AETNA LIFE INSURANCE AND ANNUITY COMPANY
ALIAC GUARANTEED ACCOUNT
CREDITED INTEREST OPTION
Supplement dated November 28, 1997 to Prospectus Dated May 1, 1997
The information in this supplement updates and amends the information contained
in the Prospectus dated May 1, 1997 (the "Prospectus") and should be read with
that Prospectus.
[bullet] Incorporation of Certain Documents By Reference
The following is added to the section entitled "Incorporation of Certain
Documents By Reference" located on the inside cover of the Prospectus.
The Company's latest Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997, filed with the Commission pursuant to Section 15(d)
of the Exchange Act, is incorporated by reference into this Prospectus.
Part I of Form 10-Q is part of this Supplement.
The Company's Quarterly Reports on Form 10-Q for the quarters ending March 31,
1997 and June 30, 1997, filed with the Commission pursuant to Section 15(d) of
the Exchange Act, are incorporated by reference into this Prospectus.
[bullet] Additional Withdrawal Option
The following has been changed throughout the Prospectus:
"Additional Withdrawal Option" to "Systematic Distribution Option"
[bullet] Guaranteed Term
The definition of Guaranteed Term under the section entitled "Glossary" on page
3 of the Prospectus has been replaced with the following:
The period of time specified by the Company for which a specific Guaranteed Rate
or Rates are offered on amounts invested during a specific Deposit Period.
Guaranteed Terms are made available by the Company subject to the Company's
terms and conditions, including, but not limited to, the Company's right to
restrict allocations to new purchase payments or deposits (such as by
prohibiting transfers into a particular Guaranteed Term from any other
Guaranteed Term or from any other funding option or by prohibiting the
reinvestment of Matured Term Value into a particular Guaranteed Term). The
Company may offer more than one Guaranteed Term of the same duration and credit
one with a different rate subject to certain restrictions such as requiring the
use of the Dollar Cost Averaging Program.
[bullet] Market Value Adjustment
The second paragraph of the section entitled "Market Value Adjustment" in the
SUMMARY on page 5 of the Prospectus has been replaced with the following:
This provision does not apply to (1) amounts transferred on the Maturity Date;
(2) amounts transferred under the Maturity Value Transfer Provision; (3) amounts
distributed under one of the Systematic Distribution Options described in the
Contract Prospectus; and (4) amounts transferred from a Guaranteed Term in
connection with the Dollar Cost Averaging Program described in the Contract
Prospectus. However, if the Certificate Holder discontinues the Dollar Cost
Averaging Program and the amounts in it are transferred in accordance with the
Company's terms and conditions governing Guaranteed Terms, to another Guaranteed
Term, a market value adjustment will apply.
[bullet] Maturity of a Guaranteed Term
The second paragraph of the section entitled "Maturity of a Guaranteed Term" in
the SUMMARY on page 5 of the Prospectus has been replaced with the following:
If the Company does not receive direction from the Certificate Holder by the
Maturity Date, the Matured Term Value will be reinvested in the Guaranteed
Account for a new Guaranteed Rate and Term under the then current Deposit
Period. The new Guaranteed Term will have the same length to maturity as the
Guaranteed Term that is maturing. If such a Guaranteed Term is not available,
the transfer will be to the next shortest available Guaranteed Term or if no
shorter Guaranteed Term is available, to the next longer available Guaranteed
Term. (See "Maturity of a Guaranteed Term").
[bullet] Contributions to the Guaranteed Account
The section entitled "Contributions to the Guaranteed Account" in the
DESCRIPTION OF THE ALIAC GUARANTEED ACCOUNT on page 7 has been replaced with the
following:
Amounts may be invested in the Guaranteed Account for the Guaranteed Terms and
at the Guaranteed Rates available during the then current Deposit Period by
allocating all or a portion of your Purchase Payment(s) to the Guaranteed
Account. You may also elect to transfer accumulated values from other funding
options available under the Contract or from other Guaranteed Terms of the
Guaranteed Account to the Guaranteed Account, subject to the transfer
limitations described in the Contract. The Company may also limit the number of
Guaranteed Terms an individual may select. At this time, if the Certificate
Holder has the Dollar Cost Averaging Program in effect in a Guaranteed Term and
wishes to add an additional deposit to be dollar cost averaged, all amounts to
be dollar cost averaged will have to be combined and the dollar cost averaging
amounts will be recalculated. This will affect the duration of amounts in the
Guaranteed Term.
The Company reserves the right to limit the number of investment options
selected during the Accumulation Period. At this time there is no limit on the
number of investment options selected during the Accumulation Period, but the
number of investment options that may be selected at any one time by a
Certificate Holder is limited to 18. Each Guaranteed Term is counted as one
investment option. There is no minimum amount required if investments come from
Purchase Payments; however, you must meet the minimum purchase amounts that are
set forth in your Contract. There is a $500 minimum for transfers from other
funding options.
Amounts invested in the Guaranteed Account during a Deposit Period may not be
transferred during that Deposit Period or for 90 days after the close of that
Deposit Period, except in connection with the Maturity Value Transfer Provision,
the Dollar Cost Averaging Program or the cessation by the Certificate Holder of
the Dollar Cost Averaging Program in certain circumstances, or the selection of
a Systematic Distribution Option available under the Contract for periodic or
systematic distributions (see "Transfers").
[bullet] Guaranteed Rates
The first paragraph of the section entitled "Guaranteed Rates" in the
DESCRIPTION OF THE ALIAC GUARANTEED ACCOUNT on page 7 has been replaced with the
following:
Guaranteed Rates are the interest rates that are guaranteed by the Company to be
credited on amounts invested during a Deposit Period for a specific Guaranteed
Term. The Company may offer different Guaranteed Rates on Guaranteed Terms of
the same duration and may have certain
2
restrictions apply to the use of any Guaranteed Terms such as, but not limited
to, the requirement of the use of the Dollar Cost Averaging Program. The Company
may also limit the number of Guaranteed Terms an individual may select.
Guaranteed Rates are annual effective yields, reflecting a full year's interest.
The interest is credited daily at a rate that will produce the guaranteed annual
effective yield over the period of one year.
[bullet] Maturity of a Guaranteed Term
The second paragraph of the section entitled "Maturity of a Guaranteed Term" in
the DESCRIPTION OF THE ALIAC GUARANTEED ACCOUNT on page 8 of the Prospectus has
been replaced with the following:
If no direction from the Certificate Holder is received by the Company at its
Home Office by the Maturity Date, the Company will automatically reinvest the
Matured Term Value in the Guaranteed Account during the new Deposit Period. The
Matured Term Value will be invested for a Guaranteed Term having the same length
to maturity as the Guaranteed Term that is maturing. If such a term is not
available, the transfer will be to the next shortest available Guaranteed Term.
If no shorter Guaranteed Term is available, the next longer Guaranteed Term will
be used. The new Guaranteed Term may have a different length of time to maturity
than the maturing Guaranteed Term. For example, if a 3-year Guaranteed Term
matures and no direction is received, and a 3-year Guaranteed Term is not
available in the current Deposit Period, but a 1 year Guaranteed Term is
available for maturities, the Matured Term Value may be reinvested in the 1 year
Guaranteed Term, which is the next shortest Guaranteed Term then available.
[bullet] Transfers
The first and second paragraphs of the section entitled "Transfers" in the
TRANSFERS AND WITHDRAWALS on page 9 of the Prospectus has been replaced with the
following:
As described in the Contract Prospectus, all or any portion of accumulated
values under the Contract may be transferred to the Guaranteed Account or to
other funding options available under the Contract. The Company reserves the
right to limit the number of investment options selected during the Accumulation
Period. At this time there is no limit on the number of investment options
selected during the Accumulation Period, but the number of investment options
that may be selected at any one time by a Certificate Holder is limited to 18.
Each Guaranteed Term is counted as one investment option. The minimum amount
that may be transferred from other investment options to the Guaranteed Account
is $500.
Amounts applied to a Guaranteed Term during a Deposit Period may not be
transferred to any other funding option or to another Guaranteed Term during
that Deposit Period or for 90 days after the close of that Deposit Period. This
restriction does not apply to the selection of Systematic Distribution Options
available under the Contract or to transfers relating to the Dollar Cost
Averaging Program. However, if the Certificate Holder discontinues the Dollar
Cost Averaging Program, the Company may require that all amounts in that
Guaranteed Term be transferred into another Guaranteed Term in accordance with
the Company's terms and conditions governing Guaranteed Terms. A market value
adjustment will apply. (See Contract Prospectus).
3
[bullet] Market Value Adjustment
This section replaces the first paragraph in the MARKET VALUE ADJUSTMENT on page
10 of the Prospectus with the following:
A Market Value Adjustment ("MVA") is applied to amounts transferred or withdrawn
from the Guaranteed Account before the Maturity Date, including transfers made
in order to elect a nonlifetime Annuity Option, but excluding transactions under
the Maturity Value Transfer Provision, transfers made in connection with the
Dollar Cost Averaging Program (unless the transfer is made as a result of the
discontinuance by the Certificate Holder of the Dollar Cost Averaging Program.--
See "Transfers"), and amounts withdrawn under one of the Systematic Distribution
Options.
4
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
TABLE OF CONTENTS
PAGE
----
PART I. FINANCIAL INFORMATION (unaudited)
Item 1. Financial Statements
Consolidated Statements of Income............................... 3
Consolidated Balance Sheets..................................... 4
Consolidated Statements of Changes in Shareholder's Equity...... 5
Consolidated Statements of Cash Flows........................... 6
Condensed Notes to Consolidated Financial Statements............ 7
Independent Auditors' Review Report............................. 11
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Consolidated Statements of Income
(millions)
3 Months Ended September 30, 9 Months Ended September 30,
---------------------------- ----------------------------
1997 1996 1997 1996
---- ---- ---- ----
Revenue:
Premiums $68.2 $35.5 $200.1 $99.9
Charges assessed against policyholders 127.7 99.1 350.2 289.3
Net investment income 269.5 259.7 804.9 771.8
Net realized capital gains 8.8 0.1 17.9 17.2
Other income 9.6 9.4 28.8 34.6
----- ----- ------- -------
Total revenue 483.8 403.8 1,401.9 1,212.8
Benefits and expenses:
Current and future benefits 286.5 245.6 853.4 719.1
Operating expenses 84.5 84.6 247.3 261.3
Amortization of deferred policy acquisition costs 40.1 17.9 92.4 46.6
Severance and facilities charges - 47.3 - 61.3
----- ----- ------- -------
Total benefits and expenses 411.1 395.4 1,193.1 1,088.3
----- ----- ------- -------
Income before income taxes 72.7 8.4 208.8 124.5
Income taxes 21.3 1.4 63.9 34.3
----- ----- ------- -------
Net income $51.4 $7.0 $144.9 $90.2
===== ===== ======= =======
See Condensed Notes to Consolidated Financial Statements.
(3)
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Consolidated Balance Sheets
(millions, except share data)
September 30, December 31,
Assets 1997 1996
- ------ ---- ----
Investments:
Debt securities available for sale, at fair value
(amortized cost: $12,736.4 and $12,539.1) $13,257.1 $12,905.5
Equity securities, available for sale:
Nonredeemable preferred stock (cost: $143.4 and $107.6) 166.5 119.0
Investment in affiliated mutual funds (cost: $42.0 and $77.3) 55.1 81.1
Common stock .8 .3
Short-term investments 111.8 34.8
Mortgage loans 12.9 13.0
Policy loans 453.7 399.3
--------- ---------
Total investments 14,057.9 13,553.0
Cash and cash equivalents 614.2 459.1
Accrued investment income 183.0 159.0
Premiums due and other receivables 37.3 26.6
Deferred policy acquisition costs 1,620.6 1,515.3
Reinsurance loan to affiliate 474.4 628.3
Other assets 40.1 33.7
Separate accounts assets 21,494.5 15,318.3
--------- ---------
Total assets $38,522.0 $31,693.3
========= =========
Liabilities and Shareholder's Equity
- ------------------------------------
Liabilities:
Future policy benefits $3,757.8 $3,617.0
Unpaid claims and claim expenses 28.0 28.9
Policyholders' funds left with the Company 11,074.5 10,663.7
--------- ---------
Total insurance reserve liabilities 14,860.3 14,309.6
Other liabilities 295.2 354.7
Income taxes:
Current 37.1 20.7
Deferred 74.8 80.5
Separate accounts liabilities 21,468.6 15,318.3
--------- ---------
Total liabilities 36,736.0 30,083.8
--------- ---------
Shareholder's equity:
Common stock, par value $50 (100,000 shares
authorized; 55,000 shares issued and outstanding) 2.8 2.8
Paid-in capital 418.0 418.0
Net unrealized capital gains 96.7 60.5
Retained earnings 1,268.5 1,128.2
--------- ---------
Total shareholder's equity 1,786.0 1,609.5
--------- ---------
Total liabilities and shareholder's equity $38,522.0 $31,693.3
========= =========
See Condensed Notes to Consolidated Financial Statements.
(4)
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Consolidated Statements of Changes in Shareholder's Equity
(millions)
9 Months Ended September 30,
----------------------------
1997 1996
---- ----
Shareholder's equity, beginning of year $1,609.5 $1,583.0
Net change in unrealized capital gains 36.2 (93.4)
Net income 144.9 90.2
Common stock dividends (8.3) (1.5)
Other changes 3.7 -
-------- --------
Shareholder's equity, end of period $1,786.0 $1,578.3
======== ========
See Condensed Notes to Consolidated Financial Statements.
(5)
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Consolidated Statements of Cash Flows
(millions)
9 Months Ended September 30,
----------------------------
1997 1996
---- ----
Cash Flows from Operating Activities:
Net income $144.9 $90.2
Adjustments to reconcile net income to net cash provided by
(used for) operating activities:
Increase in accrued investment income (24.0) (13.0)
Increase in premiums due and other receivables (8.8) (2.3)
Increase in policy loans (54.4) (29.5)
Increase in deferred policy acquisition costs (105.3) (127.2)
Decrease in reinsurance loan to affiliate 153.9 22.1
Net increase in universal life account balances 224.1 172.5
Decrease in other insurance reserve liabilities (165.5) (125.2)
Net (decrease) increase in other liabilities and other assets (122.4) 126.8
Decrease in income taxes (3.9) (23.5)
Net accretion of discount on investments (51.9) (51.1)
Net realized capital gains (17.9) (17.2)
-------- ----------
Net cash (used for) provided by operating activities (31.2) 22.6
-------- ----------
Cash Flows from Investing Activities:
Proceeds from sales of:
Debt securities available for sale 3,828.5 3,830.6
Equity securities 61.3 114.5
Mortgage loans 0.1 8.6
Investment maturities and collections of:
Debt securities available for sale 966.8 681.8
Short-term investments 43.2 21.5
Cost of investment purchases in:
Debt securities available for sale (4,811.0) (4,996.5)
Equity securities (53.6) (63.7)
Short-term investments (120.1) (35.5)
Other, net - (9.1)
-------- ----------
Net cash used for investing activities (84.8) (447.8)
-------- ----------
Cash Flows from Financing Activities:
Deposits and interest credited for investment contracts 1,230.2 1,140.6
Withdrawals of investment contracts (925.8) (860.7)
Dividends paid to shareholder (8.3) (1.5)
Capital contribution to Separate Account (25.0) -
-------- ----------
Net cash provided by financing activities 271.1 278.4
-------- ----------
Net increase (decrease) in cash and cash equivalents 155.1 (146.8)
Cash and cash equivalents, beginning of period 459.1 568.8
-------- ----------
Cash and cash equivalents, end of period $614.2 $422.0
======== ==========
Supplemental cash flow information:
Income taxes paid, net $68.7 $61.4
======== ==========
See Condensed Notes to Consolidated Financial Statements.
(6)
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Condensed Notes to Consolidated Financial Statements
1. Basis of Presentation
The consolidated financial statements include Aetna Life Insurance and
Annuity Company and its wholly owned subsidiaries, Aetna Insurance Company
of America and Aetna Private Capital, Inc. (collectively, the "Company").
Aetna Life Insurance and Annuity Company is a wholly owned subsidiary of
Aetna Retirement Holdings, Inc. ("HOLDCO"). HOLDCO is a wholly owned
subsidiary of Aetna Retirement Services, Inc., whose ultimate parent is
Aetna Inc. ("Aetna").
These consolidated financial statements have been prepared in accordance
with generally accepted accounting principles and are unaudited. Certain
reclassifications have been made to 1996 financial information to conform
to the 1997 presentation. These interim statements necessarily rely heavily
on estimates, including assumptions as to annualized tax rates. In the
opinion of management, all adjustments necessary for a fair statement of
results for the interim periods have been made. All such adjustments are of
a normal, recurring nature. The accompanying condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements and related notes as presented in the Company's 1996
Annual Report on Form 10-K. Certain financial information that is normally
included in annual financial statements prepared in accordance with
generally accepted accounting principles, but that is not required for
interim reporting purposes, has been condensed or omitted.
2. Future Application of Accounting Standards
Financial Accounting Standard ("FAS") No. 125, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities, was
issued in June 1996 and provides accounting and reporting standards for
transfers of financial assets and extinguishments of liabilities.
FAS No. 125 is effective for 1997 financial statements; however, certain
provisions relating to accounting for repurchase agreements and securities
lending are not effective until January 1, 1998. Provisions effective in
1997 did not have a material effect on the Company's financial position or
results of operations. The Company does not expect adoption of this
statement for provisions effective in 1998 to have a material effect on its
financial position or results of operations.
FAS No. 130, Reporting Comprehensive Income, was issued in June 1997 and
establishes standards for the reporting and presentation of comprehensive
income and its components in a full set of financial statements.
Comprehensive income encompasses all changes in shareholder's equity
(except those arising from transactions with owners) and includes net
income, net unrealized capital gains or losses on available for sale
securities. As this new standard only requires additional information in a
financial statement, it will not affect the Company's financial position or
results of operations. FAS No. 130 is effective for fiscal years beginning
after December 15, 1997, with earlier application permitted. The Company is
currently evaluating the presentation alternatives permitted by the
statement.
(7)
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Condensed Notes to Consolidated Financial Statements
(Continued)
2. Future Application of Accounting Standards - continued
FAS No. 131, Disclosures about Segments of an Enterprise and Related
Information, was issued in June 1997 and establishes standards for the
reporting of information relating to operating segments in annual financial
statements, as well as disclosure of selected information in interim
financial reports. This statement supersedes FAS No. 14, Financial
Reporting for Segments of a Business Enterprise, which requires reporting
segment information by industry and geographic area (industry approach).
Under FAS No. 131, operating segments are defined as components of a
company for which separate financial information is available and is used
by management to allocate resources and assess performance (management
approach). This statement is effective for year-end 1998 financial
statements. Interim financial information will be required beginning in
1999 (with comparative 1998 information). The Company does not anticipate
that this standard will significantly impact the composition of its current
operating segments, which are consistent with the management approach.
3. Financial Instruments
The Company engages in hedging activities to manage interest rate and price
risks. Such hedging activities have principally consisted of using
off-balance sheet instruments such as futures and forward contracts and
interest rate swap agreements. There were no such contracts or agreements
open as of September 30, 1997.
(8)
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Condensed Notes to Consolidated Financial Statements
(Continued)
4. Severance and Facilities Charges
In the second quarter of 1996, the Company was allocated severance and
facilities reserves from Aetna to reflect actions taken or to be taken to
reduce the level of corporate expenses and other costs previously absorbed
by Aetna's property-casualty operations.
In the third quarter of 1996, the Company established severance and
facilities reserves in the Financial Services and Individual Life Insurance
segments to reflect actions taken or to be taken in order to make its
businesses more competitive.
Activity for the nine months ended September 30, 1997 within the severance
and facilities reserves (pretax, in millions) and positions eliminated
related to such actions were as follows:
Reserve Positions
--------------------------------------------------------------------------
Balance at December 31, 1996 $ 47.9 524
Actions taken (1) (19.5) (129)
-------------------------
Balance at September 30, 1997 $ 28.4 395
--------------------------------------------------------------------------
(1) Includes $9.9 million of severance-related actions and $7.0 million of
corporate allocation-related actions.
The Company's severance actions are expected to be substantially completed
by March 31, 1998. The corporate allocation actions and vacating of certain
leased office space are expected to be substantially completed in 1997.
5. Related Party Transactions
Effective December 31, 1988, the Company entered into a reinsurance
agreement with Aetna Life Insurance Company ("Aetna Life") in which
substantially all of the nonparticipating individual life and annuity
business written by Aetna Life prior to 1981 was assumed by the Company.
Effective January 1, 1997, this agreement has been amended to transition
(based on underlying investment rollover in Aetna Life) from a modified
coinsurance to a coinsurance arrangement. As a result of this change,
reserves will be ceded to the Company from Aetna Life as investment
rollover occurs and the loan previously established will be reduced.
(9)
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Condensed Notes to Consolidated Financial Statements
(Continued)
6. Litigation
The Company is involved in numerous lawsuits arising, for the most part, in
the ordinary course of its business operations. While the ultimate outcome
of litigation against the Company cannot be determined at this time, after
consideration of the defenses available to the Company and any related
reserves established, it is not expected to result in liability for amounts
material to the financial condition of the Company, although it may
adversely affect results of operations in future periods.
7. Dividends
On June 27, 1997 and August 15, 1997, the Company paid a $5.3 million and
$3.0 million, respectively, dividend to HOLDCO. The additional amount of
dividends that may be paid by the Company to HOLDCO in 1997 without prior
approval by the Insurance Commissioner of the State of Connecticut is $62.8
million.
(10)
Independent Auditors' Review Report
The Board of Directors
Aetna Life Insurance and Annuity Company:
We have reviewed the accompanying condensed consolidated balance sheet of Aetna
Life Insurance and Annuity Company and Subsidiaries as of September 30, 1997,
and the related condensed consolidated statements of income for the three-month
and nine-month periods ended September 30, 1997 and 1996, and the related
condensed consolidated statements of changes in shareholder's equity and cash
flows for the nine-month periods ended September 30, 1997 and 1996. These
condensed consolidated financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements for them
to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Aetna Life Insurance and Annuity
Company and Subsidiaries as of December 31, 1996, and the related consolidated
statements of income, changes in shareholder's equity, and cash flows for the
year then ended (not presented herein); and in our report dated February 4,
1997, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 1996, is fairly
presented, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.
/s/ KPMG PEAT MARWICK LLP
November 3, 1997
Hartford, Connecticut
(11)