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FORM 10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998

OR

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

For the transition period from ____________ to ______________

Commission file number 2-89516

HARTFORD LIFE INSURANCE COMPANY
(Exact name of registrant as specified in its charter)

CONNECTICUT 06-0974148
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

200 HOPMEADOW STREET, SIMSBURY, CONNECTICUT 06089
(Address of principal executive offices)


(860) 525-8555
(Registrant's telephone number, including area code)


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

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

As of March 30, 1999, there were outstanding 1,000 shares of Common Stock,
$5,690 par value per share, of the registrant, all of which were directly owned
by Hartford Life and Accident Insurance Company.

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





CONTENTS




ITEM DESCRIPTION PAGE

PART I 1 Business of Hartford Life Insurance Company* 3
2 Properties* 9
3 Legal Proceedings 10
4 **

PART II 5 Market for Hartford Life Insurance Company's Common Stock and
Related Stockholder Matters 10
6 **
7 Management's Discussion and Analysis of Financial Condition and
Results of Operations* 11
7A Quantitative and Qualitative Disclosures About Market Risk 23
8 Financial Statements and Supplementary Data 23
9 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 23

PART III 10 **
11 **
12 **
13 **

PART IV 14 Exhibits, Financial Statements, Schedules and Reports on Form 8-K 23
Signatures II-1
Exhibits Index II-2




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

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PART I

ITEM 1. BUSINESS OF HARTFORD LIFE INSURANCE COMPANY

(Dollar amounts in millions, except for share data, unless otherwise stated)

GENERAL

Hartford Life Insurance Company and its subsidiaries ("Hartford Life Insurance
Company" or the "Company"), is a direct subsidiary of Hartford Life and Accident
Insurance Company (HLA), a wholly-owned subsidiary of Hartford Life, Inc.
(Hartford Life). The Company and its subsidiaries, together with HLA, provide
(i) investment products, such as annuities, including individual variable
annuities and fixed market value adjusted (MVA) annuities, deferred compensation
and retirement plan services and mutual funds for the savings and retirement
needs of over 1 million customers, (ii) life insurance for income protection and
estate planning to approximately 500,000 customers, (iii) employee benefits
products such as group life and group disability insurance for the benefit of
millions of individuals that is directly written by the Company and is
substantially ceded to its parent, HLA, and (iv) corporate owned life insurance.
According to the latest publicly available data, with respect to the United
States, the Company, along with its parent, is the largest writer of individual
variable annuities based on sales for the year ended December 31, 1998; as well
as, the second largest writer of group disability insurance and the third
largest writer of group life insurance both based on premiums written for the
nine months ended September 30, 1998. The Company's strong position in each of
its core businesses provides an opportunity to increase the sale of Hartford
Life Insurance Company's products and services as individuals increasingly save
and plan for retirement, protect themselves and their families against
disability or death and prepare their estates for an efficient transfer of
wealth between generations.

Hartford Life Insurance Company strives to maintain and enhance its position as
a market leader within the financial services industry. The Company has pursued
a strategy of developing and selling diverse and innovative products through
multiple distribution channels, continuously developing and expanding those
distribution channels, achieving cost efficiencies through economies of scale
and improved technology, maintaining effective risk management and prudent
underwriting techniques and capitalizing on its brand name and customer
recognition of The Hartford Stag Logo, one of the most recognized symbols in the
financial services industry. In the past year, the Company's total assets
increased 21% to $118.3 billion and total stockholder's equity was $2.7 billion
as of December 31, 1998. In addition, the Company generated $4.0 billion in
revenues and $350 in net income in 1998. The Company's return on shareholder's
equity, excluding net unrealized capital gains on securities, was 15.0% in 1998.

ORGANIZATION

Hartford Life Insurance Company, a Connecticut corporation, was organized in
1902. The Company's indirect parent, Hartford Life, is a direct subsidiary of
Hartford Accident and Indemnity Company (HA&I), an indirect subsidiary of The
Hartford Financial Services Group, Inc. (The Hartford). Pursuant to an initial
public offering (the "IPO") on May 22, 1997, Hartford Life sold 26 million
shares of Class A Common Stock at $28.25 per share and received proceeds, net of
offering expenses, of $687. Of the proceeds, $527 was used to retire debt
related to Hartford Life's outstanding promissory notes and line of credit with
the remaining $160 contributed by Hartford Life to HLA to support growth in its
core businesses. Hartford Life became a publicly traded company upon the sale of
26 million shares representing approximately 18.6% of the equity ownership in
Hartford Life.

DISTRIBUTION

Hartford Life Insurance Company utilizes a multiple channel distribution network
which provides a distinct competitive advantage in selling products and services
to a broad cross-section of customers throughout varying economic and market
cycles. In particular, the Company has developed an extensive network of banks
and broker-dealers, which is one of the largest in the industry, including over
1,350 national and regional broker-dealers and approximately 450 banks.
Consistent with this strategy, in August 1998, the Company's parent, HLA,
purchased all of the outstanding shares of PLANCO Financial Services, Inc. and
its affiliate, PLANCO, Incorporated (collectively, "PLANCO"), the nation's
largest wholesaler of individual annuities and the Company's primary wholesale
distributor of its Director(R) variable annuity (the number one selling retail
variable annuity in the United States) and retail mutual funds, thus securing an
important distribution channel. This broad network has enabled the Company to
introduce new products and services in an effective manner and allows the
Company significant opportunity to access its customer base. Hartford Life
Insurance Company sells variable annuities, mutual funds, fixed MVA annuities,
variable life insurance and retirement plan services through its broker-dealer
and bank distribution systems.





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PRODUCTS

Hartford Life Insurance Company provides its customers an innovative and diverse
mix of products and services directed at serving people's needs throughout the
different stages of their lives and during varying economic cycles. The Company
offers a variety of products including variable annuities, retail mutual funds,
individual life insurance and group life and disability insurance. The Company
regularly introduces new and innovative products and services to the market.

CUSTOMER SERVICE, TECHNOLOGY AND ECONOMIES OF SCALE

Hartford Life Insurance Company maintains advantageous economies of scale and
operating efficiencies due to its continued growth, attention to expense
management and commitment to customer service and technology. These advantages
allow the Company to competitively price its products for its distribution
network and policyholders. The Company has achieved operating efficiencies as
expenses associated with its individual annuity products as a percentage of
total individual annuity account value continue to decline from prior year
levels. In addition, the Company utilizes computer technology to enhance
communications within the Company and throughout its distribution network in
order to improve the Company's efficiency in marketing, selling and servicing
its products; and, as a result, provides high-quality customer service. In
recognition of excellence in customer service for variable annuities the
Company, along with its parent, and Putnam Financial Services, Inc. (Putnam)
have been awarded the Annuity Service Award by DALBAR Inc., a recognized
independent financial services research organization, for three consecutive
years. Additional information related to Hartford Life Insurance Company's
technology in respect of Year 2000 issues may be found in the Regulatory
Initiatives and Contingencies section of the Management's Discussion and
Analysis of Financial Condition and Results of Operations (MD&A).

RISK MANAGEMENT

Hartford Life Insurance Company's product designs, prudent underwriting
standards and risk management techniques protect it against disintermediation
risk and greater than expected mortality and morbidity experience. As of
December 31, 1998, the Company had limited exposure to disintermediation risk on
approximately 99% of its insurance liabilities through the use of non-guaranteed
separate accounts, MVA features, policy loans, surrender charges and
non-surrenderability provisions. With respect to the Company's individual
annuities, 97% of the related total account value was subject to surrender
charges as of December 31, 1998. The Company effectively utilizes prudent
underwriting to select and price insurance risks and regularly monitors
mortality assumptions to determine if experience remains consistent with these
assumptions and to ensure that its product pricing remains appropriate.

BRAND NAME AND FINANCIAL STRENGTH

The Hartford Stag Logo is one of the most recognized symbols in the insurance
and financial services industry. This brand recognition, coupled with a strong
balance sheet and sound ratings, has enabled the Company to establish the
reputation and financial strength necessary to maintain distribution
relationships, make strategic acquisitions and enhance important alliances, and
generate new customer sales. Pursuant to a Master Intercompany Agreement with
The Hartford, the Company, along with its parent, has been granted a perpetual
non-exclusive license to use the Stag Logo in connection with the sale of
Hartford Life Insurance Company's products and services. However, in the event
that The Hartford reduces its beneficial ownership below 50% of the combined
voting power of the Company's then outstanding securities, the license may be
revoked upon the later of the fifth anniversary of the date of consummation of
Hartford Life's IPO of its Class A Common Stock or one year after receipt by the
Company of written notice of The Hartford's intention to revoke the license.

REPORTING SEGMENTS

Hartford Life Insurance Company has the following reportable operating segments:
Investment Products, Individual Life and Corporate Owned Life Insurance (COLI).
The Company includes in "Other" corporate items not directly allocable to any of
its reportable segments as well as certain employee benefits including group
life and disability insurance that is directly written by the Company and is
substantially ceded to its parent, HLA. The following is a description of each
segment, including a discussion of principal products, methods of distribution
and competitive environments. Additional information on Hartford Life Insurance
Company's segments may be found in the MD&A on pages 11 to 23 and Note 13 of
Notes to Consolidated Financial Statements.

INVESTMENT PRODUCTS

The Investment Products segment focuses on the savings and retirement needs of
the growing number of individuals who are preparing for retirement or have
already retired through the sale of individual annuities and other investment
products. The individual annuity products offered include individual variable
annuities, fixed MVA annuities and fixed and variable immediate annuities. The
other investment products offered include deferred compensation and retirement
plan services for municipal governments, teachers, hospitals and corporations;
structured settlement contracts and other special purpose annuity contracts;
investment management


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services, and mutual funds. From 1994 to 1998 this segment's separate account
assets grew to $74.5 billion from $21.4 billion, a compounded annual growth rate
of 37%. This growth has been driven primarily by strong net cash flow of
individual variable annuities, the result of a high volume of sales and
favorable persistency, as well as significant market appreciation in the
separate accounts of the Company's individual and group variable annuities.
Investment Products generated revenues of $1.8 billion and $1.5 billion in 1998
and 1997, respectively. Net income in the Investment Products segment was $270
in 1998, a 31% increase over 1997.

The Company is the market leader in the annuity industry and was the number one
writer of individual variable annuities for the years ended December 31, 1998
and 1997, with total individual annuity sales of $10.0 billion and $10.2
billion, respectively. The Company sells both variable and fixed individual
annuity products, through a wide distribution network of national and regional
broker-dealer organizations, banks and other financial institutions and
independent financial advisors. Individual variable annuity sales were $9.9
billion and $9.7 billion in 1998 and 1997, respectively. The Company was ranked
the number one writer of individual variable annuities in the United States for
1998 according to Variable Annuity and Research Data Service (VARDS) and the
number one seller of individual variable annuities through banks, according to
Kenneth Kehrer and Associates.

The Company's total account value related to individual annuity products was
$70.8 billion as of December 31, 1998. Of the total account value, $62.2
billion, or 88%, related to individual variable annuity products and $8.6
billion, or 12%, related primarily to fixed MVA annuity products.

The Company is among the top providers of retirement products and services,
including asset management and plan administration, to municipalities pursuant
to Section 457 and plans to corporations under Section 401(k) of the Internal
Revenue Code of 1986, as amended (herein after referred to as "Section 457" and
"Section 401(k)", respectively). The Company presently administers over 1,200
Section 457 plans and over 750 Section 401(k) plans. The Company also provides
products and services to plans created under Section 403(b) of the Internal
Revenue Code of 1986, as amended (herein after referred to as "Section 403(b)"),
as well as structured settlement contracts and terminal funding products.

Products

Individual Variable Annuities -- Hartford Life Insurance Company earns fees for
managing variable annuity assets and maintaining policyholder accounts, which
are based on the policyholders' account values. The Company uses specified
portions of the periodic premiums of a customer to purchase units in one or more
mutual funds, as directed by the customer, who then assumes the investment
performance risks and rewards. As a result, variable annuities permit
policyholders to choose aggressive or conservative investment strategies as they
deem appropriate without affecting the composition and quality of assets in the
Company's general account. These products offer the policyholder a variety of
equity and fixed income options, as well as the ability to earn a guaranteed
rate of interest in the general account of the Company. The Company offers an
enhanced guaranteed rate of interest for a specified period of time (no longer
than twelve months) if the policyholder elects to dollar-cost average (DCA)
funds from the Company's general account into one or more non-guaranteed
separate accounts. Due to this enhanced rate and the volatility experienced in
the overall equity markets, this option has become very popular with
policyholders. Deposits of varying amounts may be made at regular or irregular
intervals and the value of these assets fluctuates in accordance with the
investment performance of the funds selected by the policyholder. To encourage
persistency, the Company's individual variable annuities are subject to
withdrawal restrictions and surrender charges ranging initially from 6% to 7% of
the contract's face amount which reduce to zero on a sliding scale, usually
within seven policy years. In 1998, significant volatility experienced by the
equity markets did not cause increased levels of variable annuity surrenders
demonstrating that policyholders are aware of the long-term nature of these
products. Individual variable annuity account value of $62.2 billion as of
December 31, 1998, has grown significantly from $9.7 billion as of December 31,
1993 due to strong net cash flow, the result of a high level of sales and
consistent low levels of surrenders, coupled with significant market
appreciation in both the equity and fixed income allocations of the
policyholders' account value. Approximately 94% of the individual variable
annuity account value was held in non-guaranteed separate accounts as of
December 31, 1998.

The assets underlying the Company's variable annuities are managed both
internally and by outside money managers, while the Company provides all policy
administration services. The Company utilizes a select group of money managers,
such as Wellington Management Company, LLP (Wellington), Putnam, and Dean Witter
InterCapital, Inc., who have an interest in the continued growth in sales of the
Company's products and greatly enhance the marketability of the Company's
annuities and the strength of its product offerings. Two of the industry's four
leading variable annuities, The Director and Putnam Hartford Capital Manager
Variable Annuity (based on sales for the year ended 1998) are sponsored by
Hartford Life Insurance Company and are managed in part by Wellington and
Putnam, respectively.

Fixed MVA Annuities -- Fixed MVA annuities are fixed rate annuity contracts
which guarantee a specific sum of money to be paid in the future, either as a
lump sum or as monthly income. In the event that a policyholder surrenders a
policy prior to the end of the guarantee period, the MVA feature increases or
decreases the cash surrender value of the annuity in respect of any interest
rate decreases or increases, respectively, thereby protecting the Company from
losses due to higher interest rates at the time of surrender. The amount of
payment will not fluctuate due to adverse changes in the Company's investment
return, mortality experience or


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expenses. The Company's primary fixed MVA annuities have terms varying from one
to ten years with an average term of approximately seven years. Sales of the
Company's fixed MVA annuities have been relatively minor over the past two years
due to the low interest rate environment. Account value of fixed MVA annuities
was $8.6 billion and $9.3 billion as of December 31, 1998 and 1997,
respectively.

Retirement Plans -- With respect to retirement products and services, Section
457 plans comprise approximately 80% of the related assets under management.
These assets have traditionally been held in the Company's general account, but
increasingly plan beneficiaries are transferring assets into mutual funds held
in separate accounts. The Company offers a number of different funds, both fixed
income and equity, to the employees in Section 457 plans. Generally, the Company
manages the fixed income plans and certain other outside money managers act as
advisors to the equity funds offered in Section 457 plans administered by the
Company. The Company also sells Section 401(k) products targeting the small and
medium case markets since the Company believes these markets are underpenetrated
in comparison to the large case market. Additionally, the Company markets
Section 403(b) products for teachers and hospitals.

Institutional Liabilities -- Hartford Life Insurance Company also sells
structured settlement contracts, which provide for periodic payments to an
injured person or survivor for a generally determinable number of years,
typically in settlement of a claim under a liability policy in lieu of a lump
sum settlement. The Company's structured settlements are sold through The
Hartford's property-casualty insurance operations as well as specialty brokers.
The Company also markets other annuity contracts for special purposes such as
the funding of terminated defined benefit pension plans. In addition, the
Company offers guaranteed investment contracts (GIC) business. Prior to 1995,
the Company was a sizable participant in the GIC market, selling over $5.0
billion in new business from 1992 through 1994. The Company decided in 1995,
after a thorough review of the GIC market, to de-emphasize its GIC product.
Correspondingly, from 1996 through 1998, the Company sold less than $1.0 billion
in new GIC business.

Marketing and Distribution

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

Hartford Life Insurance Company maintains a network of approximately 1,350
broker-dealers and approximately 450 banks (including 23 of the 25 largest banks
in the United States) through the use of wholesaling organizations and strategic
alliances, principally PLANCO and Putnam. The Company periodically negotiates
provisions and terms of its relationships with unaffiliated parties and there
can be no assurance that such terms will remain acceptable to the Company or
such third parties. In August 1998, the Company's parent, HLA, completed the
purchase of all outstanding shares of PLANCO, a primary distributor of the
Company's individual annuity and mutual funds. PLANCO is the nation's largest
wholesaler of individual annuities and has played a significant role in Hartford
Life Insurance Company's growth over the past decade. As a wholesaler, PLANCO
distributes Hartford Life Insurance Company's fixed and variable annuities, and
single premium variable life insurance, as well as providing sales support to
registered representatives, financial planners and broker-dealers at brokerage
firms and banks across the United States. The acquisition secures an important
distribution channel for the Company and gives the Company a wholesale
distribution platform which it can expand in terms of both the number of
individuals wholesaling its products and the portfolio of products in which they
wholesale. In addition, the Company uses internal personnel with extensive
experience in the Section 457 market, as well as access to the Section 401(k)
market, to sell its products and services in the deferred compensation and
retirement plan market.

Competition

The Investment Products segment competes with numerous other insurance companies
as well as certain banks, securities brokerage firms, investment advisors and
other financial intermediaries marketing annuities, mutual funds and other
retirement-oriented products. As the industry continues to consolidate, some of
these companies have or will gain greater financial strength and resources than
Hartford Life Insurance Company. In particular, national banks may become more
significant competitors in the future for insurers who sell annuities as a
result of court decisions and regulatory actions, particularly the recent
Financial Services Act of 1998 (H.R. 10) which is being proposed in Congress.
Product sales are affected by competitive factors such as investment performance
ratings, product design, visibility in the marketplace, financial strength
ratings, distribution capabilities, levels of charges and credited rates,
reputation and customer service.



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INDIVIDUAL LIFE

The Individual Life segment, which focuses on the high end estate and business
planning markets, sells a variety of products including variable life, universal
life, interest-sensitive whole life and term life insurance. The Company's in
force block also includes whole life, which was sold in prior years, and
modified guaranteed whole life, which was acquired from Fidelity Bankers Life
Insurance Company in 1993 and Pacific Standard Life Insurance Company in 1994.
Life insurance in force increased to $61.1 billion from $55.4 billion as of
December 31, 1998 and 1997, respectively, and account value grew 19% to $4.5
billion in 1998 from $3.8 billion in 1997. The Individual Life segment generated
revenues of $543 and $487 in 1998 and 1997, respectively. Net income in the
Individual Life segment was $64 in 1998, a 16% increase over 1997.

Products

The recent trend in the individual life industry has been a shift away from
traditional products and fixed universal life insurance towards variable life
(including variable universal life) insurance products. Hartford Life Insurance
Company has been on the leading edge of this industry trend and is now a top
five writer of new variable life sales according to Tillinghast-Towers Perrin.
In 1998, of the Company's new sales of Individual Life insurance, 78% was
variable life and 18% was either universal life or interest-sensitive life. The
Company also sold a small amount of term life insurance.

Variable Life -- Variable life insurance provides a return linked to an
underlying investment portfolio and the Company allows policyholders to
determine their desired asset mix among a variety of underlying mutual funds. As
the return on the investment portfolio increases or decreases, as the case may
be, the death benefit or surrender value of the variable life policy may
increase or decrease. The Company's single premium variable life product
provides a death benefit to the policy beneficiary based on a single premium
deposit. The Company's second-to-die products are distinguished from other
products in that two lives are insured rather than one, and the policy proceeds
are paid upon the second death of the two insureds. Second-to-die policies are
frequently used in estate planning, often to fund estate taxes for a married
couple. Variable life account values were $1.7 billion and $1.1 billion as of
December 31, 1998 and 1997, respectively.

Universal Life and Interest-Sensitive Whole Life -- Universal life and
interest-sensitive whole life insurance coverages provide life insurance with
adjustable rates of return based on current interest rates. The Company offers
both flexible and fixed premium policies and provides policyholders with
flexibility in the available coverage, the timing and amount of premium payments
and the amount of the death benefit provided there are sufficient policy funds
to cover all policy charges for the coming period. Universal life and
interest-sensitive whole life represented 18% of new annualized premium sales of
individual life insurance in 1998. The Company also sells universal life
insurance policies with a second-to-die feature similar to that of the variable
life insurance product offered. Universal life and interest-sensitive whole life
account values were $2.0 billion and $1.9 billion as of December 31, 1998 and
1997, respectively.

Marketing and Distribution

Consistent with the Company's strategy to access multiple distribution outlets,
the Individual Life distribution organization has been developed to penetrate a
multitude of retail sales channels. These include independent life insurance
sales professionals; agents of other companies; national, regional and
independent broker-dealers; banks; and property-casualty insurance
organizations. The primary organization used to wholesale Hartford Life
Insurance Company's products to these outlets is a group of highly qualified
life insurance professionals with specialized training in sophisticated life
insurance sales, particularly as it pertains to estate and business planning.
These individuals are generally employees of the Company, who are managed
through a regional sales office system. The Company has grown this organization
rapidly the past few years, to 160 individuals, and expects to continue to
increase the number of wholesalers in the future.

Competition

The Individual Life segment competes with over 2,000 life insurance companies in
the United States, as well as other financial intermediaries marketing insurance
products. Competitive factors related to this segment are primarily the breadth
and quality of life insurance products offered, competitiveness of pricing,
relationships with third-party distributors and the quality of underwriting and
customer service.

CORPORATE OWNED LIFE INSURANCE (COLI)

Hartford Life Insurance Company is a leader in the COLI market, which includes
life insurance policies purchased by a company on the lives of its employees,
with the company named as the beneficiary under the policy. Until the Health
Insurance Portability Act of 1996 (HIPA Act of 1996), the Company sold two
principal types of COLI, leveraged and variable products. Leveraged COLI is a
fixed premium life insurance policy owned by a company or a trust sponsored by a
company. The HIPA Act of 1996 phased out the


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deductibility of interest on policy loans under leveraged COLI at the end of
1998, thus virtually eliminating all future sales of leveraged COLI. Variable
COLI continues to be a product used by employers to fund non-qualified benefits
or other post-employment benefit liabilities. Products marketed in this segment
also include coverage owned by employees under business sold through corporate
sponsorship. During 1998, the Company recorded $4.1 billion of deposits of new
variable COLI business, increasing variable COLI account value to $13.0 billion
as of December 31, 1998 compared to $8.5 billion as of December 31, 1997.

In November 1998, Hartford Life recaptured an in force block of leveraged COLI
business from MBL Life Assurance Co. of New Jersey (MBL Life). The transaction
was consummated through the assignment of a reinsurance arrangement between
Hartford Life and MBL Life to a Hartford Life subsidiary. Hartford Life
originally assumed the life insurance block in 1992 from Mutual Benefit Life
Insurance Company (Mutual Benefit Life), which was placed in court-supervised
rehabilitation in 1991, and reinsured a portion of those polices back to MBL
Life. MBL Life, previously a Mutual Benefit Life subsidiary, operates under the
Rehabilitation Plan for Mutual Benefit Life. Primarily as a result of this
transaction, leveraged COLI account value increased to $7.4 billion as of
December 31, 1998 compared to $3.8 billion as of December 31, 1997. This also
impacted COLI revenues, which were $1.6 billion and $980 in 1998 and 1997,
respectively. COLI segment earnings, however, declined 11%, to $24 in 1998, due
to reduced profits on the block of leveraged COLI the Company had prior to the
HIPA Act of 1996.

OTHER MATTERS

RESERVES

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

For Hartford Life Insurance Company's universal life and interest-sensitive
whole life policies, reserves are set according to premiums collected, plus
interest credited, less charges. Other fixed death benefit and individual life
reserves are based on assumed investment yield, persistency, mortality and
morbidity as per commonly used actuarial tables, expenses and margins for
adverse deviations.

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

Hartford Life Insurance Company's reserves comply, in all material respects,
with state insurance department statutory accounting practices; however, in the
Company's Consolidated Financial Statements, life insurance reserves are
determined in accordance with generally accepted accounting principles, which
may vary from statutory accounting practices.

REGULATION AND PREMIUM RATES

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




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REINSURANCE

In accordance with normal industry practice, Hartford Life Insurance Company is
involved in both the cession and assumption of insurance with other insurance
and reinsurance companies. As of December 31, 1998, the maximum amount of life
insurance retained on any one life by any of the life operations is
approximately $2.5, excluding accidental death benefits.

INVESTMENT OPERATIONS

Hartford Life Insurance Company's investment operations are managed by its
investment strategy group which reports directly to senior management of the
Company. The Company's investments have been separated into specific portfolios
which support specific classes of product liabilities. The investment strategy
group works closely with the product lines to develop investment guidelines,
including duration targets, asset allocation and convexity constraints,
asset/liability mismatch tolerances and return objectives, to ensure that the
product line's individual risk and return objectives are met. The Company's
primary investment objective for its general account and guaranteed separate
accounts is to maximize after-tax returns consistent with acceptable risk
parameters, including the management of the interest rate sensitivity of
invested assets to that of policyholder obligations.

For further discussion of Hartford Life Insurance Company's investment
operations and the Company's approach to managing investment risk, see the
Investments section of the MD&A, as well as Notes 2(e), 2(f) and 3 of Notes to
Consolidated Financial Statements.


RATINGS

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

RISK-BASED CAPITAL

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

LEGISLATIVE INITIATIVES

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

INSOLVENCY FUND

Reference is made to the Regulatory Initiatives and Contingencies section of the
MD&A under "Insolvency Fund".

NAIC PROPOSALS

Reference is made to the Regulatory Initiatives and Contingencies section of the
MD&A under "NAIC Proposals".

DEPENDENCE ON CERTAIN THIRD PARTY RELATIONSHIPS

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

YEAR 2000

Reference is made to the Regulatory Initiatives and Contingencies section of the
MD&A under "Year 2000".

EMPLOYEES

Hartford Life Insurance Company's parent (Hartford Life) had approximately 4,500
employees at February 26, 1999.

ITEM 2. PROPERTIES

The principal executive offices of Hartford Life Insurance Company, together
with its parent, are located in Simsbury, Connecticut. The home office complex
consists of approximately 615 thousand square feet, and is leased from a third
party by Hartford Fire Insurance Company (Hartford Fire), an indirect subsidiary
of The Hartford. This lease expires in the year 2009. Expenses associated with
these offices are allocated on a direct and indirect basis to Hartford Life
Insurance Company by Hartford Fire.



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ITEM 3. LEGAL PROCEEDINGS

Hartford Life Insurance Company is involved in pending and threatened litigation
in the normal course of its business in which claims for monetary and punitive
damages have been asserted. Although there can be no assurances, at the present
time the Company does not anticipate that the ultimate liability arising from
such pending or threatened litigation, after consideration of provisions made
for potential losses and costs of defense, will have a material adverse effect
on the financial condition or operating results of the Company.


PART II

ITEM 5. MARKET FOR HARTFORD LIFE INSURANCE COMPANY'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS

All of the Company's outstanding shares are ultimately owned by Hartford Life
which is ultimately a subsidiary of The Hartford. As of March 30, 1999, the
Company had issued and outstanding 1,000 shares of common stock at a par value
of $5,690 per share.







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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

(Dollar amounts in millions, except for share data, unless otherwise stated)

Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with the Consolidated Financial
Statements and related Notes beginning on page F-1.

Certain statements contained in this discussion, other than statements of
historical fact, are forward-looking statements. These statements are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 and include estimates and assumptions related to economic,
competitive and legislative developments. These forward-looking statements are
subject to change and uncertainty which are, in many instances, beyond the
Company's control and have been made based upon management's expectations and
beliefs concerning future developments and their potential effect on Hartford
Life Insurance Company and subsidiaries ("Hartford Life Insurance Company" or
the "Company"). There can be no assurance that future developments will be in
accordance with management's expectations or that the effect of future
developments on Hartford Life Insurance Company will be those anticipated by
management. Actual results could differ materially from those expected by the
Company, depending on the outcome of certain factors, including those described
in the forward-looking statements.

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

INDEX



Consolidated Results of Operations 11 Investments 14
Investment Products 12 Capital Resources and Liquidity 20
Individual Life 13 Regulatory Initiatives and Contingencies 21
Corporate Owned Life Insurance (COLI) 14 Accounting Standards 23


CONSOLIDATED RESULTS OF OPERATIONS

Hartford Life Insurance Company is a leading financial services and insurance
company providing investment products such as variable and fixed annuities,
retirement plan services and mutual funds; individual and corporate owned life
insurance; and employee benefit products such as group life and disability
insurance that is directly written by the Company and is substantially ceded to
its parent, Hartford Life and Accident Insurance Company (HLA).

The Company derives its revenues principally from: (a) asset management fees on
separate accounts and mutual fund assets and mortality and expense fees; (b) net
investment income on general account assets; and, (c) certain other fees earned
by the Company. Asset management fees and mortality and expense fees are
primarily generated from separate account assets which are deposited with the
Company through the sale of variable annuity and variable life products and from
mutual fund sales. The Company's operating expenses primarily consist of
interest credited to policyholders on general account liabilities, insurance
benefits provided, dividends to policyholders, costs of selling and servicing
the various products offered by the Company, and other general business
expenses. Hartford Life Insurance Company's profitability depends largely on the
amount of assets under management, the adequacy of product pricing and
underwriting discipline, and its ability to earn target spreads between earned
investment rates on general account assets and credited rates to customers.

OPERATING SUMMARY



1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------

Total revenues $ 3,975 $ 3,009
Total expenses 3,625 2,707
- ------------------------------------------------------------------------------------------------------------------------------------

NET INCOME $ 350 $ 302
--------------------------------------------------------------------------------------------------------------------------


Hartford Life Insurance Company has the following reportable segments:
Investment Products, Individual Life and Corporate Owned Life Insurance (COLI).
The Company reports in "Other" corporate items not directly allocable to any of
its segments, as well as certain employee benefits including group life and
disability insurance that is directly written by the Company and is
substantially ceded to its parent, HLA. For information regarding the Company's
reportable segments as they relate to SFAS No. 131, see Note 13 of Notes to
Consolidated Financial Statements.

Revenues increased $966, or 32%, to $4.0 billion in 1998 from $3.0 billion in
1997. The increase was due in part to the continued growth in revenues in
Investment Products of $269 and Individual Life of $56 as a result of higher
aggregate fees earned on growth in account values due to strong sales and equity
market appreciation. Additionally, COLI revenues increased $587 primarily due to
the recapture of an in force block of COLI business (referred to as "MBL
Recapture") previously ceded to MBL Life Assurance Co. of New Jersey (MBL Life)
transacted in the fourth quarter 1998.

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12
Total benefits, claims and expenses increased $897, or 35%, to $3.4 billion in
1998 from $2.5 billion in 1997. Benefits, claims and claim adjustment expenses
increased $532 and dividends to policyholders increased $89 which were primarily
attributable to the COLI segment where benefits, claims and claim adjustment
expenses increased $485 and dividends to policyholders increased $89 primarily
related to the MBL Recapture. In addition, increased benefits, claims and claim
adjustment expenses in Individual Life of $20 was associated with the growth in
this segment. Higher amortization of deferred policy acquisition costs (DPAC) of
$96 in 1998 was a result of the large volume of sales in Investment Products and
Individual Life in the past several years. Also, other expenses increased $180
in 1998 as a result of higher commissions and operating expenses in Investment
Products primarily related to the growth in this segment.

Net income totaled $350 in 1998 as compared to $302 in 1997. The improvement in
earnings was primarily driven by higher aggregate fee income earned on growth in
the Company's account values due to strong sales and equity market appreciation
in Investment Products and Individual Life.

OUTLOOK

Management believes that it has developed and implemented strategies to maintain
and enhance its position as a market leader within the financial services
industry and continue the Company's asset growth. Hartford Life Insurance
Company's strong market position in each of its primary businesses, coupled with
the growth potential management believes exists in its markets, provides
opportunities to increase sales of the Company's products and services as
individuals increasingly save and plan for retirement and prepare their estates
for an efficient transfer of wealth between generations.

Certain proposed legislative initiatives which could impact Hartford Life
Insurance Company are discussed in the Regulatory Initiatives and Contingencies
section.

SEGMENT RESULTS

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


1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------


Investment Products $ 270 $ 206
Individual Life 64 55
Corporate Owned Life Insurance 24 27
Other (8) 14
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 350 $ 302
- ------------------------------------------------------------------------------------------------------------------------------------


A description of each segment as well as an analysis of the operating results
summarized above is included on the following pages.

INVESTMENT PRODUCTS

OPERATING SUMMARY


1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------

Total revenues $ 1,779 $ 1,510
Total expenses 1,509 1,304
- ------------------------------------------------------------------------------------------------------------------------------------

NET INCOME $ 270 $ 206
--------------------------------------------------------------------------------------------------------------------------


The Investment Products segment focuses on the savings and retirement needs of
the growing number of individuals who are preparing for retirement or have
already retired through the sale of individual annuities and other investment
products. The individual annuity products offered include individual variable
annuities, fixed market value adjusted (MVA) annuities and fixed and variable
immediate annuities. The other investment products offered include retail mutual
funds, deferred compensation and retirement plan services for municipal
governments, teachers, hospitals and corporations; structured settlement
contracts and other special purpose annuity contracts; and, investment
management services. The Company sells both variable and fixed individual
annuity products, through a wide distribution network of national and regional
broker-dealer organizations, banks and other financial institutions, and
independent financial advisors. The Company, along with its parent, was ranked
the number one writer of individual variable annuities in the United States for
1998 according to Variable Annuity and Research Data Service (VARDS) and the
number one seller of individual variable annuities through banks, according to
Kenneth Kehrer and Associates.




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Revenues increased $269, or 18%, to $1.8 billion in 1998 from $1.5 billion in
1997. Driven primarily by the individual annuity operation, this improvement was
a result of higher aggregate fees earned on growth in account values due to
strong net cash flow resulting from a high volume of sales and favorable
persistency as well as significant equity market appreciation in the Company's
separate accounts. Fee income related to individual variable annuity products
increased $236 as related average account values grew $14.9 billion, or 38%, to
$54.6 billion in 1998 from $39.7 billion in 1997. This growth was a result of
strong individual variable annuity sales of $9.9 billion in 1998 as well as
equity market appreciation. In addition, fee income from other investment
products increased $60 primarily as a result of growth in the Company's mutual
fund operations, where assets under management increased $1.5 billion in 1998 to
$2.5 billion as compared to $972 in 1997.

Total benefits, claims and expenses increased $171, or 14%, to $1.4 billion in
1998 from $1.2 billion in 1997 as a result of the continued growth in this
segment. Other expenses increased $102 in 1998 as compared to 1997 primarily due
to growth in the mutual funds and individual annuity operations. Amortization of
DPAC grew $76 primarily due to individual annuity products as sales remained
strong. A 38% growth in average variable annuity account value in 1998, coupled
with a reduction in individual annuity operating expenses as a percentage of
total individual annuity account value to 23 basis points in 1998 from 25 basis
points in 1997, contributed to the increase in net income of $64, or 31%, to
$270 in 1998 from $206 in 1997.

OUTLOOK

The market for retirement products continues to expand as individuals
increasingly save and plan for retirement. Demographic trends suggest that as
the baby boom generation matures, a significant portion of the United States
population will allocate a greater percentage of their disposable incomes to
saving for their retirement years due to uncertainty surrounding the Social
Security system and increases in average life expectancy. As this market grows,
particularly for variable annuities and mutual funds, new companies are
continually entering the market and aggressively seeking distribution
capabilities and pursuing market share. This trend is not expected to subside
particularly in light of pending legislation to deregulate the financial
services industry.

Management believes that it has developed and implemented strategies to maintain
and enhance its position as a market leader in the financial services industry.

INDIVIDUAL LIFE

OPERATING SUMMARY


1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------

Total revenues $ 543 $ 487
Total expenses 479 432
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 64 $ 55
--------------------------------------------------------------------------------------------------------------------------


The Individual Life segment, which focuses on the high end estate and business
planning markets, sells a variety of life insurance products, including variable
life, universal life, interest-sensitive whole life and term life insurance.

Revenues in 1998 increased $56, or 11%, to $543 from $487 in 1997, reflecting
the impact of applying cost of insurance charges and variable life fees on the
growing block of variable life insurance. Variable life average account values
increased $562, or 67%, to $1.4 billion in 1998 from $840 in 1997 due to strong
sales and equity market appreciation. In 1998, higher variable life sales of
$29, or 30%, constituted the majority of increased total sales over 1997. Total
benefits, claims and expenses increased $42, or 10%, to $444 in 1998 from $402
in 1997. This increase was the result of an increase in amortization of DPAC of
$22 and benefits, claims and claim adjustment expenses of $20 in 1998 related to
the growth in this segment. As a result of growth in account values, primarily
variable life, net income increased $9, or 16%, in 1998 as compared to 1997.

OUTLOOK

Management believes that the Company's strong market position will provide
opportunities for growth in this segment as individuals increasingly prepare
their estates for an efficient transfer of wealth between generations.




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CORPORATE OWNED LIFE INSURANCE (COLI)

OPERATING SUMMARY


1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------

Total revenue $ 1,567 $ 980
Total expenses 1,543 953
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 24 $ 27
--------------------------------------------------------------------------------------------------------------------------


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

Revenues in this operation increased $587, or 60%, to $1.6 billion in 1998 from
$980 in 1997. This increase was primarily related to the recapture of an in
force block of COLI business, previously ceded to MBL Life, which was transacted
in the fourth quarter 1998. (For additional information, see "MBL Recapture"
under the Capital Resources and Liquidity section.) The MBL Recapture, which was
retroactive to January 1, 1998, resulted in an increase in COLI revenues of $624
and is comprised of $245 of premiums and other considerations and $379 of net
investment income. Higher fee income on the segment's growing block of variable
COLI account values also contributed to the increase in revenues. Partially
offsetting these increases was a decline in premiums and other considerations on
leveraged COLI as that block of business continues to decline due to the
implications of the HIPA Act of 1996 (discussed above).

Benefits, claims and expenses increased $593, or 63%, to $1.5 billion in 1998
from $938 in 1997. The MBL Recapture resulted in an increase in benefits, claims
and expenses of $624 and is comprised of $478 of benefits, claims and other
expenses and $146 of dividends to policyholders. The increase in benefits,
claims and expenses was also a result of the growth in the segment's variable
COLI block of business which was partially offset by a decrease in benefits,
claims and expenses related to leveraged COLI.

Net income declined $3, or 11%, to $24 in 1998 from $27 in 1997 as the growth in
the Company's variable COLI business was offset by the declining block of
leveraged COLI the Company had prior to passage of the HIPA Act of 1996. The MBL
Recapture had no impact on earnings in 1998.

OUTLOOK

The focus of this segment is variable COLI which continues to be a product
generally used by employers to fund non-qualified benefits or other
post-employment benefit liabilities. The leveraged COLI product has been an
important contributor to Hartford Life Insurance Company's profitability in
recent years and will continue to contribute to the profitability of Hartford
Life Insurance Company in the future, although the level of profit is expected
to decline. COLI is subject to a changing legislative and regulatory environment
that could have a material adverse affect on its business.

Certain proposed legislative initiatives which could impact Hartford Life
Insurance Company are discussed in the Regulatory Initiatives and Contingencies
section.

INVESTMENTS

GENERAL

The Company's investments are managed by its investment strategy group which
consists of a risk management unit and a portfolio management unit and reports
directly to senior management of the Company. The risk management unit is
responsible for monitoring and managing the Company's asset/liability profile
and establishing investment objectives and guidelines. The portfolio management
unit is responsible for determining, within specified risk tolerances and
investment guidelines, the appropriate asset allocation, duration, and convexity
characteristics of the Company's general account and guaranteed separate account
investment portfolios. The Hartford Investment Management Company, a wholly
owned subsidiary of The Hartford Financial Services Group, Inc., executes the
investment plan of the investment strategy group including the identification
and purchase of securities that fulfill the objectives of the strategy group.

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15
The primary investment objective of the Company's general account and guaranteed
separate accounts is to maximize after-tax returns consistent with acceptable
risk parameters (including the management of the interest rate sensitivity of
invested assets relative to that of policyholder obligations). The Company does
not hold any financial instruments purchased for trading purposes. The Company
is exposed to two primary sources of investment risk: credit risk, relating to
the uncertainty associated with an obligor's continued ability to make timely
payment of principal and/or interest, and interest rate risk, relating to the
market price and/or cash flow variability associated with changes in market
yield curves. See "Investment Risk Management" for further discussion of the
Company's approach to managing these investment risks.

The Company's separate accounts reflect two categories of risk assumption:
non-guaranteed separate accounts totaling $80.6 billion and $58.6 billion as of
December 31, 1998 and 1997, respectively wherein the policyholder assumes
substantially all the investment risk and reward, and guaranteed separate
accounts totaling $9.7 billion and $10.5 billion as of December 31, 1998 and,
1997, respectively, wherein Hartford Life Insurance Company contractually
guarantees either a minimum return or account value to the policyholder.
Non-guaranteed separate account products include variable annuities, variable
life insurance contracts and COLI. Guaranteed separate account products
primarily consist of modified guaranteed individual annuities and modified
guaranteed life insurance and generally include market value adjustment features
to mitigate the risk of disintermediation.

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

Invested assets in the Company's general account totaled $21.8 billion as of
December 31, 1998 and were comprised of $14.8 billion of fixed maturities, $6.7
billion of policy loans and other investments of $295. As of December 31, 1997,
general account invested assets totaled $18.2 billion and were comprised of
$14.2 billion of fixed maturities, $3.8 billion of policy loans and other
investments of $227. Policy loans, which had a weighted-average interest rate of
9.9% and 11.2%, as of December 31, 1998 and 1997, respectively, increased
primarily as a result of the MBL Recapture. These loans are secured by the cash
value of the underlying life insurance policies and do not mature in a
conventional sense, but expire in conjunction with the related policy
liabilities.

During 1998, the Company, in executing its investment strategy, increased its
allocation to municipal tax-exempt securities with the objective of increasing
after-tax yields, and also increased its allocation to commercial mortgage
backed securities while decreasing its allocation to asset backed securities. An
increase in short-term investments as of December 31, 1998 as compared to 1997
was impacted by the settlement of the MBL Recapture in the fourth quarter 1998
(as discussed in the COLI section) which resulted in short-term investment
proceeds of approximately $300.

Approximately 23.3% and 22.1% of the Company's fixed maturity portfolio was
invested in private placement securities (including Rule 144A offerings) as of
December 31, 1998 and 1997, respectively. Private placement securities are
generally less liquid than public securities; however, covenants for private
placements are designed to mitigate liquidity risk. Most of the private
placement securities in the Company's portfolio are rated by nationally
recognized rating organizations.

INVESTMENT RESULTS

The table below summarizes Hartford Life Insurance Company's investment results
for the past two years.



(Before-tax) 1998 1997
-----------------------------------------------------------------------------------------------------------------------------------

Net investment income - excluding policy loan income $ 970 $ 943
Policy loan income 789 425
-----------------------------------------------------------------------------------------------------------------------------------
Net investment income - total $ 1,759 $ 1,368
-----------------------------------------------------------------------------------------------------------------------------------
Yield on average invested assets (1) 8.0% 7.7%
-----------------------------------------------------------------------------------------------------------------------------------

(1) Represents net investment income (excluding net realized capital gains
(losses)) divided by average invested assets at cost (fixed maturities at
amortized cost). In 1998, average invested assets were calculated assuming
the MBL Recapture proceeds were received on January 1, 1998.

Total net investment income, before-tax, increased $391, or 29%, to $1.8 billion
in 1998 from $1.4 billion in 1997, principally due to an increase in policy loan
income of $364 which is primarily due to the MBL Recapture. (For additional
information on the MBL Recapture, see the COLI section.) Yields on average
invested assets, before-tax, increased to 8.0% in 1998 from 7.7% in 1997
primarily due to the increase in policy loan income that resulted from the MBL
Recapture as well as an increase in fixed maturities rated BBB. During 1998,
realized capital gains from the sale of fixed maturities and equity securities
were offset by realized capital losses including $18, after-tax, related to the
other than temporary impairment charge associated with asset backed securities
securitized and serviced by Commercial Financial Services, Inc. (CFS). (For
additional information on CFS, see Note 12, Commitments and Contingent
Liabilities, of Notes to Consolidated Financial Statements.)

15
16
INVESTMENT RISK MANAGEMENT

Credit risk and interest rate risk are the primary sources of investment risk to
the Company. The Company manages credit risk through industry and issuer
diversification and asset allocation. Investment credit policies have been
established that focus on the credit quality of obligors and counterparties,
limit credit concentrations, and encourage diversification and require frequent
creditworthiness reviews. The Company invests primarily in securities rated
investment grade and has established exposure limits, diversification standards
and review procedures for all credit risks including borrower, issuer and
counterparty. Also, the Company maintains credit policies regarding the
financial stability and credit standing of its major derivatives' counterparties
and, to the extent the current value of derivatives exceed exposure policy
thresholds, collateral is pledged to or held by the Company. The Company manages
interest rate risk as part of its asset/liability management strategies,
including the use of certain hedging techniques (which may include the use of
certain financial derivatives), product design, such as the use of MVA features
and surrender charges, and proactive monitoring and management of certain
non-guaranteed elements of the Company's products (such as resetting of credited
rates for policies that permit such adjustments). For additional information of
the Company's interest rate risk management techniques see the "Asset/Liability
Management Strategies Used to Manage Market Risk" discussion below.

The following table reflects the principal amounts of the fixed and variable
rate fixed maturity portfolio, along with the respective weighted average
coupons by estimated maturity year as of December 31, 1998. Comparative totals
are included for December 31, 1997. Expected maturities differ from contractual
maturities due to call or prepayment provisions. The weighted average coupon on
variable rate securities is based on spot rates as of December 31, 1998 and
1997, and is primarily based on the London Interbank Offered Rate (LIBOR).
Callable bonds and notes are distributed to either call dates or maturity,
depending on which date produces the most conservative yield. Asset backed
securities, collateralized mortgage obligations and mortgage backed securities
are distributed to maturity year based on estimates of the rate of future
prepayments of principal over the remaining life of the securities. These
estimates are developed using prepayment speeds provided in broker consensus
data. Such estimates are derived from prepayment speeds previously experienced
at the interest rate levels projected for the underlying collateral. Actual
prepayment experience may vary from these estimates. Financial instruments with
certain leverage features have been included in each of the fixed maturity
categories. These instruments have not been separately displayed because they
were immaterial to the Company's investment portfolio.




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1998 1997
1999 2000 2001 2002 2003 Thereafter TOTAL Total
---- ---- ---- ---- ---- ---------- ----- -----


BONDS AND NOTES - CALLABLE
Fixed Rate
Par value $ 29 $ 23 $ 42 $ 38 $ 54 $ 294 $ 480 $ 466
Weighted average coupon 7.8% 7.4% 5.7% 7.1% 8.5% 5.5% 6.3% 6.3%
Fair value $ 480 $ 435
Variable Rate
Par value $ 40 $ 52 $ 39 $ 14 $ -- $ 829 $ 974 $ 1,020
Weighted average coupon 6.7% 7.3% 5.4% 5.9% -- 5.9% 6.0% 6.5%
Fair value $ 883 $ 966
BONDS AND NOTES - OTHER
Fixed Rate
Par value $ 2,646 $ 1,264 $ 1,190 $ 876 $ 1,045 $ 6,125 $ 13,146 $ 13,387
Weighted average coupon 6.6% 7.0% 7.4% 7.5% 6.8% 5.8% 6.4% 6.1%
Fair value $ 13,655 $ 13,465
Variable Rate
Par value $ 90 $ 176 $ 14 $ 81 $ 90 $ 681 $ 1,132 $ 1,250
Weighted average coupon 5.1% 5.9% 5.4% 5.4% 5.4% 5.9% 5.7% 5.3%
Fair value $ 1,096 $ 1,141
ASSET BACKED SECURITIES
Fixed Rate
Par value $ 437 $ 390 $ 395 $ 192 $ 123 $ 349 $ 1,886 $ 2,076
Weighted average coupon 6.7% 6.9% 6.8% 6.6% 6.4% 7.3% 6.8% 6.9%
Fair value $ 1,811 $ 2,109
Variable Rate
Par value $ 192 $ 251 $ 354 $ 206 $ 190 $ 527 $ 1,720 $ 1,696
Weighted average coupon 6.0% 6.0% 6.3% 5.9% 6.6% 6.0% 6.1% 6.4%
Fair value $ 1,622 $ 1,696
COLLATERALIZED MORTGAGE OBLIGATIONS
Fixed Rate
Par value $ 434 $ 388 $ 157 $ 115 $ 74 $ 174 $ 1,342 $ 1,619
Weighted average coupon 6.0% 6.0% 6.0% 6.8% 7.1% 7.3% 6.3% 6.0%
Fair value $ 1,286 $ 1,582
Variable Rate
Par value $ 43 $ 20 $ 8 $ 6 $ 6 $ 193 $ 276 $ 430
Weighted average coupon 6.3% 6.8% 7.2% 8.4% 8.4% 6.0% 6.2% 7.3%
Fair value $ 260 $ 408
COMMERCIAL MORTGAGE BACKED SECURITIES
Fixed Rate
Par value $ 46 $ 117 $ 78 $ 110 $ 90 $ 1,094 $ 1,535 $ 1,244
Weighted average coupon 7.6% 6.7% 7.6% 7.0% 6.8% 7.1% 7.1% 7.3%
Fair value $ 1,578 $ 1,246
Variable Rate
Par value $ 107 $ 215 $ 48 $ 133 $ 128 $ 415 $ 1,046 $ 708
Weighted average coupon 6.7% 6.6% 7.0% 6.3% 6.8% 6.8% 6.7% 7.1%
Fair value $ 1,000 $ 718
MORTGAGE BACKED SECURITIES
Fixed Rate
Par value $ 78 $ 71 $ 63 $ 52 $ 46 $ 344 $ 654 $ 499
Weighted average coupon 7.0% 6.8% 6.7% 6.6% 6.6% 6.8% 6.8% 7.3%
Fair value $ 615 $ 511
Variable Rate
Par value $ 1 $ 2 $ 1 $ 1 $ 1 $ 5 $ 11 $ 24
Weighted average coupon 7.8% 8.4% 8.6% 8.6% 8.6% 8.9% 8.6% 6.6%
Fair value $ 10 $ 24


17
18
ASSET/LIABILITY MANAGEMENT STRATEGIES USED TO MANAGE MARKET RISK

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

Derivatives play an important role in facilitating the management of interest
rate risk, creating opportunities to efficiently fund obligations, hedge against
risks that affect the value of certain liabilities and adjust broad investment
risk characteristics as a result of any significant changes in market risks. The
Company uses a variety of derivatives, including swaps, caps, floors, forwards
and exchange-traded financial futures and options, in order to hedge exposure
primarily to interest rate risk on anticipated investment purchases or existing
assets and liabilities. The Company does not make a market or trade derivatives
for the express purpose of earning trading profits. The Company's derivative
program is monitored by an internal compliance unit and is reviewed frequently
by senior management and reported to Hartford Life's Finance Committee. The
notional amounts of derivative contracts, which represent the basis upon which
pay or receive amounts are calculated and are not reflective of credit risk,
totaled $9.7 billion as of December 31, 1998 ($4.9 billion related to insurance
investments and $4.8 related to life insurance liabilities). As of December 31,
1997, the notional amounts pertaining to derivatives totaled $9.5 billion ($5.5
billion related to insurance investments and $4.0 billion related to life
insurance liabilities.)

The strategies described below are used to manage the aforementioned risks.

Anticipatory Hedging -- For certain liabilities, the Company commits to the
price of the product prior to receipt of the associated premium or deposit.
Anticipatory hedges are routinely executed to offset the impact of changes in
asset prices arising from interest rate changes pending the receipt of premium
or deposit and the subsequent purchase of an asset. These hedges involve taking
a long position in interest rate futures or entering into an interest rate swap
with duration characteristics equivalent to the associated liabilities or
anticipated investments. The notional amount of anticipatory hedges as of
December 31, 1998 was $235. There were no anticipatory hedges as of December 31,
1997.

Liability Hedging -- Several products obligate the Company to credit a return to
the contract holder which is indexed to a market rate. To hedge risks associated
with these products, the Company typically enters into interest rate swaps to
convert the contract rate into a rate that trades in a more liquid and efficient
market. This hedging strategy enables the Company to customize contract terms
and conditions to customer objectives and satisfies the operation's
asset/liability matching policy. Additionally, interest rate swaps are used to
convert certain fixed contract rates into floating rates, thereby allowing them
to be appropriately matched against floating rate assets. The notional amount of
derivatives used for liability hedges as of December 31, 1998 and 1997 was $4.8
billion and $4.0 billion, respectively.

Asset Hedging -- To meet the various policyholder obligations and to provide
cost effective prudent investment risk diversification, the Company may combine
two or more financial instruments to achieve the investment characteristics of a
fixed maturity security or that match an associated liability. The use of
derivative instruments in this regard effectively transfers unwanted investment
risks or attributes to others. The selection of the appropriate derivative
instruments depends on the investment risk, the liquidity and efficiency of the
market, and the asset and liability characteristics. The notional amount of
asset hedges as of December 31, 1998 and 1997 was $3.2 billion and $2.5 billion,
respectively.

Portfolio Hedging -- The Company periodically compares the duration and
convexity of its portfolios of assets to their corresponding liabilities and
enters into portfolio hedges to reduce any difference to desired levels.
Portfolio hedges reduce the mismatch between assets and liabilities and offset
the potential impact to cash flows caused by changes in interest rates. The
notional amount of portfolio hedges as of December 31, 1998 and 1997 was $1.5
billion and $3.0 billion, respectively.

LIFE INSURANCE LIABILITY CHARACTERISTICS

Hartford Life Insurance Company's insurance liabilities, other than
non-guaranteed separate accounts, are primarily related to accumulation vehicles
such as fixed or variable annuities and investment contracts and other insurance
products such as long-term disability and term life insurance.




18
19
Asset Accumulation Vehicles
- ---------------------------

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

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

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

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

Other Insurance Products
- ------------------------

Long-term Pay Out Liabilities -- Products in this category are long-term in
nature and may contain significant actuarial (including mortality and morbidity)
pricing and cash flow risks. The cash flows associated with these policy
liabilities are not interest rate sensitive but do vary based on the timing and
amount of benefit payments. The primary risks associated with these products are
that the benefits will exceed expected actuarial pricing and/or that the actual
timing of the cash flows will differ from those anticipated resulting in an
investment return lower than that assumed in pricing. Product examples include
structured settlement contracts, on-benefit annuities (i.e., the annuitant is
currently receiving benefits thereon) and long-term disability contracts.
Contract duration is generally 6 to 10 years.

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

Management of the duration of investments with respective policyholder
obligations is an explicit objective of the Company's management strategy. The
estimated cash flows of insurance policy liabilities based upon internal
actuarial assumptions as of December 31, 1998 are reflected in the table below
by expected maturity year. Comparative totals are included for December 31,
1997.

(Dollars in billions)




1998 1997
DESCRIPTION (1) 1999 2000 2001 2002 2003 Thereafter TOTAL Total
- ------------------------------------------------------------------------------------------------------------------------------------

Fixed rate asset accumulation vehicles $ 2.1 $ 1.8 $ 1.3 $ 0.7 $ 1.4 $ 3.5 $ 10.8 $ 12.7
Weighted average credited rate 6.6% 7.0% 6.8% 6.4% 5.4% 7.0% 6.6% 6.8%
Indexed asset accumulation vehicles $ 0.2 $ 0.1 $ - $ - $ - $ - $ 0.3 $ 0.2
Weighted average credited rate 5.2% 5.1% - - - - 5.1% 5.9%
Interest credited asset accumulation $ 4.8 $ 0.7 $ 0.9 $ 0.6 $ 0.5 $ 5.4 $ 12.9 $ 10.8
vehicles
Weighted average credited rate 6.0% 5.7% 5.7% 5.9% 5.9% 5.9% 5.9% 5.8%
Long-term pay out liabilities $ 0.1 $ 0.1 $ - $ - $ - $ 0.5 $ 0.7 $ 0.6
Short-term pay out liabilities $ 0.2 $ - $ - $ - $ - $ - $ 0.2 $ -


(1) As of December 31, 1998 and 1997, the fair value of the Company's investment
contracts including guaranteed separate accounts was $21.4 billion and $21.7
billion, respectively.




19
20
CAPITAL RESOURCES AND LIQUIDITY

RATINGS

The following table summarizes the Company's financial ratings from the major
independent rating organizations as of February 17, 1999:




DUFF & STANDARD &
INSURANCE RATINGS A.M. BEST PHELPS MOODY'S POOR'S
-------------------------------------------------------------------------------

Hartford Life Insurance Company A+ AA+ Aa3 AA
Hartford Life and Annuity A+ AA+ Aa3 AA
-------------------------------------------------------------------------------



Ratings are an important factor in establishing the competitive position of an
insurance company such as Hartford Life Insurance Company. There can be no
assurance that the Company's ratings will continue for any given period of time
or that they will not be changed. In the event that the Company's ratings are
downgraded, the level of sales or the persistency of the Company's block of in
force business may be adversely impacted.

RISK-BASED CAPITAL

The National Association of Insurance Commissioners (NAIC) adopted regulations
establishing minimum capitalization requirements based on Risk-Based Capital
(RBC) formulas for life insurance companies (effective December 31, 1993). The
requirements consist of formulas which identify companies that are
undercapitalized and require specific regulatory actions. The RBC formula for
life insurance companies establishes capital requirements relating to insurance,
business, asset and interest rate risks. The RBC ratios for Hartford Life
Insurance Company and its major life insurance subsidiaries are in excess of
200% as of December 31, 1998.

CASH FLOW


1998 1997
- --------------------------------------------------------------------------------

Cash provided by operating activities $ 371 $ 972
Cash provided by (used for) investing activities 601 (284)
Cash used for financing activities (1,009) (677)
Cash - end of year 17 54
- --------------------------------------------------------------------------------


In 1998, the change in cash provided by operating activities was primarily the
result of timing in the settlement of receivables and payables as well as an
increase in income taxes paid. The change in cash provided by or used for
investing activities primarily reflects a decrease in policy loans resulting
from the reduction of COLI account values in conjunction with the decline of the
block of leveraged COLI offset by the investment of cash from operating
activities. The change in cash used for financing activities was primarily due
to declines in GIC and COLI account values.

Operating cash flows in the periods presented have been more than adequate to
meet liquidity requirements.

MBL RECAPTURE

On November 10, 1998, Hartford Life recaptured an in force block of COLI
business (referred to as "MBL Recapture") previously ceded to MBL Life Assurance
Co. of New Jersey (MBL Life), as well as purchased the outstanding interest in
International Corporate Marketing Group, Inc. (ICMG), which was previously 40%
owned by MBL Life. The transaction was consummated through the assignment of a
reinsurance arrangement between Hartford Life and MBL Life to a Hartford Life
subsidiary. Hartford Life originally assumed the life insurance block in 1992
from Mutual Benefit Life, which was placed in court-supervised rehabilitation in
1991, and reinsured a portion of those polices back to MBL Life. MBL Life,
previously a Mutual Benefit Life subsidiary, operates under the Rehabilitation
Plan for Mutual Benefit Life. The MBL Recapture has been recorded retroactive to
January 1, 1998 with respect to results of operations. The transaction resulted
in a decrease in reinsurance recoverables of $4.5 billion with an offset
primarily in policy loans and other investments.




20
21
REGULATORY INITIATIVES AND CONTINGENCIES

LEGISLATIVE INITIATIVES

Although the Federal government does not directly regulate the insurance
business, Federal initiatives often have an impact on the insurance industry in
a variety of ways. Current and proposed Federal measures which may significantly
affect the life insurance business include tax law changes affecting the tax
treatment of life insurance products and its impact on the relative desirability
of various personal investment vehicles, medical testing for insurability, and
proposed legislation to prohibit the use of gender in determining insurance and
pension rates and benefits. In particular, President Clinton's 1999 Federal
Budget Proposal currently contains certain recommendations for modifying tax
rules related to the treatment of COLI by contractholders which, if enacted as
described, could have a material adverse impact on the Company's sales of these
products. The budget proposal also includes provisions which would result in a
significant increase in the "DAC tax" on certain of the Company's products and
would apply a tax to the Company's policyholder surplus account. (For further
discussion on policyholder surplus accounts and related tax treatment as of
December 31, 1998, see Note 10 of Notes to Consolidated Financial Statements.)
It is too early to determine whether these tax proposals will ultimately be
enacted by Congress. Therefore, the potential impact to the Company's financial
condition or results of operations cannot be reasonably estimated at this time.

INSOLVENCY FUND

See Note 12(b) of Notes to Consolidated Financial Statements.

NAIC PROPOSALS

The NAIC has been developing several model laws and regulations, including a
Model Investment Law and amendments to the Model Holding Company System
Regulatory Act (the "Holding Act Amendments"). The Model Investment Law defines
the investments which are permissible for life insurers to hold, and the Holding
Act Amendments address the types of activities in which subsidiaries and
affiliates may engage. The NAIC adopted these models in 1997 and 1996, but the
laws have not been enacted for insurance companies domiciled in the State of
Connecticut, such as Hartford Life Insurance Company. Even if enacted in
Connecticut or other states in which Hartford Life Insurance Company's
subsidiaries are domiciled, it is expected that these laws will neither
significantly change Hartford Life Insurance Company's investment strategies nor
have any material adverse effect on the Company's liquidity or financial
position.

The NAIC adopted the Codification of Statutory Accounting Principles (SAP) in
March 1998. The proposed effective date for the statutory accounting guidance is
January 1, 2001. It is expected that Hartford Life Insurance Company's
domiciliary state will adopt the SAP and the Company will make the necessary
changes required for implementation. These changes are not anticipated to have a
material impact on the statutory financial statements of the Company.

DEPENDENCE ON CERTAIN THIRD PARTY RELATIONSHIPS

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

YEAR 2000

In General

The Year 2000 issue relates to the ability or inability of computer hardware,
software and other information technology (IT) systems, as well as non-IT
systems, such as equipment and machinery with imbedded chips and
microprocessors, to properly process information and data containing or related
to dates beginning with the year 2000 and beyond. The Year 2000 issue exists
because, historically, many IT and non-IT systems that are in use today were
developed years ago when a year was identified using a two-digit date field
rather than a four-digit date field. As information and data containing or
related to the century date are introduced to date sensitive systems, these
systems may recognize the year 2000 as "1900", or not at all, which may result
in systems processing information incorrectly. This, in turn, may significantly
and adversely affect the integrity and reliability of information databases of
IT systems, may cause the malfunctioning of certain non-IT systems, and may
result in a wide variety of adverse consequences to a company. In addition, Year
2000 problems that occur with third parties with which a company does business,
such as suppliers, computer vendors, distributors and others, may also adversely
affect any given company.

21
22
The integrity and reliability of Hartford Life Insurance Company's IT systems,
as well as the reliability of its non-IT systems, are integral aspects of the
Company's business. Hartford Life Insurance Company issues insurance policies,
annuities, mutual funds and other financial products to individual and business
customers, nearly all of which contain date sensitive data, such as policy
expiration dates, birth dates and premium payment dates. In addition, various IT
systems support communications and other systems that integrate the Company's
various business segments and field offices, including Hartford Life Insurance
Company's foreign operations. Hartford Life Insurance Company also has business
relationships with numerous third parties that affect virtually all aspects of
the Company's business, including, without limitation, suppliers, computer
hardware and software vendors, insurance agents and brokers, securities
broker-dealers and other distributors of financial products, many of which
provide date sensitive data to Hartford Life Insurance Company, and whose
operations are important to the Company's business.

Internal Year 2000 Efforts and Timetable

Beginning in 1990, Hartford Life Insurance Company began working on making its
IT systems Year 2000 ready, either through installing new programs or replacing
systems. Since January 1998, Hartford Life Insurance Company's Year 2000 efforts
have focused on the remaining Year 2000 issues related to IT and non-IT systems
in all of the Company's business segments. These Year 2000 efforts include the
following five main initiatives: (1) identifying and assessing Year 2000 issues;
(2) taking actions to remediate IT and non-IT systems so that they are Year 2000
ready; (3) testing IT and non-IT systems for Year 2000 readiness; (4) deploying
such remediated and tested systems back into their respective production
environments; and (5) conducting internal and external integrated testing of
such systems. As of December 31, 1998, Hartford Life Insurance Company
substantially completed initiatives (1) through (4) of its internal Year 2000
efforts. Hartford Life Insurance Company has begun initiative (5) and management
currently anticipates that such activity will continue into the fourth quarter
of 1999.

Third Party Year 2000 Efforts and Timetable

Hartford Life Insurance Company's Year 2000 efforts include assessing the
potential impact on the Company of third parties' Year 2000 readiness. Hartford
Life Insurance Company's third party Year 2000 efforts include the following
three main initiatives: (1) identifying third parties which have significant
business relationships with the Company, including, without limitation,
insurance agents, brokers, third party administrators, banks and other
distributors and servicers of financial products, and inquiring of such third
parties regarding their Year 2000 readiness; (2) evaluating such third parties'
responses to Hartford Life Insurance Company's inquiries; and (3) based on the
evaluation of third party responses (or a third party's failure to respond) and
the significance of the business relationship, conducting additional activities
with respect to third parties as determined to be necessary in each case. These
activities may include conducting additional inquiries, more in-depth
evaluations of Year 2000 readiness and plans, and integrated IT systems testing.
Hartford Life Insurance Company has completed the first third party initiative
and, as of early 1999, had substantially completed evaluating third party
responses received. Hartford Life Insurance Company has begun conducting the
additional activities described in initiative (3) and management currently
anticipates that it will continue to do so through the end of 1999. However,
notwithstanding these third party Year 2000 efforts, Hartford Life Insurance
Company does not have control over these third parties and, as a result, the
Company cannot currently determine to what extent future operating results may
be adversely affected by the failure of these third parties to adequately
address their Year 2000 issues.

Year 2000 Costs

The costs of Hartford Life Insurance Company's Year 2000 program, along with its
parent, that were incurred through the year ended December 31, 1997 were not
material to Hartford Life Insurance Company's financial condition or results of
operations. The after-tax costs of Hartford Life Insurance Company's Year 2000
efforts for the year ended December 31, 1998 were approximately $3. Management
currently estimates that after-tax costs related to the Year 2000 program to be
incurred in 1999 will be less than $10. These costs are being expensed as
incurred.

Risks and Contingency Plans

If significant Year 2000 problems arise, including problems arising with third
parties, failures of IT and non-IT systems could occur, which in turn could
result in substantial interruptions in Hartford Life Insurance Company's
business. In addition, the Company's investing activities are an important
aspect of its business and Hartford Life Insurance Company may be exposed to the
risk that issuers of investments held by it will be adversely impacted by Year
2000 issues. Given the uncertain nature of Year 2000 problems that may arise,
especially those related to the readiness of third parties discussed above,
management cannot determine at this time whether the consequences of Year 2000
related problems that could arise will have a material impact on Hartford Life
Insurance Company's financial condition or results of operations.

Hartford Life Insurance Company is in the process of developing certain
contingency plans so that if, despite its Year 2000 efforts, Year 2000 problems
ultimately arise, the impact of such problems may be avoided or minimized. These
contingency plans are being developed based on, among other things, known or
reasonably anticipated circumstances and potential vulnerabilities. The


22
23
contingency planning also includes assessing the dependency of Hartford Life
Insurance Company's business on third parties and their Year 2000 readiness. The
Company currently anticipates that internal and external contingency plans will
be substantially complete by the end of the second quarter of 1999. However, in
many contexts, Year 2000 issues are dynamic, and ongoing assessments of business
functions, vulnerabilities and risks must be made. As such, new contingency
plans may be needed in the future and/or existing plans may need to be modified
as circumstances warrant.

ACCOUNTING STANDARDS

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

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Reference is made to the "Investment Risk Management" discussion of the
Investments section of the Management's Discussion and Analysis of Financial
Condition and Results of Operations.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Index to Consolidated Financial Statements and Schedules elsewhere herein.

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

None.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

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

1. CONSOLIDATED FINANCIAL STATEMENTS. See Index to Consolidated Financial
Statements and Schedules elsewhere herein.

2. CONSOLIDATED FINANCIAL STATEMENT SCHEDULES. See Index to Consolidated
Financial Statement and Schedules elsewhere herein.

3. EXHIBITS. See Exhibit Index elsewhere herein.

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

(c) See Item 14(a)(3).

(d) See Item 14(a)(2).






23
24
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES




Page(s)


Report of Management F-1
Report of Independent Public Accountants F-2
Consolidated Statements of Income for the years ended December 31, 1998, 1997 and 1996 F-3
Consolidated Balance Sheets as of December 31, 1998 and 1997 F-4
Consolidated Statements of Changes in Stockholder's Equity for the years ended
December 31, 1998, 1997 and 1996 F-5
Consolidated Statements of Cash Flows for the years ended December 31, 1998, 1997 and 1996 F-6
Notes to Consolidated Financial Statements F-7-21
Schedule I -- Summary of Investments - Other Than Investments in Affiliates S-1
Schedule III -- Supplementary Insurance Information S-2
Schedule IV -- Reinsurance S-3




REPORT OF MANAGEMENT


The management of Hartford Life Insurance Company (the "Company") is responsible
for the preparation and integrity of information contained in the accompanying
Consolidated Financial Statements. The Consolidated Financial Statements are
prepared in accordance with generally accepted accounting principles, and, where
necessary, include amounts that are based on management's informed judgments and
estimates. Management believes these consolidated statements present fairly
Hartford Life Insurance Company's financial position and results of operations,
and, that any other information contained in the Annual Report is consistent
with the Consolidated Financial Statements.

Management has made available Hartford Life Insurance Company's financial
records and related data to Arthur Andersen LLP, independent public accountants,
in order for them to perform an audit of the Company's Consolidated Financial
Statements. Their report appears on page F-2.

An essential element in meeting management's financial responsibilities is
Hartford Life Insurance Company's system of internal controls. These controls,
which include accounting controls and the internal auditing program, are
designed to provide reasonable assurance that assets are safeguarded, and
transactions are properly authorized, executed and recorded. The controls, which
are documented and communicated to employees in the form of written codes of
conduct and policies and procedures, provide for careful selection of personnel
and for appropriate division of responsibility. Management continually monitors
for compliance, while Hartford Life Insurance Company's internal auditors
independently assess the effectiveness of the controls and make recommendations
for improvement. Also, Arthur Andersen LLP took into consideration the Company's
system of internal controls in determining the nature, timing and extent of
their audit tests.

Another important element is management's recognition of its responsibility for
fostering a strong, ethical climate, thereby ensuring that Hartford Life
Insurance Company's affairs are transacted according to the highest standards of
personal and professional conduct. Hartford Life Insurance Company has a
long-standing reputation of integrity in business conduct and utilizes
communication and education to create and fortify a strong compliance culture.

The Audit Committee of the Board of Directors of Hartford Life, Inc. (the
"Committee"), the Company's ultimate parent, composed of non-employee directors,
meets periodically with the external and internal auditors to evaluate the
effectiveness of work performed by them in discharging their respective
responsibilities and to assure their independence and free access to the
Committee.





F-1
25
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


TO HARTFORD LIFE INSURANCE COMPANY:

We have audited the accompanying Consolidated Balance Sheets of Hartford Life
Insurance Company and subsidiaries as of December 31, 1998 and 1997, and the
related Consolidated Statements of Income, Changes in Stockholder's Equity and
Cash Flows for each of the three years in the period ended December 31, 1998.
These Consolidated Financial Statements and the schedules referred to below are
the responsibility of Hartford Life Insurance Company's management. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits.

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

In our opinion, the Consolidated Financial Statements referred to above present
fairly, in all material respects, the financial position of Hartford Life
Insurance Company and subsidiaries as of December 31, 1998 and 1997, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1998 in conformity with generally accepted
accounting principles.

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



ARTHUR ANDERSEN LLP

Hartford, Connecticut
January 26, 1999






F-2
26
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME



For the years ended December 31,
-----------------------------------------
(In millions) 1998 1997 1996
- ----------------------------------------------------------------------------------------------------

REVENUES
Premiums and other considerations $ 2,218 $1,637 $ 1,705
Net investment income 1,759 1,368 1,397
Net realized capital (losses) gains (2) 4 (213)
- ----------------------------------------------------------------------------------------------------

TOTAL REVENUES 3,975 3,009 2,889
--------------------------------------------------------------------------------------------

BENEFITS, CLAIMS AND EXPENSES
Benefits, claims and claim adjustment expenses 1,911 1,379 1,535
Amortization of deferred policy acquisition costs 431 335 234
Dividends to policyholders 329 240 635
Other expenses 766 586 427
- ----------------------------------------------------------------------------------------------------

TOTAL BENEFITS, CLAIMS AND EXPENSES 3,437 2,540 2,831
--------------------------------------------------------------------------------------------

INCOME BEFORE INCOME TAX EXPENSE 538 469 58
Income tax expense 188 167 20
- ----------------------------------------------------------------------------------------------------

NET INCOME $ 350 $ 302 $ 38
- ----------------------------------------------------------------------------------------------------




























SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.




F-3
27
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS


As of December 31,
---------------------------
(In millions, except for share data) 1998 1997
- -----------------------------------------------------------------------------------------------------------------------

ASSETS
Investments
Fixed maturities, available for sale, at fair value (amortized cost of $14,505
and $13,885) $ 14,818 $14,176
Equity securities, at fair value 31 180
Policy loans, at outstanding balance 6,684 3,756
Other investments, at cost 264 47
- -----------------------------------------------------------------------------------------------------------------------
Total investments 21,797 18,159
Cash 17 54
Premiums receivable and agents' balances 17 18
Reinsurance recoverables 1,257 6,114
Deferred policy acquisition costs 3,754 3,315
Deferred income tax 464 348
Other assets 695 682
Separate account assets 90,262 69,055
- -----------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $118,263 $97,745
---------------------------------------------------------------------------------------------------------

LIABILITIES
Future policy benefits $ 3,595 $ 3,059
Other policyholder funds 19,615 21,034
Other liabilities 2,094 2,254
Separate account liabilities 90,262 69,055
- -----------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 115,566 95,402
--------------------------------------------------------------------------------------------------------------

STOCKHOLDER'S EQUITY
Common stock - 1,000 shares authorized, issued and outstanding,
par value $5,690 6 6
Capital surplus 1,045 1,045
Accumulated other comprehensive income
Net unrealized capital gains on securities, net of tax 184 179
----------------------
Total accumulated other comprehensive income 184 179
----------------------
Retained earnings 1,462 1,113
- -----------------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDER'S EQUITY 2,697 2,343
---------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $118,263 $97,745
---------------------------------------------------------------------------------------------------------









SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.




F-4
28
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY





ACCUMULATED OTHER
COMPREHENSIVE
INCOME
------------------

NET
UNREALIZED CAPITAL
GAINS (LOSSES) ON TOTAL
CAPITAL SECURITIES, NET OF RETAINED STOCKHOLDER'S
(In millions) COMMON STOCK SURPLUS TAX EARNINGS EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------

1998


Balance, December 31, 1997 $ 6 $1,045 $ 179 $ 1,113 $ 2,343
Comprehensive income
--------------------
Net income -- -- -- 350 350
-------
Other comprehensive income, net of tax (1):
Changes in net unrealized capital gains
on securities (2) -- -- 5 -- 5
-------
Total other comprehensive income 5
-------
Total comprehensive income 355
-------
Dividends -- -- -- (1) (1)
- ------------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1998 $ 6 $1,045 $ 184 $ 1,462 $ 2,697
- ------------------------------------------------------------------------------------------------------------------------------------

1997

Balance, December 31, 1996 $ 6 $1,045 $ 30 $ 811 $ 1,892
Comprehensive income
--------------------

Net income -- -- -- 302 302
-------
Other comprehensive income, net of tax (1):
Changes in net unrealized capital gains
on securities (2) -- -- 149 -- 149
-------
Total other comprehensive income 149
-------
Total comprehensive income 451
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1997 $ 6 $1,045 $ 179 $ 1,113 $ 2,343
- ------------------------------------------------------------------------------------------------------------------------------------

1996

Balance, December 31, 1995 $ 6 $1,007 $ (57) $ 773 $ 1,729
Comprehensive income
--------------------

Net income -- -- -- 38 38
-------
Other comprehensive income, net of tax (1):
Changes in net unrealized capital gains
on securities (2) -- -- 87 -- 87
-------
Total other comprehensive income 87
-------
Total comprehensive income 125
-------
Capital contribution -- 38 -- -- 38
- ------------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1996 $ 6 $1,045 $ 30 $ 811 $ 1,892
- ------------------------------------------------------------------------------------------------------------------------------------


(1) Net unrealized capital gain on securities is reflected net of tax of $3, $80
and $47, as of December 31, 1998, 1997 and 1996, respectively.
(2) There was no reclassification adjustment for after-tax gains (losses)
realized in net income for the years ended December 31, 1998 and 1997.
December 31, 1996 is net of a $142 reclassification adjustment for after-tax
losses realized in net income.




SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.




F-5
29
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS




For the years ended December 31,
--------------------------------------------------
(In millions) 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------

OPERATING ACTIVITIES
Net income $ 350 $ 302 $ 38
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Depreciation and amortization (23) 8 14
Net realized capital losses (gains) 2 (4) 213
Decrease in premiums receivable and agents' balances 1 119 10
(Decrease) increase in other liabilities (79) 223 577
Change in receivables, payables, and accruals 83 107 (22)
Increase (decrease) in accrued taxes 60 126 (91)
(Increase) decrease in deferred income taxes (118) 40 (102)
Increase in deferred policy acquisition costs (439) (555) (572)
Increase in future policy benefits 536 585 101
(Increase) decrease in reinsurance recoverables and other related assets (2) 21 (146)
- ------------------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 371 972 20
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchases of investments (6,061) (6,869) (5,854)
Sales of investments 4,901 4,256 3,543
Maturity of investments 1,761 2,329 2,693
- ------------------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES 601 (284) 382
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Capital contribution -- -- 38
Net disbursements for investment and universal life-type contracts charged
against policyholder accounts (1,009) (677) (443)
- ------------------------------------------------------------------------------------------------------------------------------------
NET CASH USED FOR FINANCING ACTIVITIES (1,009) (677) (405)
- ------------------------------------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash (37) 11 (3)
Cash - beginning of year 54 43 46
- ------------------------------------------------------------------------------------------------------------------------------------
CASH - END OF YEAR $ 17 $ 54 $ 43
- ------------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
- -------------------------------------------------
NET CASH PAID DURING THE YEAR FOR:
Income taxes $ 263 $ 9 $ 189


NONCASH INVESTING ACTIVITIES:
Due to the recapture of an in force block of business previously ceded to MBL
Life Assurance Co. of New Jersey, reinsurance recoverables of $4,546 were
exchanged for the fair value of assets comprised of $4,354 in policy loans and
$192 in other assets.










SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

F-6
30
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in millions except per share data unless otherwise stated)

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

These Consolidated Financial Statements include Hartford Life Insurance Company
and its wholly-owned subsidiaries ("Hartford Life Insurance Company" or the
"Company"), Hartford Life and Annuity Insurance Company (ILA) and Hartford
International Life Reassurance Corporation (HLRe), formerly American Skandia
Life Reinsurance Corporation. The Company is a wholly-owned subsidiary of
Hartford Life and Accident Insurance Company (HLA), a wholly-owned subsidiary of
Hartford Life, Inc. (Hartford Life). Hartford Life is a direct subsidiary of
Hartford Accident and Indemnity Company (HA&I), an indirect subsidiary of The
Hartford Financial Services Group, Inc. (The Hartford). Pursuant to an initial
public offering (the "IPO") on May 22, 1997, Hartford Life sold 26 million
shares of Class A Common Stock at $28.25 per share and received proceeds, net of
offering expenses, of $687. Of the proceeds, $527 was used to retire debt
related to Hartford Life's outstanding promissory notes and line of credit with
the remaining $160 contributed by Hartford Life to HLA to support growth in its
core businesses. Hartford Life became a publicly traded company upon the sale of
26 million shares representing approximately 18.6% of the equity ownership in
Hartford Life. On December 19, 1995, ITT Industries, Inc. (formerly ITT
Corporation) (ITT) distributed all the outstanding shares of capital stock of
The Hartford to ITT stockholders of record on such date. As a result, The
Hartford became an independent, publicly traded company.

Along with its parent, HLA, the Company is a leading financial services and
insurance company which provides (a) investment products such as individual
variable annuities and fixed market value adjusted annuities, deferred
compensation and retirement plan services and mutual funds for savings and
retirement needs; (b) life insurance for income protection and estate planning;
and (c) employee benefits products such as group life and disability insurance
that is directly written by the Company and is substantially ceded to its
parent, HLA, and (d) corporate owned life insurance.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) BASIS OF PRESENTATION

These Consolidated Financial Statements present the financial position, results
of operations and cash flows of the Company. All material intercompany
transactions and balances between the Company, its subsidiaries and affiliates
have been eliminated. The Consolidated Financial Statements are prepared on the
basis of generally accepted accounting principles which differ materially from
the statutory accounting practices prescribed by various insurance regulatory
authorities.

The preparation of financial statements, in conformity with generally accepted
accounting principles, requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The most significant estimates
include those used in determining deferred policy acquisition costs and the
liability for future policy benefits and other policyholder funds. Although some
variability is inherent in these estimates, management believes the amounts
provided are adequate.

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

(b) CHANGES IN ACCOUNTING PRINCIPLES

In November 1998, the Emerging Issues Task Force (EITF) reached consensus on
Issue No. 98-15, "Structured Notes Acquired for a Specific Investment Strategy".
This EITF issue requires companies to account for structured notes acquired for
a specific investment strategy, as a unit. Affected companies that entered into
these notes prior to September 25, 1998 are required to either restate prior
period financial statements to conform with the prescribed unit accounting model
or disclose the related impact on earnings for all periods presented and
cumulatively over the life of the instruments had the registrant accounted for
the structure as a unit. Based upon recently prescribed current generally
accepted accounting principles for such types of transactions entered into after
September 24, 1998, there was no additional earnings impact to the Company
related to combined structured note transactions. As of December 31, 1998, the
Company does not hold any combined structured notes.

F-7
31
In June 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities". The new standard establishes accounting and
reporting guidance for derivative instruments, including certain derivative
instruments embedded in other contracts. The standard requires, among other
things, that all derivatives be carried on the balance sheet at fair value. The
standard also specifies hedge accounting criteria under which a derivative can
qualify for special accounting. In order to receive special accounting, the
derivative instrument must qualify as either a hedge of the fair value or the
variability of the cash flow of a qualified asset or liability. Special
accounting for qualifying hedges provides for matching the timing of gain or
loss recognition on the hedging instrument with the recognition of the
corresponding changes in value of the hedged item. SFAS No. 133 will be
effective for fiscal years beginning after June 15, 1999. Initial application
for Hartford Life Insurance Company will begin for the first quarter of the year
2000. While Hartford Life Insurance Company is currently in the process of
quantifying the impact of SFAS No. 133, the Company is reviewing its derivative
holdings in order to take actions needed to minimize potential volatility, while
at the same time maintaining the economic protection needed to support the goals
of its business.

In March 1998, the American Institute of Certified Public Accountants (AICPA)
issued Statement of Position (SOP) No. 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use". The SOP provides
guidance on accounting for the costs of internal use software and in determining
whether the software is for internal use. The SOP defines internal use software
as software that is acquired, internally developed, or modified solely to meet
internal needs and identifies stages of software development and accounting for
the related costs incurred during the stages. This statement is effective for
fiscal years beginning after December 15, 1998 and is not expected to have a
material impact on the Company's financial condition or results of operations.

Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income", which establishes standards for reporting and display of
comprehensive income and its components in a full set of general purpose
financial statements. The objective of this statement is to report a measure of
all changes in equity of an enterprise that result from transactions and other
economic events of the period other than transactions with owners. Comprehensive
income is the total of net income and all other nonowner changes in equity.
Accordingly, the Company has reported comprehensive income in the Consolidated
Statements of Changes in Stockholder's Equity.

In December 1997, the AICPA issued SOP No. 97-3 "Accounting by Insurance and
Other Enterprises for Insurance Related Assessments". This SOP provides guidance
on accounting by insurance and other enterprises for assessments related to
insurance activities. Specifically, the SOP provides guidance on when a guaranty
fund or other assessment should be recognized, how to measure the liability, and
what information should be disclosed. This SOP will be effective for fiscal
years beginning after December 15, 1998. Adoption of SOP 97-3 is not expected to
have a material impact on the Company's financial condition or results of
operations.

In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information". The new standard requires public business
enterprises to disclose certain financial and descriptive information about
reportable operating segments in annual financial statements and in condensed
financial statements of interim periods. Operating segments are components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and assessing performance. SFAS No. 131 also establishes
standards for related disclosures about products and services, geographic areas
and major customers. The Company adopted SFAS No. 131 in 1998. For additional
information, see Note 13.

On November 14, 1996, the EITF reached a consensus on Issue No. 96-12,
"Recognition of Interest Income and Balance Sheet Classification of Structured
Notes". This EITF issue requires companies to record income on certain
structured securities on a retrospective interest method. The Company adopted
EITF No. 96-12 for structured securities acquired after November 14, 1996.
Adoption of EITF No. 96-12 did not have a material effect on the Company's
financial condition or results of operations.

In June 1996, the FASB issued SFAS No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities" which is
effective for transfers and servicing of financial assets and extinguishments of
liabilities occurring after December 31, 1996. This statement established
criteria for determining whether transferred assets should be accounted for as
sales or secured borrowings. Adoption of SFAS No. 125 did not have a material
effect on the Company's financial condition or results of operations.

Effective January 1, 1996, Hartford Life Insurance Company adopted SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of ". This statement establishes accounting standards for the
impairment of long-lived assets, certain identifiable intangibles and goodwill
related to those assets to be held and used and for long-lived assets and


F-8
32
certain identifiable intangibles to be disposed. Adoption of SFAS No. 121 did
not have a material effect on the Company's financial condition or results of
operations.

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

(C) REVENUE RECOGNITION

Revenues for investment products and universal life-type policies consist of
policy charges for policy administration, cost of insurance and surrender
charges assessed to policy account balances and are recognized in the period in
which services are provided. Premiums for traditional life insurance policies
are recognized as revenues when they are due from policyholders.

(D) FUTURE POLICY BENEFITS AND OTHER POLICYHOLDER FUNDS

Liabilities for future policy benefits are computed by the net level premium
method using interest rate assumptions varying from 3% to 11% and withdrawal and
mortality assumptions appropriate at the time the policies were issued.
Liabilities for universal life-type and investment contracts are stated at
policyholder account values before surrender charges.

(E) INVESTMENTS

Hartford Life Insurance Company's investments in fixed maturities include bonds
and commercial paper which are considered "available for sale" and accordingly
are carried at fair value with the after-tax difference from cost reflected as a
component of stockholder's equity designated "net unrealized capital gains on
securities, net of tax". Equity securities, which include common and
non-redeemable preferred stocks, are carried at fair values with the after-tax
difference from cost reflected in stockholder's equity. Policy loans are carried
at outstanding balance which approximates fair value. Realized capital gains and
losses on security transactions associated with the Company's immediate
participation guaranteed contracts are excluded from revenues and deferred over
the expected maturity of the securities, since under the terms of the contracts
the realized gains and losses will be credited to policyholders in future years
as they are entitled to receive them. Net realized capital gains and losses,
excluding those related to immediate participation guaranteed contracts, are
reported as a component of revenue and are determined on a specific
identification basis.

The Company's accounting policy for impairment requires recognition of an other
than temporary impairment charge on a security if it is determined that the
Company is unable to recover all amounts due under the contractual obligations
of the security. In addition, for securities expected to be sold, an other than
temporary impairment charge is recognized if the Company does not expect the
fair value of a security to recover to cost or amortized cost prior to the
expected date of sale. Once an impairment charge has been recorded, the Company
then continues to review the other than temporarily impaired securities for
additional impairment, if necessary.

(F) DERIVATIVE INSTRUMENTS

Hartford Life Insurance Company uses a variety of derivative instruments
including swaps, caps, floors, forwards and exchange traded financial futures
and options as part of an overall risk management strategy. These instruments
are used as a means of hedging exposure to price, foreign currency and/or
interest rate risk on planned investment purchases or existing assets and
liabilities. The Company does not hold or issue derivative instruments for
trading purposes. Hartford Life Insurance Company's accounting for derivative
instruments used to manage risk is in accordance with the concepts established
in SFAS No. 80, "Accounting for Futures Contracts", SFAS No. 52, "Foreign
Currency Translation", AICPA SOP 86-2, "Accounting for Options" and various EITF
pronouncements. Written options are used, in all cases in conjunction with other
assets and derivatives, as part of the Company's asset and liability management
strategy. Derivative instruments are carried at values consistent with the asset
or liability being hedged. Derivative instruments used to hedge fixed maturities
or equity securities are carried at fair value with the after-tax difference
from cost reflected in Stockholder's Equity. Derivative instruments used to
hedge other invested assets or liabilities are carried at cost. For a discussion
of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities"
issued in June 1998, see (b) Changes in Accounting Principles.

Derivative instruments must be designated at inception as a hedge and measured
for effectiveness both at inception and on an ongoing basis. Hartford Life
Insurance Company's correlation threshold for hedge designation is 80% to 120%.
If correlation, which is assessed monthly and measured based on a rolling three
month average, falls outside the 80% to 120% range, hedge accounting will be
terminated. Derivative instruments used to create a synthetic asset must meet
synthetic accounting criteria including designation at inception and consistency
of terms between the synthetic and the instrument being replicated. Consistent
with industry practice,


F-9
33
synthetic instruments are accounted for like the financial instrument it is
intended to replicate. Derivative instruments which fail to meet risk management
criteria, subsequent to acquisition, are marked to market with the impact
reflected in the Consolidated Statements of Income.

Gains or losses on financial futures contracts entered into in anticipation of
the investment of future receipt of product cash flows are deferred and, at the
time of the ultimate investment purchase, reflected as an adjustment to the cost
basis of the purchased asset. Gains or losses on futures used in invested asset
risk management are deferred and adjusted into the cost basis of the hedged
asset when the contract futures are closed, except for futures used in duration
hedging which are deferred and basis adjusted on a quarterly basis. The basis
adjustments are amortized into net investment income over the remaining asset
life.

Open forward commitment contracts are marked to market through stockholder's
equity. Such contracts are accounted for at settlement by recording the purchase
of the specified securities at the previously committed price. Gains or losses
resulting from the termination of forward commitment contracts before the
delivery of the securities are recognized immediately in the Consolidated
Statements of Income as a component of net investment income.

The cost of options entered into as part of a risk management strategy are basis
adjusted to the underlying asset or liability and amortized over the remaining
life of the option. Gains or losses on expiration or termination are adjusted
into the basis of the underlying asset or liability and amortized over the
remaining asset life.

Interest rate swaps involve the periodic exchange of payments without the
exchange of underlying principal or notional amounts. Net receipts or payments
are accrued and recognized over the life of the swap agreement as an adjustment
to investment income. Should the swap be terminated, the gain or loss is
adjusted into the basis of the asset or liability and amortized over the
remaining life. Should the hedged asset be sold or liability terminated without
terminating the swap position, any swap gains or losses are immediately
recognized in net investment income. Interest rate swaps purchased in
anticipation of an asset purchase (anticipatory transaction) are recognized
consistent with the underlying asset components such that the settlement
component is recognized in the Consolidated Statements of Income while the
change in market value is recognized as an unrealized capital gain or loss.

Premiums paid on purchased floor or cap agreements and the premium received on
issued cap or floor agreements (used for risk management) are adjusted into the
basis of the applicable asset and amortized over the asset life. Gains or losses
on termination of such positions are adjusted into the basis of the asset or
liability and amortized over the remaining asset life. Net payments are
recognized as an adjustment to income or basis adjusted and amortized depending
on the specific hedge strategy.

Forward exchange contracts and foreign currency swaps are accounted for in
accordance with SFAS No. 52. Changes in the spot rate of instruments designated
as hedges of the net investment in a foreign subsidiary are reflected in the
cumulative translation adjustments component of stockholder's equity. Cash flows
from futures, options, and swaps, accounted for as hedges, are included with the
cash flows of the item being hedged.

(G) SEPARATE ACCOUNTS

Hartford Life Insurance Company maintains separate account assets and
liabilities which are reported at fair value. Separate account assets are
segregated from other investments. Separate accounts reflect two categories of
risk assumption: non-guaranteed separate accounts, wherein the policyholder
assumes the investment risk and rewards, and guaranteed separate account assets,
wherein the Company contractually guarantees either a minimum return or account
value to the policyholder.

(H) DEFERRED POLICY ACQUISITION COSTS

Policy acquisition costs, which include commissions and certain underwriting
expenses associated with acquiring business, are deferred and amortized over the
estimated lives of the contracts, usually 20 years. Generally, acquisition costs
are deferred and amortized using the retrospective deposit method. Under the
retrospective deposit method, acquisition costs are amortized in proportion to
the present value of expected gross profits from surrender charges, investment
charges, mortality and expense margins. Actual gross profits can vary from
management's estimates resulting in increases or decreases in the rate of
amortization. Management periodically updates these estimates, when appropriate,
and evaluates the recoverability of the deferred acquisition cost asset. When
appropriate, management revises its assumptions on the estimated gross profits
of these contracts and the cumulative amortization for the books of business are
re-estimated and adjusted by a cumulative charge or credit to income.





F-10
34
Acquisition costs and their related deferral are included in the Company's other
expenses as follows:


1998 1997 1996
- ----------------------------------------------------------------------------------------------------------------------------------

Commissions $ 1,069 $ 976 $ 848
Deferred acquisition costs (891) (862) (823)
Other 588 472 402
- ----------------------------------------------------------------------------------------------------------------------------------
Total other expenses $ 766 $ 586 $ 427
- ----------------------------------------------------------------------------------------------------------------------------------


(I) DIVIDENDS TO POLICYHOLDERS

Certain life insurance policies contain dividend payment provisions that enable
the policyholder to participate in the earnings on that participating block of
business. The participating insurance in force accounted for 71%, 55% and 44% in
1998, 1997 and 1996, respectively, of total insurance in force.

3. INVESTMENTS AND DERIVATIVE INSTRUMENTS


For the years ended December 31,
-------------------------------------------------------
1998 1997 1996
- ----------------------------------------------------------------------------------------------------------------------------------

(A) COMPONENTS OF NET INVESTMENT INCOME

Interest income from fixed maturities $ 952 $ 932 $ 918
Interest income from policy loans 789 425 477
Income from other investments 32 26 15
- ----------------------------------------------------------------------------------------------------------------------------------
Gross investment income 1,773 1,383 1,410
Less: Investment expenses 14 15 13
- ----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 1,759 $ 1,368 $ 1,397
- ----------------------------------------------------------------------------------------------------------------------------------

(B) COMPONENTS OF NET REALIZED CAPITAL (LOSSES) GAINS

Fixed maturities $ (28) $ (7) $ (201)
Equity securities 21 12 2
Real estate and other 5 (1) (4)
Less: Decrease in liability to policyholders for realized capital gains -- -- (10)
- ----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED CAPITAL (LOSSES) GAINS $ (2) $ 4 $ (213)
- ----------------------------------------------------------------------------------------------------------------------------------


(C) NET UNREALIZED CAPITAL (LOSSES) GAINS ON EQUITY SECURITIES

Gross unrealized capital gains $ 2 $ 14 $ 13
Gross unrealized capital losses (1) -- (1)
- ----------------------------------------------------------------------------------------------------------------------------------
Net unrealized capital gains 1 14 12
Deferred income tax expense -- 5 4
- ----------------------------------------------------------------------------------------------------------------------------------
Net unrealized capital gains, net of tax 1 9 8
Balance - beginning of year 9 8 1
- ----------------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED CAPITAL GAINS ON EQUITY SECURITIES $ (8) $ 1 $ 7
- ----------------------------------------------------------------------------------------------------------------------------------

(D) NET UNREALIZED CAPITAL GAINS (LOSSES) ON FIXED MATURITIES

Gross unrealized capital gains $ 421 $ 371 $ 386
Gross unrealized capital losses (108) (80) (341)
Unrealized capital gains credited to policyholders (32) (30) (11)
- ----------------------------------------------------------------------------------------------------------------------------------
Net unrealized capital gains 281 261 34
Deferred income tax expense 98 91 12
- ----------------------------------------------------------------------------------------------------------------------------------
Net unrealized capital gains, net of tax 183 170 22
Balance - beginning of year 170 22 (58)
- ----------------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED CAPITAL GAINS (LOSSES) ON FIXED MATURITIES $ 13 $ 148 $ 80
- ----------------------------------------------------------------------------------------------------------------------------------





F-11
35
(E) FIXED MATURITY INVESTMENTS



As of December 31, 1998
-----------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized
Cost Gains Losses Fair Value
- ------------------------------------------------------------------------------------------------------------------------------------


U. S. Government and Government agencies and authorities
(guaranteed and sponsored) $ 121 $ 2 $-- $ 123
U. S. Government and Government agencies and authorities
(guaranteed and sponsored) - asset backed 1,001 23 (8) 1,016
States, municipalities and political subdivisions 165 8 -- 173
International governments 393 26 (7) 412
Public utilities 844 33 (3) 874
All other corporate including international 5,469 260 (42) 5,687
All other corporate - asset backed 4,155 58 (42) 4,171
Short-term investments 1,847 -- -- 1,847
Certificates of deposit 510 11 (6) 515
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED MATURITIES $14,505 $421 $(108) $14,818
- ------------------------------------------------------------------------------------------------------------------------------------




As of December 31, 1997
-----------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized
Cost Gains Losses Fair Value
- ------------------------------------------------------------------------------------------------------------------------------------


U. S. Government and Government agencies and authorities
(guaranteed and sponsored) $ 217 $ 3 $ (1) $ 219
U. S. Government and Government agencies and authorities
(guaranteed and sponsored) - asset backed 1,175 64 (35) 1,204
States, municipalities and political subdivisions 211 7 (1) 217
International governments 376 20 (3) 393
Public utilities 871 26 (3) 894
All other corporate including international 5,033 200 (25) 5,208
All other corporate - asset backed 4,091 41 (8) 4,124
Short-term investments 1,318 -- -- 1,318
Certificates of deposit 593 10 (4) 599
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED MATURITIES $13,885 $371 $(80) $14,176
- ------------------------------------------------------------------------------------------------------------------------------------


The amortized cost and estimated fair value of fixed maturity investments as of
December 31, 1998 by estimated maturity year are shown below. Expected
maturities differ from contractual maturities due to call or prepayment
provisions. Asset backed securities, including mortgage backed securities and
collateralized mortgage obligations, are distributed to maturity year based on
the Company's estimates of the rate of future prepayments of principal over the
remaining lives of the securities. These estimates are developed using
prepayment speeds provided in broker consensus data. Such estimates are derived
from prepayment speeds experienced at the interest rate levels projected for the
applicable underlying collateral and can be expected to vary from actual
experience.




MATURITY Amortized Cost Fair Value
- ------------------------------------------------------------------------------------------------------------------------------------

One year or less $ 3,047 $ 3,116
Over one year through five years 4,796 4,843
Over five years through ten years 3,242 3,318
Over ten years 3,420 3,541
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL $14,505 $14,818
- ------------------------------------------------------------------------------------------------------------------------------------


Sales of fixed maturities, excluding short-term fixed maturities, for the years
ended December 31, 1998, 1997 and 1996 resulted in proceeds of $3.2 billion,
$4.2 billion and $3.5 billion, gross realized capital gains of $103, $169 and
$87, gross realized capital losses


F-12
36
(including writedowns) of $131, $176 and $298, respectively. In 1996, gross
realized capital losses includes an other than temporary impairment of $137
related to the Company's block of guaranteed investment contract business
written prior to 1995 which could not recover to amortized cost prior to sale.
Sales of equity security investments for the years ended December 31, 1998, 1997
and 1996 resulted in proceeds of $35, $132 and $74 and gross realized capital
gains of $21, $12 and $2, respectively, and no gross realized capital losses for
all periods.

(F) CONCENTRATION OF CREDIT RISK

The Company is not exposed to any significant concentration of credit risk in
fixed maturities of a single issuer greater than 10% of stockholder's equity.

(G) DERIVATIVE INSTRUMENTS

Hartford Life Insurance Company utilizes a variety of derivative instruments,
including swaps, caps, floors, forwards and exchange traded futures and options,
in accordance with Company policy and in order to achieve one of three Company
approved objectives: to hedge risk arising from interest rate, price or currency
exchange rate volatility; to manage liquidity; or, to control transactions
costs. The Company utilizes derivative instruments to manage market risk through
four principal risk management strategies: hedging anticipated transactions,
hedging liability instruments, hedging invested assets and hedging portfolios of
assets and/or liabilities. The Company does not trade in these instruments for
the express purpose of earning trading profits.

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

Hartford Life Insurance Company's derivative program is monitored by an internal
compliance unit and is reviewed by senior management and Hartford Life's Finance
Committee of the Board of Directors. Notional amounts, which represent the basis
upon which pay or receive amounts are calculated and are not reflective of
credit risk, pertaining to derivative financial instruments (excluding the
Company's guaranteed separate account derivative investments), totaled $6.2
billion and $6.5 billion ($3.9 billion and $4.6 billion related to the Company's
investments, $2.3 billion and $1.9 billion on the Company's liabilities) as of
December 31, 1998 and 1997, respectively.

The tables below provide a summary of derivative instruments held by Hartford
Life Insurance Company as of December 31, 1998 and 1997, segregated by major
investment and liability category:



1998 AMOUNT HEDGED (NOTIONAL AMOUNTS)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Purchased Interest Foreign Total
Carrying Issued Caps Caps & Rate Currency Notional
ASSETS HEDGED Value & Floors Floors Futures (2) Swaps Swaps (3) Amount
- ------------------------------------------------------------------------------------------------------------------------------------

Asset backed securities (excluding
inverse floaters and anticipatory) $ 5,163 $ - $ 188 $ 3 $ 885 $ - $ 1,076
Inverse floaters (1) 24 44 55 -- -- -- 99
Anticipatory (4) -- -- -- -- 235 -- 235
Other bonds and notes 7,683 461 597 18 1,300 90 2,466
Short-term investments 1,948 -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED MATURITIES 14,818 505 840 21 2,420 90 3,876
Equity securities, policy loans and
other investments 6,979 -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS $21,797 505 840 21 2,420 90 3,876
OTHER POLICYHOLDER FUNDS $19,615 1,100 50 -- 1,195 -- 2,345
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DERIVATIVE INSTRUMENTS - NOTIONAL VALUE $ 1,605 $ 890 $ 21 $ 3,615 $ 90 $ 6,221
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DERIVATIVE INSTRUMENTS - FAIR VALUE $ (6) $ 19 $ -- $ 27 $ (7) $ 33
- ------------------------------------------------------------------------------------------------------------------------------------





F-13
37


1997 AMOUNT HEDGED (NOTIONAL AMOUNTS)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Purchased Interest Foreign Total
Carrying Issued Caps Caps & Rate Currency Notional
ASSETS HEDGED Value & Floors Floors Futures (2) Swaps Swaps (3) Amount
- ------------------------------------------------------------------------------------------------------------------------------------

Asset backed securities (excluding
inverse floaters and anticipatory) $ 5,253 $ 500 $ 1,404 $ 28 $ 221 $ - $ 2,153
Inverse floaters (1) 75 47 80 - 25 - 152
Anticipatory (4) - - - - - - -
Other bonds and notes 7,531 462 460 22 1,258 91 2,293
Short-term investments 1,317 - - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED MATURITIES 14,176 1,009 1,944 50 1,504 91 4,598
Equity securities, policy loans and
other investments 3,983 - - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS $ 18,159 1,009 1,944 50 1,504 91 4,598
OTHER POLICYHOLDER FUNDS $ 21,034 10 150 - 1,747 - 1,907
TOTAL DERIVATIVE INSTRUMENTS - NOTIONAL VALUE $ 1,019 $ 2,094 $ 50 $ 3,251 $ 91 $ 6,505
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DERIVATIVE INSTRUMENTS - FAIR VALUE $ (8) $ 23 $ - $ 19 $ (6) $ 28
- ------------------------------------------------------------------------------------------------------------------------------------


(1) Inverse floaters are variations of collateralized mortgage obligations
(CMO's) for which the coupon rates move inversely with an index rate such
as the London Interbank Offered Rate (LIBOR). The risk to principal is
considered negligible as the underlying collateral for the securities is
guaranteed or sponsored by government agencies. To address the volatility
risk created by the coupon variability, the Company uses a variety of
derivative instruments, primarily interest rate swaps, caps and floors.
(2) As of December 31, 1998 and 1997, approximately 5% and 44% , respectively,
of the notional futures contracts expire within one year.
(3) As of December 31, 1998 and 1997, approximately 11% and 16%, respectively,
of foreign currency swaps expire within one year.
(4) Deferred gains and losses on anticipatory transactions are included in the
carrying value of fixed maturities in the Consolidated Balance Sheets. At
the time of the ultimate purchase, they are reflected as a basis adjustment
to the purchased asset. As of December 31, 1998 and 1997, the Company had
no deferred gains for interest rate swaps. During 1998, $1.5 in deferred
gains were basis adjusted.

The following is a reconciliation of notional amounts by derivative type and
strategy as of December 31, 1998 and 1997:




December 31, 1997 Maturities/ December 31, 1998
Notional Amount Additions Terminations (1) Notional Amount
- ----------------------------------------------------------------------------------------------------------------------------

BY DERIVATIVE TYPE
Caps $1,239 $1,000 $ 327 $1,912
Floors 1,864 - 1,281 583
Swaps/ Forwards 3,342 1,838 1,475 3,705
Futures 50 8 37 21
Options 10 - 10 -
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL $6,505 $2,846 $3,130 $6,221
- ----------------------------------------------------------------------------------------------------------------------------

BY STRATEGY
Liability $1,907 $1,099 $ 661 $2,345
Anticipatory - 242 7 235
Asset 1,805 1,260 667 2,398
Portfolio 2,793 245 1,795 1,243
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL $6,505 $2,846 $3,130 $6,221
- ----------------------------------------------------------------------------------------------------------------------------


(1) During 1998, the Company had no significant gains or losses on terminations
of hedge positions using derivative financial instruments.




F-14
38
4. FAIR VALUE OF FINANCIAL INSTRUMENTS

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

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

For policy loans, carrying amounts approximate fair value.

Fair value for other invested assets primarily consist of partnerships and
trusts that are based on external market valuations from partnership and trust
management as well as mortgage loans where carrying amounts approximate fair
value.

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

The fair value of derivative financial instruments, including swaps, caps,
floors, futures, options and forward commitments, is determined using a pricing
model which is validated through periodic comparison to dealer quoted prices.

The carrying amount and fair values of Hartford Life Insurance Company's
financial instruments as of December 31, 1998 and 1997 were as follows:


1998 1997
------------------------------------------------------------------------------------
Carrying Amount Fair Value Carrying Amount Fair Value
- ------------------------------------------------------------------------------------------------------------------------------------

ASSETS
Fixed maturities $14,818 $14,818 $14,176 $14,176
Equity securities 31 31 180 180
Policy loans 6,684 6,684 3,756 3,756
Other investments 264 309 47 91
LIABILITIES
Other policyholder funds (1) 11,709 11,726 11,769 11,755
- ------------------------------------------------------------------------------------------------------------------------------------


(1) Excludes corporate owned life insurance and universal life insurance
contracts.

5. SEPARATE ACCOUNTS

Hartford Life Insurance Company maintained separate account assets and
liabilities totaling $90.3 billion and $69.1 billion as of December 31, 1998 and
1997, respectively, which are reported at fair value. Separate account assets,
which are segregated from other investments, reflect two categories of risk
assumption: non-guaranteed separate accounts totaling $80.6 billion and $58.6
billion as of December 31, 1998 and 1997, respectively, wherein the policyholder
assumes the investment risk, and guaranteed separate accounts totaling $9.7 and
$10.5 billion as of December 31, 1998 and 1997, respectively, wherein Hartford
Life Insurance Company contractually guarantees either a minimum return or
account value to the policyholder. Included in non-guaranteed separate account
assets were policy loans totaling $1.8 billion and $1.9 billion as of December
31, 1998 and 1997, respectively. Net investment income (including net realized
capital gains and losses) and interest credited to policyholders on separate
account assets are not reflected in the Consolidated Statements of Income.

Separate account management fees and other revenues were $908, $699 and $538 in
1998, 1997 and 1996, respectively. The guaranteed separate accounts include
fixed market value adjusted (MVA) individual annuity and modified guaranteed
life insurance. The average credited interest rate on these contracts was 6.6%
and 6.5% as of December 31, 1998 and 1997, respectively. The assets that support
these liabilities were comprised of $9.5 billion and $10.2 billion in fixed
maturities as of December 31, 1998 and 1997, respectively. The portfolios are
segregated from other investments and are managed to minimize liquidity and
interest rate risk. In order to minimize the risk of disintermediation
associated with early withdrawals, fixed MVA annuity and modified guaranteed
life insurance contracts carry a graded surrender charge as well as a market
value adjustment. Additional investment risk is hedged using a


F-15
39
variety of derivatives which totaled $40 and $119 in carrying value and $3.5
billion and $3.0 billion in notional amounts as of December 31, 1998 and 1997,
respectively.

6. STATUTORY RESULTS



For the years ended December 31,
------------------------------------------------------------------------------------------
1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------

Statutory net income $ 211 $ 214 $ 144
- ------------------------------------------------------------------------------------------------------------------------------------
Statutory surplus $ 1,676 $ 1,441 $ 1,207
- ------------------------------------------------------------------------------------------------------------------------------------


A significant percentage of the consolidated statutory surplus is permanently
reinvested or is subject to various state regulatory restrictions which limit
the payment of dividends without prior approval. The total amount of statutory
dividends which may be paid by the insurance subsidiaries of the Company in 1999
is estimated to be $168.

Hartford Life Insurance Company and its domestic insurance subsidiaries prepare
their statutory financial statements in accordance with accounting practices
prescribed by the State of Connecticut. Prescribed statutory accounting
practices include publications of the National Association of Insurance
Commissioners, as well as state laws, regulations, and general administrative
rules.

7. STOCK COMPENSATION PLANS

Hartford Life Insurance Company's employees are included in the 1997 Hartford
Life, Inc. Incentive Stock Plan (the "Plan"), which was adopted during the
second quarter of 1997. Under the Plan, options granted may be either
non-qualified options or incentive stock options qualifying under Section 422A
of the Internal Revenue Code. The aggregate number of shares of Class A Common
Stock which may be awarded in any one year shall be subject to an annual limit.
The maximum number of shares of Class A Common Stock which may be granted under
the Plan in each year shall be 1.5% of the total issued and outstanding shares
of Hartford Life Class A Common Stock and treasury stock as reported in the
Annual Report on Hartford Life's Form 10-K for the preceding year plus unused
portions of such limit from prior years. In addition, no more than 5 million
shares of Class A Common Stock shall be cumulatively available for awards of
incentive stock options under the Plan, and no more than 20% of the total number
of shares on a cumulative basis shall be available for restricted stock and
performance shares.

All options granted have an exercise price equal to the market price of Hartford
Life's stock on the date of grant and an option's maximum term is ten years.
Certain nonperformance based options become exercisable upon the attainment of
specified market price appreciation of Hartford Life's common shares or at seven
years after the date of grant, while the remaining nonperformance based options
become exercisable over a three year period commencing with the date of grant.

Also included in the Plan are long-term performance awards which become payable
upon the attainment of specific performance goals achieved over a three year
period.

During the second quarter of 1997, Hartford Life established the Hartford Life,
Inc. Employee Stock Purchase Plan (ESPP). Under this plan, eligible employees of
Hartford Life and the Company may purchase Class A Common Stock of Hartford Life
at a 15% discount from the lower of the market price at the beginning or end of
the quarterly offering period. Hartford Life may sell up to 2,700,000 shares of
stock to eligible employees. Hartford Life sold 121,943 and 54,316 shares under
the ESPP in 1998 and 1997, respectively. The weighted average fair value of the
discount under the ESPP was $13.80 per share in 1998 and $9.63 per share in
1997.

8. POSTRETIREMENT BENEFIT AND SAVINGS PLANS

(A) PENSION PLANS

Hartford Life Insurance Company's employees are included in The Hartford's
noncontributory defined benefit pension plans. These plans provide pension
benefits that are based on years of service and the employee's compensation
during the last ten years of employment. The Company's funding policy is to
contribute annually an amount between the minimum funding requirements set forth
in the Employee Retirement Income Security Act of 1974, as amended, and the
maximum amount that can be deducted for U.S. Federal income tax purposes.
Generally, pension costs are funded through the purchase of the Company's group
pension contracts. The cost to the Company was approximately $6 in 1998 and $5
in both 1997 and 1996.




F-16
40
The Company also provides, through The Hartford, certain health care and life
insurance benefits for eligible retired employees. A substantial portion of the
Company's employees may become eligible for these benefits upon retirement. The
Company's contribution for health care benefits will depend on the retiree's
date of retirement and years of service. In addition, the plan has a defined
dollar cap which limits average Company contributions. The Company has prefunded
a portion of the health care and life insurance obligations through trust funds
where such prefunding can be accomplished on a tax effective basis.
Postretirement health care and life insurance benefits expense, allocated by The
Hartford, was immaterial to the results of operations for 1998, 1997 and 1996.

The assumed rate in the per capita cost of health care (the health care trend
rate) was 7.8% for 1998, decreasing ratably to 5.0% in the year 2003. Increasing
the health care trend rates by one percent per year would have an immaterial
impact on the accumulated postretirement benefit obligation and the annual
expense. To the extent that the actual experience differs from the inherent
assumptions, the effect will be amortized over the average future service of
covered employees.

(B) INVESTMENT AND SAVINGS PLAN

Substantially all employees of the Company are eligible to participate in The
Hartford's Investment and Savings Plan. Under this plan, designated
contributions, which may be invested in Class A Common Stock of Hartford Life or
certain other investments, are matched, up to 3% of compensation, by the
Company. The cost to Hartford Life Insurance Company for the above-mentioned
plan was approximately $4 and $2 in 1998 and 1997, respectively.

9. REINSURANCE

Hartford Life Insurance Company cedes insurance to other insurers, including its
parent, HLA, in order to limit its maximum loss. Such transfer does not relieve
the Company of its primary liability. The Company also assumes insurance from
other insurers. Failure of reinsurers to honor their obligations could result in
losses to the Company. The Company evaluates the financial condition of its
reinsurers and monitors concentration of credit risk.

Net premiums and other considerations were comprised of the following:



For the years ended December 31,
---------------------------------------------------------------------------------
1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------

Gross premiums $ 2,722 $ 2,164 $ 2,138
Assumed 150 159 190
Ceded (654) (686) (623)
- ------------------------------------------------------------------------------------------------------------------------------------
NET PREMIUMS AND OTHER CONSIDERATIONS $ 2,218 $ 1,637 $ 1,705
- ------------------------------------------------------------------------------------------------------------------------------------


The Company ceded approximately $128, $76 and $100 of group life premium to HLA
in 1998, 1997 and 1996, respectively, representing $38.4 billion, $33.6 billion
and $33.3 billion of insurance in force, respectively. The Company ceded $383,
$339 and $318 of accident and health premium to HLA in 1998, 1997 and 1996,
respectively. The Company assumed $82, $89 and $101 of premium in 1998, 1997 and
1996, respectively, representing $7.4 billion, $8.2 billion and $8.5 billion of
individual life insurance in force, respectively, from HLA.

Life reinsurance recoveries, which reduce death and other benefits, approximated
$97, $158 and $140 for the years ended December 31, 1998, 1997 and 1996,
respectively.

Hartford Life Insurance Company has no significant reinsurance-related
concentrations of credit risk.





F-17
41
10. INCOME TAX

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

As long as The Hartford continues to own at least 80% of the combined voting
power and 80% of the value of the outstanding capital stock of Hartford Life,
the Company will be included for Federal income tax purposes in the affiliated
group of which The Hartford is the common parent. It is the intention of The
Hartford and its non-life subsidiaries to file a single consolidated Federal
income tax return. The life insurance companies will file a separate
consolidated federal income tax return. The Company's effective tax rate was
35%, 36% and 35% in 1998, 1997 and 1996, respectively.

Income tax expense is as follows:



For the years ended December 31,
-----------------------------------------------------------------------------------
1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------

Current $ 307 $ 162 $ 118
Deferred (119) 5 (98)
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME TAX EXPENSE $ 188 $ 167 $ 20
- ------------------------------------------------------------------------------------------------------------------------------------


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



For the years ended December 31,
--------------------------------------------------------------
1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------

Tax provision at the U.S. Federal statutory rate $ 188 $ 164 $ 20
Other - 3 -
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 188 $ 167 $ 20
- ------------------------------------------------------------------------------------------------------------------------------------


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



1998 1997
---------------------------------------------------------

Tax basis deferred policy acquisition costs $ 751 $ 639
Financial statement deferred policy acquisition costs and reserves 103 69
Employee benefits 4 8
Net unrealized capital gains on securities (98) (96)
Investments and other (296) (272)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 464 $ 348
- ------------------------------------------------------------------------------------------------------------------------------------


Hartford Life Insurance Company had a current tax payable of $65 and $64 as of
December 31, 1998 and 1997, respectively.

Prior to the Tax Reform Act of 1984, the Life Insurance Company Income Tax Act
of 1959 permitted the deferral from taxation of a portion of statutory income
under certain circumstances. In these situations, the deferred income was
accumulated in a "Policyholders' Surplus Account" and, based on current tax law,
will be taxable in the future only under conditions which management considers
to be remote; therefore, no Federal income taxes have been provided on this
deferred income. The balance for tax return purposes of the Policyholders'
Surplus Account as of December 31, 1998 was $104.





F-18
42
11. RELATED PARTY TRANSACTIONS

Transactions of the Company with HA&I and its affiliates relate principally to
tax settlements, reinsurance, insurance coverage, rental and service fees,
payment of dividends and capital contributions. In addition, certain affiliated
insurance companies purchased group annuity contracts from the Company to fund
pension costs and claim annuities to settle casualty claims. Substantially all
general insurance expenses related to the Company, including rent and employee
benefit plan expenses, are initially paid by The Hartford. Direct expenses are
allocated to the Company using specific identification, and indirect expenses
are allocated using other applicable methods. Indirect expenses include those
for corporate areas which, depending on type, are allocated based on either a
percentage of direct expenses or on utilization. Indirect expenses allocated to
the Company by The Hartford were $47, $34 and $40 in 1998, 1997 and 1996,
respectively. Management believes that the methods used are reasonable.

12. COMMITMENTS AND CONTINGENT LIABILITIES

(A) LITIGATION

Hartford Life Insurance Company is involved in pending and threatened litigation
in the normal course of its business in which claims for monetary and punitive
damages have been asserted. Although there can be no assurances, at the present
time the Company does not anticipate that the ultimate liability arising from
such pending or threatened litigation, after consideration of provisions made
for potential losses and costs of defense, will have a material adverse effect
on the financial condition or operating results of the Company.

(B) GUARANTY FUNDS

Under insurance guaranty fund laws in each state, the District of Columbia and
Puerto Rico, insurers licensed to do business can be assessed by state insurance
guaranty associations for certain obligations of insolvent insurance companies
to policyholders and claimants. Recent regulatory actions against certain large
life insurers encountering financial difficulty have prompted various state
insurance guaranty associations to begin assessing life insurance companies for
the deemed losses. Most of these laws do provide, however, that an assessment
may be excused or deferred if it would threaten an insurer's solvency and
further provide annual limits on such assessments. Part of the assessments paid
by the Company and its subsidiaries 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 $9, $15 and $11 in 1998, 1997 and 1996,
respectively, of which $4, $4 and $5, respectively, were estimated to be
creditable against premium taxes.

(C) LEASES

The rent paid to Hartford Fire for space occupied by the Company was $7 in both
1998 and 1997 and $3 in 1996. Future minimum rental commitments are as follows:



1999 $ 7
2000 12
2001 12
2002 13
2003 13
Thereafter 74
-----------------------------------------------
TOTAL $ 131
-----------------------------------------------


Rental expense is recognized on a level basis over the term of the primary
sublease, which expires on December 31, 2009, and amounted to approximately $9
in both 1998 and 1997 and $8 in 1996.

(D) TAX MATTERS

Hartford Life's federal income tax returns are routinely audited by the Internal
Revenue Service. Hartford Life is currently under audit for the years 1993
through 1995, with the audit for the years 1996 through 1997 expected to begin
during early 1999. Management believes that adequate provision has been made in
the financial statements for items that may result from tax examinations and
other tax related matters.





F-19
43
(E) INVESTMENTS

As of December 31, 1998, Hartford Life Insurance Company held $71 of asset
backed securities securitized and serviced by Commercial Financial Services,
Inc. (CFS) of which $50 were included in the Company's general account and $21
in the Company's guaranteed separate account. In October 1998, the Company
became aware of allegations of improper activities at CFS. On December 11, 1998,
CFS filed for protection under Chapter 11 of the Bankruptcy Code. As of December
31, 1998, CFS continues to service the asset backed securities, which remain
current on payments of principal and interest, however, the Company does not
expect to recover all of its principal investment. Based upon information
available in the fourth quarter 1998, the Company recognized a $25, after-tax,
writedown related to its holdings in CFS of which $18 was related to the
Company's general account assets. The ultimate realizable amount depends on the
outcome of the bankruptcy of CFS and these estimates are therefore subject to
material change as new information becomes available. The Company is presently
unable to determine the amount of further potential loss, if any, related to the
securities.

13. SEGMENT INFORMATION

Hartford Life Insurance Company adopted SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information", during the fourth quarter of
1998. This statement replaces SFAS No. 14, "Financial Reporting for Segments of
a Business Enterprise", and establishes new standards for reporting information
about operating segments in annual financial statements and in interim financial
reports issued to shareholders. It also establishes standards for related
disclosures about products and services, geographic areas and major customers.
This statement requires that the reportable operating segments be based on the
Company's internal operations. On this basis, Hartford Life Insurance Company's
segments represent strategic operations which offer different products and
services as well as serve different markets.

Hartford Life Insurance Company is organized into three reportable operating
segments which include Investment Products, Individual Life and Corporate Owned
Life Insurance (COLI). Investment Products offers individual variable annuities,
fixed market value adjusted (MVA) annuities and fixed and variable immediate
annuities, mutual funds, deferred compensation and retirement plan services,
structured settlement contracts and other special purpose annuity contracts.
Individual Life sells a variety of life insurance products, including variable
life, universal life, interest-sensitive whole life and term life insurance.
COLI primarily offers variable products used by employers to fund non-qualified
benefits or other post-employment benefit obligations as well as leveraged COLI.
The Company includes in "Other" corporate items not directly allocable to any of
its reportable operating segments as well as certain employee benefit products
including group life and disability insurance that is directly written by the
Company and is substantially ceded to its parent, HLA.

The accounting policies of the reportable operating segments are the same as
those described in the summary of significant accounting policies in Note 2.
Hartford Life Insurance Company evaluates performance of its segments based on
revenues, net income and the segment's return on allocated capital. The Company
charges direct operating expenses to the appropriate segment and allocates the
majority of indirect expenses to the segments based on an intercompany expense
arrangement. Intersegment revenues are not significant and primarily occur
between corporate and the operating segments. These amounts include interest
income on allocated surplus and the amortization of net realized capital gains
and losses through net investment income utilizing the duration of the segment's
investment portfolios. The Company's revenues are primarily derived from
customers within the United States. The Company's long-lived assets primarily
consist of deferred policy acquisition costs and deferred tax assets from within
the United States. The following table outlines summarized financial information
concerning the Company's segments. The information for 1997 and 1996 has been
restated to conform to the 1998 presentation.



Investment Individual
1998 Products Life COLI Other Total
- ------------------------------------------------------------------------------------------------------------------------------------

Total revenues $ 1,779 $ 543 $ 1,567 $ 86 $ 3,975
Net investment income 736 181 793 49 1,759
Amortization of deferred policy
acquisition costs 326 105 - - 431
Income tax expense (benefit) 145 35 12 (4) 188
Net income (loss) 270 64 24 (8) 350
Assets 87,207 5,228 22,631 3,197 118,263
- ------------------------------------------------------------------------------------------------------------------------------------





F-20
44



Investment Individual
1997 Products Life COLI Other Total
- ------------------------------------------------------------------------------------------------------------------------------------

Total revenues $ 1,510 $ 487 $ 980 $ 32 $ 3,009
Net investment income 739 164 429 36 1,368
Amortization of deferred policy
acquisition costs 250 83 - 2 335
Income tax expense 111 30 15 11 167
Net income 206 55 27 14 302
Assets 72,288 4,914 17,800 2,743 97,745
- ------------------------------------------------------------------------------------------------------------------------------------





Investment Individual
1996 Products Life COLI Other Total
- ------------------------------------------------------------------------------------------------------------------------------------

Total revenues $ 1,002 $ 440 $ 1,360 $ 87 $ 2,889
Net investment income 684 153 480 80 1,397
Amortization of deferred policy
acquisition costs 174 60 - - 234
Income tax expense (benefit) (42) 24 11 27 20
Net income (loss) (77) 44 26 45 38
Assets 57,410 3,753 14,222 2,377 77,762
- ------------------------------------------------------------------------------------------------------------------------------------


14. QUARTERLY RESULTS FOR 1998 AND 1997 (UNAUDITED)



Three Months Ended
----------------------------------------------------------------------------------------
March 31, June 30, September 30, December 31,
----------------------------------------------------------------------------------------
1998 1997 1998 1997 1998 1997 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------

Revenues $ 915 $ 651 $ 721 $ 645 $ 826 $ 679 $ 1,513 $ 1,034
Benefits, claims and expenses 787 550 591 536 688 550 1,371 904
Net income 83 63 85 74 89 81 93 84
- ----------------------------------------------------------------------------------------------------------------------------------






F-21
45
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES

SCHEDULE I

SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN AFFILIATES





(In millions) As of December 31, 1998
----------------------------------------------------------
Amount at which
shown on Balance
Type of Investment Cost Fair Value Sheet
- ------------------------------------------------------------------------------------------------------------------------------------


FIXED MATURITIES
Bonds and Notes
U. S. Government and Government agencies and authorities
(guaranteed and sponsored) $ 121 $ 123 $ 123
U. S. Government and Government agencies and authorities
(guaranteed and sponsored) - asset backed 1,001 1,016 1,016
States, municipalities and political subdivisions 165 173 173
Foreign governments 393 412 412
Public utilities 844 874 874
All other corporate including international 5,469 5,687 5,687
All other corporate - asset backed 4,155 4,171 4,171
Short-term investments 1,847 1,847 1,847
Certificates of deposit 510 515 515
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED MATURITIES 14,505 14,818 14,818
- ------------------------------------------------------------------------------------------------------------------------------------


EQUITY SECURITIES
Common Stocks
Industrial and miscellaneous 30 31 31
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL EQUITY SECURITIES 30 31 31
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED MATURITIES AND EQUITY SECURITIES 14,535 14,849 14,849
- ------------------------------------------------------------------------------------------------------------------------------------

POLICY LOANS 6,684 6,684 6,684
- ------------------------------------------------------------------------------------------------------------------------------------

OTHER INVESTMENTS
Mortgage loans on real estate 206 207 206
Other invested assets 58 102 58
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL OTHER INVESTMENTS 264 309 264
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS $21,483 $21,842 $21,797
- ------------------------------------------------------------------------------------------------------------------------------------





S-1
46
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES

SCHEDULE III

SUPPLEMENTARY INSURANCE INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996


(In millions)



Deferred Other
Policy Future Policy- Premiums Net Net Realized
Acquisition Policy holder and Other Investment Capital Gains
Segment Costs Benefits Funds Considerations Income (Losses)
- ------------------------------------------------------------------------------------------------------------------------------------

1998

Investment Products $2,823 $2,407 $ 9,194 $ 1,043 $ 736 $ -
Individual Life 931 466 2,307 363 181 (1)
Corporate Owned Life
Insurance - 225 8,097 774 793 -
Other - 497 17 38 49 (1)
- ------------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED OPERATIONS $3,754 $3,595 $ 19,615 $ 2,218 $ 1,759 $ (2)
- ------------------------------------------------------------------------------------------------------------------------------------

1997
Investment Products $2,478 $2,070 $ 9,620 $ 771 $ 739 $ -
Individual Life 837 392 2,182 323 164 -
Corporate Owned Life
Insurance - 56 9,259 551 429 -
Other - 541 (27) (8) 36 4
- ------------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED OPERATIONS $3,315 $3,059 $ 21,034 $ 1,637 $ 1,368 $ 4
- ------------------------------------------------------------------------------------------------------------------------------------

1996
Investment Products $2,030 $1,526 $ 10,140 $ 537 $ 684 $(219)
Individual Life 730 346 2,160 287 153 -
Corporate Owned Life
Insurance - - 9,823 880 480 -
Other - 602 11 1 80 6
- ------------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED OPERATIONS $2,760 $2,474 $ 22,134 $ 1,705 $ 1,397 $(213)
- ------------------------------------------------------------------------------------------------------------------------------------





Benefits, Amortization
Claims and of Deferred
Claim Policy
Adjustment Acquisition Dividends to Other
Segment Expenses Costs Policyholders Expenses
- ---------------------------------------------------------------------------------------------

1998

Investment Products $ 670 $326 $- $ 368
Individual Life 262 105 - 77
Corporate Owned Life
Insurance 924 - 329 278
Other 55 - - 43
- ---------------------------------------------------------------------------------------------
CONSOLIDATED OPERATIONS $1,911 $431 $329 $ 766
- ---------------------------------------------------------------------------------------------

1997
Investment Products $ 677 $250 $ - $ 266
Individual Life 242 83 - 77
Corporate Owned Life
Insurance 439 - 240 259
Other 21 2 - (16)
- ---------------------------------------------------------------------------------------------
CONSOLIDATED OPERATIONS $1,379 $335 $240 $ 586
- ---------------------------------------------------------------------------------------------

1996
Investment Products $ 744 $175 $ - $ 203
Individual Life 245 59 - 68
Corporate Owned Life
Insurance 545 - 634 144
Other 1 - 1 12
- ---------------------------------------------------------------------------------------------
CONSOLIDATED OPERATIONS $1,535 $234 $635 $ 427
- ---------------------------------------------------------------------------------------------




S-2
47
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES

SCHEDULE IV

REINSURANCE






Assumed
Ceded to From Percentage of
Other Other Amount Assumed
(In millions) Gross Amount Companies Companies Net Amount to Net
- ------------------------------------------------------------------------------------------------------------------------------------


FOR THE YEAR ENDED DECEMBER 31, 1998

Life insurance in force $326,400 $200,782 $18,289 $143,907 12.7%
- ------------------------------------------------------------------------------------------------------------------------------------

PREMIUMS AND OTHER CONSIDERATIONS
Life insurance and annuities $ 2,329 $ 271 $ 142 $ 2,200 6.5%
Accident and health insurance 393 383 8 18 44.4%
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL PREMIUMS AND OTHER CONSIDERATIONS $ 2,722 $ 654 $ 150 $ 2,218 6.8%
- ------------------------------------------------------------------------------------------------------------------------------------


FOR THE YEAR ENDED DECEMBER 31, 1997

Life insurance in force $245,487 $178,771 $33,156 $ 99,872 33.2%
- ------------------------------------------------------------------------------------------------------------------------------------

PREMIUMS AND OTHER CONSIDERATIONS
Life insurance and annuities $ 1,818 $ 340 $ 157 $ 1,635 9.6%
Accident and health insurance 346 346 2 2 100.0%
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL PREMIUMS AND OTHER CONSIDERATIONS $ 2,164 $ 686 $ 159 $ 1,637 9.7%
- ------------------------------------------------------------------------------------------------------------------------------------


FOR THE YEAR ENDED DECEMBER 31, 1996

Life insurance in force $177,094 $106,146 $31,957 $102,905 31.1%
- ------------------------------------------------------------------------------------------------------------------------------------

PREMIUMS AND OTHER CONSIDERATIONS
Life insurance and annuities $ 1,801 $ 298 $ 169 $ 1,672 10.1%
Accident and health insurance 337 325 21 33 63.6%
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL PREMIUMS AND OTHER CONSIDERATIONS $ 2,138 $ 623 $ 190 $ 1,705 11.1%
- ------------------------------------------------------------------------------------------------------------------------------------







S-3
48
SIGNATURES

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

HARTFORD LIFE INSURANCE COMPANY

By: /S/ Mary Jane B. Fortin
-------------------------------
Mary Jane B. Fortin
Chief Accounting Officer
and Vice President
Date: March 29, 1999

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



SIGNATURE TITLE DATE
--------- ----- ----



/S/ Lowndes A. Smith President, Chief Executive Officer, March 29, 1999
- ---------------------------------------- and Director
Lowndes A. Smith

/S/ Thomas M. Marra Executive Vice President March 29, 1999
- ---------------------------------------- and Director
Thomas M. Marra

/S/ David T. Foy Senior Vice President and Treasurer March 29, 1999
- ---------------------------------------- (Chief Financial Officer)
David T. Foy

/S/ Mary Jane B. Fortin Chief Accounting Officer March 29, 1999
- ---------------------------------------- and Vice President
Mary Jane B. Fortin

/S/ Gregory A. Boyko Director March 29, 1999
- ----------------------------------------
Gregory A. Boyko

/S/ Lynda Godkin Director March 29, 1999
- ----------------------------------------
Lynda Godkin

/S/ Raymond P. Welnicki Director March 29, 1999
- ----------------------------------------
Raymond P. Welnicki

/S/ Lizabeth H. Zlatkus Director March 29, 1999
- ----------------------------------------
Lizabeth H. Zlatkus

/S/ David M. Znamierowski Director March 29, 1999
- ----------------------------------------
David M. Znamierowski








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49
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
EXHIBITS INDEX

EXHIBIT #

3.01 Restated Certificate of Incorporation of Hartford Life Insurance
Company filed March 1985 (File No. 2-89516) is incorporated herein by
reference.

3.02 By-Laws of Hartford Life Insurance Company filed March 1985 (File No.
2-89516) is incorporated herein by reference.

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

10.1 Tax Sharing Agreement among Hartford Life Insurance Company, The
Hartford Financial Services Group, Inc. and certain of their
affiliates was filed as Exhibit 10.2 to Hartford Life, Inc.'s Form
10-Q filed for the quarter ended June 30, 1997 (File No. 1-12749) and
is incorporated herein by reference.

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

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

27 Financial Data Schedule is filed herewith.






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