================================================================================
FORM 11-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the year ended December 30, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ______________
Commission file number 0-19277
A. Full title of Plan and the address of the Plan, if different from that of the
issuer named below:
THE HARTFORD INVESTMENT AND SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the Plan and the address of
its principal executive office:
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
HARTFORD PLAZA, HARTFORD, CONNECTICUT 06115-1900
================================================================================
THE HARTFORD INVESTMENT AND SAVINGS PLAN
TABLE OF CONTENTS
YEARS ENDED DECEMBER 30, 2001 AND 2000
Pages
-----
Independent Auditors' Report F-1
Report of Independent Public Accountants F-2
Statements of Net Assets Available for Benefits as of December 30,
2001 and 2000 F-3
Statements of Changes in Net Assets Available for Benefits for the
Years Ended December 30, 2001 and 2000 F-4
Notes to Financial Statements F-5 - F-10
Schedule H, Line 4i - Schedule of Assets Held at Year End as of
December 30, 2001 F-11 - F-14
Schedule H, Line 4j - Schedule of Reportable Transactions for the
Year Ended December 30, 2001 F-15
Signature F-16
Exhibit 1 - Consent of Independent Auditors F-17
INDEPENDENT AUDITORS' REPORT
The Hartford Financial Services Group, Inc.
Hartford, Connecticut
We have audited the accompanying statement of net assets available for benefits
of The Hartford Investment and Savings Plan (the "Plan") as of December 30,
2001, and the related statement of changes in net assets available for benefits
for the year then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the 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 audit provides a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of The Hartford Investment and
Savings Plan as of December 30, 2001, and the changes in net assets available
for benefits for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
Our audit was conducted for the purpose of forming an opinion on the 2001 basic
financial statements taken as a whole. The supplemental schedules of Assets Held
for Investment Purposes and of Reportable Transactions are presented for the
purpose of additional analysis and are not a required part of the basic 2001
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. These schedules are the
responsibility of the Plan's management. Such schedules have been subjected to
the auditing procedures applied in our audit of the basic 2001 financial
statements and, in our opinion, are fairly stated in all material respects when
considered in relation to the basic 2001 financial statements taken as a whole.
Deloitte & Touche LLP
Hartford, Connecticut
June 20, 2002
F-1
THIS IS A COPY OF A REPORT PREVIOUSLY ISSUED BY ARTHUR ANDERSEN LLP. THE REPORT
HAS NOT BEEN REISSUED BY ARTHUR ANDERSEN LLP NOR HAS ARTHUR ANDERSEN LLP
PROVIDED A CONSENT TO THE INCLUSION OF ITS REPORT IN THIS ANNUAL REPORT ON FORM
11-K.
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 30, 2000 and 1999,
and the related Statements of Changes in Net Assets Available for Benefits for
the years then ended. These financial statements and the schedules referred to
below are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements and schedules based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the 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 30, 2000 and 1999, and the changes in
net assets available for benefits for the years then ended, in conformity with
accounting principles generally accepted in the United States.
Our audits were made for the purpose of forming an opinion on the basic 2001
financial statements taken as a whole. The supplemental schedules are presented
for purposes of additional analysis and are not a required part of the basic
financial statements but is 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, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
June 18, 2001
F-2
EIN# 06-0383750
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 30, 2001 AND 2000
($ IN THOUSANDS)
2001 2000
----------------------------------------------------------------------------------
NON- NON-
MEMBER MEMBER MEMBER MEMBER
TOTAL DIRECTED DIRECTED TOTAL DIRECTED DIRECTED
-----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at fair value:
The Hartford Financial Services Group,
Inc. common stock (13,456,621 and
13,477,603 shares at December 30, 2001
and 2000, respectively) $ 845,076 $ 646,479 $ 198,597 $ 951,958 $ 727,218 $ 224,740
Standard & Poor's 500 Index Portfolio 216,776 -- 216,776 253,439 -- 253,439
Investment in mutual funds 318,193 -- 318,193 297,911 -- 297,911
Pooled temporary investments 32,076 12,477 19,599 33,751 14,223 19,528
Investment in group annuity contracts, at
contract value 358,011 -- 358,011 319,639 -- 319,639
Investment in loans receivable 34,922 -- 34,922 35,429 -- 35,429
Dividends and interest receivable 6,755 3,326 3,429 6,584 3,537 3,047
Contributions receivable 4,877 1,205 3,672 3,676 1,211 2,465
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 1,816,686 663,487 1,153,199 1,902,387 746,189 1,156,198
LIABILITIES
Unsettled net security purchases (sales) 3,403 -- 3,403 3,720 (189) 3,909
Interfund transfers pending -- 627 (627) -- 573 (573)
Other liabilities 471 -- 471 -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 3,874 627 3,247 3,720 384 3,336
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 1,812,812 $ 662,860 $ 1,149,952 $ 1,898,667 $ 745,805 $ 1,152,862
===================================================================================================================================
See notes to financial statements.
F-3
EIN# 06-0383750
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 30, 2001 AND 2000
($ IN THOUSANDS)
2001 2000
----------------------------------------------------------------------------------
NON- NON-
MEMBER MEMBER MEMBER MEMBER
TOTAL DIRECTED DIRECTED TOTAL DIRECTED DIRECTED
-----------------------------------------------------------------------------------------------------------------------------------
ADDITIONS (DEDUCTIONS) TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net realized and unrealized gains (losses) $ (157,334) $ (80,686) $ (76,648)$ 304,637 $ 267,618 $ 37,019
Dividends and interest 40,721 11,052 29,669 61,752 11,254 50,498
-----------------------------------------------------------------------------------------------------------------------------------
Total investment income (loss) (116,613) (69,634) (46,979) 366,389 278,872 87,517
Interest on participant loans 3,231 95 3,136 3,205 -- 3,205
Employee contributions 69,370 -- 69,370 63,550 -- 63,550
Employer contributions, net of forfeitures 30,367 28,943 1,424 26,607 25,894 713
Rollovers 21,455 -- 21,455 8,119 -- 8,119
Other, net 4,495 (684) 5,179 1,043 (11,814) 12,857
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL ADDITIONS (DEDUCTIONS) 12,305 (41,280) 53,585 468,913 292,952 175,961
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Interfund transfers -- (9,669) 9,669 -- (42,139) 42,139
Loans to participants -- (589) 589 -- (650) 650
Administrative expenses (3,392) (1,291) (2,101) (3,276) (1,086) (2,190)
Benefits paid to members (94,768) (30,116) (64,652) (142,473) (50,067) (92,406)
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL DEDUCTIONS (98,160) (41,665) (56,495) (145,749) (93,942) (51,807)
-----------------------------------------------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE (85,855) (82,945) (2,910) 323,164 199,010 124,154
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 1,898,667 745,805 1,152,862 1,575,503 546,795 1,028,708
-----------------------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 1,812,812 $ 662,860 $ 1,149,952 $ 1,898,667 $ 745,805 $ 1,152,862
===================================================================================================================================
See notes to financial statements.
F-4
THE HARTFORD INVESTMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 30, 2001 AND 2000
($ IN THOUSANDS)
NOTE 1. DESCRIPTION OF THE PLAN
The Hartford Financial Services Group, Inc., a Delaware corporation, and its
consolidated subsidiaries ("The Hartford" or the "Company") provide life and
property and casualty insurance to both individual and commercial customers in
the United States and internationally.
On June 27, 2000, The Hartford acquired all of the outstanding shares of
Hartford Life, Inc. ("Hartford Life" or "HLI") that the Company did not already
own ("The HLI Repurchase"). As a result, HLI became a wholly-owned subsidiary of
The Hartford. While Hartford Life continues to exist as a company, Hartford Life
stock no longer is listed or traded on the New York Stock Exchange. Proceeds
received by The Hartford Investment and Savings Plan (the "Plan") from The HLI
Repurchase of $70,888 were used by the trustee to purchase shares of The
Hartford common stock. All of the assets that were remaining in the Hartford
Life Company Stock Fund, after the purchase of the shares was completed, were
transferred to the Hartford Financial Services Group, Inc. Stock Fund. After the
purchase of the HLI shares was completed, future employee contributions were
redirected to the Hartford Financial Services Group, Inc. Stock Fund.
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's information document, which
has been distributed to the participants.
Plan Changes
------------
There have been several amendments to the Plan document during 2002. See Note 10
for explanation of changes.
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 and
who have attained age 19. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
The Trust, as defined in the Plan document, is the aggregate funds held by the
Trustee, Bankers Trust Company, under the trust agreement established for the
purposes of this Plan.
Contributions
-------------
Plan members may generally elect to save 2% to 16% of base salary ("Basic
Savings"). 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 (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. Members' savings in excess of 6% of base salary are supplemental savings
that are not matched by Company contributions. In addition, the Company
allocates 0.5% of base salary ("Floor Company contributions") to the Floor
Company Contribution Account of each eligible employee. Matching Company
contributions and Floor Company contributions are invested in the Hartford
Financial Services Group, Inc. Stock Fund.
On December 30, 2001 for the 2002 Plan year and December 30, 2000 for the 2001
Plan year, the Company guaranteed a fixed minimum contribution (based on a
percentage of the amount of employer contributions normally made) that
represents the employee salary deferral contributions and matching contributions
for the subsequent Plan year. If actual contributions are less than the
guaranteed fixed minimum amount at the end of the Plan year, an additional
matching contribution would be made to the participants. The minimum
contribution was met for the 2001 and 2000 Plan years.
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. The Company continues to
pay certain Plan administrative expenses which cannot be paid by the Trust.
F-5
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 in the Plan document. The
benefit to which a member is entitled is the benefit that can be provided from
that member's vested account.
Vesting
-------
Vesting in 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. Floor
contributions are 100% vested when allocated to each member's account.
Investment Options
------------------
Contributions of member savings are invested in any one or more of the funds
listed below in multiples of 1%, as elected by the member ("member directed
investments"). Non-member directed investments are invested in The Hartford
Financial Services Group, Inc. Stock Fund, and consist of Matching Company
contributions and Floor Company contributions.
[1], [2] HARTFORD FINANCIAL This fund's investment objective is to
SERVICES GROUP, INC. seek long-term capital appreciation by
STOCK FUND investing in the common stock of The
Hartford.
[1], [3] HARTFORD LIFE COMPANY This fund's investment objective was to
STOCK FUND seek long-term capital appreciation by
investing in the Class A common stock
of Hartford Life, Inc.
[1] INDEX FUND This fund's investment objective is to
seek investment results that track the
overall performance of the stocks in the
Standard & Poor's ("S&P") 500 Stock
Index by investing in stocks in the S&P
500 Stock Index.
[1] STABLE VALUE FUND This fund's investment objective is to
seek a stable and predictable rate of
return and preservation of capital by
investing in group annuity contracts
issued by a diversified group of
high-quality life insurance companies,
which may include an affiliate, Hartford
Life, deposit agreements issued by a
diversified group of high-quality banks,
U.S. government obligations and asset-
backed securities.
[1] ADVISERS FUND This fund's investment objective is to
seek long-term total return by investing
primarily in the stocks of U.S.
companies, bonds and other debt
securities, and money market
instruments.
[1] BOND INCOME STRATEGY This fund's investment objective is to
FUND seek a high level of current income
consistent with a competitive total
return as compared with bond funds with
similar investment objectives and
policies by investing primarily in
investment-grade bonds.
[1] MONEY MARKET FUND This fund's investment objective is to
seek maximum current income consistent
with liquidity and preservation of
capital by investing in cash, cash
equivalents and high-quality debt
securities.
[1] DIVIDEND AND GROWTH This fund's investment objective is to
FUND seek current income and growth of
capital by investing primarily in large,
well-known U.S. companies that pay
above-average dividends.
[1] INTERNATIONAL This fund's investment objective is to
OPPORTUNITIES FUND seek long-term growth of capital by
investing primarily in the stocks of
large non-U.S. companies.
F-6
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
[1] CAPITAL APPRECIATION This fund's investment objective is to
FUND seek capital appreciation by investing
primarily in the stocks of small, medium
and large U.S. companies.
[1] SMALL COMPANY FUND This fund's investment objective is to
seek capital appreciation by investing
primarily in stocks of U.S. companies
with market capitalization of less than
$2 billion that the portfolio manager
believes have above-average earnings
growth potential.
[1] MIDCAP FUND This fund's investment objective is to
seek capital appreciation by investing
primarily in stocks with market
capitalization in the range represented
by the S&P MidCap 400 index.
[1] HIGH YIELD FUND This fund's investment objective is to
seek high current income with growth of
capital as a secondary consideration by
investing primarily in securities
considered to be below investment grade
quality.
[1] GLOBAL LEADERS FUND This fund's investment objective is to
seek growth of capital by investing in
stocks of U.S. and non-U.S. companies
that are leaders in their industries as
indicated by an established market
presence and a strong global, regional,
or country competitive position.
[1], [4] GLOBAL HEALTH FUND This fund's investment objective is to
seek long-term capital appreciation by
investing at least 80% of its total
assets in the equity securities of
health care companies worldwide.
[1], [4] GLOBAL TECHNOLOGY FUND This fund's investment objective is to
seek long-term capital appreciation by
investing at least 80% of its total
assets in the equity securities of
technology companies worldwide.
[1], [4] STOCK FUND This fund's investment objective is to
seek long-term capital appreciation with
income as a secondary consideration by
investing in stocks of U.S. and non-U.S.
companies.
[1] Indicates party-in-interest with The Hartford or certain of its
subsidiaries. See Note 8 for further discussion.
[2] An amendment effective January 1, 2000 renamed the fund from the former
"Hartford Company Stock Fund".
[3] Terminated on August 3, 2000.
[4] Became effective September 1, 2000.
Participant Loans
-----------------
Members may borrow from their fund accounts a minimum of $1 to a maximum equal
to the lesser of $50 or 50% of their vested account balances. Loan transactions
are treated as transfers from (to) the investment funds to (from) 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% and remains fixed for the term of the loan. The interest rate is
determined quarterly.
Payment of Benefits
-------------------
On termination of service due to death, disability, retirement, or other
reasons, members or their designated beneficiaries may elect to receive a lump
sum amount equal to the value of the vested interest in their respective
accounts; subject to certain conditions, annual installments over a period not
greater than twenty years; annual installments over the recipient's life
expectancy; or stock distributions. Members or their designated beneficiaries
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 were immaterial for
the years ended December 30, 2001 and 2000.
F-7
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2. ACCOUNTING POLICIES
The financial statements have been prepared using the accrual basis of
accounting. The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America and the
Department of Labor Rules and Regulations for Reporting and Disclosure under
ERISA requires management of the Plan to make estimates and assumptions that
affect the reported amounts of assets and liabilities and contingent assets and
liabilities at the date of the financial statements and the reported amounts of
additions and deletions during the reporting period. Actual results could differ
from those estimates.
Certain reclassifications have been made to prior year financial information to
conform to the current year classification of transactions and accounts.
NOTE 3. INVESTMENTS
The following investments represented 5% or more of the Plan's net assets:
DECEMBER 30,
2001 2000
---------------------------------------------------------------------------------------------------------------------
The Hartford Financial Services Group, Inc. common stock (13,456,621 and
13,477,603 shares at December 30, 2001 and 2000, respectively) $ 845,076* $ 951,958*
S&P 500 Index Portfolio Hartford GA-6226 216,776 253,439
Stable Value Fund - group annuity contracts 358,011 319,639
=====================================================================================================================
* Includes non-member directed assets
For the years ended December 30, 2001 and 2000, the Plan's investments
(depreciated) appreciated as follows:
DECEMBER 30,
2001 2000
---------------------------------------------------------------------------------------------------------------------
The Hartford Financial Services Group, Inc. common stock $ (105,472) $ 338,985
Hartford Life, Inc. common stock (For 2000, for the period through June 27, 2000) -- 12,944
Standard & Poor's 500 Index Portfolio (28,085) (25,045)
Mutual funds (23,777) (22,247)
---------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses) $ (157,334) $ 304,637
=====================================================================================================================
NOTE 4. VALUATION OF INVESTMENTS
Plan investments, except group annuity contracts, are reported at fair value.
The fair value of the underlying common stock of Hartford Financial Services
Group, Inc. Stock Fund and Hartford Life Company Stock Fund (until the date of
the HLI Repurchase) is based on quoted market prices. Interests in mutual funds
and pooled investment funds are valued at the redemption price established by
the trustee or the investment manager of the respective fund.
The Plan has entered into numerous traditional and synthetic group annuity
contracts primarily with insurance carriers. These contracts, which are included
in the Stable Value Fund, are fully benefit responsive and are included in the
financial statements at contract value. Fully benefit responsive contracts
provide for a stated return on principal invested over a specified period and
that permit withdrawals at contract value for benefit payments, loans, or
transfers. Contract value represents contributions made under the contract, plus
earnings, less Plan withdrawals and administrative expenses. As of December 30,
2001 and 2000, the estimated fair value of the group annuity contracts was
$358,011 and $319,639, respectively. The average yield and weighted average
crediting interest rate on these contracts was 6.54% and 6.33%, respectively,
for the year ended December 30, 2001, and 6.56% and 6.80%, respectively, for the
year ended December 30, 2000. Crediting interest rate resets are generally made
quarterly for synthetic contracts and are reset based on formulas which may use
market value, book value, duration and yield. A synthetic group annuity contract
is an investment contract that simulates the performance of a traditional group
annuity contract through the use of financial instruments. A key difference
between a synthetic group annuity contract and a traditional group annuity
contract is that the Plan owns the assets underlying the synthetic group annuity
contract. Traditional group annuity contracts have fixed crediting interest
rates.
F-8
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 5. FEDERAL INCOME TAX
The Internal Revenue Service has determined and informed the Company by letter
dated February 25, 1998 that the Plan and related Trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC). The Plan
has been amended since receiving the determination letter. However, the Plan
Administrator and the Plan's tax counsel believe that the Plan is designed and
is currently being operated in compliance with the applicable requirements of
the IRC.
NOTE 6. 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
or partial termination of the Plan or complete discontinuance of contributions,
the interest of affected members shall automatically become nonforfeitable.
NOTE 7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
As of December 30, 2001 and 2000, the following is a reconciliation of net
assets available for plan benefits according to the accompanying financial
statements to Form 5500:
2001 2000
---------------------------------------------------------------------------------------------------------------------
Net assets available for plan benefits on financial statements $ 1,812,812 $ 1,898,667
Amounts allocated to withdrawing members (117) (1,291)
---------------------------------------------------------------------------------------------------------------------
Net assets available for plan benefits on Form 5500 $ 1,812,695 $ 1,897,376
=====================================================================================================================
The following is a reconciliation of benefits paid to members according to the
accompanying financial statements to Form 5500:
2001 2000
---------------------------------------------------------------------------------------------------------------------
Benefits paid to members on financial statements $ 94,768 $ 142,473
Amounts allocated to withdrawing members at end of year 117 1,291
Amounts allocated to withdrawing members at beginning of year (1,291) (378)
---------------------------------------------------------------------------------------------------------------------
Benefits paid to members on Form 5500 $ 93,594 $ 143,386
=====================================================================================================================
Amounts allocated to withdrawing members are recorded on Form 5500 for benefit
claims that have been processed and approved for payment prior to the end of the
Plan year but not paid as of that date.
NOTE 8. PARTY-IN-INTEREST TRANSACTIONS
Certain Plan investments are held in funds managed by Bankers Trust Company, the
Trustee, as defined by the Plan, and certain subsidiaries of The Hartford. Fees
paid by the Plan for Trustee, custodial and investment management services
provided by Bankers Trust Company amounted to $592 and $615 for the years ended
December 30, 2001 and 2000, respectively. Fees paid by the Plan to certain
subsidiaries of the Company for investment management services and the issuance
of group annuity contracts amounted to $65 and $76 for the years ended December
30, 2001 and 2000, respectively. In addition, certain Plan investments are
shares of The Hartford common stock for the 2001 and 2000 Plan years. Since The
Hartford is the Plan Sponsor, these transactions qualify as party-in-interest
transactions.
NOTE 9. PLAN AMENDMENTS
Effective November 29, 2001, a portion of the Plan was converted into a
non-leveraged employee stock ownership plan ("ESOP") within the meaning of code
section 4975(e)(7). The ESOP is designed to invest primarily in The Hartford
Financial Services Group, Inc. stock.
F-9
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 10. SUBSEQUENT EVENTS
Effective January 1, 2002, the following changes were made to the Plan:
o Employees with fewer than six months of service can begin contributing
to the Plan, though six months of service is still necessary to be
eligible for Floor Company contributions and Matching Company
contributions.
o The annual before-tax savings limit in the Plan will increase from
$10.5 to $11 for 2002 and the amount of before-tax money that may be
contributed will increase by $1 each year until the limit reaches $15
in 2006. This limit will increase for inflation in $0.5 increments
after 2006. The total annual contribution limit for combined before-
and after- tax savings will increase to $40 (or annual pay if less)
from $35.
o The dollar threshold for determining highly compensated employees has
increased from $80 to $85. This determination is based on a member's
prior year earnings.
o Members now have the option of automatically reinvesting earned
dividends or withdrawing them from the Plan in cash after they are paid
(usually quarterly). Prior to January 1, 2002, earned dividends were
automatically reinvested to increase a member's account balance.
o The mandatory suspension period (period of time in which a member may
not make contributions to the Plan) when taking a Safe Harbor hardship
withdrawal from the Plan has been reduced to six months from twelve
months.
o Other qualified retirement plan balances, including before-tax and
after-tax money, may now be rolled over into the member's Plan account
at any time, without incurring tax penalties.
o Eligible retired or terminated plan members can elect to receive their
account balances in annual installments over the lesser of the member's
life expectancy (based on IRS life expectancy tables) or thirty years.
If a member elected life expectancy installments prior to 2002, the
member's remaining installments will be recalculated based on the new
tables.
Beginning on January 2, 2002, the Plan will be offering The Hartford HLS mutual
funds in place of the Class Y shares of The Hartford's retail mutual funds. The
HLS funds have the same investment management, investment objective, and
investment style as their retail fund counterparts. However, the HLS funds have
lower retail fees and expenses. Existing balances that Plan members have in the
Class Y shares will be automatically transferred to the applicable HLS funds on
January 2, 2002.
Beginning on February 1, 2002, Plan members will have greater flexibility in the
investment of their Company contribution accounts. Plan members will no longer
be required to wait until age 55 to diversify their Company contribution
accounts (Company Matching, Floor Company and ESOP contributions). All Plan
members will be able to make fund transfers of existing Company contributions
and direct future Company contributions at any time, in any amount, and to any
fund.
Also, beginning on February 1, 2002, the maximum employee contribution rate is
increasing from 16% to 30%. Certain employees will be able to elect to
contribute from 2% to 30% of annual base pay with before-tax dollars, from 1% to
30% with after-tax dollars, or from 2% to 30% with a combination of both, as
allowed by the Plan and subject to IRS limits. Highly compensated employees
(employees who earned more than $85 in 2001) will continue to be limited to a
maximum combined contribution rate of 10% and their before-tax rate cannot
exceed 7%.
On April 10, 2002, participant balances in the amount of $7,568 from the Omni
401(k) plan merged into The Hartford Investment and Savings Plan. Omni Insurance
Group, Inc. is a subsidiary of The Hartford Financial Services Group, Inc.
Beginning December 31, 2002, the annual base pay limit for the Plan will
increase to $200 (from $170).
F-10
EIN# 06-0383750
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
SCHEDULE H, LINE 4I - SCHEDULE OF ASSETS HELD AT YEAR END
AS OF DECEMBER 30, 2001
($ IN THOUSANDS)
(C) DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, RATE OF (E) CURRENT
(A) (B) IDENTITY OF PARTY INTEREST, COLLATERAL, PAR OR MATURITY VALUE (D) COST VALUE
------------------------------------------------------------------------------------------------------------------------------------
Hartford Financial Services Group, Inc. Stock Fund
--------------------------------------------------
* The Hartford Financial The Hartford Financial Services Group, Inc. common stock
Services Group, Inc. (13,456,526 shares) $ 485,547 $ 845,070
* Bankers Trust Company BT Pyramid Directed Account Cash Fund - STIF 16,310 16,310
-------------
SUBTOTAL 861,380
-------------
Stock Fund
----------
* The Hartford Financial Hartford Mutual Funds, Inc. Stock Fund Cash Fund - Class Y
Services Group, Inc. shares (109,343.06 shares) *** 2,074
-------------
SUBTOTAL 2,074
-------------
Clearing Account
----------------
* Bankers Trust Company BT Pyramid Directed Account *** 5,751
* The Hartford Financial The Hartford Financial Services Group, Inc. common stock
Services Group, Inc. (95 shares) *** 6
-------------
SUBTOTAL 5,757
-------------
Index Fund
----------
* Hartford Life Insurance
Company S&P 500 Index Portfolio Hartford - GA - 6226, S/A BI *** 216,776
-------------
SUBTOTAL 216,776
-------------
Stable Value Fund
-----------------
* Bankers Trust Company BT Pyramid Discretionary Account Cash Fund - STIF *** 8,738
Business Mens Assurance Group Annuity Contract #1412, 7.64%, 11/30/2004 *** 9,931
Caisse des Depots et
Consignations Group Annuity Contract #BR302-01, 6.98%, 01/01/2002 *** 4,105
Canada Life Assurance
Company Group Annuity Contract #46092, 5.77%, 4/10/2006 *** 6,945
Continental Assurance
Company Group Annuity Contract #24022, 6.58%, 12/31/2001 *** 3,342
General Electric Capital
Assurance Company Group Annuity Contract #GS3614GECA, 5.92%, 6/01/2006 *** 5,090
Monumental Life Insurance
Company Group Annuity Contract #MDA00380TR, 4.64% 1/31/2012 *** 10,900
Monumental Life Insurance
Company Group Annuity Contract #ADA00212TR, 6.29% ** *** 65,117
* Indicates party-in-interest.
** These synthetic portfolios have no final maturity. Final maturity is
based on the underlying assets in the bond portfolios.
*** Cost information not required for member directed investments.
F-11
EIN# 06-0383750
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
SCHEDULE H, LINE 4I - SCHEDULE OF ASSETS HELD AT YEAR END
AS OF DECEMBER 30, 2001
($ IN THOUSANDS)
(C) DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, RATE OF (E) CURRENT
(A) (B) IDENTITY OF PARTY INTEREST, COLLATERAL, PAR OR MATURITY VALUE (D) COST VALUE
------------------------------------------------------------------------------------------------------------------------------------
Morgan Guaranty Trust Company Group Annuity Contract #AITTH01, 6.67% ** $ *** $ 90,919
Principal Life Insurance
Company Group Annuity Contract #GA 4-36623, 5.78%, 01/21/2004 *** 10,568
Protective Life Insurance
Company Group Annuity Contract #GA1629, 7.34%, 5/30/2003 *** 3,436
Security Benefit Life
Insurance Company Group Annuity Contract #G0105, 6.46%, 1/25/2006 *** 6,850
Transamerica Insurance
Company Group Annuity Contract #TDA76592TR, 6.89%, 1/31/2012 *** 81,070
Union Bank of Switzerland Group Annuity Contract #3024, 6.61% ** *** 59,737
-------------
SUBTOTAL 366,748
-------------
Advisers Fund
-------------
* The Hartford Financial Hartford Mutual Funds, Inc. Advisers Fund #BL416645786, Class
Services Group, Inc. Y shares *** 58,363
-------------
SUBTOTAL 58,363
-------------
Bond Income Strategy Fund
-------------------------
* The Hartford Financial Hartford Mutual Funds, Inc. Bond Income Strategy Fund, Class Y
Services Group, Inc. shares *** 18,303
-------------
SUBTOTAL 18,303
-------------
Money Market Fund
-----------------
* The Hartford Financial
Services Group, Inc. Hartford Mutual Funds, Inc. Money Market Fund, Class Y shares *** 33,009
-------------
SUBTOTAL 33,009
-------------
Dividend and Growth Fund
------------------------
* The Hartford Financial Hartford Mutual Funds, Inc. Dividend and Growth Fund, Class Y
Services Group, Inc. shares *** 24,370
-------------
SUBTOTAL 24,370
-------------
International Opportunities Fund
--------------------------------
* The Hartford Financial Hartford Mutual Funds, Inc. International Opportunities Fund,
Services Group, Inc. Class Y shares *** 13,339
-------------
SUBTOTAL 13,339
-------------
* Indicates party-in-interest.
** These synthetic portfolios have no final maturity. Final maturity is
based on the underlying assets in the bond portfolios.
*** Cost information not required for member directed investments.
F-12
EIN# 06-0383750
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
SCHEDULE H, LINE 4I - SCHEDULE OF ASSETS HELD AT YEAR END
AS OF DECEMBER 30, 2001
($ IN THOUSANDS)
(C) DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, RATE OF (E) CURRENT
(A) (B) IDENTITY OF PARTY INTEREST, COLLATERAL, PAR OR MATURITY VALUE (D) COST VALUE
------------------------------------------------------------------------------------------------------------------------------------
Capital Appreciation Fund
-------------------------
* The Hartford Financial Hartford Mutual Funds, Inc. Capital Appreciation Fund, Class
Services Group, Inc. Y shares $ *** $ 74,110
-------------
SUBTOTAL 74,110
-------------
Small Company Fund
------------------
* The Hartford Financial
Services Group, Inc. Hartford Mutual Funds, Inc. Small Company Fund, Class Y shares *** 26,112
-------------
SUBTOTAL 26,112
-------------
MidCap Fund
-----------
* The Hartford Financial
Services Group, Inc. Hartford Mutual Funds, Inc. MidCap Fund, Class Y shares *** 45,159
-------------
SUBTOTAL 45,159
-------------
High Yield Fund
---------------
* The Hartford Financial
Services Group, Inc. Hartford Mutual Funds, Inc. High Yield Fund, Class Y shares *** 3,579
-------------
SUBTOTAL 3,579
-------------
Global Leaders Fund
-------------------
* The Hartford Financial Hartford Mutual Funds, Inc. Global Leaders Fund, Class Y
Services Group, Inc. shares *** 9,005
-------------
SUBTOTAL 9,005
-------------
Global Health Fund
------------------
* The Hartford Financial
Services Group, Inc. Hartford Mutual Funds, Inc. Global Health Fund, Class Y shares *** 4,578
-------------
SUBTOTAL 4,578
-------------
Global Technology Fund
----------------------
* The Hartford Financial Hartford Mutual Funds, Inc. Global Technology Fund, Class Y
Services Group, Inc. shares *** 6,173
-------------
SUBTOTAL 6,173
-------------
Bankers Trust Company Cash Fund-STIF
------------------------------------
* Bankers Trust Company BT Pyramid Directed Account Cash Fund-STIF *** 20
* Bankers Trust Company BT Pyramid Discretionary Account Cash Fund-STIF *** 1,277
-------------
SUBTOTAL 1,297
-------------
* Indicates party-in-interest.
*** Cost information not required for member directed investments.
F-13
EIN# 06-0383750
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
SCHEDULE H, LINE 4I - SCHEDULE OF ASSETS HELD AT YEAR END
AS OF DECEMBER 30, 2001
($ IN THOUSANDS)
(C) DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, RATE OF (E) CURRENT
(A) (B) IDENTITY OF PARTY INTEREST, COLLATERAL, PAR OR MATURITY VALUE (D) COST VALUE
------------------------------------------------------------------------------------------------------------------------------------
Loan Fund
---------
* Loans to Participants Loans Receivable from Participants, maturing at various
dates bearing interest at rates from 5.68% - 11.50% $ N/A $ 34,922
-------------
SUBTOTAL 34,922
-------------
TOTAL $ 1,805,054
-------------
* Indicates party-in-interest.
F-14
EIN# 06-0383750
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
SCHEDULE H, LINE 4J - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 30, 2001
($ IN THOUSANDS)
(C) (D) (E) (F)
(A) (B) PURCHASE SELLING LEASE EXPENSE
IDENTITY OF PARTY DESCRIPTION OF ASSET PRICE PRICE RENTAL INCURRED
--------------------------------------------------------------------------------------------------------------------------
The Hartford Financial Services The Hartford Financial Services
Group, Inc. * Group, Inc. common stock $-- $80,829 $-- $--
The Hartford Financial Services The Hartford Financial Services
Group, Inc. * Group, Inc. common stock 86,058 -- -- --
--------------------------------------------------------------------------------------------------------------------------
* Indicates party-in-interest.
EIN# 06-0383750
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
SCHEDULE H, LINE 4J - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 30, 2001
($ IN THOUSANDS)
(CONTINUED)
(H)
(G) CURRENT VALUE OF (I)
(A) COST OF ASSETS ON NET
IDENTITY OF PARTY ASSET TRANSACTION DATE GAIN
----------------------------------------------------------------------------------
The Hartford Financial Services
Group, Inc. * $45,882 $80,829 $34,947
The Hartford Financial Services
Group, Inc. * 86,058 86,058 --
----------------------------------------------------------------------------------
* Indicates party-in-interest.
F-15
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 28, 2002
-------------
(DATE)
F-16
EXHIBIT 1
CONSENT OF INDEPENDENT AUDITORS
The Hartford Financial Services Group, Inc.:
We consent to the incorporation by reference in Registration Statement No.
33-80663 on Form S-8 of our report dated June 20, 2002, appearing in this Annual
Report on Form 11-K of The Hartford Investment and Savings Plan for the year
ended December 30, 2001.
DELOITTE & TOUCHE LLP
Hartford, Connecticut
June 26, 2002
F-17