================================================================================
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, 2002
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, 2002 AND 2001
Page No(s).
-----------
Independent Auditors' Report F-1
Statements of Net Assets Available for Benefits as of December
30, 2002 and 2001 F-2
Statements of Changes in Net Assets Available for Benefits for
the Years Ended December 30, 2002 and 2001 F-3
Notes to Financial Statements
Supplemental Schedules:
Form 5500 Schedule H, Part IV, Line 4i - Schedule of
Investment Assets Held at December 30, 2002 F-10 - F-13
Form 5500 Schedule H, Part IV, Line 4j - Schedule of
Reportable Transactions for the Year Ended December
30, 2002 F-14
Signature F-15
EXHIBITS
Exhibit 23.1 - Independent Auditors' Consent
Exhibit 99.1 - Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
INDEPENDENT AUDITORS' REPORT
The Hartford Financial Services Group, Inc.
Hartford, Connecticut
We have audited the accompanying statements of net assets available for benefits
of The Hartford Investment and Savings Plan (the "Plan") as of December 30, 2002
and 2001, and the related statements of changes in net assets available for
benefits for the years 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 audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the 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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 30,
2002 and 2001, 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 of America.
Our audit was conducted for the purpose of forming an opinion on the 2002 basic
financial statements taken as a whole. The supplemental schedules listed in the
Table of Contents are presented for the purpose of additional analysis and are
not a required part of the basic 2002 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 2002 financial statements and, in our opinion,
are fairly stated in all material respects when considered in relation to the
basic 2002 financial statements taken as a whole.
Deloitte & Touche LLP
Hartford, Connecticut
June 24, 2003
F-1
EIN# 06-0383750
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 30, 2002 AND 2001
($ IN THOUSANDS)
2002 2001
----------------------------------------------------------------------------------
NON-MEMBER NON-MEMBER
DIRECTED MEMBER DIRECTED MEMBER
TOTAL DIRECTED TOTAL DIRECTED
-----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at fair value:
The Hartford Financial Services Group,
Inc. common stock (12,624,182 and
13,456,621 shares at December 30, 2002
and 2001, respectively) $ 574,906 $ 424,108 $ 150,798 $ 845,076 $ 646,479 $ 198,597
Standard & Poor's 500 Index Portfolio 161,259 -- 161,259 216,776 -- 216,776
Investment in mutual funds 312,671 -- 312,671 318,193 -- 318,193
Pooled temporary investments 26,287 9,108 17,179 32,076 12,477 19,599
Investment in group annuity contracts, at
contract value 447,834 -- 447,834 358,011 -- 358,011
Investment in loans receivable 35,468 -- 35,468 34,922 -- 34,922
Dividends and interest receivable 5,836 2,721 3,115 6,755 3,326 3,429
Contributions receivable 139 -- 139 4,877 1,205 3,672
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 1,564,400 435,937 1,128,463 1,816,686 663,487 1,153,199
LIABILITIES
Unsettled net security purchases (sales) 580 723 (143) 3,403 -- 3,403
Interfund transfers pending -- 171 (171) -- 627 (627)
Other liabilities 792 100 692 471 -- 471
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,372 994 378 3,874 627 3,247
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 1,563,028 $ 434,943 $ 1,128,085 $ 1,812,812 $ 662,860 $ 1,149,952
===================================================================================================================================
See Notes to Financial Statements.
F-2
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, 2002 AND 2001
($ IN THOUSANDS)
2002 2001
----------------------------------------------------------------------------------
NON-MEMBER NON-MEMBER
DIRECTED MEMBER DIRECTED MEMBER
TOTAL DIRECTED TOTAL DIRECTED
-----------------------------------------------------------------------------------------------------------------------------------
ADDITIONS (DEDUCTIONS) TO NET ASSETS ATTRIBUTED
TO:
Investment income:
Net realized and change in unrealized
gains/losses $ (313,395) $ (154,862) $ (158,533)$ (157,334) $ (80,686) $ (76,648)
Dividends and interest 44,804 9,939 34,865 40,721 11,052 29,669
-----------------------------------------------------------------------------------------------------------------------------------
Total investment loss (268,591) (144,923) (123,668) (116,613) (69,634) (46,979)
Interest on participant loans 2,641 68 2,573 3,231 95 3,136
Employee contributions 74,028 -- 74,028 69,370 -- 69,370
Employer contributions, net of forfeitures 31,210 27,053 4,157 30,367 28,943 1,424
Rollovers 9,243 -- 9,243 21,455 -- 21,455
Other, net (1,325) (522) (803) 4,495 (684) 5,179
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL ADDITIONS (DEDUCTIONS) (152,794) (118,324) (34,470) 12,305 (41,280) 53,585
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Interfund transfers -- (81,202) 81,202 -- (9,669) 9,669
Loans to participants -- (417) 417 -- (589) 589
Administrative expenses (3,712) (1,281) (2,431) (3,392) (1,291) (2,101)
Benefits paid to members (93,278) (26,693) (66,585) (94,768) (30,116) (64,652)
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL ADDITIONS (DEDUCTIONS) (96,990) (109,593) 12,603 (98,160) (41,665) (56,495)
-----------------------------------------------------------------------------------------------------------------------------------
NET DECREASE (249,784) (227,917) (21,867) (85,855) (82,945) (2,910)
-----------------------------------------------------------------------------------------------------------------------------------
Net assets available for benefits
Beginning of Year $ 1,812,812 $ 662,860 $ 1,149,952 $ 1,898,667 $ 745,805 $ 1,152,862
-----------------------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 1,563,028 $ 434,943 $ 1,128,085 $ 1,812,812 $ 662,860 $ 1,149,952
===================================================================================================================================
See Notes to Financial Statements.
F-3
THE HARTFORD INVESTMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 30, 2002 AND 2001
($ IN THOUSANDS)
NOTE 1. DESCRIPTION OF THE PLAN
The following description of The Hartford Investment and Savings Plan is
provided for general information purposes only. Participants should refer to the
Plan Document for more complete information.
The Hartford Financial Services Group, Inc., a Delaware corporation, and its
consolidated subsidiaries ("The Hartford" or the "Company") provide investment
products and life and property and casualty insurance to both individual and
commercial customers in the United States and internationally.
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 9
for explanation of changes.
General
The Plan is a defined contribution plan covering all full-time and part-time
employees of the Company 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, Deutsche Bank Trust Company, under the trust agreement established for
the purposes of this Plan, or the aggregate funds held under an insurance
contract or contracts established within The Hartford or its affiliates.
Contributions
-------------
Plan members may generally elect to save 2% to 30% 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 (the "Code").
Basic Before-Tax Savings are contributions which are not in excess of the first
6% of base salary. An amount equal to 50% of a member's Basic Before-Tax Savings
is matched by the Company. 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.
On December 30, 2001 for the 2002 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 2002 and 2001 Plan years.
Administrative Costs
--------------------
The Trust, as defined by the Plan, pays certain administrative expenses of the
Plan up to 0.25% of the market value of Trust assets. Expenses not paid by the
Trust are borne by the Company.
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.
F-4
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 (for certain members), 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 and Company contributions are invested in any
one of the 16 funds in multiples of 1%, as elected by the member ("member
directed investments").
THE HARTFORD FINANCIAL This fund's investment objective is to seek
SERVICES GROUP, INC. long-term capital appreciation by investing
STOCK FUND in the common stock of The Hartford.
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.
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.
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.
BOND INCOME STRATEGY FUND This fund's investment objective is to 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.
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.
DIVIDEND AND GROWTH FUND This fund's investment objective is to seek
current income and growth of capital by
investing primarily in large, well-known
U.S. companies that pay above-average
dividends.
INTERNATIONAL This fund's investment objective is to seek
OPPORTUNITIES FUND long-term growth of capital by investing
primarily in the stocks of large non-U.S.
companies.
CAPITAL APPRECIATION This fund's investment objective is to seek
FUND capital appreciation by investing primarily
in the stocks of small, medium and large
U.S. companies.
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.
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.
F-5
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
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.
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.
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.
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.
All investment options are party-in-interests with The Hartford or certain of
its subsidiaries. See Note 8 for further discussion.
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 in the quarter the loan originates (as
published in the Wall Street Journal) plus 1% is fixed for the term of the loan.
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 thirty 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. These
benefits are recorded when paid.
Forfeitures
-----------
At December 30, 2002 and 2001, forfeited non-vested accounts totaled $682 and
$7, respectively. These forfeitures are applied to reduce future employer
contributions. During the year ended December 30, 2002, employer contributions
were reduced by $663 from forfeitures.
NOTE 2. ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The accompanying financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America, using the accrual basis of accounting.
USE OF ESTIMATES - 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 changes therein, and
disclosure of 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. The Plan
utilizes various investment instruments, including mutual funds and investment
contracts. Investment securities, in general, are exposed to various risks, such
as interest rate, credit and overall market volatility. Due to the level of risk
associated with certain investment securities, it is possible that changes in
the values of investment securities may occur in the near term and that such
changes could affect the amounts reported in the financial statements.
F-6
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3. INVESTMENTS
The following investments represented 5% or more of the Plan's net assets:
DECEMBER 30,
2002 2001
---------------------------------------------------------------------------------------------------------------------
The Hartford Financial Services Group, Inc. common stock (12,624,182 and
13,456,621 shares at December 30, 2002 and 2001, respectively) $ 574,906* $ 845,076*
Standard & Poor's 500 Index Portfolio 161,259 216,776
Stable Value Fund - group annuity contracts 447,834 358,011
=====================================================================================================================
o - Includes non-member directed assets
For the years ended December 30, 2002 and 2001, the Plan's net realized and
change in unrealized gains and losses were net losses as follows:
DECEMBER 30,
2002 2001
---------------------------------------------------------------------------------------------------------------------
The Hartford Financial Services Group, Inc. common stock $ (209,925) $ (105,472)
Standard & Poor's 500 Index Portfolio (50,498) (28,085)
Investment in Mutual funds (52,972) (23,777)
---------------------------------------------------------------------------------------------------------------------
Net realized and unrealized (losses) $ (313,395) $ (157,334)
=====================================================================================================================
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 The Hartford Financial Services
Group, Inc. Stock Fund 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 at the Plan's
year-end.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
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
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, 2002 and
2001, the estimated fair value of the group annuity contracts was $447,834 and
$358,011, respectively. There are no reserves against contract value for credit
risk of control issuer. The average yield and weighted average crediting
interest rate on these contracts was 6.02% and 5.91%, respectively, for the year
ended December 30, 2002, and 6.54% and 6.33%, respectively, for the year ended
December 30, 2001. Crediting interest rates are generally reset 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.
NOTE 5. FEDERAL INCOME TAX STATUS
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. The Company, 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.
F-7
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 non-forfeitable.
NOTE 7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
As of December 30, 2002 and 2001, the following is a reconciliation of net
assets available for plan benefits according to the accompanying financial
statements to Form 5500:
2002 2001
---------------------------------------------------------------------------------------------------------------------
Net assets available for plan benefits per financial statements $ 1,563,028 $ 1,812,812
Amounts allocated to withdrawing members (885) (117)
---------------------------------------------------------------------------------------------------------------------
Net assets available for plan benefits per Form 5500 $ 1,562,143 $ 1,812,695
=====================================================================================================================
The following is a reconciliation of benefits paid to members according to the
accompanying financial statements to Form 5500:
2002 2001
---------------------------------------------------------------------------------------------------------------------
Benefits paid to members per financial statements $ 93,217 $ 94,768
Amounts allocated to withdrawing members at end of year 885 117
Amounts allocated to withdrawing members at beginning of year (117) (1,291)
---------------------------------------------------------------------------------------------------------------------
Benefits paid to members per Form 5500 $ 93,985 $ 93,594
---------------------------------------------------------------------------------------------------------------------
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 Deutsche Bank 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 the Trustees amounted to $648 and $592 for the years ended
December 30, 2002 and 2001, 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 $57 and $65 for the years ended December
30, 2002 and 2001, respectively. In addition, certain Plan investments for the
2002 and 2001 Plan years are shares of mutual funds that are sponsored by The
Hartford and shares of The Hartford's common stock. At December 30, 2002 and
2001, the Plan held 12,624,182 shares and 13,456,621 shares of common stock of
The Hartford with a cost basis of $480,019 and $485,547, respectively. During
the years ended December 30, 2002 and 2001, the Plan recorded dividend income
from The Hartford's common stock and mutual funds of $19,686 and $13,785,
respectively. Since The Hartford wholly owns 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. common stock.
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.
F-8
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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).
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.
o If a member dies after requesting benefit payments in the form of
periodic installments but before all installment payments are paid,
then the remaining benefit will be paid to the beneficiary in a lump
sum if the beneficiary is not a spouse. If the beneficiary is a
spouse, then the beneficiary has the option to receive the remaining
benefit in a lump sum or installments.
Beginning on January 2, 2002, the Plan began 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 had in the
Class Y shares were automatically transferred to the applicable HLS funds on
January 2, 2002.
Beginning on February 1, 2002, Plan members began having greater flexibility in
the investment of their Company contribution accounts. Plan members were no
longer required to wait until age 55 to diversify their Company contribution
accounts (Company Matching, Floor Company and ESOP contributions). All Plan
members were 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
increased from 16% to 30%. Certain employees were able to elect to contribute
from 2% to 30% of annual eligible compensation 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 $90 and $85 in 2002 and 2001, respectively) were
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 $7,568 from the Omni
401(k) plan were merged into The Hartford Investment and Savings Plan. Omni
Insurance Group, Inc. is a subsidiary of The Hartford Financial Services Group,
Inc.
NOTE 10. SUBSEQUENT EVENTS
Effective January 1, 2003, Deutsche Bank was removed as Trustee of the Plan
Trust and State Street Bank and Trust Company was appointed as Trustee.
Effective January 1, 2003, the plan year changed from a fiscal year ending
December 30 to a calendar year ending December 31.
F-9
EIN# 06-0383750
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN SUPPLEMENTAL SCHEDULE
FORM 5500, SCHEDULE H, PART IV, LINE 4I - SCHEDULE OF INVESTMENT ASSETS HELD AT
DECEMBER 30, 2002
($ IN THOUSANDS)
I DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, RATE OF (E) CURRENT
(A) (B) IDENTITY OF PARTY INTEREST, COLLATERAL, PAR OR MATURITY VALUE (D) COST VALUE
------------------------------------------------------------------------------------------------------------------------------------
The Hartford Financial Services Group, Inc. Stock Fund
------------------------------------------------------
* The Hartford Financial The Hartford Financial Services Group, Inc. common stock
Services Group, Inc. (12,624,182 shares) $ 480,019 $ 574,906
* Deutsche Bank Trust Company DB Pyramid Directed Account Cash Fund - STIF 12,347 12,347
-------------
SUBTOTAL 587,253
-------------
Stock Fund
----------
* The Hartford Financial Hartford Mutual Funds, Inc. Stock Fund Cash Fund - Class 1A
Services Group, Inc. shares (94,564.455 shares) *** 3,344
-------------
SUBTOTAL 3,344
-------------
Clearing Account
----------------
* Deutsche Bank Trust Company BT Pyramid Directed Account *** 1,032
-------------
SUBTOTAL 1,032
-------------
Index Fund
----------
* Hartford Life Insurance
Company S&P 500 Index Portfolio Hartford - GA - 6226, S/A BI *** 161,259
-------------
SUBTOTAL 161,259
-------------
Stable Value Fund
-----------------
* Deutsche Bank Trust Company BT Pyramid Discretionary Account Cash Fund - STIF *** 11,474
Business Mens Assurance Group Annuity Contract #1412, 7.64%, 11/30/2004 *** 10,690
Canada Life Assurance
Company Group Annuity Contract P26092, 5.77%, 2/28/2005 *** 7,346
General Electric Capital
Assurance Company Group Annuity Contract #GS3614GECA, 5.92%, 6/01/2006 *** 5,391
Monumental Life Insurance
Company Group Annuity Contract #MDA00380TR, 4.64% 1/25/2015 *** 35,468
Monumental Life Insurance
Company Group Annuity Contract #ADA00212TR, 6.01% ** *** 69,144
o 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 is not required for member directed investments, and
therefore is not included.
F-10
EIN# 06-0383750
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN SUPPLEMENTAL SCHEDULE
FORM 5500, SCHEDULE H, PART IV, LINE 4I - SCHEDULE OF INVESTMENT ASSETS HELD AT
DECEMBER 30, 2002
($ IN THOUSANDS)
I DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, RATE (E) CURRENT
(A) (B) IDENTITY OF PARTY OF INTEREST, COLLATERAL, PAR OR MATURITY VALUE (D) COST VALUE
------------------------------------------------------------------------------------------------------------------------------------
Morgan Guaranty Trust Company
Group Annuity Contract #AITTH01, 5.99% ** $ *** $ 114,049
Principal Life Insurance 11,178
Company Group Annuity Contract #GA 4-36623, 5.78%, 01/21/2004 ***
Protective Life Insurance
Company Group Annuity Contract #GA 1629, 7.34%, 5/30/2003 *** 1,844
Security Benefit Life
Insurance Company Group Annuity Contract #G0105, 6.46%, 1/25/2006 *** 7,293
Transamerica Insurance
Company Group Annuity Contract #TDA76592TR, 6.00%, 1/31/2018 *** 86,304
Union Bank of Switzerland Group Annuity Contract #3024, 5.78% ** *** 99,127
-------------
SUBTOTAL 459,308
-------------
Advisers Fund
-------------
* The Hartford Financial Hartford Mutual Funds, Inc. Advisers Fund #BL416645786, Class
Services Group, Inc. 1A shares *** 49,076
-------------
SUBTOTAL 49,076
-------------
Bond Income Strategy Fund
-------------------------
* The Hartford Financial Hartford Mutual Funds, Inc. Bond Income Strategy Fund, Class
Services Group, Inc. 1A shares *** 34,697
-------------
SUBTOTAL 34,697
-------------
Money Market Fund
-----------------
* The Hartford Financial Hartford Mutual Funds, Inc. Money Market Fund, Class 1A shares
Services Group, Inc. *** 36,018
-------------
SUBTOTAL 36,018
-------------
Dividend and Growth Fund
------------------------
* The Hartford Financial Hartford Mutual Funds, Inc. Dividend and Growth Fund, Class 1A
Services Group, Inc. shares *** 26,732
-------------
SUBTOTAL 26,732
-------------
International Opportunities Fund
--------------------------------
* The Hartford Financial Hartford Mutual Funds, Inc. International Opportunities Fund,
Services Group, Inc. Class 1A shares *** 12,160
-------------
SUBTOTAL 12,160
------------------------------------------------------------------------------------------------------------------------------------
o 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 is not required for member directed investments, and
therefore is not included.
F-11
EIN# 06-0383750
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN SUPPLEMENTAL SCHEDULE
FORM 5500, SCHEDULE H, PART IV, LINE 4I - SCHEDULE OF INVESTMENT ASSETS HELD AT
DECEMBER 30, 2002
($ IN THOUSANDS)
I DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, RATE (E) CURRENT
(A) (B) IDENTITY OF PARTY OF 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. 1A shares $ *** $ 60,187
-------------
SUBTOTAL 60,187
-------------
Small Company Fund
------------------
* The Hartford Financial Hartford Mutual Funds, Inc. Small Company Fund, Class 1A
Services Group, Inc. shares *** 21,286
-------------
SUBTOTAL 21,286
-------------
MidCap Fund
-----------
* The Hartford Financial
Services Group, Inc. Hartford Mutual Funds, Inc. MidCap Fund, Class 1A shares *** 47,038
-------------
SUBTOTAL 47,038
-------------
High Yield Fund
---------------
* The Hartford Financial
Services Group, Inc. Hartford Mutual Funds, Inc. High Yield Fund, Class 1A shares *** 4,331
-------------
SUBTOTAL 4,331
-------------
Global Leaders Fund
-------------------
* The Hartford Financial Hartford Mutual Funds, Inc. Global Leaders Fund, Class 1A
Services Group, Inc. shares *** 8,109
-------------
SUBTOTAL 8,109
-------------
Global Health Fund
------------------
* The Hartford Financial Hartford Mutual Funds, Inc. Global Health Fund, Class 1A
Services Group, Inc. shares *** 5,428
-------------
SUBTOTAL 5,428
-------------
Global Technology Fund
----------------------
* The Hartford Financial Hartford Mutual Funds, Inc. Global Technology Fund, Class 1A
Services Group, Inc. shares *** 4,244
-------------
SUBTOTAL 4,244
-------------
Deutsche Bank Cash Fund-STIF
-----------------------------
* Deutsche Bank Trust Company DB Pyramid Directed Account Cash Fund-STIF *** 916
* Deutsche Bank Trust Company DB Pyramid Discretionary Account Cash Fund-STIF *** 539
-------------
SUBTOTAL 1,455
------------------------------------------------------------------------------------------------------------------------------------
o Indicates party-in-interest.
*** Cost information is not required for member directed investments and,
therefore is not included.
F-12
EIN# 06-0383750
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN SUPPLEMENTAL SCHEDULE
FORM 5500, SCHEDULE H, PART IV, LINE 4I - SCHEDULE OF INVESTMENT ASSETS HELD AT
DECEMBER 30, 2002
($ IN THOUSANDS)
I DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, RATE (E) CURRENT
(A) (B) IDENTITY OF PARTY OF 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 $ 35,468
-------------
SUBTOTAL 35,468
-------------
TOTAL $ 1,558,425
------------------------------------------------------------------------------------------------------------------------------------
o Indicates party-in-interest.
F-13
EIN# 06-0383750
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN SUPPLEMENTAL SCHEDULE
FORM 5500, SCHEDULE H, PART IV, LINE 4J - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 30, 2002
($ IN THOUSANDS)
I PURCHASE (E) (F)
(A) (B) PRICE (D) SELLING LEASE EXPENSE
IDENTITY OF PARTY DESCRIPTION OF ASSET PRICE RENTAL INCURRED
--------------------------------------------------------------------------------------------------------------------------
The Hartford Financial Services The Hartford Financial Services
Group, Inc. * Group, Inc. common stock $ - $141,215 $ - $ -
The Hartford Financial Services The Hartford Financial Services
Group, Inc. * Group, Inc. common stock $80,975 $- $ - $ -
--------------------------------------------------------------------------------------------------------------------------
o Indicates party-in-interest.
EIN# 06-0383750
PLAN# 100
THE HARTFORD INVESTMENT AND SAVINGS PLAN SUPPLEMENTAL SCHEDULE
FORM 5500, SCHEDULE H, PART IV, LINE 4J - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 30, 2002
($ IN THOUSANDS)
(H)
(G) CURRENT VALUE OF (I)
(A) (B) COST OF ASSETS ON TRANSACTION NET
IDENTITY OF PARTY DESCRIPTION OF ASSET ASSET DATE GAIN
-----------------------------------------------------------------------------------------------------------------------
The Hartford Financial Services The Hartford Financial Services
Group, Inc. * Group, Inc. common stock $86,503 $141,215 $54,712
The Hartford Financial Services The Hartford Financial Services
Group, Inc. * Group, Inc. common stock $80,975 $80,975 $-
-----------------------------------------------------------------------------------------------------------------------
o Indicates party-in-interest.
F-14
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 IN ITS BEHALF BY THE UNDERSIGNED
THEREUNTO DULY AUTHORIZED.
THE HARTFORD INVESTMENT AND SAVINGS PLAN
(NAME OF PLAN)
BY: /S/ FRANCIS A. DORION
--------------------------
(FRANCIS A. DORION, PLAN ADMINISTRATOR)
JUNE 30, 2003
F-15