================================================================================
FORM 11-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, 1996
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 0-19277
THE HARTFORD INVESTMENT AND SAVINGS PLAN
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3317783
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
HARTFORD PLAZA, HARTFORD, CONNECTICUT 06115-1900
(Address of principal executive offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (860) 547-5000
================================================================================
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE PENSION
FUND TRUST AND INVESTMENT COMMITTEE OF THE HARTFORD INVESTMENT AND SAVINGS PLAN
HAS DULY CAUSED THIS ANNUAL REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED
HEREUNTO DULY AUTHORIZED.
THE HARTFORD INVESTMENT AND SAVINGS PLAN
----------------------------------------
(NAME OF PLAN)
BY:
/S/ FRANCIS A. DORION
---------------------------------------
(FRANCIS A. DORION, PLAN ADMINISTRATOR)
JUNE 25, 1997
- - -------------
(DATE)
THE HARTFORD INVESTMENT AND SAVINGS PLAN
CONTENTS
Pages
-----
Report of Independent Public Accountants F-1
Statement of Net Assets Available for Benefits With Fund
Information as of December 31, 1996 F-2
Statement of Net Assets Available for Benefits With Fund
Information as of December 31, 1995 F-3
Statement of Changes in Net Assets Available for Benefits
With Fund Information For the Year Ended December 31, 1996 F-4
Statement of Changes in Net Assets Available for Benefits
With Fund Information For the Period December 19, 1995
through December 31, 1995 F-5
Notes to Financial Statements F-6 - F-9
Item 27a - Schedule of Assets Held for Investment Purposes
- Part I as of December 31, 1996 F-10 - F-13
Item 27d - Schedule of Reportable Transactions for the Year
Ended December 31, 1996 F-14
Exhibit 23 - Consent of Independent Public Accountants F-15
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Hartford Financial Services Group, Inc.
We have audited the accompanying statements of net assets available for benefits
of The Hartford Investment and Savings Plan as of December 31, 1996 and 1995,
and the related statements of changes in net assets available for benefits for
the year ended December 31, 1996 and the period December 19, 1995 through
December 31, 1995. These financial statements and the schedules referred to
below are the responsibility of the Plan Administrator. 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 financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of The Hartford
Investment and Savings Plan as of December 31, 1996 and 1995, and the changes in
net assets available for benefits for the year ended December 31, 1996 and the
period December 19, 1995 through December 31, 1995, 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 supplemental schedules on pages F-10
through F-14 are presented for purposes of additional analysis and are not a
required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedules have been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
June 27, 1997
F-1
EIN# 13-3317783
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1996
($ IN THOUSANDS)
NON-MEMBER
DIRECTED MEMBER DIRECTED
------------------------------------------
THE HARTFORD THE HARTFORD
COMMON STOCK COMMON STOCK INDEX FUND FIXED INCOME
TOTAL FUND (FUND A) FUND (FUND A) (FUND B) FUND (FUND C)
- - -----------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at fair value:
The Hartford common stock: 4,759,452
shares $ 321,263 $ 240,305 $ 80,958 $ -- $ --
ITT Corporation common stock:
3,594,381 shares 155,906 -- -- -- --
ITT Industries, Inc. common stock:
3,597,377 shares 88,136 -- -- -- --
Investment in securities of
unaffiliated issuers 197,028 2,989 1,007 145,009 18,197
Investment in group annuity contracts
at contract value 248,155 -- -- -- 248,155
Dividends and interest receivable 4,080 1,492 502 42 1,377
Loans receivable 24,821 -- -- -- --
----------------------------------------------------------------------
TOTAL ASSETS 1,039,389 244,786 82,467 145,051 267,729
----------------------------------------------------------------------
LIABILITIES
Interfund transfers pending -- (4,384) (1,477) 745 (2,440)
Unsettled security purchases 548 410 138 -- --
Contributions payable 112 (62) (21) 103 211
----------------------------------------------------------------------
TOTAL LIABILITIES 660 (4,036) (1,360) 848 (2,229)
----------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 1,038,729 $ 248,822 $ 83,827 $ 144,203 $ 269,958
- - -------------------------------------------=============-=============-=============-============--=============-
<FN>
The accompanying notes are an integral part of these financial statements
</FN>
EIN# 13-3317783
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1996
($ IN THOUSANDS)
(Continued)
MEMBER DIRECTED
--------------------------------------------------------
ITT ITT
CORPORATION INDUSTRIES
BALANCED FUND COMMON STOCK COMMON STOCK
(FUND D) FUND (FUND F) FUND (FUND G) LOAN FUND
- - ---------------------------------------------------------------------------------------------------
ASSETS
Investments, at fair value:
The Hartford common stock: 4,759,452
shares $ -- $ -- $ -- $ --
ITT Corporation common stock:
3,594,381 shares -- 155,906 -- --
ITT Industries, Inc. common stock:
3,597,377 shares -- -- 88,136 --
Investment in securities of
unaffiliated issuers 25,950 2,651 1,225 --
Investment in group annuity contracts
at contract value -- -- -- --
Dividends and interest receivable 57 (23) 633 --
Loans receivable -- -- -- 24,821
--------------------------------------------------------
TOTAL ASSETS 26,007 158,534 89,994 24,821
--------------------------------------------------------
LIABILITIES
Interfund transfers pending (164) 4,264 3,456 --
Unsettled security purchases -- -- -- --
Contributions payable (213) 69 25 --
--------------------------------------------------------
TOTAL LIABILITIES (377) 4,333 3,481 --
--------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 26,384 $ 154,201 $ 86,513 $ 24,821
- - -------------------------------------------=============--=============-=============--===========-
<FN>
The accompanying notes are an integral part of these financial statements
</FN>
F-2
EIN# 13-3317783
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1995
($ IN THOUSANDS)
NON-MEMBER
DIRECTED MEMBER DIRECTED
------------------------------------------
THE HARTFORD THE HARTFORD
COMMON STOCK COMMON STOCK INDEX FUND FIXED INCOME
TOTAL FUND (FUND A) FUND (FUND A) (FUND B) FUND (FUND C)
- - -----------------------------------------------------------------------------------------------------------------
ASSETS
Receivable from ITT Industries
Investment & Savings Plan $ 935,439 $ 154,104 $ 51,917 $ 107,687 $ 256,294
Contributions receivable 5,221 2,005 676 1,431
871
Loan repayments pending transfer -- 162 55 129 234
Interest receivable 133 32 11 29 54
----------------------------------------------------------------------
TOTAL ASSETS 940,793 156,303 52,659 108,716 258,013
----------------------------------------------------------------------
LIABILITIES
Accrued administrative expenses 187 33 11 22 53
Interfund transfers pending -- 1,252 422 278 (745)
Participant loans payable -- (97) (33) (123) (204)
Other liabilities, net 289 101 34 -- (21)
----------------------------------------------------------------------
TOTAL LIABILITIES 476 1,289 434 177 (917)
----------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 940,317 $ 155,014 $ 52,225 $ 108,539 $ 258,930
- - -------------------------------------------=============-=============-=============-============--=============-
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
EIN# 13-3317783
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1995
($ IN THOUSANDS)
(Continued)
MEMBER DIRECTED
--------------------------------------------------------
ITT ITT
CORPORATION INDUSTRIES
BALANCED FUND COMMON STOCK COMMON STOCK
(FUND D) FUND (FUND F) FUND (FUND G) LOAN FUND
- - ---------------------------------------------------------------------------------------------------
ASSETS
Receivable from ITT Industries
Investment & Savings Plan $ 15,988 $ 225,946 $ 103,177 $ 20,326
Contributions receivable 238 -- -- --
Loan repayments pending transfer 37 -- --
(617)
Interest receivable 7 -- -- --
--------------------------------------------------------
TOTAL ASSETS 16,270 225,946 103,177 19,709
--------------------------------------------------------
LIABILITIES
Accrued administrative expenses 3 44 21 --
Interfund transfers pending 530 (440) (1,297) --
Participant loans payable (35) (138) (63) 693
Other liabilities, net -- 120 55 --
--------------------------------------------------------
TOTAL LIABILITIES 498 (414) (1,284) 693
--------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 15,772 $ 226,360 $ 104,461 $ 19,016
- - -------------------------------------------=============--=============-=============--==========--
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
F-3
EIN# 13-3317783
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
($ IN THOUSANDS)
NON-MEMBER
DIRECTED MEMBER DIRECTED
------------------------------------------
THE HARTFORD THE HARTFORD
COMMON STOCK COMMON STOCK INDEX FUND FIXED INCOME
TOTAL FUND (FUND A) FUND (FUND A) (FUND B) FUND (FUND C)
- - --------------------------------------------------------------------------------------------------------------------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment Income:
Net unrealized appreciation/(depreciation) $ 45,847 $ 64,003 $ 21,562 $ 25,515 $ --
Dividends 12,201 6,683 2,252 -- 33
Net realized appreciation 38,695 2,053 692 292 --
Interest 17,283 140 47 56 16,624
---------------------------------------------------------------------
Total investment income/(loss) 114,026 72,879 24,553 25,863 16,657
Interest on participant loans 1,642 396 134 401 616
Repayment of participant loans -- 2,387 804 2,331 3,888
Contributions 67,226 25,077 8,448 13,092 16,958
---------------------------------------------------------------------
TOTAL ADDITIONS/(DEDUCTIONS) 182,894 100,739 33,939 41,687 38,119
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Interfund transfers -- 10,954 3,691 4,875 7,456
Loans to participants -- (3,230) (1,088) (2,645) (4,884)
Administrative expense (1,831) (360) (124) (251) (377)
Withdrawals and distributions (80,823) (13,269) (4,470) (7,883) (29,154)
Other, net (1,828) (1,026) (346) (119) (132)
---------------------------------------------------------------------
TOTAL (DEDUCTIONS)/ADDITIONS (84,482) (6,931) (2,337) (6,023) (27,091)
---------------------------------------------------------------------
NET INCREASE/(DECREASE) 98,412 93,808 31,602 35,664 11,028
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 940,317 155,014 52,225 108,539 258,930
-------------------------------------------------------------------
END OF YEAR $ 1,038,729 $ 248,822 $ 83,827 $ 144,203 $ 269,958
- - -----------------------------------------------============--===========---=============-============-============--
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
EIN# 13-3317783
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
($ IN THOUSANDS)
(Continued)
MEMBER DIRECTED
--------------------------------------------------------
ITT ITT
CORPORATION INDUSTRIES
BALANCED FUND COMMON STOCK COMMON STOCK
(FUND D) FUND (FUND F) FUND (FUND G) LOAN FUND
- - ---------------------------------------------------------------------------------------------------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment Income:
Net unrealized appreciation/(depreciation) $ (1,761) $ (55,966)$ (7,506) $ --
Dividends 188 -- 3,045 --
Net realized appreciation 3,383 22,268 10,007 --
Interest 220 125 71 --
--------------------------------------------------------
Total investment income/(loss) 2,030 (33,573) 5,617 --
Interest on participant loans 95 -- -- --
Repayment of participant loans 547 -- -- (9,957)
Contributions 3,823 (90) (82) --
--------------------------------------------------------
TOTAL ADDITIONS/(DEDUCTIONS) 6,495 (33,663) 5,535 (9,957)
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Interfund transfers 5,328 (19,066) (14,491) 1,253
Loans to participants (458) (1,518) (686) 14,509
Administrative expense (43) (469) (207) --
Withdrawals and distributions (1,189) (17,100) (7,758) --
Other, net 479 (343) (341) --
--------------------------------------------------------
TOTAL (DEDUCTIONS)/ADDITIONS 4,117 (38,496) (23,483) 15,762
--------------------------------------------------------
NET INCREASE/(DECREASE) 10,612 (72,159) (17,948) 5,805
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 15,772 226,360 104,461 19,016
--------------------------------------------------------
END OF YEAR $ 26,384 $ 154,201 $ 86,513 $ 24,821
- - -------------------------------------------===============-=============-============--===========-
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
F-4
EIN# 13-3317783
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE PERIOD DECEMBER 19, 1995 THROUGH DECEMBER 31, 1995
($ IN THOUSANDS)
NON-MEMBER
DIRECTED MEMBER DIRECTED
------------------------------------------
THE HARTFORD THE HARTFORD
COMMON STOCK COMMON STOCK INDEX FUND FIXED INCOME
TOTAL FUND (FUND A) FUND (FUND A) (FUND B) FUND (FUND C)
- - --------------------------------------------------------------------------------------------------------------------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Transfer in from ITT Industries Investment &
Savings Plan at 12/19/95 $ 922,040 $ 155,130 $ 52,263 $ 106,842 $ 255,691
Investment Income:
Net unrealized appreciation/(depreciation) 12,667 (1,026) (346) 749 --
Net realized appreciation 626 -- -- 1 603
Dividends 102 -- -- 95 --
Interest 4 -- -- -- --
---------------------------------------------------------------------
Total investment income 13,399 (1,026) (346) 845 603
Interest on participant loans 133 32 11 29 54
Repayment of participant loans -- 162 55 129 234
Contributions 5,221 2,005 676 871 1,431
---------------------------------------------------------------------
TOTAL ADDITIONS 940,793 156,303 52,659 108,716 258,013
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Interfund transfers -- (1,252) (422) (278) 745
Loans to participants -- 97 33 123 204
Administrative expense (187) (33) (11) (22) (53)
Other, net (289) (101) (34) -- 21
---------------------------------------------------------------------
TOTAL (DEDUCTIONS)/ADDITIONS (476) (1,289) (434) (177) 917
---------------------------------------------------------------------
NET INCREASE/(DECREASE) 940,317 155,014 52,225 108,539 258,930
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of period -- -- -- -- --
-------------------------------------------------------------------
END OF PERIOD $ 940,317 $ 155,014 $ 52,225 $ 108,539 $ 258,930
- - -----------------------------------------------============--===========---=============-============-============--
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
EIN# 13-3317783
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE PERIOD DECEMBER 19, 1995 THROUGH DECEMBER 31, 1995
($ IN THOUSANDS)
(Continued)
MEMBER DIRECTED
------------------------------------------------------------
ITT ITT
CORPORATION INDUSTRIES
BALANCED FUND COMMON STOCK COMMON STOCK
(FUND D) FUND (FUND F) FUND (FUND G) LOAN FUND
- - -------------------------------------------------------------------------------------------------------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Transfer in from ITT Industries Investment &
Savings Plan at 12/19/95 $ 15,942 $ 208,540 $ 107,306 $ 20,326
Investment Income:
Net unrealized appreciation/(depreciation) 17 17,406 (4,133) --
Net realized appreciation 18 -- 4 --
Dividends 7 -- -- --
Interest 4 -- -- --
--------------------------------------------------------
Total investment income 46 17,406 (4,129) --
Interest on participant loans 7 -- -- --
Repayment of participant loans 37 -- -- (617)
Contributions 238 -- -- --
--------------------------------------------------------
TOTAL ADDITIONS 16,270 225,946 103,177 19,709
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Interfund transfers (530) 440 1,297 --
Loans to participants 35 138 63 (693)
Administrative expense (3) (44) (21) --
Other, net -- (120) (55) --
--------------------------------------------------------
TOTAL (DEDUCTIONS)/ADDITIONS (498) 414 1,284 (693)
--------------------------------------------------------
NET INCREASE/(DECREASE) 15,772 226,360 104,461 19,016
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of period -- -- -- --
--------------------------------------------------------
END OF PERIOD $ 15,772 $ 226,360 $ 104,461 $ 19,016
- - -----------------------------------------------==============--=============-============--===========-
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
F-5
- - --------------------------------------------------------------------------------
THE HARTFORD INVESTMENT AND SAVING PLAN
- - --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS)
NOTE 1 - DESCRIPTION OF THE PLAN
The Hartford Financial Services Group, Inc., ("The Hartford" or the "Company",
formerly ITT Hartford Group, Inc.), a Delaware corporation, was a wholly-owned
subsidiary of ITT Corporation ("ITT" which was renamed ITT Industries, Inc.). On
December 19, 1995, ITT distributed all of the outstanding shares of The Hartford
to ITT shareholders of record in an action known herein as the "Distribution".
In such Distribution, holders of common stock of ITT, including the ITT
Investment and Savings Plan for Salaried Employees ("ITT Plan"), received one
share of ITT Destinations, Inc. (renamed "ITT Corporation") common stock, one
share of ITT Industries, Inc. common stock and one share of The Hartford common
stock for each share of ITT common stock held. Shares in The Hartford, ITT
Corporation, and ITT Industries, Inc. are held in Fund A, Fund F and Fund G,
respectively.
Through the date of the Distribution, eligible employees of the Company
participated in the ITT Plan. Subsequent to the Distribution, the Company
established The Hartford Investment and Savings Plan (the "Plan", formerly the
ITT Hartford Investment and Savings Plan) for the benefit of eligible employees
of The Hartford. The accounts of employees who had participated in the ITT Plan
were transferred to the Plan.
Information with regard to eligibility, contributions, distributions, vesting,
trustees, withdrawals, restoration, loans, fund redistribution and definitions
of all capitalized terms are contained in the Plan information document, which
has been distributed to the participants.
General
- - -------
The Plan is a defined contribution plan covering all full-time and some
part-time employees of the Company who have six months or more of service, or
who have fulfilled the requisite eligibility requirements for employees on a
temporary or less than full-time basis. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA).
Contributions
- - -------------
Plan members may generally elect to save 2% to 16% of base salary. Members may
designate their savings as before-tax, after-tax or a combination of both.
Members who are highly compensated employees may be limited to less than 16% due
to the operation of certain tests required under the Internal Revenue Code of
1986, as amended from time to time (the "Code").
An amount equal to 50% of a member's Basic Savings is matched by the Company.
Basic Savings are contributions which are not in excess of the first 6% of base
salary. Member's savings in excess of 6% of base salary are supplemental savings
that are not matched by Company contributions. In addition, the Company
allocates .50% of base salary to the Floor Company Contribution Account of each
eligible employee. Matching Company contributions are used to acquire The
Hartford common stock.
Administrative Costs
- - --------------------
The Trust, as defined by the Plan, pays for the administrative expenses of the
Plan up to 0.25% of the market value of trust assets. These expenses are limited
to services provided by unrelated vendors. The Company continues to pay Plan
administrative expenses which are not paid by the Trust.
F-6
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)
Member Accounts
- - ---------------
Each member's account is credited with that member's contributions and
allocations of (a) the Company's contribution and (b) Plan earnings, and is
charged with an allocation of administrative expenses. Allocations are based on
member earnings or account balances, as defined. The benefit to which a member
is entitled is the benefit that can be provided from that member's vested
account.
Vesting
- - -------
Vesting in the Company-matched contributions begins one year after employment at
20% and increases 20% each consecutive year until the fifth consecutive year of
employment when 100% is vested. Notwithstanding the foregoing statement, a
member becomes fully vested in such member's Company contribution account upon
retirement, disability, death, or upon reaching age 65, or the complete
discontinuance of Company contributions or upon termination of the Plan.
Investment Options
- - ------------------
Contributions of member savings made on or after the Distribution date have
been, and continue to be, invested in any one or more of Fund A, B, C or D, in
multiples of 5%, as elected by the member. Except with respect to dividends
thereon, no such amounts will be invested in Fund F or Fund G.
Fund A - A fund invested primarily in The Hartford common stock.
Fund B - A fund invested in a portfolio of common stocks, all of which
are included in the Standard and Poor's 500 Composite Stock Index (
"S&P 500" ), with the objective of providing investment results which
approximate the performance of the S&P 500 ( the "Index Fund" ).
Fund C - A fund invested in a diversified portfolio consisting of
fixed income investments and agreements in support of capital
preservation and liquidity.
Fund D - A fund invested through an actively managed portfolio
consisting of equity securities, fixed income securities and cash
equivalents ( the "Balanced Fund" ).
Fund F - A fund invested primarily in common stock of ITT Corporation,
attributable to the Distribution.
Fund G - A fund invested primarily in common stock of ITT Industries,
Inc., attributable to the Distribution.
F-7
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)
Participant Loans
- - -----------------
Members may borrow from their fund accounts a minimum of $1,000 to a maximum
equal to the lesser of $50,000 or 50 percent of their vested account balances.
Loan transactions are treated as transfers to (from) the investment fund from
(to) the loan fund. Loan terms range from one to five years, or up to 15 years
for the purchase of a primary residence. The loan is secured by the balance in
the member's account and bears interest at the prime rate (as published in the
Wall Street Journal) plus 1%. The interest rate is determined quarterly.
Payment of Benefits
- - -------------------
On termination of service due to death, disability, retirement, or other
reasons, members may elect to receive either a lump sum amount equal to the
value of the vested interest in their respective accounts or, subject to certain
conditions, annual installments over a period not greater than twenty years.
Members may also elect to defer distributions subject to certain conditions.
Forfeitures
- - -----------
Forfeitures of the nonvested portion of any member's Company contributions are
applied to reduce future Company contributions. Forfeitures for the year ended
December 31, 1996 and the period December 19, 1995 through December 31, 1995
were immaterial.
NOTE 2 -ACCOUNTING POLICIES
The financial statements have been prepared using the accrual basis of
accounting. Repayment of participant loans, interest on participant loans, new
loans to participants, contributions and administrative expenses for the period
December 19, 1995 through December 31, 1995 represent such transactions for the
entire month of December 1995.
The preparation of financial statements in conformity with generally accepted
accounting principles and the Department of Labor Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974 requires management of the plan to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expense during the
reporting period. Actual results could differ from those estimates.
NOTE 3 - FEDERAL INCOME TAX
In 1997, the Company plans to file with the Internal Revenue Service a request
for a formal determination that the Plan is qualified, and that the Trust
established under the Plan is tax-exempt. In the opinion of management, upon
such a filing, a favorable ruling would be received in due course. The Plan
administrator and the Plan's legal counsel believe that the Plan is designed and
is currently being operated in compliance with applicable provisions of the Code
and other applicable law.
F-8
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)
NOTE 4 - PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to suspend, reduce, or partially or completely discontinue its
contributions at any time and to terminate the Plan, the trust agreement and the
trust hereunder subject to the provisions of ERISA. In the event of termination
of the Plan or partial termination or complete discontinuance of contributions,
the interest of members shall automatically become nonforfeitable.
NOTE 5 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for plan benefits per
the financial statements to the Form 5500:
1996 1995
- - ------------------------------------------------------------------------------------------ ----------------- ---------------
Net assets available for plan benefits per financial statements $ 1,038,729 $ 940,317
Amounts allocated to withdrawing members (7,342) (4,021)
- - ------------------------------------------------------------------------------------------ -- -------------- -- ------------
Net assets available for plan benefits per the Form 5500 $ 1,031,387 $ 936,296
- - ------------------------------------------------------------------------------------------ -- -------------- -- ------------
The following is a reconciliation of benefits paid to members according to the
financial statements to Form 5500:
1996 1995
- - ------------------------------------------------------------------------------------------ -------------- ------------------
Benefits paid to members per the financial statements $ 80,823 $ --
Amounts allocated to withdrawing members at December 31, 1996 7,342 --
Amounts allocated to withdrawing members at December 31, 1995 (4,021) 4,021
- - ------------------------------------------------------------------------------------------ -- ----------- --- --------------
Benefits paid to members per Form 5500 $ 84,144 $ 4,021
- - ------------------------------------------------------------------------------------------ -- ----------- --- --------------
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to the
end of the Plan year, but not yet paid as of that date.
NOTE 6 - ANNUITY CONTRACTS WITH INSURANCE COMPANIES
The Plan has entered into numerous group annuity contracts with approximately 23
regulated insurance carriers. These contracts, which are classified as part of
Fund C, are included in the financial statements at contract value. Contract
value represents contributions made under the contract, plus earnings, less Plan
withdrawals and administrative expenses.
As of December 31, 1996, the estimated fair value of the group annuity contracts
was $250,030. The average yield and weighted-average crediting interest rate on
these contracts was 6.59% and 6.18%, respectively, for the year ended December
31, 1996.
NOTE 7 - PARTY-IN-INTEREST TRANSACTIONS
Certain Plan investments are held in funds managed by Bankers Trust Company and
Hartford Life Insurance Company. Bankers Trust Company is the Trustee, as
defined by the Plan, and Hartford Life Insurance Company, a subsidiary of The
Hartford, is an asset manager and, therefore, these transactions qualify as
party-in-interest transactions. Fees paid by the Plan for Trustee and Investment
management services provided by Bankers Trust Company amounted to $595 for the
year ended December 31, 1996. Fees paid by the Plan related to the Plan's group
annuity contracts issued by Hartford Life Insurance Company amounted to $26 for
the year ended December 31, 1996. No fees were paid by the Plan to Bankers Trust
Company and Hartford Life Insurance Company in 1995. In addition, certain Plan
investments are shares of The Hartford common stock. As The Hartford is the Plan
Sponsor, these transactions qualify as party-in-interest transactions.
F-9
EIN# 13-3317783
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - PART I
AS OF DECEMBER 31, 1996
($ IN THOUSANDS)
Description of investment including maturity
date, rate of interest,
Identity of Party collateral, par or maturity value Cost Market Value
----------------- --------------------------------- ---- ------------
Fund A:
-------
* The Hartford Financial Services
Group, Inc. Common Stock $ 124,776 $ 321,263
* Bankers Trust Company BT Pyramid Directed Account Cash Fund - STIF 3,996 3,996
---------------- -----------------
SUB-TOTAL 128,772 325,259
---------------- -----------------
Fund B:
- - -------
* Hartford Life Insurance Company S&P 500 Index Portfolio Hartford -
GA - 6226, S/A BI 88,696 144,304
* Bankers Trust Company BT Pyramid Discretionary Account Cash Fund -
STIF 705 705
---------------- -----------------
SUB-TOTAL 89,401 145,009
---------------- -----------------
Fund C:
- - -------
* Bankers Trust Company BT Pyramid Discretionary Account Cash Fund -
STIF 18,197 18,197
New York Life Group Annuity Contract
Insurance Company #30495, 8.38%, 08/01/1997 7,482 7,482
Metro politan Life Group Annuity Contract
Insurance Company #24533, 6.05%, 04/30/1994 16,834 16,834
Allstate Life Group Annuity Contract
Insurance Company #GA 5429A, 5.74%, 05/03/1999 8,838 8,838
People Security Life Group Annuity Contract
Insurance Company #BDA00598FR, 5.15%, 12/23/1998 9,676 9,676
Pacific Mutual Group Annuity Contract
Insurance Company #26243-01, 9.20%, 01/02/1997 2,008 2,008
Connecticut General Group Annuity Contract
Insurance Company #25214, 8.64%, 12/01/1997 3,890 3,890
<FN>
The accompanying notes are an integral part of these financial statements.
* - Indicates party-in-interest
</FN>
F-10
EIN# 13-3317783
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - PART I
AS OF DECEMBER 31, 1996
($ IN THOUSANDS)
(continued)
Description of investment including maturity
date, rate of interest,
Identity of Party collateral, par or maturity value Cost Market Value
----------------- --------------------------------- ---- ------------
New York Life Group Annuity Contract
Insurance Company GA#30497, 7.20%, 09/30/1999 $ 7,300 $ 7,300
Allstate Life Group Annuity Contract
Insurance Company GA#5593A, 7.52%, 11/01/1999 3,945 3,945
Prudential Life Group Annuity Contract
Insurance Company #8163-211, 8.62%, 11/30/1997 3,312 3,312
Prudential Life Group Annuity Contract
Insurance Company #GA-8162, 6.52%, 06/05/1995 22,927 22,927
Life Insurance Company Group Annuity Contract
of Virginia #GS2891, 5.91%, 06/02/1998 2,953 2,953
John Hancock Group Annuity Contract
Insurance Company #8509, 7.50% 28,950 28,950
* Hartford Life Group Annuity Contract
Insurance Company #30026, 5.46%, 06/04/1999 9,012 9,012
* Hartford Life Group Annuity Contract
Insurance Company GA#10361, 5.64%,03/31/1999 4,318 4,318
Metropolitan Life Group Annuity Contract
Insurance Company GAC#24543, 5.80% 12,630 12,630
* Hartford Life Group Annuity Contract
Insurance Company GA#30027, 6.22%, 06/01/1999 4,394 4,394
Commonwealth Life Group Annuity Contract
Insurance Company ADA000013TR 30,598 30,598
Principal Financial Group Annuity Contract
Group #06126, 8.70% 11,989 11,989
Principal Financial Group Annuity Contract
Group #14950-2, 8.15%, 03/20/1999 5,447 5,447
Transamerica Group Annuity Contract
Insurance Company #76592, 5.88% 15,488 15,488
<FN>
The accompanying notes are an integral part of these financial statements.
* - Indicates party-in-interest
</FN>
F-11
EIN# 13-3317783
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - PART I
AS OF DECEMBER 31, 1996
($ IN THOUSANDS)
(continued)
Description of investment including maturity
date, rate of interest,
Identity of Party collateral, par or maturity value Cost Market Value
----------------- --------------------------------- ---- ------------
Sun Life Group Annuity Contract
Insurance Company #4670, 6.81%, 10/16/2001 $ 7,865 $ 7,865
Continental Assurance Group Annuity Contract
Insurance Contracts #GP24022, 6.58%, 12/31/2001 7,800 7,800
Transamerica Group Annuity Contract
Insurance Company #76620, 7.05% - STIF 20,499 20,499
---------------- -----------------
SUB-TOTAL 266,352 266,352
---------------- -----------------
Fund D:
-------
* Bankers Trust Company BT Pyramid Directed Account
Cash Fund- STIF 25,950 $ 25,950
---------------- -----------------
SUB-TOTAL 25,950 25,950
---------------- -----------------
Fund F:
-------
ITT Corporation Common Stock 81,556 155,906
* Bankers Trust Company BT Pyramid Directed Account
Cash Fund- STIF 2,651 2,651
---------------- -----------------
SUB-TOTAL 84,207 158,557
---------------- -----------------
Fund G:
-------
ITT Industries, Inc. Common Stock 37,940 88,136
* Bankers Trust Company BT Pyramid Directed Account
Cash Fund- STIF 1,225 1,225
---------------- -----------------
SUB-TOTAL 39,165 89,361
---------------- -----------------
<FN>
The accompanying notes are an integral part of these financial statements.
* - Indicates party-in-interest
</FN>
F-12
EIN# 13-3317783
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - PART I
AS OF DECEMBER 31, 1996
($ IN THOUSANDS)
(continued)
DESCRIPTION OF INVESTMENT INCLUDING MATURITY
DATE, RATE OF INTEREST,
IDENTITY OF PARTY COLLATERAL, PAR OR MATURITY VALUE COST MARKET VALUE
----------------- --------------------------------- ---- ------------
Loan Fund:
----------
Loans to Participant Loans Receivable from Participants, at
various dates bearing interest at rates from
9.25% - 9.75% 24,821 24,821
---------------- -----------------
SUB-TOTAL 24,821 24,821
---------------- -----------------
GRAND-TOTAL $ 658,668 $ 1,035,309
================ =================
<FN>
The accompanying notes are an integral part of these financial statements.
* - Indicates party-in-interest
</FN>
F-13
EIN# 13-3317783
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
($ IN THOUSANDS)
CURRENT VALUE
OF ASSETS ON
NO. OF PURCHASE SELLING COST OF TRANSACTION NET GAIN
IDENTITY OF PARTY DESCRIPTION OF ASSET TRANSACTIONS PRICE PRICE ASSET DATE OR (LOSS)
- - ----------------- -------------------- ------------ ----- ----- ----- ---- ---------
* Bankers Trust BT Pyramid Discretionary Cash
Company Fund - STIF 151 -- $ 85,828 $ 85,828 $ 85,828 --
* Bankers Trust BT Pyramid Directed Account Cash
Company Fund - STIF 301 -- 104,731 104,731 104,731 --
* Bankers Trust BT Pyramid Discretionary Cash
Company Fund - STIF 125 $ 104,730 -- 104,730 104,730 --
* Bankers Trust BT Pyramid Directed Account Cash
Company Fund - STIF 216 138,553 -- 138,553 138,553 --
<FN>
The accompanying notes are an integral part of these financial statements.
* - Indicates party-in-interest
</FN>
F-14
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Hartford Financial Services Group, Inc.:
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 11-K, into the Company's previously filed
registration statement on Form S-8 (Registration No. 33-80663).
ARTHUR ANDERSEN LLP
Hartford, Connecticut
June 27, 1997
F-15