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HARTFORD LIFE TO ASSUME $4 BILLION ANNUITY AND LIFE BUSINESS FROM FIDELITY BANKERS LIFE INSURANCE CO.

 HARTFORD LIFE TO ASSUME $4 BILLION ANNUITY AND LIFE BUSINESS
 FROM FIDELITY BANKERS LIFE INSURANCE CO.
 SIMSBURY, Conn., March 30 /PRNewswire/ -- Steven T. Foster, Commissioner of Insurance for the Commonwealth of Virginia, and Hartford Life Insurance Co., a subsidiary of ITT Hartford Insurance Group, have announced major elements of a plan for the rehabilitation of Fidelity Bankers Life Insurance Company.
 Under the plan, which Foster announced yesterday at the Spring meeting of the National Association of Insurance Commissioners, Hartford Life has agreed to assume and reinsure all of Fidelity Bankers' annuities and life, accident and sickness insurance policies. He noted that this plan contemplates immediate lifting of the current moratorium on cash value payments once the plan is implemented.
 The agreement is designed to preserve 100 percent of account values for annuities and contracts. It will become effective upon approval by the Virginia State Corporation Commission.
 Lon A. Smith, president and chief operating officer, Hartford Life, noted that Hartford Life's assumption of these contracts will offer Fidelity Bankers customers peace of mind since the agreement is designed to fully restore their account values, and to provide immediate access to their funds, competitive interest rates and uninterrupted policyholder service.
 "Fidelity Bankers' annuity and life insurance lines are an excellent strategic fit for Hartford Life's product portfolio and will provide an opportunity for growth, economies of scale and a fair rate of return," added Smith. As part of the agreement, Hartford Life will accept only cash and investment-grade assets from Fidelity Bankers for the assumed contracts. Consistent with ITT Hartford's investment practices, non-investment grade assets will not be transferred.
 Commissioner Foster was appointed deputy receiver of Fidelity Bankers last May 13 by the State Corporation Commission which was appointed its receiver on that date by the Circuit Court of the City of Richmond. Foster retained a team of experts and consultants to manage and rehabilitate the company. This team was led by the law firm of Rubenstein & Perry and included First Boston Corp., First Boston Asset Management Co., Coopers & Lybrand and Resource Managerial Services. Their rehabilitation efforts made this plan possible by:
 -- Reducing the amount of non-investment grade securities
 from more than 37 percent of net admitted assets on
 May 13, 1991 to less than 7 percent today.
 -- Reducing liabilities.
 -- Improving operating results.
 -- Realizing certain assets.
 Interested parties will be given an opportunity to comment on this plan at a confirmation hearing expected to be held within the next 90 days. At that hearing, competing rehabilitation plans can also be presented to the commission.
 Commissioner Foster expressed his particular pleasure at being able to offer Fidelity Bankers policyholders such excellent coverage with a company with the reputation enjoyed by Hartford Life, which is rated AAA by Standard & Poor's and Duff & Phelps.
 BACKGROUND
 Hartford Life/Fidelity Bankers Agreement
 Fidelity Bankers Life Insurance Co. was placed in Receivership in a May 13, 1991, order of the Circuit Court of the city of Richmond, which appointed the State Corporation Commission of the Commonwealth of Virginia its receiver for conservation and rehabilitation. On the same day, the commission appointed Steven T. Foster, the Commissioner of Insurance, as the company's Deputy Receiver and he in turn appointed Austin, Texas, lawyer Patrick Cantilo as special deputy receiver.
 Fidelity Bankers has approximately 184,000 policies in force with account values of approximately $4 billion, $3 billion of which is held by annuity contractholders. It has been licensed in 49 States, excluding New York.
 Hartford Life Insurance Co., an insurance subsidiary of ITT Corp., has more than $16 billion in assets, making it the 19th largest life insurer in the United States. With current surplus of nearly $600 million, Hartford Life has earned top ratings from major insurance rating agencies including A.M. Best, Standard & Poor's, Duff & Phelps and Moody's.
 SUMMARY OF FIDELITY BANKERS
 REHABILITATION PLAN
 Hartford Life Insurance Company will assume and reinsure all policies of Fidelity Bankers beginning on an Effective Date to be determined after a confirmation hearing expected to be held in May, 1992. Under this assumption and reinsurance agreement:
 1. Hartford Life will preserve 100 percent of the account value
 of the Fidelity Bankers contracts it assumes. Certain
 contract terms may be modified, as described below.
 2. Annuitized contracts, accident and health policies, term life
 insurance policies and whole life insurance policies, other
 than those described below, will not be modified.
 3. For annuity and single premium whole life contracts
 a. Crediting rates and surrender charges will be adjusted on
 the Effective Date depending on financial market
 conditions. Based on current market conditions, the
 initial crediting rate would be competitive with those
 offered by other established insurers.
 b. A "Market Value Adjustment" (MVA) will be applied to
 contracts surrendered before expiration of their interest
 rate guarantee period. This adjustment reflects the
 impact that interest rate fluctuations have on the market
 value of the underlying assets. Generally, as interest
 rates fall, the adjustment will result in a higher cash
 payment upon surrender. Conversely, the MVA will result
 in a lower payment in a rising interest rate environment.
 c. "Bailout" and other provisions permitting
 surrender-charge-free withdrawal will be eliminated. For
 annuity contracts only, interest earned during the
 preceding 12 months (after the effective date) may be
 withdrawn without surrender charge or market value
 adjustment.
 4. Universal Life and Interest Sensitive Whole Life contracts
 will be modified as follows:
 a. No first year front-end charges will apply, though new
 premiums will be subject to a 6 percent load.
 b. Interest rates changes, adjustments in cost-of-insurance
 charges and administrative fees will apply.
 c. Surrender charges will be increased by 2 percent during
 the first two years.
 5. Contract holders who elect not to permit Hartford Life to
 assume and reinsure their contracts may "opt out" of the
 rehabilitation plan. In that event, their Fidelity Bankers
 contracts will be canceled and they will receive a percentage
 of their account value, if any, in cash shortly after
 implementation of the plan. Currently it is estimated that
 such cash payment will be 85 percent of account values. It is
 possible that additional payments will be made to contract
 holders who opt out if and when additional funds become
 available under the plan.
 6. Fidelity Bankers will continue to provide certain
 administrative and other services to policyholders (including
 those whose contacts are assumed and reinsured by Hartford
 Life) for a period currently estimated to be at least one year
 after the effective date.
 7. Hartford Life will accept only cash and investment-grade
 assets from Fidelity Bankers for the assumed contracts.
 8. Other provisions of the rehabilitation plan are still in
 development and will be announced when completed.
 9. Assets remaining after satisfaction of liabilities to
 policyholders and priority creditors will be devoted to the
 satisfaction of claims of other creditors and equity holders.
 10. Detailed contract provisions, including those not described
 here, will be provided to contract holders upon the deputy
 receiver's application for approval of the plan by the
 Virginia State Corporation Commission.
 -0- 3/30/92
 /CONTACT: Joe Fazzino of ITT Hartford Life Insurance, 203-843- 8180 (office) or 203-489-0055 (home); or Patrick Cantilo, special deputy receiver, Fidelity Bankers, 804-323-5601 (office)/ CO: ITT Hartford Insurance Group; Hartford Life Insurance Company;
 Fidelity Bankers Life Insurance Company ST: Connecticut IN: SU:


EG -- NE0010 -- 2878 03/30/92 12:09 EST
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Date:Mar 30, 1992
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