to the Administered Business (the "Transferred
Disbursing Accounts" and, collectively with the Administrator Disbursing
Accounts, the "Disbursing Accounts"). The Disbursing Accounts shall be used for
all disbursements provided for in connection with the Services, including but
not limited to benefit payments, insurance contract surrenders, annuity payments
and other benefits under Covered Insurance Policies. Until the occurrence of a
Triggering Event or Recapture Triggering Event,
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the Administrator shall, as needed, deposit in the Disbursing Accounts funds
sufficient to cover checks drawn on the Disbursing Accounts by the Administrator
with respect to the Administered Business from time to time. The Administrator
shall be solely responsible for all fees, costs and expenses of the Disbursing
Accounts, and in no event shall ILA have any obligation to provide funding for
the Disbursing Accounts with respect to the Administered Business or be
responsible for any fees, costs or expenses associated therewith. Checks drawn
on the Disbursing Accounts in connection with the Services shall show the
Administrator, acting on behalf of ILA.
(b) Unless prohibited by Applicable Law and excluding any payments in progress
to policyholders or beneficiaries, upon the occurrence of, and during the
continuance of, a Triggering Event or a Recapture Triggering Event, the
Administrator, immediately upon becoming aware of such Triggering Event or
Recapture Triggering Event, shall, in accordance with the terms of the
Reinsurance Agreement, (i) transfer all Custodial Funds previously deposited or
held in the Disbursing Accounts from the Disbursing Accounts into the Custodial
Account, (ii) deposit all Custodial Funds directly into the Custodial Account as
set forth in Section 4.9(b) of the Reinsurance Agreement and (iii) to the extent
permitted pursuant to the Reinsurance Agreement, apply such Custodial Funds as
set forth in Section 4.9(c) of the Reinsurance Agreement.
(c) ILA shall cooperate with the establishment and maintenance of the
Disbursing Accounts (including the assignment and transfer of the Transferred
Disbursing Accounts).
Section 6.04 Remittances. If ILA or the Administrator or any of their
respective Affiliates receives any remittance or other payment that it is not
entitled to under the terms of this Agreement, the Reinsurance Agreement or any
other Transaction Agreement, ILA, the Administrator or such Affiliate shall hold
such remittance or other payment in trust for the benefit of ILA, the
Administrator or the applicable Separate Account, as the case may be. Upon
becoming aware that another Party is entitled to such remittance or other
payment, ILA or the Administrator shall endorse any such remittance to the order
of ILA, the Administrator or the applicable Separate Account, as the case may
be, and promptly transfer such remittance or other payment to ILA, the
Administrator or to the applicable Separate Account, as the case may be.
Section 6.05 Audit Rights.
(a) During the term of this Agreement and continuing for one (1) year after the
termination of this Agreement, the Administrator shall permit ILA to review the
Administrator's compliance with its obligations under this Agreement, not more
than once annually and on no less than thirty (30) calendar days' notice (except
as set forth below) during normal business hours. Such audits shall be conducted
by personnel of ILA or its Affiliates or by an independent auditor selected by
ILA. The Administrator shall accommodate such audits and shall provide each
auditor access to pertinent books and records during normal business hours upon
reasonable advance notice. ILA shall bear the expenses of any such audits.
(b) Upon the written request of ILA and if specifically available solely
related to the Services, the Administrator shall provide to ILA a copy of its
SSAE 16 Type II report (or any successor or other substantially similar report).
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Section 6.06 Internal Controls Over Financial Reporting. Each Party shall
provide the other with reasonable access to its personnel, books and records,
and such other certifications and information as the other Party may reasonably
deem necessary to enable its designated officers to evaluate the effectiveness
of the disclosing party's internal control over financial reporting, as defined
in Exchange Act Rules 13a-15(f) and 15(d)-15(f) and Subsection I of Section 3 of
the NAIC Annual Financial Reporting Model Regulation ("Internal Control Over
Financial Reporting") with respect to the Administered Business (including with
respect to any financial information provided by the disclosing Party to the
other Party under this Agreement or any other Ancillary Agreement).
ARTICLE VII
INABILITY TO PERFORM SERVICES; ERRORS
Section 7.01 Inability to Perform Services.
(a) In the event that the Administrator is unable to perform all or a portion
of the Services for any reason for a period that could reasonably be expected to
exceed twenty (20) Business Days, the Administrator shall promptly provide
notice to ILA of its inability to perform the applicable Services and shall
cooperate with ILA in obtaining an alternative means of providing such Services.
The Administrator shall be responsible for all fees, costs and expenses incurred
in order to obtain such alternative means of providing the applicable Services
and in order to restore such Services.
(b) In the event that the Administrator commits three (3) independent Material
Breaches (as such term is defined below) during any rolling twelve (12) month
period, ILA will, at its option, initiate the dispute resolution process set
forth in Section 18.03(a). If, after Level Three Negotiations, ILA is not
reasonably satisfied with the results thereof, the CEO or CFO of ILA's ultimate
parent will provide written notice to the CEO or CFO of the Administrator's
ultimate parent and the Administrator shall use commercially reasonable efforts
to obtain an alternative means of providing the impacted Services pursuant to
the service standards set forth in Section 4.02(a). In such event, the
Administrator shall be responsible for the incremental costs incurred in
providing such alternative services. The term "Material Breach" shall mean a
material breach of a material obligation under this Agreement by the
Administrator, the occurrence of which is not subject to a good faith dispute
between the Parties, that remains in existence ninety (90) calendar days after
receipt by the Administrator of ILA's written notice of such breach (which
notice shall specify ILA's view that such breach is a material breach of a
material obligation hereunder), which breach shall not have been cured within
such ninety (90) calendar day period; provided, however, that if the
Administrator can demonstrate that, despite having used its commercially
reasonable efforts to cure such failure within the ninety (90) calendar day
period, it has not been able to effect such a cure, ILA may, at its sole
discretion, grant the Administrator additional time in which to effect such a
cure. The remedy set forth herein and ILA's indemnification rights pursuant to
Section 13.02 shall be ILA's sole and exclusive remedy with respect to any
Material Breach that is not cured within the foregoing cure period.
(c) For the avoidance of doubt, if the Administrator fails to perform
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any obligation hereunder and such failure is attributable to (i) an act, error
or omission of ILA, including any failure by ILA or ILA's Representatives to
perform any obligation of ILA hereunder or under any of the Ancillary Agreements
(excluding this Agreement), (ii) revocation by ILA of any or all authority of
the Administrator under Section 6.03(c) or (iii) the termination upon the
occurrence of a Recapture Triggering Event of Administrator's right to direct
disbursements from the Custodial Account, then in each such case, such failure
to perform such obligation by the Administrator shall not be a breach of this
Agreement and the Administrator shall have no liability under this Agreement
with respect to such obligation.
(d) In the event that a third party administrator is engaged in accordance with
Section 7.01(b) and the Administrator subsequently determines that such third
party administrator is incapable of performing the Services subcontracted to
such third party administrator, the Parties agree that the Administrator shall,
at its option, replace the third party administrator with another third party
administrator or resume its performance of such Services pursuant to this
Agreement.
Section 7.02 Errors. The Administrator shall, at its own expense, correct any
errors in the Services caused by it as promptly as practicable following notice
thereof from ILA or any other Person or upon discovery thereof by the
Administrator. ILA shall, at its own expense, cooperate with and assist
Administrator to correct any errors resulting from any act or omission by ILA as
promptly as practicable following notice thereof from Administrator or any other
Person or upon discovery thereof by ILA. ILA shall reimburse the Administrator
for the reasonable costs and expenses incurred by the Administrator in making
any such corrections.
ARTICLE VIII
REGULATORY COMPLAINTS AND LEGAL ACTIONS
Section 8.01 Routine Complaints. The Administrator shall supervise and control
the investigation, contest, defense and/or settlement of any policyholder,
insured or beneficiary complaints (including any such complaints asserted
through any Governmental Body) that in the Administrator's reasonable judgment
would reasonably be expected to result solely in monetary Losses [REDACTED]
relating to the Administered Business (the "Routine Complaints") at its own cost
and expense, and in the name of ILA when necessary. Notwithstanding anything in
this Agreement to the contrary, the Administrator shall not be required to
provide notice to ILA with respect to any Routine Complaints; provided, that at
ILA's request, the Administrator shall, no more frequently than monthly, provide
ILA with a report summarizing the nature and status of any pending or resolved
Routine Complaints, the alleged actions or omissions giving rise to such Routine
Complaints, and the status of any such Routine Complaints.
Section 8.02 Regulatory Actions.
(a) If ILA or the Administrator receives notice of, or otherwise becomes aware
of, any Regulatory Action (as defined below), ILA or the Administrator, as
applicable, shall promptly notify the other Party thereof. The term "Regulatory
Action" means any Action initiated by or involving the participation of a
Governmental Body related to the
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Administered Business other than Routine Complaints. ILA, upon twenty (20)
calendar days written notice to the Administrator, shall have the right at any
time to assume sole and exclusive control over the response, defense, settlement
or other resolution of any Regulatory Action; provided that ILA shall be solely
responsible for all costs and expenses related thereto (including any Losses,
fines, penalties or other amounts imposed on or suffered by the Administrator
and its Affiliates, and the cost of any remediation efforts by the
Administrator) and any increased liability of the Administrator, in its capacity
as the Reinsurer, under the Reinsurance Agreement or this Agreement resulting
from ILA's control thereof. The Administrator shall have the right at its sole
expense to engage its own separate legal representation and to participate fully
in, but not control, any such defense, settlement, or compromise assumed by ILA.
Notwithstanding the foregoing, ILA shall not settle or compromise any such
Regulatory Action without the Administrator's prior written consent (such
consent not to be unreasonably withheld, conditioned or delayed) unless (i)
there is no finding or admission of any violation of Applicable Law or any
violation of the rights of any Person by the Administrator or any of its
Affiliates, (ii) ILA pays all settlement amounts with respect thereto, (iii) ILA
obtains a complete release for the Administrator and its Affiliates who are
parties to the proceedings with respect to such Regulatory Action, and (iv) the
terms of the proposed settlement or compromise of the Regulatory Action do not
impose injunctive, equitable relief or remediation or result in any non-monetary
restriction or condition or material burden on the Business or operations of the
Administrator and its Affiliates.
(b) In the event that ILA does not timely assert its right to control the
handling of Regulatory Actions pursuant to Section 8.02(b), the Administrator
shall assume sole and exclusive control over the response, defense, settlement
or other resolution of any Regulatory Action. ILA shall have the right at its
sole expense to engage its own separate legal representation and to participate
fully in, but not control, any such defense, settlement, or compromise assumed
by the Administrator. Notwithstanding the foregoing, the Administrator shall not
settle or compromise any such Regulatory Action without ILA's prior written
consent (such consent not to be unreasonably withheld, conditioned or delayed)
unless (i) there is no finding or admission of any violation of Applicable Law
or any violation of the rights of any Person by ILA or any of its Affiliates,
(ii) the Administrator pays all settlement amounts with respect thereto, (iii)
the Administrator obtains a complete release for ILA and its Affiliates who are
parties to the proceeding with respect to such Regulatory Action, and (iv) the
terms of the proposed settlement of the Regulatory Action do not impose
injunctive, equitable relief or remediation or result in any non-monetary
restriction or condition on ILA or its Affiliates.
(c) Upon the other Party's request, the controlling Party shall provide such
other Party with a report of any pending Regulatory Actions controlled by the
controlling Party that are covered under this Section 8.02, summarizing the
nature of any such pending Regulatory Actions, the alleged actions or omissions,
if any, giving rise to such Regulatory Actions and copies of any files or other
documents that the controlling Party may reasonably request in connection with
its review of such matters.
Section 8.03 Legal Actions.
(a) The Administrator shall promptly notify ILA of any Action other than a
Regulatory Action or a Routine Complaint that has been instituted or threatened
in writing
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with respect to the Administered Business or any Covered Insurance Policy (each,
a "Legal Action"), and in no event more than five (5) Business Days after
receipt or notice thereof.
(b) ILA shall promptly notify the Administrator of any Legal Action to the
extent known to it and not made against or served on the Administrator as
administrator hereunder, and in no event more than five (5) Business Days after
receipt or notice thereof, and shall promptly furnish to the Administrator
copies of all pleadings in connection therewith.
(c) The Administrator shall supervise and shall exclusively control the
investigation, contest, defense and/or settlement of all Legal Actions, at its
own cost and expense and in the name of ILA when necessary.
(d) Notwithstanding anything in this Agreement to the contrary, ILA shall have
the right to engage its own separate legal representation, at its own expense,
and to participate fully in, but not control, the defense of any Legal Action
with respect to which ILA is a named party to the extent that such Legal Action,
if successful, could (in ILA's reasonable opinion) materially interfere with the
business, assets, liabilities, obligations, financial condition, results of
operations or reputation of ILA or any of its Affiliates other than the
Administered Business, without waiving any right to indemnification or payment
that it may have under the terms of the Purchase Agreement, the Reinsurance
Agreement or this Agreement. The Administrator and ILA shall use commercially
reasonable efforts to cooperate with each other with respect to the
administration of any such Legal Action. The Administrator shall not settle or
compromise any Legal Action without ILA's prior written consent (such consent
not to be unreasonably withheld, conditioned or delayed) unless (i) there is no
finding or admission of any violation of Applicable Law or any violation of the
rights of any Person by ILA or any of its Affiliates, (ii) the Administrator
pays all settlement amounts with respect thereto, (iii) the Administrator
obtains a complete release for ILA and its Affiliates who are parties to the
proceeding with respect to such Legal Action, and (iv) the terms of the proposed
settlement do not impose injunctive, equitable relief or remediation or result
in any non-monetary restriction or condition on ILA or its Affiliates.
(e) The Administrator shall keep ILA informed of the progress of all pending
Legal Actions and, at ILA's request (which requests shall be reasonable in their
frequency and nature as reasonably determined by the Administrator), provide to
ILA a report summarizing the nature of any pending Legal Action, the alleged
actions or omissions giving rise to such Legal Action and copies of any files or
other documents that ILA may reasonably request in connection with its review of
such matters, in each case other than such files, documents and other
information as would, in the judgment of counsel to the Administrator, lead to
the loss or waiver of legal privilege. Except to the extent that the
Administrator prepares such reports in the ordinary course of business, ILA
shall reimburse the Administrator for the reasonable out-of-pocket costs
incurred by it in preparing the reports and copies described in this Section
8.03(e).
Section 8.04 Cooperation. Each Party shall use commercially reasonable efforts
to cooperate with and assist the controlling Party in responding to, defending,
prosecuting and Routine Complaint, Regulatory Action or Legal Action pursuant to
Article VIII, provided, that neither Party shall be required to waive any
applicable attorney-client, attorney work product or other evidentiary
privileges; provided, further, that, except as set forth in this Article VIII,
the
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Administrator shall reimburse ILA for any reasonable out-of-pocket costs and
expenses incurred by ILA in connection with such efforts. Neither ILA nor the
Administrator shall have the authority to institute, prosecute or maintain any
legal or regulatory proceeding on behalf of the other Party without the prior
written consent of such other Party, except as expressly contemplated in this
Agreement.
Section 8.05 Reporting. On a quarterly basis, (a) ILA shall prepare and provide
to the Administrator a report containing a summary of any Regulatory Actions
with respect to which ILA has exercised its right to supervise and control the
defense thereof in accordance with Section 8.02(b), and (b) the Administrator
shall prepare and provide to ILA a report containing a summary of any Legal
Actions and Regulatory Actions controlled by the Administrator in a form
reasonably acceptable to ILA.
Section 8.06 Relationship with Other Agreements. Notwithstanding anything to
the contrary contained herein, the provisions of this Article VIII (including
any obligation of the Administrator to bear any costs associated with any
Regulatory Action or Legal Action) shall be subject to and shall not impair or
reduce the indemnity obligations and rights of the Parties and their Affiliates
and other provisions related to indemnification under the Purchase Agreement and
the Reinsurance Agreement. The Parties acknowledge and agree that this Article
VIII shall not apply to the Specified Action, with respect to which the
provisions of Section 8.20 of the Business Disclosure Schedule to the Purchase
Agreement shall govern.
Section 8.07 Taxes. This Article VIII shall not apply to matters relating to
Taxes.
ARTICLE IX
[REDACTED]
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[REDACTED]
ARTICLE X
DURATION; TERMINATION
Section 10.01 Duration. This Agreement shall become effective as of the
Effective Time and shall continue until the earlier of (a) the date on which the
Reinsurance Agreement is terminated in accordance with the terms thereof (b) the
date on which this Agreement is terminated in accordance with the provisions of
Section 10.02, or (c) the date of a recapture under the Reinsurance Agreement.
Section 10.02 Termination.
(a) This Agreement may be terminated at any time upon the mutual written
consent of the Parties hereto, which written consent shall state the effective
date and relevant terms of termination.
(b) This Agreement is subject to immediate termination at the option of ILA,
upon written notice to the Administrator, in the event that the Administrator
becomes insolvent or is placed into liquidation, rehabilitation, conservation,
supervision, receivership or similar proceedings (whether voluntary or
involuntary), or there is instituted against it proceedings for the appointment
of a receiver, liquidator, rehabilitator, conservator or trustee in bankruptcy,
or other agent known by whatever name, to take possession of its assets or
assume control of its operations.
(c) This Agreement is subject to immediate termination in its entirety upon
written notice to the Administrator, if the business reinsured under the
Reinsurance Agreement is recaptured pursuant to its terms or the Reinsurance
Agreement is terminated.
(d) Upon termination of this Agreement (other than a termination resulting from
the termination of all liabilities of ILA under all Covered Insurance Policies
in accordance with their respective terms), the Administrator shall reasonably
cooperate in the transfer of the applicable Services and any books and records
and other materials maintained by the Administrator related to such Services as
promptly as practicable (or, where required by Applicable Law, copies thereof)
to ILA or ILA's designee, such that ILA or its designee shall be able to perform
the applicable Services without interruption following termination of this
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Agreement.
Section 10.03 Survival. Notwithstanding the other provisions of this Article X,
Articles I, XIII and XIV and Sections 18.01, 18.03, 18.05, 18.08 and 18.09 shall
remain in full force and effect after the termination of this Agreement.
ARTICLE XI
CUSTOMER INFORMATION
Section 11.01 Customer Information.
(a) The Administrator shall, and shall cause its Affiliates and its and their
respective Representatives to, comply with Applicable Privacy Laws and the
Information Security Requirements set forth in Schedule III attached hereto.
(b) ILA agrees that the Administrator may use and disclose Customer Information
for any and all purposes described in: (i) Sections 16 and 17 of the NAIC Model
Privacy of Consumer Financial and Health Information Regulation and (ii) Section
13 of the NAIC Insurance Information and Privacy Protection Model Act, except
where disclosure is prohibited by Applicable Law.
(c) ILA agrees that the Administrator may use Customer Information for the
Administrator's own purposes relating to its insurance products and services,
including but not limited to: servicing, administering, and maintaining its
insurance products and services; administering and servicing benefits or claims;
underwriting, risk management and control; and the detection and prevention of
fraud, criminal activity, misrepresentations, or unauthorized transactions.
(d) ILA hereby enters into a joint marketing agreement with the Administrator
as described in Section 15 of the NAIC Model Privacy of Consumer Financial and
Health Information Regulation such that Nonpublic Personal Financial
Information, as defined in the NAIC Model Privacy of Consumer Financial and
Health Information Regulation, relating to the Covered Insurance Policies may be
disclosed to the Administrator and used by the Administrator to market insurance
products and services to insureds or policyholders under the Covered Insurance
Policies. Specifically, ILA agrees that it will send or cause the Administrator
to send, on ILA letterhead, at Administrator's sole cost and expense, marketing
material regarding the products and services of the Administrator and its
affiliates and subsidiaries to insureds or policyholders under the Covered
Insurance Policies. The content of such marketing material is subject to
approval by ILA, the approval of which shall not be unreasonably withheld by
ILA. Notwithstanding the foregoing, Administrator shall not solicit individuals
that are included in ILA's Do Not Contact Database (which database shall be made
available to the Administrator by ILA upon Administrator's reasonable request).
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ARTICLE XII
DISASTER RECOVERY
Section 12.01 Disaster Recovery. The Administrator represents that it has
developed and shall maintain, for as long as Services are provided hereunder, a
disaster recovery plan ("DRP") related to the Services that is consistent with
commercially reasonable business practices. For as long as Services are provided
hereunder, the Administrator will: (a) periodically, but no less than one time
per calendar year, update and test the operability of the DRP; (b) certify to
ILA at least once during every calendar year that the DRP is fully operational;
(c) in consultation with ILA, implement the DRP upon the declaration of a
disaster under such DRP; and (d) reinstate the Services upon the declaration of
such a disaster within the applicable timeframes specified in the DRP. ILA shall
have the right to review the DRP periodically, but no more than one time per
calendar year at the Administrator's location.
ARTICLE XIII
INDEMNIFICATION
Section 13.01 Indemnification by ILA. ILA shall indemnify, defend and hold
harmless Administrator and its Affiliates, including the Investment Manager, and
their respective Representatives, successors and assigns (collectively, the
"Administrator Indemnified Parties") from and against and pay and reimburse all
Losses imposed on, sustained, incurred or suffered by the Administrator
Indemnified Parties resulting from, arising out of or relating to (whether or
not arising from a Third-Party Claim):
(a) any breach by ILA of the covenants and agreements of ILA contained in this
Agreement;
[REDACTED]
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(d) any fraud, theft or embezzlement by officers, employees or agents of ILA
with respect to the Reinsured Portfolios during the term of this Agreement and
the Investment Management Agreement;
(e) the failure of ILA to comply with any Applicable Law; and
(f) any successful enforcement of this indemnity.
Notwithstanding anything in this Agreement to the contrary, the indemnification
claims set forth in subsections (b) and (c) of this Section 13.01 shall not
constitute "Legal Actions" as defined in Section 8.03(a), and any
indemnification thereunder shall be governed by this Article XIII.
Nothing contained in this Section 13.01 is intended to amend or supersede any
provision of the Investment Management Agreement.
Section 13.02 Indemnification by the Administrator. Except as otherwise
provided in Section 4.02(c), Administrator shall indemnify, defend and hold
harmless ILA and its Affiliates and their respective Representatives, successors
and assigns (collectively, the "ILA Indemnified Parties") from and against and
pay and reimburse all Losses imposed on, sustained, incurred or suffered by the
ILA Indemnified Parties resulting from, arising out of or relating to (whether
or not arising from a Third-Party Claim):
(a) any breach by the Administrator of the covenants and agreements of the
Administrator contained in this Agreement;
[REDACTED]
(c) any fraud, theft or embezzlement by officers, employees or agents of the
Investment Manager during the term of this Agreement or the Investment
Management Agreement;
(d) the failure of Administrator, the Investment Manager or any sub-manager
retained by the Investment Manager in accordance with Section 3 of the
Investment Management Agreement to comply with any Applicable Law; and
(f) any successful enforcement of this indemnity.
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Notwithstanding anything in this Agreement to the contrary, the indemnification
claims set forth in subsection (b) of this Section 13.02 shall not constitute
"Legal Actions" as defined in Section 8.03(a), and any indemnification
thereunder shall be governed by this Article XIII.
Nothing contained in this Section 13.02 is intended to amend or supersede any
provision of the Investment Management Agreement.
Section 13.03 Notice of Claim; Defense.
(a) If (i) any non-affiliated third party or Governmental Body institutes
asserts any Action that may give rise to Losses for which a Party (an
"Indemnifying Party") may be liable for indemnification under this Article XIII
(a "Third-Party Claim") or (ii) any Person that may be entitled to
indemnification under this Agreement (an "Indemnified Party") desires to make a
claim not involving a Third-Party Claim to be indemnified by an Indemnifying
Party, then the Indemnified Party shall promptly send to the Indemnifying Party
a written notice specifying the nature of such claim and a good faith estimate
of the amount of all related Losses to the extent they are ascertainable (a
"Claim Notice"). The Indemnifying Party shall not be relieved from any of its
indemnification obligations under this Article XIII as a result of a failure of
the Indemnified Parties to provide a Claim Notice except to the extent that it
is prejudiced by such failure.
(b) The Indemnifying Party may, by notice delivered within twenty (20) Business
Days of the receipt of a Claim Notice with respect to a Third-Party Claim,
assume the defense and control of such Third-Party Claim (at the expense of such
Indemnifying Party). The Indemnified Party may take any actions reasonably
necessary to defend any Third-Party Claim prior to the time that it receives
notice from the Indemnifying Party as contemplated by the preceding sentence.
The Indemnifying Party shall not be entitled to assume or maintain control of
the defense of any Third-Party Claim and shall pay the reasonable fees and
expenses of counsel retained by the Indemnified Party if (i) the Third-Party
Claim relates to or arises in connection with any criminal proceeding, action,
indictment, allegation or investigation against the Indemnified Party or (ii)
the Third-Party Claim would reasonably be expected to result in an injunction or
equitable relief against the Indemnified Party that would, in each case, have a
material effect on the operation of the business of such Indemnified Party or
any of its Affiliates.
(c) Subject to Section 13.03(b), in the event of a Third-Party Claim, if the
Indemnifying Party assumes the defense of a Third-Party Claim, the Indemnifying
Party may elect to retain counsel reasonably acceptable to the Indemnified
Parties to represent such Indemnified Parties in connection with such Action and
shall pay the fees, charges and disbursements of such counsel. Subject to
Section 13.03(b), if the Indemnifying Party so elects, the Indemnified Parties
may participate, at their own expense and through legal counsel of their choice,
in any such Action; provided that (i) the Indemnifying Party shall control the
defense of the Indemnified Parties in connection with such Action and (ii) the
Indemnified Parties and their counsel shall reasonably cooperate with the
Indemnifying Party and its counsel in connection with such Action. To the extent
such action can be taken in a way that does not unreasonably jeopardize the
attorney-client privilege: (i) the Indemnified Party's right to participate in
the defense of any Action shall include the right to attend all significant
internal meetings, all meetingswith representatives of plaintiffs, hearings and
the like; and (ii) counsel for a
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Indemnified Party also shall be given a reasonable opportunity to comment upon
all memoranda of law, pleadings and briefs and other documents relating to the
Third-Party Claim, and the Indemnifying Party and its counsel shall give
reasonable consideration to the comments of counsel for the Indemnified Party.
The Indemnifying Party shall not settle any such Action without the relevant
Indemnified Parties' prior written consent, unless the terms of such settlement
(A) provide for no relief other than the payment of monetary damages, (B)
involve no finding or admission of any breach or violation by any Indemnified
Party and (C) include an express unconditional release of each Indemnified Party
from all liability arising from such Action. Notwithstanding the foregoing, if
the Indemnifying Party does not promptly retain counsel and assume control of
such defense, then the Indemnified Parties may retain counsel reasonably
acceptable to the Indemnifying Party in connection with such Action and assume
control of the defense in connection with such Action. Under no circumstances
will the Indemnifying Party have any liability in connection with any settlement
of any Action that is entered into without its prior written consent (such
consent not to be unreasonably withheld, delayed or conditioned).
(d) From and after the delivery of a Claim Notice involving a Third-Party
Claim, at the reasonable request of the Indemnifying Party, each Indemnified
Party shall grant the Indemnifying Party and its counsel, experts and
Representatives full access, during normal business hours, to the books,
records, personnel and properties of the Indemnified Party to the extent
reasonably related to such Claim Notice at no cost to the Indemnifying Party
(other than for reasonable out-of-pocket expenses of the Indemnified Parties).
(e) In the event any Indemnifying Party receives a Claim Notice from an
Indemnified Party that does not involve a Third-Party Claim, the Indemnifying
Party shall notify the Indemnified Party within twenty (20) Business Days
following its receipt of such notice whether the Indemnifying Party disputes its
liability to the Indemnified Party under this Article XIII.
Section 13.04 No Duplication; Exclusive Remedy.
(a) To the extent that an Administrator Indemnified Party or an ILA Indemnified
Party has received payment in respect of a Loss pursuant to the provisions of
any other Ancillary Agreement, such Administrator Indemnified Party or ILA
Indemnified Party shall not be entitled to indemnification for such Loss under
this Agreement to the extent of such payment.
(b) Except with respect to claims alleging fraud and as otherwise provided
under this Agreement or the provisions of any other Ancillary Agreement, from
and after the Closing, the exclusive remedy of the Administrator, the
Administrator Indemnified Parties, ILA and the ILA Indemnified Parties in
connection with this Agreement (and any certificate or instrument delivered
hereunder) and the transactions contemplated hereby (whether under this
Agreement or arising under Applicable Law) shall be as provided in this Article
XIII. In furtherance of the foregoing, each of Administrator, on behalf of
itself and each other Administrator Indemnified Party, and ILA, on behalf of
itself and each other ILA Indemnified Party, hereby waives, from and after the
Closing, to the fullest extent permitted under Applicable Law, any and all
rights, claims and causes of action (other than claims of, or causes of action
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arising from, fraud) it may have against ILA or any of its Affiliates or
Representatives and the Administrator or any of its Affiliates or
Representatives, as the case may be, arising under or based upon this Agreement
or any certificate or instrument delivered in connection herewith, except (x)
pursuant to the indemnification provisions set forth in this Article XIII or (y)
as otherwise provided under this Agreement or the provisions of any other
Ancillary Agreement.
Section 13.05 Limitation on Set-off. Neither ILA nor the Administrator shall
have any right to set off any unresolved indemnification claim pursuant to this
Article XIII against any payment due pursuant to any Transaction Agreement.
Section 13.06 Mitigation. The Administrator and ILA shall cooperate with each
other with respect to resolving any claim or liability with respect to which one
Party is obligated to indemnify the other Party under this Article XIII,
including by making commercially reasonable efforts to mitigate such claim or
liability, to the extent required by Applicable Law.
Section 13.07 Recovery by Indemnified Party.
(a) In any case where an Indemnified Party recovers from a third party not
affiliated with such Indemnified Party any amount in respect of any Loss for
which an Indemnifying Party has actually reimbursed it pursuant to this Article
XIII, such Indemnified Party shall promptly pay over to the Indemnifying Party
the amount so recovered (net of any out-of-pocket expenses incurred by such
Indemnified Party in collecting such amount), but not in excess of the sum of
(i) any amount previously paid by the Indemnifying Party to or on behalf of the
Indemnified Party in respect of such claim and (ii) any amount expended by the
Indemnifying Party in pursuing or defending any claim arising out of such
matter.
(b) If any portion of Losses to be reimbursed by the Indemnifying Party
pursuant to this Article XIII could be recovered from a third party not
affiliated with the relevant Indemnified Party (including under any applicable
third-party insurance coverage) based on the underlying claim or demand asserted
against such Indemnifying Party, then the Indemnified Party shall promptly give
notice thereof to the Indemnifying Party and, upon the request of the
Indemnifying Party, shall use commercially reasonable efforts to collect the
maximum amount recoverable from such third party, in which event the
Indemnifying Party shall reimburse the Indemnified Party for all reasonable
costs incurred in connection with such collection. If any portion of Losses
actually paid by the Indemnifying Party pursuant to this Article XIII could have
been recovered from a third party not affiliated with the relevant Indemnified
Party (including under any applicable third-party insurance coverage) based on
the underlying claim or demand asserted against such Indemnifying Party, then
the Indemnified Party shall transfer, to the extent transferable, such of its
rights to proceed against such third party as are necessary to permit the
Indemnifying Party to recover from such third party any amount actually paid by
the Indemnifying Party pursuant to this Article XIII.
Section 13.08 Relationship with Reinsurance Agreement. Nothing contained in this
Article XIII is intended to amend or supersede any provision of the Reinsurance
Agreement.
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ARTICLE XIV
COOPERATION
Section 14.01 Cooperation. The Parties hereto shall use commercially reasonable
efforts to reasonably cooperate in order that the duties assumed by the
Administrator hereunder will be effectively, efficiently and promptly
discharged, and will not take any actions that would frustrate the intent of the
transactions contemplated by this Agreement or any Transaction Agreement. In
accordance with the foregoing and at the Administrator's sole cost and expense,
each Party shall, at all reasonable times under the circumstances, make
available to the other Party properly authorized personnel for the purpose of
consultation and decision.
ARTICLE XV
TRADEMARK LICENSE
Section 15.01 Trademark License. On the date hereof, HFIC and the Administrator
shall enter into the Trademark License Agreement, a form of which is attached
hereto as Exhibit A (the "Trademark License Agreement"), pursuant to which HFIC
will grant the Administrator a license to the trade names and marks described
therein, subject to the terms and conditions set forth therein.
ARTICLE XVI
FIDELITY BOND
Section 16.01 Fidelity Bond. The Administrator shall, at its sole cost and
expense, obtain from an insurance company or companies and maintain in-force at
all times during the performance of the Services a fidelity bond or employee
dishonesty insurance policy [REDACTED], subject to a deductible which is subject
to the Administrator's self-insurance. The insurance companies providing
insurance under this Article XVI shall have a Best's Financial Performance
Rating of A- or higher and a Financial Size Category of VIII or higher, unless
otherwise approved in writing by ILA.
ARTICLE XVII
TAX MATTERS
Section 17.01 Premium Taxes.
(a) Quarterly Premium Tax Report. Within 20 calendar days of the end of each
calendar quarter, the Administrator (i) will provide a report (a "Quarterly
Premium Tax Report") to ILA and (ii) will forward to ILA, in the Administrator's
capacity as the Reinsurer, any reimbursement for Premium Taxes and assessments
due and payable by the Reinsurer in respect of the Covered Insurance Policies
under the terms of the Reinsurance Agreement (a "Quarterly Premium Tax
Payment"). Each Quarterly Premium Tax Report shall provide Premium and Premium
Tax rate information by state, which information shall include, without
limitation, the applicable rate for Premium Taxes for each state in the report.
The Quarterly Premium Tax Payment accompanying a Quarterly Premium Tax Report
shall be
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calculated using the statutory rate for Premium Taxes in each of the states
listed in the report.
(b) Retaliatory Premium Taxes. For purposes of preparing each Quarterly Premium
Tax Report, ILA shall provide to the Administrator, in accordance with Section
17.01(c), such additional information as is necessary and appropriate for
purposes of facilitating the Administrator's calculation of retaliatory Premium
Taxes for such preceding calendar quarter. Unless ILA (i) provides the
Administrator with such additional information in accordance with Section
17.01(c) and (ii) certifies to the Administrator that the information so
provided is the same as the information that will be reported on, or taken into
account in preparing, ILA's Premium Tax Returns for the taxable period to which
the Quarterly Premium Tax Report relates, the Administrator shall calculate
retaliatory Premium Taxes for the relevant Quarterly Premium Tax Report (x)
based upon the difference between ILA's state of domicile rate for Premium Taxes
and the statutory rates for Premium Taxes of other applicable jurisdictions and
(y) only when the rate for Premium Taxes of another jurisdiction is lower than
the rate for Premium Taxes of ILA's state of domicile.
(c) Requested Information. ILA shall provide to the Administrator on a timely
basis any information within ILA's possession or control that is reasonably
requested by the Administrator in connection with the Administrator's
obligations under this Article XVII. The Quarterly Premium Tax Report shall be
based on Premiums collected by the Administrator with respect to the Covered
Insurance Policies pursuant to this Agreement and the information in its
possession. ILA and the Administrator shall cooperate in the accurate
preparation and timely filing of all Tax Returns that must be filed in
connection with Premium Taxes. Each Party shall furnish to the other Party all
information and records reasonably requested by the other Party for use in the
preparation, review or verification of all Tax Returns that must be filed in
connection with Premium Taxes. ILA will provide to Administrator copies of any
communications received from a Taxing Authority relating to Premium Taxes or to
any related credits, deductions or offsets.
(d) Credits, Deductions, Offsets. The Quarterly Premium Tax Report will
indicate any credits, deductions, or offsets that reduce the Reinsurer's
obligation to reimburse ILA for Premium Taxes under the terms of the Reinsurance
Agreement. If (i) a credit, deduction, or offset against Premium Taxes was
reflected as an asset on the Closing Date Transfer Balance Sheet or (ii) the
Reinsurer shall have reimbursed ILA under the Reinsurance Agreement for an
assessment by any guaranty fund, insolvency fund, plan, pool, association, or
any similar assessment that has given rise to a credit, deduction, or offset
against Premium Taxes, and such credit, deduction or offset cannot be fully used
by ILA to offset a liability for Premium Taxes for which the Reinsurer otherwise
would be required to reimburse ILA, and the remainder of the credit, deduction
or offset is applied against other Taxes payable by ILA, then such credit,
deduction or offset shall be applied to reduce the Reinsurer's obligation to
reimburse ILA as reflected on the Quarterly Premium Tax Report for the next
succeeding calendar quarter (or the first calendar quarter thereafter for which
the Reinsurer would otherwise be required to reimburse ILA with respect to
Premium Taxes under the terms of the Reinsurance Agreement). To the extent that
ILA receives any refunds of amounts previously paid to a guarantee fund, plan,
pool, or association or of any similar assessment, ILA shall reimburse the
Administrator (in the Administrator's capacity as the Reinsurer) to the extent
such amount was reflected as an asset on the Closing Date Transfer Balance Sheet
or the Reinsurer shall have reimbursed ILA under the
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Reinsurance Agreement for the amount refunded.
(e) Pro Forma Schedule T. Within twenty (20) calendar days of the end of each
calendar year, the Administrator shall prepare and provide ILA with a pro forma
Schedule T with respect to the Administered Business for the preceding calendar
year. The pro forma Schedule T will be prepared on the basis of the Quarterly
Premium Tax Reports for the calendar year to which the pro forma Schedule T
relates. ILA will file its Schedule T in a manner consistent with the pro forma
Schedule T provided to it by the Administrator and will provide a copy of its
filed Schedule T to the Administrator. Should the Administrator come into
possession of any additional information that it would have used to prepare the
pro forma Schedule T after it has provided the pro forma Schedule T to ILA in
accordance with this Section 17.01(e), the Administrator shall promptly provide
such additional information to ILA in writing, along with a reasonably detailed
written explanation of what changes should be made to the pro forma Schedule T
to reflect such additional information.
(f) Annual Premium Tax Report. The Administrator will provide ILA with a final
annual report of Premiums and Premium Taxes for each calendar year of this
Agreement (the "Annual Premium Tax Report") on or before March 31st of the
following calendar year. Each Annual Premium Tax Report (i) shall provide
Premium and Premium Tax rate information by state, which information shall
include, without limitation, the applicable rate for Premium Taxes for each
state in the report and (ii) shall be prepared by the Administrator in a manner
consistent with the pro forma Schedule T provided by the Administrator to ILA
with respect to such calendar year pursuant to Section 17.01(e) (taking into
account any additional information provided by the Administrator to ILA in
accordance with the last sentence of Section 17.01(e)), as adjusted to reflect
any additional information in the Administrator's possession at the time the
Annual Premium Tax Report is prepared and to take into account the definition of
General Account Liabilities in the Reinsurance Agreement and Section 17.01(d).
The Annual Premium Tax Report will reflect (x) any overpayment or underpayment
of reimbursements by the Reinsurer for Premium Taxes due in respect of Premiums
reported and paid to ILA with the Quarterly Premium Tax Reports for the calendar
year to which the Annual Premium Tax Report relates and (y) any other relevant
adjustments to Premium Taxes, which adjustments shall be described in reasonable
detail in a schedule to the Annual Premium Tax Report. Such overpayment or
underpayment will be reconciled in conjunction with the next Quarterly Premium
Tax Payment following ILA's receipt of the Annual Premium Tax Report.
(g) Notice. Each of ILA and the Administrator shall promptly notify the other
in writing upon receipt by it or any of its Affiliates of notice of any pending
or threatened Action related to any Premium Taxes or any Tax Returns filed in
connection with such Taxes.
(h) Actions. ILA shall have the sole right to control the conduct of any Action
related to any Premium Taxes or any Tax Returns filed in connection with such
Premium Taxes, and to employ counsel of ILA's choice at ILA's expense; provided,
that the Administrator shall be permitted, at the Administrator's expense, to be
present at, and to participate in, any such Action. Notwithstanding such
control, ILA shall not settle, either administratively or after the commencement
of litigation, any claim for Premium Taxes without the consent of the
Administrator, which consent shall not be unreasonably withheld or delayed.
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ILA and the Administrator shall furnish or cause to be furnished to each other,
upon request, as promptly as practicable, such information and assistance
relating to the preparation for any Tax audit or other Action related to Taxes,
and the prosecution or defense of any Action related to any Premium Taxes or any
Tax Returns filed in connection with such Premium Taxes. ILA and the
Administrator shall reasonably cooperate with each other in the conduct of any
Action related to any Premium Taxes. For the avoidance of doubt, nothing in this
Agreement shall require ILA to provide the Administrator access to any federal,
state, or local consolidated income Tax Return that includes ILA or its
Affiliates. Any information obtained under this Section 17.01(h) shall be kept
confidential, except as otherwise reasonably may be required in connection with
the filing of Tax Returns or claims for Tax refunds or in conducting any Action
related to Taxes.
Section 17.02 Tax Information Reporting, Withholding, and Depositing.
(a) The Administrator shall be responsible for all Tax information reporting,
withholding, and depositing required under Applicable Law with respect to the
Administered Business. All Tax Returns required to be filed with respect to such
Tax information reporting, withholding, and depositing shall be accurate and
complete in all material respects, and filed by the Administrator on a timely
basis and, where required by Applicable Law, shall be accompanied by the correct
amount of required payments or deposits of Taxes.
(b) Upon ILA's reasonable request, the Administrator shall (i) provide ILA
reasonable access during normal business hours to (A) review, audit, or copy any
Tax Returns for which the Administrator is responsible under Article XVII
(either prior to or following the filing of such Tax Returns) and (B) review the
Administrator's processes and operations with respect to its obligations under
Article XVII, provided that such access shall not unreasonably interfere with
the conduct of the business of the Administrator; (ii) provide information to
ILA demonstrating the Administrator's compliance with Article XVII; and (iii)
cooperate with ILA in connection with any Action related to any Tax Return for
which the Administrator is responsible under Article XVII (provided that such
cooperation shall not unreasonably interfere with the business or operations of
the Administrator).
Section 17.03 Sales Taxes. ILA shall reimburse the Administrator for all sales,
value-added, goods and services, or similar Taxes (including any such Taxes that
are collected through withholding, but excluding any Taxes based upon, or
calculated by reference to, the income, receipts, or capital of the
Administrator, which Taxes shall be solely the liability of the Administrator)
imposed on or paid by the Administrator with respect to its receipt of payments
from ILA under this Agreement; provided that the Administrator shall provide ILA
with written notice that, and information reasonably sufficient to verify that,
such Taxes have been paid or are payable by the Administrator. In any case where
the Administrator has not previously paid such Taxes, the Administrator shall
promptly make payment of such Taxes to the appropriate Governmental Body upon
receipt of the reimbursement from ILA.
Section 17.04 Reinsurer Product Tax Liabilities. To the extent that the
Reinsurer is liable under the Reinsurance Agreement for any Reinsurer
Extra-Contractual Obligations that relate to the Tax treatment or the Tax status
of one or more Covered Insurance Policies ("Reinsurer Product Tax Liabilities"),
including, without limitation, any Losses described in clauses (i) and (ii) of
Section 12.6(a) of the Purchase Agreement, ILA and the Administrator
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shall cooperate in the defense and resolution of any Action related to such
Reinsurer Product Tax Liabilities, provided that such cooperation shall not
unreasonably interfere with the business or operations of either Party.
Section 17.05. Conflicts. Notwithstanding any other provision in this
Agreement, with respect to the matters specifically set forth in this Article
XVII, the provisions of this Article XVII shall control. To the extent not
provided for in this Article XVII or any other provisions of this Agreement,
including the schedules to the same, matters related to Taxes shall be governed
by the Purchase Agreement, the Reinsurance Agreement, the Transition Services
Agreement, the Trust Agreement, or another Ancillary Agreement, as applicable
and as appropriate.
ARTICLE XVIII
MISCELLANEOUS
Section 18.01 Notices. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given (a) on the date of service if served personally on the Party to whom
notice is to be given, (b) on the day of transmission if sent via facsimile
transmission to the facsimile number given below, and telephonic confirmation of
receipt is obtained promptly after completion of transmission, or (c) on the
Business Day after delivery to an overnight courier (such as Federal Express) or
an overnight mail service (such as the Express Mail service) maintained by the
United States Postal Service, to the Party as follows:
To ILA or HFIC: Hartford Life and Annuity Insurance
Company
200 Hopmeadow Street
Simsbury, CT 06089
Fax: (866) 522-0308
Attention: President
With concurrent
copies (which will not
constitute notice) to: The Hartford
One Hartford Plaza
Hartford, CT 06155
Fax: (860) 547-6959
Attention: Ceded Reinsurance &
General Counsel
[REDACTED]
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To the Administrator: The Prudential Insurance Company of
America
213 Washington Street, 15th Floor
Newark, NJ 07102
Facsimile: (973) 367-8920
Attention: Chief Legal Officer,
Individual Life Insurance
With concurrent
copies (which will not
constitute notice) to: Prudential Financial, Inc.
751 Broad St., 21st Floor
Newark, NJ 07102
Facsimile: (973) 367-8105
Attention: General Counsel
[REDACTED]
or to such other address as such Party may indicate by a notice delivered to the
other Party hereto. Notwithstanding the foregoing, pursuant to Section 18.01
notice shall also be given by e-mail to the respective party's Coordinator.
Section 18.02 Entire Agreement. This Agreement, together with the Schedules and
Exhibits referred to herein, the Purchase Agreement, the Reinsurance Agreement,
the Transition Services Agreement, the Trust Agreement and the other documents
delivered pursuant hereto and thereto, contain the entire understanding of the
Parties hereto with regard to the subject matter contained herein or therein,
and supersede all other prior representations, warranties, agreements,
understandings or letters of intent between or among any of the Parties hereto
which representations, warranties, agreements, understandings or letters of
intent shall be of no force or effect for any purpose. This Agreement shall not
be amended, modified or supplemented except by a written instrument signed by an
authorized Representative of each of the Parties hereto or their respective
successors in interest.
Section 18.03 Dispute Escalation; Governing Law and Jurisdiction.
(a) In the event a dispute arises between the Parties under this Agreement,
face-to-face negotiations shall be conducted between the Parties' respective
Coordinators within five (5) calendar days following a written request from any
Party ("Level One Negotiations"). The Parties shall ensure that their respective
Coordinators shall use reasonable efforts and work together in good faith to
resolve any disagreements or disputes between the Parties as expeditiously as
possible. If such Project Managers are unable to resolve the dispute within five
(5) calendar days after the Parties have commenced Level One Negotiations, then
either Party may request that face to face or telephonic negotiations be
conducted within five (5) calendar days of such request by the Parties'
respective internal subject matter experts ("Level Two Negotiations"). If such
individuals are unable to resolve the dispute within five (5) calendar days
after the Parties have commenced Level Two Negotiations, any Party may request
that face to face or telephonic negotiations shall be conducted within five (5)
calendar days of such request between a senior executive of ILA and a senior
executive of the
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Administrator ("Level Three Negotiations"). Except for Material Breaches under
Section 7.01, if such executives are unable to resolve the dispute within ten
(10) calendar days after the Parties have commenced Level Three Negotiations,
any unresolved dispute arising out of the interpretation, performance, or breach
of this Agreement, including the formation or validity thereof, shall be
resolved pursuant to Section 18.03(b).
(b) This Agreement shall be governed by and construed in accordance with the
internal laws (as opposed to the conflicts of law provisions) of the State of
New York (other than Sections 5-1401 and 5-1402 of the General Obligations Law,
which shall apply). Each of the Parties hereto irrevocably agrees that any and
all Actions arising out of, relating to or in connection with this Agreement or
its subject matter and the rights and obligations arising hereunder, or for
recognition and enforcement of any settlement or judgment in respect of this
Agreement and the rights and obligations arising hereunder brought by any other
Party hereto or its successors or assigns, shall be brought and determined
exclusively in the courts of the State of New York located in the Borough of
Manhattan, The City of New York or in the courts of the United States of America
for the Southern District of New York. Each of the Parties agrees that mailing
of process or other papers in connection with any such Action in the manner
provided in Section 18.01 or in such other manner as may be permitted by
Applicable Laws, will be valid and sufficient service thereof. Each of the
Parties hereto hereby irrevocably submits with regard to any such Action for
itself and in respect of its property, generally and unconditionally, to the
personal jurisdiction of the aforesaid courts and agrees that it will not bring
any Action relating to this Agreement or any of the transactions contemplated by
this Agreement in any court or tribunal other than the aforesaid courts. Each of
the Parties hereto hereby irrevocably waives, and agrees not to assert, by way
of motion, as a defense, counterclaim or otherwise, in any Action with respect
to this Agreement and the rights and obligations arising hereunder, or for
recognition and enforcement of any judgment in respect of this Agreement and the
rights and obligations arising hereunder (a) any claim that it is not personally
subject to the jurisdiction of the above named courts for any reason other than
the failure to serve process in accordance with this Agreement, (b) any claim
that it or its property is exempt or immune from jurisdiction of any such court
or from any legal process commenced in such courts (whether through service of
notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise) and (c) to the fullest extent
permitted by Applicable Law, any claim that (i) the Action in such court is
brought in an inconvenient forum, (ii) the venue of such Action is improper or
(iii) this Agreement, or the subject matter hereof, may not be enforced in or by
such courts. In order to facilitate the comprehensive resolution of related
disputes, and upon request of any Party to any Action, the court may consolidate
the Action with any other Action relating to this Agreement or to any Ancillary
Agreement and the Parties hereby agree not to oppose any request by the other
Party to consolidate any such Action with another Action relating to this
Agreement or to any Ancillary Agreement.
Section 18.04 No Third Party Beneficiaries. Nothing in this Agreement,
expressed or implied, is intended or shall be construed to confer upon any
Person other than the Parties and permitted successors and assigns and the
Administrator Indemnified Persons and the ILA Indemnified Persons any right,
remedy or claim under or by reason of this Agreement.
Section 18.05 Expenses. Except as otherwise expressly set forth in this
Agreement, each Party hereto will pay all costs and expenses incident to its
negotiation and
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preparation of this Agreement and to its performance and compliance with all
agreements and conditions contained herein or therein on its part to be
performed or complied with, including the fees, expenses and disbursements of
its counsel and independent public accountants.
Section 18.06 Counterparts. This Agreement may be executed in one or more
counterparts, including by facsimile or by electronic delivery in .pdf format,
each of which shall be considered an original instrument, but all of which shall
be considered one and the same agreement, and shall become binding when one or
more counterparts have been signed by each of the Parties hereto.
Section 18.07 Severability. Wherever possible, each provision hereof shall be
interpreted in such manner as to be effective and valid under Applicable Law,
but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
provision shall be ineffective to the extent, but only to the extent, of such
invalidity, illegality or unenforceability without invalidating the remainder of
such invalid, illegal or unenforceable provision or provisions or any other
provisions hereof, unless such a construction would be unreasonable.
Section 18.08 Waiver of Jury Trial; Multiplied and Punitive Damages. EACH PARTY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY ACTION ARISING OUT OF OR RELATING TO THIS
AGREEMENT, AND WHETHER MADE BY CLAIM, COUNTERCLAIM, THIRD-PERSON CLAIM OR
OTHERWISE. EACH PARTY HERETO ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS IN THIS SECTION. EACH PARTY ALSO IRREVOCABLY WAIVES ANY RIGHT TO
PUNITIVE, INCIDENTAL, CONSEQUENTIAL OR MULTIPLIED DAMAGES, EITHER PURSUANT TO
COMMON LAW OR STATUTE, IN EACH CASE IN ANY LEGAL PROCEEDINGS ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (BUT NOT AS TO
ANY ACTION BY ONE PARTY AGAINST THE OTHER SEEKING INDEMNIFICATION FOR A THIRD
PARTY CLAIM AGAINST THE PARTY INITIATING THE ACTION, TO THE EXTENT THAT SUCH
DAMAGES MAY BE RECOVERABLE AS PART OF THE INDEMNIFICATION BY THE INDEMNIFIED
PARTY).
Section 18.09 Treatment of Confidential Information.
(a) The Parties agree that, other than as contemplated by this Agreement or any
Transaction Agreement and to the extent permitted or required to implement the
transactions contemplated by this Agreement and the other Transaction
Agreements, the Parties will keep confidential and will not use or disclose the
other Party's Confidential Information and the terms and conditions of this
Agreement, including the exhibits and schedules hereto, except (x) as otherwise
required by Applicable Law or any order or ruling of any state insurance
regulatory authority or any other Governmental Body, (y) as may be required to
be disclosed in the financial statements of such Party or any of its Affiliates
or (z) such disclosure as may be required in connection with any dispute
resolution proceeding between the Parties in respect hereof.
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(b) The confidentiality obligations contained in this Agreement shall not apply
to the federal tax structure or federal tax treatment of this Agreement and each
Party hereto may disclose to any and all persons, without limitation of any
kind, the federal tax structure and federal tax treatment of this Agreement;
provided, that such disclosure may not be made until the earliest of (x) the
date of the public announcement of discussions relating to this Agreement, (y)
the date of the public announcement of this Agreement, or (z) the date of the
execution of this Agreement. The preceding sentence is intended to cause this
Agreement to be treated as not having been offered under conditions of
confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor
provision) of the Treasury Regulations promulgated under Section 6011 of the
Code, and shall be construed in a manner consistent with such purpose. Subject
to the provision with respect to disclosure in the first sentence of this
subsection (b), each Party hereto acknowledges that it has no proprietary or
exclusive rights to the federal tax structure of this Agreement or any federal
tax matter or federal tax idea related to this Agreement.
Section 18.10 Assignment. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective successors and permitted
assigns. Except as provided below in this Section 18.10, the rights and
obligations of either Party under this Agreement shall not be assignable or
delegable by such Party hereto without the written consent of the other Party;
provided, that the Administrator may (i) assign this Agreement or any rights,
duties or obligations hereunder to any Affiliate of the Administrator and (ii)
subcontract the performance of any Service (or any portion thereof) under this
Agreement to another Person in accordance with Section 4.03; provided further,
that no such assignment or delegation (including with respect to permitted
Subcontractors) shall relieve the Administrator from any of its obligations or
liabilities hereunder, and the Administrator shall remain responsible for all
obligations or liabilities of any such assignee with respect to the provision on
any Services as if provided by the Administrator.
Section 18.11 Waivers. Any term or provision of this Agreement may be waived,
or the time for its performance may be extended, in writing at any time by the
Party or Parties entitled to the benefit thereof. Any such waiver shall be
validly and sufficiently authorized for the purposes of this Agreement if, as to
any Party, it is authorized in writing by an authorized Representative of such
Party. The failure of any Party hereto to enforce at any time any provision of
this Agreement shall not be construed to be a waiver of such provision, nor in
any way to affect the validity of this Agreement or any part hereof or the right
of any Party thereafter to enforce each and every such provision. No waiver of
any breach of this Agreement shall be held to constitute a waiver of any
preceding or subsequent breach.
Section 18.12 Relationship. ILA and the Administrator are and shall remain
independent contractors and not employees or agents of the other Party. Except
as expressly granted in this Agreement or otherwise by the other Party in
writing or as may be required by Applicable Law or as necessary to perform the
services to be provided hereunder or to obtain the benefits hereof, no Party
shall have any authority, express or implied, to act as an agent of the other
Party or its subsidiaries or Affiliates under this Agreement. Except as
otherwise provided by this Agreement or by any other agreement between the
Parties, each Party shall be responsible for the payment of all employment,
income and social security Taxes arising in connection with the compensation
payable to its personnel involved in the provision of the Services hereunder.
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Section 18.13 Interpretation. The table of contents, articles, titles and
headings to sections herein are inserted for convenience of reference only and
are not intended to be a part of or to affect the meaning or interpretation of
this Agreement. The Schedules and Exhibits referred to herein shall be construed
with and as an integral part of this Agreement to the same extent as if they
were set forth verbatim herein. All references herein to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". Unless the context otherwise
requires, the words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein. The
definitions in this Agreement are applicable to the singular as well as the
plural forms of such terms and to the masculine as well as to the feminine
genders of such term. Any agreement or instrument defined or referred to herein
or any agreement or instrument that is referred to herein means such agreement
or instrument as from time to time amended, modified or supplemented, including
by waiver or consent, and references to all attachments thereto and instruments
incorporated therein. Any statute or regulation referred to herein means such
statute or regulation as amended, modified, supplemented or replaced from time
to time (and, in the case of any statute, includes any rules and regulations
promulgated under such statute), and references to any section of any statute or
regulation include any successor to such section. Any agreement referred to
herein shall include reference to all Exhibits, Schedules and other documents or
agreements attached thereto.
Section 18.14 Conflict. In the event of any conflict between the terms of this
Agreement and the Reinsurance Agreement, the terms of the Reinsurance Agreement
shall control.
Section 18.15 Force Majeure. No Party shall be liable for any expense, loss or
damage whatsoever arising out of any interruption of Service or delay or failure
to perform under this Agreement caused by Force Majeure (except to the extent
that the Service being provided was a disaster recovery service). For purposes
of this Agreement, "Force Majeure" means any circumstance or event beyond the
reasonable control of any Party relying upon such event or circumstance,
including: acts of God, acts of a public enemy, acts of terrorism, acts of a
nation or any state, territory, province or other political division thereof,
changes in Applicable Law, fires, floods, epidemics, riots, quarantine
restrictions, freight embargoes or other similar causes. In any such event,
ILA's and the Administrator's obligations hereunder shall be postponed for such
time as its or their performance is suspended or delayed on account thereof. If
any Party is so affected, such Party will notify the other Parties in writing
upon learning of the occurrence of such event of Force Majeure. Upon the
cessation of the Force Majeure event, such Party will use commercially
reasonable efforts to resume, or to cause the relevant Subcontractor, to resume,
its performance with the least practicable delay.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the
date first written above by their respective duly authorized officers.
HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY
By: /s/ David C. Robinson
-------------------------------
Name: David C. Robinson
Title: Senior Vice President
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ Gaurav Wadhwa
-------------------------------
Name: Gaurav Wadhwa
Title: Second Vice President
[SIGNATURE PAGE TO ILA ADMINISTRATIVE SERVICES AGREEMENT]
<Page>
SCHEDULE I
SCHEDULED REPORTS
[REDACTED]
(ii) Within twenty (20) Business Days after the end of each Accounting Period,
the Administrator shall prepare and provide to ILA a Settlement Statement (and,
upon the request of ILA, detailed supporting records therefor) in accordance
with Section 3.4 of the Reinsurance Agreement.
(iii) Within fifteen (15) Business Days after the end of each calendar quarter
that this Agreement is in effect, the Administrator shall provide to ILA reports
(including quarterly statement exhibits and schedules) including all such items
related to the General Account Reserves (including average liability credit
rate), General Account Liabilities, Separate Account Reserves, Separate Account
Liabilities, and all other General Account and Separate Account general ledger
data required to be reported on ILA's financial statements, footnotes, tax
returns, and other SAP and GAAP financial reports required by ILA's auditors or
any Governmental Body related to the Covered Insurance Policies; provided,
however, that quarterly AG 36 certifications shall be provided within twenty
(20) Business Days after the end of each calendar quarter that this Agreement is
in effect. Notwithstanding the foregoing, for tax reserves, such quarterly
reports shall contain estimates of the General Account Reserves and the Separate
Account Reserves. The Administrator shall provide such reports in such form and
manner as may reasonably be requested by ILA prior to the end of each calendar
quarter.
(iv) Within forty-five (45) Business Days after the end of each calendar year,
the Administrator shall provide to ILA a report setting forth projections of
General Account Reserves, GUL Net Reserves and the Required Balance, on an
annual basis going forward each year until the expiry of the liabilities ceded
under the Reinsurance Agreement.
(v) Within twenty (20) Business Days after the end of each calendar year that
this Agreement is in effect, the Administrator shall provide to ILA reports,
including (i) relevant information regarding the Covered Insurance Policies
(including any New Insurance Policies), the face amount thereof and the
reinsurance coverage provided for such policies in order for ILA to reasonably
verify the calculations described in Section 8.4(d) of the Reinsurance
Agreement; and (ii) all such items related to the General Account Reserves
(including average liability credit rate), General Account Liabilities, Separate
Account Reserves, Separate Account Liabilities, and all other General Account
and Separate Account general ledger data required to be reported on ILA's
financial statements, unaudited footnotes, tax returns, and other SAP and GAAP
financial reports required by ILA's auditors or any Governmental Body related to
the
<Page>
Covered Insurance Policies. Notwithstanding the foregoing, for tax reserves, the
reports with respect to General Account Reserves and Separate Account Reserves
shall be provided as soon as possible, but in any event by May 1st of the
following year. In addition, the Administrator shall provide to ILA as soon as
possible, but in no event later than the dates sets forth below: (1) final,
clean copies of all required actuarial opinions of the Administrator and
supporting actuarial memoranda prepared by the Administrator's actuaries,
independent or otherwise, in each case, pertaining to the Covered Insurance
Policies in a form to be mutually agreed by the Parties (which may include
redactions of confidential information not related to the Covered Insurance
Policies) by a date mutually agreed by the Parties each year, provided such date
shall in any event be reasonably sufficient to allow ILA to comply with any
regulatory filing requirements or deadlines (and provided that ILA shall have
given Administrator sufficient advance detailed notice of the need thereof); (2)
annual certifications, in a form to be mutually agreed by the Parties, by an
actuary employed by the Administrator (who meets the requirements of the
American Academy of Actuaries for providing actuarial opinions) that the General
Account Reserves and the Separate Account Reserves reported by the Administrator
with respect to the Covered Insurance Policies are consistent with the
requirements for such calculation by no later than February 15th of each year to
the extent required to allow ILA to comply with applicable regulatory filing
requirements; (3) all actuarial exhibits and schedules as available starting
with Exhibit 5 and Schedule S with a target of February 7th of each year but no
later than February 15th of each year; (4) final, clean copies of all other
reports such as analysis of increase in reserves, exhibit of life insurance, and
state business pages required to be included in ILA's annual statement and to
complete ILA's New York Annual Statement Supplement filing by no later than
February 15th of each year and other state specific information with sufficient
time to allow ILA to meet any other regulatory filing requirements (and in any
event at least ten (10) calendar days prior to the date such filings are due);
and (5) final, clean copies of all non-actuarial annual statement exhibits and
schedules by no later than January 31st of each year; provided, however, that in
the case of items (1) through (4) above, the Administrator may provide its
reasonable best estimate with respect to AAT reserves as are available by
February 15th;
(vi) The Administrator shall timely provide written notice to ILA of any
material changes in the reserve basis or reserve methodology used in calculating
the General Account Reserves and the Separate Account Reserves in each case in
accordance with Applicable Law.
[REDACTED]
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(viii) During the term of this Agreement, the Administrator shall furnish to
ILA the reports and certifications specified by the Trust Account Investment
Guidelines.
(ix) Within thirty (30) Business Days after the end of each calendar quarter
that this Agreement is in effect, other than the calendar quarters ending on
December 31, the Administrator shall provide to ILA information required to file
reports BE-45 and BE-140 required by the U.S. Department of Commerce. Such
information to include premiums earned and losses incurred on reinsurance
assumed from insurance companies resident abroad and premiums incurred and
losses recovered on reinsurance ceded to insurance companies resident abroad.
The Administrator shall provide such reports in such form and manner as may
reasonably be requested by ILA prior to the end of each calendar quarter.
(x) Within forty-five (45) Business Days after the end of each calendar year
that this Agreement is in effect, the Administrator shall provide to ILA
information required to file reports BE-45 and BE-140 required by the U.S.
Department of Commerce. Such information to include premiums earned and losses
incurred on reinsurance assumed from insurance companies resident abroad;
premiums incurred and losses recovered on reinsurance ceded to insurance
companies resident abroad and premiums earned and losses incurred on primary
insurance sold to foreign persons. The Administrator shall provide such reports
in such form and manner as may reasonably be requested by ILA prior to the end
of each calendar year.
(xi) The Administrator shall provide its Asset Impairment (OTTI) Policy (i) at
or before the Effective Time, as such policy is in effect as of the Effective
Time and (b) after the Effective Time, promptly upon any changes to such policy.
(xii) With respect to any commercial mortgage loans held in any trust account
established pursuant to the Reinsurance Agreement, the Administrator shall
provide (or shall cause the servicer of such loans to provide) to ILA the
following standard reports, which shall be substantially in the forms set forth
in Exhibit A to this Schedule I within fifteen (15) Business Days after the end
of each calendar month: (a) monthly remittance reports detailing loan number,
loan name, investor trial balance, UPB, collections of principal, interest,
prepayment premium/yield maintenance, and any other amounts paid by the borrower
under such loan and (b) a month end loan listing report which reflects loan
number, loan name, end of month UPB, book value, market value and maturity date.
3
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EXHIBIT A TO SCHEDULE I
<Page>
SCHEDULE II
SERVICES
The Services shall include, but are not limited to, the following:
(a) Upon the reasonable request by ILA, the Administrator shall provide "ledger
information" feeds with respect to the General Account and the Separate Account
concerning the Administered Business as soon as practicable thereafter. Parties
will make commercially reasonable efforts to migrate the use of "ledger
information" feeds to provide the Services in Schedule II and the reports in
Schedule I as are reasonably practicable.
(b) Preparing and/or mailing all necessary, required or appropriate statements,
notices, reports, confirmation statements, policy statements (quarterly and
annual), contract prospectuses, and communications to Underlying Companies,
policyholders of the Covered Insurance Policies, and to individual insurance
producers, including notices of premiums and notices of any grace and lapse in
coverage, as required by Applicable Law and performing services necessary to
meet SEC requirements with respect to any Covered Insurance Policy, In addition,
the Administrator, shall distribute at its expense to policy owners all required
contract and fund prospectuses, post effective amendments or supplements to the
registration statements of the Separate Accounts or of any underlying funds as
well as annual and semi-annual reports;
(c) billing, collecting (for the account of the Administrator) and processing
Recoverables and other amounts due under the Covered Insurance Policies and
Existing Reinsurance Agreements and processing and paying any return
Recoverables and other amounts due under the Covered Insurance Policies,
Existing Reinsurance Agreements, any other Ancillary Agreement Covered
Contracts, this Agreement and the Reinsurance Agreement;
(d) providing usual and customary services for the Underlying Companies and
policyholders of the Covered Insurance Policies, including processing
reinstatements, cancellations, policy lapses, expiries, non-forfeiture options,
policyholder and beneficiary changes, policy loans, surrenders, policyholder
sub-account transfer requests, and systematic payouts or other changes provided
for under the Covered Insurance Policies and calculations relating thereto, and
processing any policy changes requested by policyholders of the Covered
Insurance Policies, including name changes, address changes, loss payee changes
and increases and decreases in coverage amounts;
(e) as provided in Article XVI, calculating all premium taxes and assessments
due in respect of the Administered Business and notifying ILA of the full amount
of said premium taxes and assessments for ILA to make payment to the appropriate
Governmental Body or guaranty association and furnishing ILA with all
information necessary for ILA to make such payments and comply with all related
filing and reporting requirements under the terms of this Agreement;
(f) preparing and delivering to ILA or an ILA Affiliate all accounting,
financial, regulatory and actuarial information and reports related to the
Administered Business that is necessary to meet any regulatory, statutory, tax
or GAAP accounting requirements;
<Page>
(g) monitoring the Required Balance of the Trust Account and the assets held
therein for purposes of delivering the reports required under Schedule I(vii);
(h) subject to Article VIII, handling all Governmental Body compliance matters
in connection with the Administered Business and the Services;
(i) receiving, administering, processing, investigating and evaluating claims
and disbursement requests filed by or on behalf of policyholders or Underlying
Companies of the Covered Insurance Policies and either (i) paying, within the
time periods and in the manner prescribed by Applicable Law, on behalf of ILA,
such claims and disbursement requests in accordance with the terms and
conditions of the Covered Insurance Policies and Applicable Law (it being
understood that this obligation is merely in furtherance of the provision of
Services and is not intended to expand the Administrator's liability with
respect to the Covered Insurance Policies, which liability shall be solely
governed by the Reinsurance Agreement) or (ii) proposing to deny or denying, or
compromising in accordance with the terms and conditions of the Covered
Insurance Policies, Applicable Law and customary practices, such claims and
disbursements in whole or in part and communicating the reason for denial to the
claimant. In the event of non-payment of claims on account of incomplete or
insufficient data, the Administrator shall acknowledge such fact to the claimant
by the number of days provided by Applicable Law. The Administrator shall also
communicate with reinsurers with respect to submission approval and payment,
compromise or denial of claims made under the Covered Insurance Policies;
maintain such files and records as are necessary to enable ILA, at any time, to
determine the true and accurate claim experience of the Covered Insurance
Policies; and perform such other claim services as may be reasonably required in
connection with the support and administration of the Covered Insurance
Policies;
(j) The Administrator shall provide ILA, on a monthly basis a list of all
reported and discovered deaths of insureds under Covered Insurance Policies so
that ILA can comply with state death claim sharing requirements.
(k) The Administrator shall search public records to identify insured deaths.
Such searches shall be done in accordance with Applicable Law, any applicable
regulatory settlement or agreement in a process as reasonably agreed by the
Parties. The Administrator may utilize the services of third party vendors to
identify and locate insureds as long as the vendors are obligated to safeguard
and keep confidential Customer Information relating to the Covered Insurance
Policies to the same extent as the Administrator.
(l) Preparing all required escheat filings with respect to the Administered
Business and timely providing information to ILA upon request in order to allow
ILA to timely file such escheat filings;
(m) transferring assets or funds (i) between one or more Separate Accounts and
ILA's general account, (ii) between one or more sub-accounts of any such
Separate Accounts, or (iii) between ILA and the Reinsurer in support of the
Reinsurance Agreement;
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<Page>
(n) providing the following services related to the Separate Accounts on behalf
ILA and any additional Services reasonably requested by ILA with respect to the
Separate Accounts:
(i) maintaining copies of each Separate Account's governing documents;
provided that ILA shall provide to the Administrator all current copies of
such documents;
(ii) preparing and filing with state insurance departments, necessary
filings for the Separate Accounts, and preparing and maintaining required
licenses and permits and complying with all related regulatory
requirements; provided that the Administrator shall not be required to take
any action pursuant to this paragraph (n)(ii) with respect to the modified
guaranteed life insurance business;
(iii) (1) preparing all Filings with the SEC in an accurate and complete
manner and consistent with all applicable requirements for such Filings,
except as provided below for Form N-6 filings;
(2) with respect to Covered Insurance Policies required to be filed on
Form N-6, the Administrator shall coordinate the preparation and filing
with the SEC of registration statements and any amendments thereto. The
Administrator shall prepare the prospectus, statement of additional
information, Part C and any exhibits and letters required to be filed in or
with the registration statement. The Administrator shall also prepare and
file the financial statements of the Registrant (the separate account as
defined in Section 2(a)(37) of the Investment Company Act of 1940 and as
required by Form N-6 (SA Financials)) and coordinate the review of the SA
Financials and the registration statement with the appointed independent
auditing firms, ILA will provide the Administrator with the financial
statements of the Depositor as required by Form N-6 as soon as reasonably
practicable for the Administrator to edgarize and include in the
registration statement filings with the SEC. The Administrator shall obtain
the necessary consents and exhibits for the registration statements. The
Administrator shall provide ILA with each registration statement prior to
filing so that ILA can review the filing and sign the Legal Opinion Letter
provided in Item 26(k) of Form N-6. ILA agrees to cooperate with the
Administrator and provide the Administrator information and assistance
reasonably necessary in order for the Administrator to timely file the
registration statements,
(iv) upon reasonable prior notice, the Administrator may cease updating
prospectuses relating to the Covered Insurance Policies in accordance with
the SEC no-action letter dated October 23, 1990 issued to Great-West Life &
Annuity Insurance Company and any subsequent related no-action letters, or
may begin to update prospectuses that ILA has previously stopped updating.
(v) administering Contracts on behalf of ILA with, among others, mutual
fund organizations that make their mutual funds available as investment
options within the Separate Accounts;
3
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(vi) performing all accounting services with respect to the Separate
Accounts as may be reasonably requested by ILA from time to time or as
required by Applicable Law, including that (1) within fifteen (15) days
after the end of each calendar month, the Administrator shall provide
"ledger information" in a mutually agreeable format with respect to the
Separate Account so that ILA can prepare the statutory annual statements,
and (2) Administrator shall perform daily net asset/ unit valuations; and
(vii) performing, in the name and on behalf of ILA or on behalf of an
Affiliate of ILA, all of ILA's or an Affiliate's obligations under, and
shall comply with the terms of, (i) any Mutual Fund Agreements, (ii) the
underwriting agreements between ILA and the principal underwriters for the
policies, and (iii) any Distribution Agreements or other agreements related
to the distribution of the policies, in each case to the extent that ILA
has provided complete copies of such agreements (including any amendments
thereto) to the Administrator, in each case, to the extent consistent with
Applicable Law,
(o) performing monthly reconciliations of suspense and withholding accounts
and, upon ILA's request, providing documentation of these reconciliations to
ILA;
(p) receiving, logging and responding to complaints in respect of the Covered
Insurance Policies in accordance with Article VIII;
(q) providing any standard supplies needed for the administration of the
Administered Business, which materials shall strictly be used in accordance with
this Agreement;
(r) making recommendations to ILA with respect to: (i) Non- Guaranteed Elements
in accordance with Section 4.06, (ii) reserving methodologies related to the
Covered Insurance Policies, (iii) dividends with respect to any par policies and
(iv) changes to fund options in accordance with Section 4.07;
(s) managing any communications with Distributors or Distribution
Intermediaries regarding the Covered Insurance Policies;
(t) Rule 38a-l Compliance Program. For as long as any Covered Insurance Policy
that is registered as a security with the SEC remains in force and the
Administrator continues to act as an "administrator" (as defined in the
Investment Company Act of 1940, as amended), the Administrator shall implement
and, throughout the term of this Agreement, maintain in effect, policies and
procedures reasonably designed to prevent, detect, and correct violations of
"federal securities laws" (as defined in Rule 38a-1), insofar as applicable to
the Services the Administrator is providing hereunder, by the Administrator and
its respective employees, officers, agents and Affiliates. The Administrator
will promptly notify ILA in the event that it becomes aware of any "material
compliance matter" (as defined in Rule 38a-1) arising with respect to the
Services provided hereunder. The Administrator shall promptly provide true and
complete copies of such policies and procedures (or summaries thereof) and
related information required by Applicable Law upon reasonable request including
4
<Page>
but not limited to, control reports, incident reports, exception reports,
compliance check-lists and internal audit reports. The Administrator shall
cooperate with periodic reviews by ILA's personnel of such policies and
procedures, their operation and implementation, including visual inspection of
the Administrator's facilities and processes, and provide such additional
information, reports, and certifications to ILA in respect of such policies and
procedures, compliance with federal securities laws and related compliance
matters as ILA may reasonably request. The Administrator shall appoint a Chief
Compliance Officer whose responsibilities include preparation of reports on the
operation and effectiveness of the Separate Account's Rule 38a-l compliance
program ("COMPLIANCE PROGRAM"), and providing information with respect to the
Compliance Program to ILA so that the ILA 38a-l CCO can prepare the annual and
periodic reports as required.
(u) The Administrator shall provide ILA or an Affiliate of ILA as required by
Applicable Law, with the following non-exclusive list of periodic reports,
certifications, and additional information, the frequency of which may be
changed from time to time at the discretion of ILA:
(i) The Administrator's Compliance Program shall include an annual review
by the Administrator's Chief Compliance Officer of the adequacy and
effectiveness of the policies and procedures of the Administrator's
Compliance Program and the effectiveness of its implementation and the
submission of a signed annual report by the Administrator's Chief
Compliance Officer by no later than May 1 of every calendar year containing
all customary and reasonable detail and elements of a report necessary for
the ILA 38a-l CCO to prepare the reports as provided in Rule 38a-l;
(ii) The Administrator shall promptly notify ILA in the event that it
becomes aware of any compliance matter arising with respect to the Services
provided hereunder within 24 hours of discovery, if possible, but in no
instance later than three (3) Business Days after discovery thereof, and
shall provide ILA with copies of all pertinent files and information
relating thereto and the ILA 38a-l CCO shall have the opportunity to
discuss the Administrator's remediation plans, prior to implementation if
practicable, regarding any such compliance matter and to make reasonable
recommendations to the Administrator regarding such remediation plan;
(iii) In the event the Administrator contemplates making any material
changes to the existing compliance policies and procedures under its
Compliance Program, the Administrator shall timely notify and provide ILA
with copies of the proposed amendments for review, comment, and final
approval by ILA of such documents;
(iv) Provide ILA with reports upon request, regarding the compliance
personnel employed and retained by the Administrator to provide services to
the Covered Insurance Policies, or on behalf of an Affiliate of ILA, and
describing the experience, skill, expertise, licenses and accreditation of
said compliance staff; and
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(v) Create and maintain all internal reports, control reports, exception
reports, and certifications necessary to administer the business, and make
such reports and certifications available to ILA as needed for internal and
external purposes.
(v) Perform services to administer and manage the Existing Reinsurance
Agreements, including:
(i) Provide reports and data to reinsurers as required under the Existing
Reinsurance Agreements;
(ii) Calculate amounts required, pay amounts due and collect amounts owing
as required under the Existing Reinsurance Agreements;
(iii) Consult with reinsurers as required under the terms of the Existing
Reinsurance Agreements (such consultation may include notification of
changes in rates or terms of Covered Insurance Policies, changes in
policies, manuals or processes related to the Covered Insurance Policies or
review of claims made under the Covered Insurance Policies );
(iv) Respond to reinsurer requests for information and facilitate audits
as permissible under the Existing Reinsurance Agreements;
(v) Initiate and facilitate amendments to Existing Reinsurance Agreements,
as requested by ILA or the reinsurers;
(vi) Facilitate, in accordance with the Existing Reinsurance Agreements,
the timely update of any collateral supporting ILA's reserve credit under
such Existing Reinsurance Agreements in its Statutory Financial Statements;
(vii) Provide ILA with updated collateral documentation within fifteen
(15) Business Days of receipt by the Administrator and an annual
verification of collateral amounts no later than fifteen (15) Business Days
after every calendar year; and
(viii) Provide ILA with information related to the Existing Reinsurance
Agreements to complete internal and external reporting related to
reinsurance. Such reporting includes, but is not limited to quarterly and
annual statutory and GAAP reporting, rating agency surveys, and regulatory
reports, requests and inquiries.
(w) The Administrator shall investigate and prepare responses to all customer
complaints and regulatory inquiries or complaints. Subject to the foregoing, all
customer complaints shall be handled in accordance with Applicable Law
(including without limitation any response time requirements applicable
thereto). A record of all customer complaints shall be maintained in a log
showing the date received, the nature of the complaint, the action taken (if
any) and the date of the response. As used herein, a "customer complaint"
6
<Page>
shall be deemed to include any written communication primarily expressing a
grievance against ILA, an Affiliate of ILA, or the Administrator;
(x) Print and mail privacy notices to policy owners as required by Applicable
Law;
(y) Provide regulatory supervision and compliance, to the extent the
Administrator is permitted under Applicable Law, as to all Services contemplated
by this Agreement;
(z) Monitor statutes and regulations of the insurance departments in the
various states in which the policyowners or Covered Insurance Policies are
located to ensure compliance therewith and to provide reasonable assurance that
any actions or communications required by such regulations or statutes are
properly made;
(aa) Monitor the federal securities statutes and the rules, regulations, orders
and interpretations thereunder and the securities statutes and rules,
regulations, orders and interpretations thereunder of the various states in
which the policy owners or Covered Insurance Policies are located to provide
reasonable assurance of compliance therewith and to ensure that any actions or
communications required thereby are properly made;
(bb) Monitor the federal Tax and the rules, regulations, orders, and
interpretations thereunder and the tax statutes and rules, regulations, orders
and interpretations thereunder of the various states in which the policy owners
or Covered Insurance Policies are located to provide reasonable assurance of
compliance therewith and to ensure that any actions or communications required
thereby are properly made; and
(cc) Provide such services as ILA or an Affiliate of ILA may require in
connection with responding to inquiries from the SEC, FINRA, NAIC or the
insurance or securities departments in accordance with Article VIII.
(dd) Provide the Commission Payment Services, as such term is defined in and,
in accordance with, the Letter Agreement dated January 2, 2013 by and among
Administrator, HESCO, Hartford Securities Distribution Company, Inc., Hartford
Life Insurance Company, Hartford Life and Accident Insurance Company and
Hartford Life and Annuity Insurance Company as long as it remains in effect,
including:
(i) Providing ministerial services involving the calculation and provision
of commission disbursement payment instructions to a financial institution
selected by ILA for the payment of commissions to Distribution
Intermediaries distributing products covered by this Agreement, including
variable life insurance policies underwritten by ILA's affiliated
broker-dealers;
(ii) Providing ILA and any affiliated broker-dealer information reasonably
necessary for ILA and any such affiliated broker-dealer to monitor the
Administrator's performance with respect to the functions described in
paragraph (i) above;
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(iii) Providing ILA and any affiliated broker-dealer with information
necessary for such affiliated broker-dealer to properly reflect the
commission payments described in (i) above on any affiliated
broker-dealer's books and records in accordance with FINRA rules and
regulations;
(iv) Creating and maintaining books and records reflecting the commission
payment instructions with respect to insurance policies covered by this
Agreement in accordance with Applicable Law (as defined in the Purchase
Agreement), retaining such books and records for time periods required by
Applicable Law, and providing access to the books and records to ILA and
any affiliated broker-dealer upon their reasonable written request.
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<Page>
SCHEDULE III
INFORMATION SECURITY REQUIREMENTS
1. Purpose. This Schedule III sets forth the minimum information security
program and infrastructure policies (the "Information Security Requirements")
that each Party (the "Data Recipient") must meet and maintain in order to
protect Confidential Information and Personal Information (collectively, the
"Data") of the other Party (the "Data Provider") from unauthorized use, access,
disclosure, theft, manipulation, reproduction and/or possible security breach
during the term of the Agreement and for any period of time thereafter during
which the Data Recipient has possession of or access to the Data.
2. Information Security Safeguards. The Data Recipient and all of its Affiliates
and Representatives have implemented, currently maintain, and will maintain
throughout the term of this Agreement an information security program designed
to protect Data, which program includes administrative, technical and physical
safeguards (i) to ensure the security and confidentiality of Data; (ii) to
protect against any anticipated threats or hazards to the security or integrity
of such Data; and (iii) to protect against unauthorized access to or use of Data
which could result in harm or inconvenience to the Data Provider or its
customers ("Information Security Safeguards").
2.1 Standards & Practices. The Data Recipient's Information Security
Safeguards shall incorporate commercially reasonable methods and safeguards
to ensure the security, confidentiality, integrity, availability and
privacy of the Data.
2.2 Information Security Policies. The Data Recipient must have in place
and adhere to internal information security and privacy policies that
address the roles and responsibilities of the Data Recipient's personnel,
including both technical and non-technical personnel, who have direct or
indirect access to the Data. These internal security and privacy policies
must, at a minimum, include: security policy; organization of information
security; asset management; human resources security; physical and
environment security; communications and operations management; access
control; information systems procurement, development and maintenance;
information security incident management; business continuity management;
and compliance.
2.3 Workspace Security. The Data Recipient's Information Security
Safeguards must include reasonable workspace controls designed to protect
Customer Information.
2.4 Appropriate Safeguards. The Data Recipient's Information Security
Safeguards shall include (i) safeguards against the unauthorized
destruction, loss, or alteration of the Data; (ii) safeguards against
unauthorized access to such data; and (iii) network and internet security
procedures, protocols, security gateways and firewalls with respect to such
data in accordance with best commercial practices.
2.5 Physical Security Safeguards. The Data Recipient's Information Security
Safeguards shall include physical safety and security safeguards at any
facilities
<Page>
where any Services are performed or received that meet or exceed reasonable
best commercial practices.
3. Vulnerability Assessments. Without limiting the Data Recipient's obligations
set forth in this Agreement, the Data Recipient will maintain, at its own
expense, a vulnerability assessment program that is consistent with the Data
Recipient's standard process and procedures, or at least annually, on all
information applications and/or systems associated with accessing, processing,
storage, communication and/or transmission of the Data including the Data
Recipient's systems and networks. The assessment program must include a
methodology for identifying, quantifying, ranking and mitigating weaknesses in
the Data Recipient's systems.
4. Third Party Security Assessment. No more than one time per year, the
Administrator shall complete ILA's Third-Party Security Assessment Questionnaire
and forward a completed copy to ILA's information protection department. No more
than one time per year, ILA shall complete Administrator's Third-Party Security
Assessment Questionnaire and forward a completed copy to Administrator's
information protection department.
5. Information Security Infrastructure.
5.1 Access Controls. The Data Recipient will ensure appropriate access
controls are in place to protect the Data. The Data Recipient must also
ensure that segregation of duties principles are employed in the assignment
of all critical job functions. The Data Provider will be solely responsible
for implementing and maintaining access controls on its own systems to
which the Data Recipient may be granted access.
5.2 Authorized Persons. The Data Recipient shall limit access to the Data
to those of its Representatives who have a need to access such data in
connection to the uses permitted by this Agreement ("Authorized Persons").
The Data Recipient shall ensure that each Authorized Person is trained and
shall comply with the requirements of the Data Recipient's Information
Security Safeguards. The Data Recipient shall re-evaluate its list of
Authorized Persons at least annually.
5.3 Password Administration. The Data Recipient's passwords that are
associated with access to Data must comply with PCI password requirements.
5.4 Encryption. The Data Recipient must encrypt all off-site tapes,
removable media devices, laptops, e-mail between the Parties, network file
transfers, and web transactions. Encryption is provided through commercial
grade, industry-standard strong cryptographic algorithms, protocols, and
commercially reasonable key strengths.
5.5 Network and Host Security. The Data Recipient must have commercially
reasonable and efficient network intrusion detection, firewalls and
anti-virus protection in place and functioning properly. The Data Recipient
shall use commercially reasonable efforts to ensure that operating systems
and applications that are associated with the Data must be patched within a
commercially
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reasonable time period after Data Recipient has actual or constructive
knowledge of any security vulnerabilities. The Data Recipient will exercise
generally accepted industry standards to protect against malware and
Viruses.
6. Audit and Reporting. Each Data Recipient must conduct annual self-audits to
ensure compliance with these Information Security Requirements and its internal
information security and privacy policies and, upon request, shall provide a
copy of the latest report for such audits to the Data Provider.
7. Customer Information.
7.1 The Data Recipient shall notify the Data Provider, promptly and without
unreasonable delay, but in no event more than two (2) Business Days after
learning that unauthorized access to, disclosure of, or breach in the security
(in each case as defined by Applicable Law) of Customer Information disclosed or
provided by the Data Recipient has occurred (a "Security Incident"). Thereafter,
the Data Recipient shall, at its own cost and expense:
(a) promptly furnish to the Data Provider full details of the Security
Incident;
(b) assist and cooperate fully with the Data Provider in the Data
Provider's investigation of the Data Recipient and employees or third
parties related to the Security Incident (subject to the Data Recipient
being present at any discussions with such employees or third parties),
including providing the Data Provider with reasonable and necessary
physical access to the facilities and operations affected, facilitating
interviews with employees and others involved in the matter (subject to the
Data Recipient being present at any interviews with such employees or
others), and making available all relevant requested records, logs, files,
and data;
(c) cooperate with the Data Provider in any litigation or other action
against third parties deemed necessary by Data Provider to protect its
rights; and\
(d) promptly use its commercially reasonable efforts to prevent a
recurrence of any such Security Incident.
7.2 In addition to the foregoing, the Data Recipient agrees that in the event
of a Security Incident, the Data Provider shall have the sole right to determine
(i) whether notice is to be provided to any individuals, regulators, law
enforcement agencies, consumer reporting agencies, or others as required by law
or regulation; (ii) the contents of such notice; and (iii) whether any type of
remediation may be offered to affected persons (provided that such remediation
shall be limited to two (2) years of credit monitoring at a level at least equal
to that offered by Equifax ID Patrol). Any such notice or remediation shall be
at the Data Recipient's sole cost and expense.
7.3 The Data Recipient agrees that its treatment of Customer Information is in
compliance with Applicable Laws and/or regulations with respect to privacy and
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data security and that it has implemented and currently maintains an effective
information security program that includes administrative, technical, and
physical safeguards to (i) ensure the security and confidentiality of such
Customer Information; (ii) protect against any anticipated threats or hazards to
the security or integrity of such Customer Information; and (iii) protect
against unauthorized access to, destruction, modification, disclosure or use of
such Customer Information which could result in substantial harm or
inconvenience to the Data Provider, or to any person who may be identified by
such Customer Information. The Data Recipient shall immediately notify the Data
Provider if the Data Recipient is in material breach of this Schedule III. The
Data Recipient shall allow the Data Provider to perform an audit, the scope of
which is mutually agreed upon, of the Data Recipient's facilities and records to
ensure compliance with the privacy and security provisions of this Agreement.
4
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EXHIBIT A
<Page>
FORM OF TRADEMARK LICENSE AGREEMENT
[REDACTED]
<Page>
[LOGO]
THE HARTFORD
April 22, 2013
Board of Directors
Hartford Life and Annuity Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089
RE: SEPARATE ACCOUNT VL I
HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
FILE NO. 333-82866
Dear Sir/Madam:
I have acted as Counsel to Hartford Life and Annuity Insurance Company (the
"Company"), a Connecticut insurance company, and Hartford Life and Annuity
Insurance Company Separate Account VL I (the "Account") in connection with the
registration of an indefinite amount of securities in the form of flexible
premium variable life insurance policies (the "Policies") with the Securities
and Exchange Commission under the Securities Act of 1933, as amended. I have
examined such documents (including the Form N-6 Registration Statement) and
reviewed such questions of law as I considered necessary and appropriate, and on
the basis of such examination and review, it is my opinion that:
1. The Company is a corporation duly organized and validly existing as a stock
life insurance company under the laws of the State of Connecticut and is
duly authorized by the Insurance Department of the State of Connecticut to
issue the Policies.
2. The Account is a duly authorized and validly existing separate account
established pursuant to the provisions of Section 38a-433 of the
Connecticut Statutes.
3. To the extent so provided under the Policies, that portion of the assets of
the Account equal to the reserves and other contract liabilities with
respect to the Account will not be chargeable with liabilities arising out
of any other business that the Company may conduct.
4. The Policies, when issued as contemplated by the Form N-6 Registration
Statement, will constitute legal, validly issued and binding obligations of
the Company.
I hereby consent to the filing of this opinion as an exhibit to the Form N-6
Registration Statement for the Policies and the Account.
Sincerely,
/s/ Lisa M. Proch
---------------------------------------------------------
Lisa M. Proch
Vice President and Assistant General Counsel
<Page>
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use in this Post-Effective Amendment No. 24 to Registration
Statement No. 333-82866 of Hartford Life and Annuity Insurance Company Separate
Account VL I, on Form N-6, of our report dated March 28, 2013, relating to the
statements of assets and liabilities of Hartford Life and Annuity Insurance
Company Separate Account VL I as of December 31, 2012, and the related
statements of operations for each of the periods presented in the year then
ended, the statements of changes in net assets for each of the periods presented
in the two years then ended, and the financial highlights in Note 6 for each of
the periods presented in the five years then ended, appearing in the Statement
of Additional Information, which is part of such Registration Statement, and to
the reference to us under the heading "Experts" in such Statement of Additional
Information.
/s/ Deloitte & Touche LLP
Hartford, Connecticut
April 22, 2013
<Page>
CONSENT OF INDEPENDENT AUDITORS'
We consent to the use in this Post-Effective Amendment No. 24 to Registration
Statement No. 333-82866 of Hartford Life and Annuity Insurance Company Separate
Account VL I, on Form N-6, of our report dated April 10, 2013, relating to the
statutory-basis financial statements of Hartford Life and Annuity Insurance
Company ("Company") as of December 31, 2012 and 2011 and for each of three years
in the period ended December 31, 2012 (which report expresses an unmodified
opinion in accordance with accounting practices prescribed and permitted by the
Insurance Department of the State of Connecticut), appearing in the Statement of
Additional Information, which is part of such Registration Statement, and to the
reference to us under the heading "Experts" in such Statement of Additional
Information.
/s/ Deloitte & Touche LLP
Hartford, Connecticut
April 22, 2013
<Page>
HARTFORD LIFE INSURANCE COMPANY
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
POWER OF ATTORNEY
------------
Beth A. Bombara
does hereby authorize Jack Ewing, Blakely Fishlin, Sun-Jin Moon and/or Erin
Schwerzmann, individually, to sign as her agent any and all pre-effective
amendments and post-effective amendments filed on Form N-6 for the File Numbers
listed on Appendix A attached hereto, with respect to Hartford Life Insurance
Company and/or Hartford Life and Annuity Insurance Company and does hereby
ratify such signature heretofore made by such persons.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for the
purpose herein set forth.
<Table>
<S> <C> <C>
By: /s/ Beth A. Bombara Dated as of February 4, 2013
----------------------------------------------------
Beth A. Bombara
</Table>
<Page>
APPENDIX A
Hartford Life Insurance Company
Hartford Life and Annuity Insurance Company
Power of Attorney dated as of February 4, 2013
Filed on Form N-6
File Numbers:
333-180756
333-180757
333-155092
333-155096
333-148814
333-148815
333-148816
333-148817
333-109529
333-109530
333-93319
333-88787
333-83057
333-82866
333-07471
033-53692
<Page>
HARTFORD LIFE INSURANCE COMPANY
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
POWER OF ATTORNEY
------------
Mark J. Niland
does hereby authorize Jack Ewing, Blakely Fishlin, Sun-Jin Moon and/or Erin
Schwerzmann, individually, to sign as his agent any and all pre-effective
amendments and post-effective amendments filed on Form N-6 for the File Numbers
listed on Appendix A attached hereto, with respect to Hartford Life Insurance
Company and/or Hartford Life and Annuity Insurance Company and does hereby
ratify such signature heretofore made by such persons.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for the
purpose herein set forth.
<Table>
<S> <C> <C>
By: /s/ Mark J. Niland Dated as of February 4, 2013
----------------------------------------------------
Mark J. Niland
</Table>
<Page>
APPENDIX A
Hartford Life Insurance Company
Hartford Life and Annuity Insurance Company
Power of Attorney dated as of February 4, 2013
Filed on Form N-6
File Numbers:
333-180756
333-180757
333-155092
333-155096
333-148814
333-148815
333-148816
333-148817
333-109529
333-109530
333-93319
333-88787
333-83057
333-82866
333-07471
033-53692
<Page>
HARTFORD LIFE INSURANCE COMPANY
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
POWER OF ATTORNEY
------------
Robert W. Paiano
does hereby authorize Jack Ewing, Blakely Fishlin, Sun-Jin Moon and/or Erin
Schwerzmann, individually, to sign as his agent any and all pre-effective
amendments and post-effective amendments filed on Form N-6 for the File Numbers
listed on Appendix A attached hereto, with respect to Hartford Life Insurance
Company and/or Hartford Life and Annuity Insurance Company and does hereby
ratify such signature heretofore made by such persons.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for the
purpose herein set forth.
<Table>
<S> <C> <C>
By: /s/ Robert W. Paiano Dated as of February 4, 2013
----------------------------------------------------
Robert W. Paiano
</Table>
<Page>
APPENDIX A
Hartford Life Insurance Company
Hartford Life and Annuity Insurance Company
Power of Attorney dated as of February 4, 2013
Filed on Form N-6
File Numbers:
333-180756
333-180757
333-155092
333-155096
333-148814
333-148815
333-148816
333-148817
333-109529
333-109530
333-93319
333-88787
333-83057
333-82866
333-07471
033-53692
<Page>
HARTFORD LIFE INSURANCE COMPANY
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
POWER OF ATTORNEY
------------
Peter F. Sannizzaro
does hereby authorize Jack Ewing, Blakely Fishlin, Sun-Jin Moon and/or Erin
Schwerzmann, individually, to sign as his agent any and all pre-effective
amendments and post-effective amendments filed on Form N-6 for the File Numbers
listed on Appendix A attached hereto, with respect to Hartford Life Insurance
Company and/or Hartford Life and Annuity Insurance Company and does hereby
ratify such signature heretofore made by such persons.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for the
purpose herein set forth.
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<S> <C> <C>
By: /s/ Peter F. Sannizzaro Dated as of February 4, 2013
----------------------------------------------------
Peter F. Sannizzaro
</Table>
<Page>
APPENDIX A
Hartford Life Insurance Company
Hartford Life and Annuity Insurance Company
Power of Attorney dated as of February 4, 2013
Filed on Form N-6
File Numbers:
333-180756
333-180757
333-155092
333-155096
333-148814
333-148815
333-148816
333-148817
333-109529
333-109530
333-93319
333-88787
333-83057
333-82866
333-07471
033-53692