TRAVELERS SEPARATE ACCOUNT QP FOR VARIABLE ANNUITIES, 485BPOS, 1998-04-22

TRAVELERS SEPARATE ACCOUNT QP FOR VARIABLE ANNUITIES
485BPOS, 1998-04-22

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<PAGE> 1
Registration Statement No. 333-00165
811-07487

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 3

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 3

THE TRAVELERS SEPARATE ACCOUNT QP FOR VARIABLE ANNUITIES
--------------------------------------------------------
(Exact name of Registrant)

THE TRAVELERS INSURANCE COMPANY
-------------------------------
(Name of Depositor)

ONE TOWER SQUARE, HARTFORD, CONNECTICUT 06183
----------------------------------------------
(Address of Depositor's Principal Executive Offices)

Depositor's Telephone Number, including area code: (860) 277-0111
--------------

ERNEST J. WRIGHT
Vice President and Secretary
The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183
----------------------------
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering:
---------------------------------

It is proposed that this filing will become effective (check appropriate box):

immediately upon filing pursuant to paragraph (b) of Rule 485
- ---------
X on May 1, 1998 pursuant to paragraph (b) of Rule 485
- ---------
60 days after filing pursuant to paragraph (a)(1) of Rule 485
- ---------
on pursuant to paragraph (a)(1) of Rule 485
- --------- -----------

If appropriate, check the following box:

this post-effective amendment designates a new effective date for a
- ------ previously filed post-effective amendment.

<PAGE> 2

THE TRAVELERS SEPARATE ACCOUNT QP FOR VARIABLE ANNUITIES

Cross-Reference Sheet

Form N-4

<TABLE>
<CAPTION>
ITEM
NO. CAPTION IN PROSPECTUS
- --- ---------------------
<S> <C> <C>
1. Cover Page Prospectus
2. Definitions Glossary of Special Terms
3. Synopsis Summary
4. Condensed Financial Information Condensed Financial Information
5. General Description of Registrant, The Company, The Separate
Depositor, and Portfolio Companies Account and the Funding Options
6. Deductions and Expenses Fee Table; Charges Under the Contracts;
Distribution of the Contracts
7. General Description of Variable The Contracts
Annuity Contracts
8. Annuity Period Payment of Benefits
9. Death Benefit Payment of Benefits
10. Purchases and Contract Value Operation of the Contract
11. Redemptions Sales Loads
12. Taxes Federal Tax Considerations
13. Legal Proceedings Legal Proceedings
14. Table of Contents of Statement Appendix B

CAPTION IN STATEMENT OF ADDITIONAL
INFORMATION
------------------------------------------
15. Cover Page Statement of Additional Information
16. Table of Contents Table of Contents
17. General Information and History The Insurance Company
18. Services Principal Underwriter; Distribution and
Management Agreement
19. Purchase of Securities Being Offered Valuation of Assets
20. Underwriters Principal Underwriter
21. Calculation of Performance Data Performance Information
22. Annuity Payments Not Applicable
23. Financial Statements Financial Statements
</TABLE>
<PAGE> 3

PART A

Information Required in a Prospectus
<PAGE> 4

TRAVELERS GOLD TRACK
VARIABLE ANNUITY CONTRACT PROFILE

MAY 1, 1998

THIS PROFILE IS A SUMMARY OF SOME OF THE MORE IMPORTANT POINTS THAT YOU SHOULD
KNOW AND CONSIDER BEFORE PURCHASING THE CONTRACT. THE CONTRACT IS MORE FULLY
DESCRIBED IN THE FULL PROSPECTUS WHICH IS ATTACHED TO THIS PROFILE. PLEASE READ
THE PROSPECTUS CAREFULLY. THE TERMS "WE," "US," "OUR" AND "THE COMPANY" REFER TO
TRAVELERS INSURANCE COMPANY. "YOU" AND "YOUR" REFER TO THE CONTRACT OWNER.

1. THE VARIABLE ANNUITY CONTRACT. The Contract offered by Travelers Insurance
Company is a variable annuity that is intended for retirement savings or other
long-term investment purposes. The Contract provides a death benefit as well as
guaranteed income options. You will be issued a certificate summarizing the
provisions of the group Contract. For convenience, we refer to Contracts and
certificates as "Contracts." Under a qualified Contract, you can make one or
more payments, as you choose, on a tax-deferred basis. Under a nonqualified
Contract, you can make one or more payments with after-tax dollars. You direct
your payment(s) to one or more of the variable funding options listed in Section
4 and/or to the Fixed Account. We guarantee money directed to the Fixed Account
as to principal and interest. The variable funding options are designed to
produce a higher rate of return than the Fixed Account; however, this is not
guaranteed. You may also lose money in the variable funding options.

The Contract, like all deferred variable annuity contracts has two phases: the
accumulation phase and the income phase. During the accumulation phase, under a
qualified Contract, your pre-tax contributions accumulate on a tax-deferred
basis and are taxed as income when you make a withdrawal, presumably when you
are in a lower tax bracket. During the accumulation phase, under a nonqualified
Contract, earnings on your after-tax contributions accumulate on a tax-deferred
basis and are taxed as income when you make a withdrawal. The income phase
occurs when you begin receiving payments from your Contract. The amount of money
you accumulate in your Contract determines the amount of income (annuity
payments) you receive during the income phase.

2. ANNUITY PAYMENTS (THE INCOME PHASE). You may choose to receive annuity
payments from the Fixed Account or the variable funding options. If you want to
receive payments from your annuity, you can choose one of the following annuity
options: Option 1 -- payments for your life (life annuity) assuming you are the
annuitant; Option 2 -- payments for your life (life annuity) for a certain
number of months as you select (such as 120, 180 or 240) with an added guarantee
that payments will continue should you die during that period; Option
3 -- payments for your life (life annuity) with a cash refund with the guarantee
that, upon your death, your beneficiary will receive the balance as a lump sum
payment; Option 4 -- payments under a Joint and Last Survivor Life Annuity in
which payments are made for your life and the life of another person (usually
your spouse). Option 4 can also be elected with payments continuing at a reduced
rate after the death of one payee.

Once you make an election of an annuity option and income payments begin, it
cannot be changed. During the income phase, you have the same investment choices
you had during the accumulation phase. If amounts are directed to the variable
funding options, the dollar amount of your payments may increase or decrease.
Once the annuity or income payments begin, the selection of funding options may
be changed only with the permission of the Company.

3. PURCHASE. The minimum purchase payment allowed is an average of $1,000
annually per individual certificate, or $10,000 annually per group contract.

<PAGE> 5

WHO MAY PURCHASE THIS CONTRACT?

The Contract is currently available for use in connection with qualified
retirement plans, which include contracts qualifying under Section 401, 403(b)
or 457 of the Internal Revenue Code. The Contract may also be issued for
nonqualified and unfunded deferred compensation plans which do not qualify for
special treatment under the Code.

4. INVESTMENT OPTIONS. You can direct your money into the Fixed Account and/or
to any or all of the following variable funding options. The funding options and
the Fixed Account are described in the applicable prospectuses for the funds.
Depending on market conditions, you may make or lose money in any of these
options.

Capital Appreciation Fund

Dreyfus Stock Index Fund

High Yield Bond Trust

Managed Assets Trust

AMERICAN ODYSSEY FUNDS, INC.

Core Equity Fund

Emerging Opportunities Fund

Global High-Yield Bond Fund

Intermediate-Term Bond Fund

International Equity Fund

Long-Term Bond Fund

DELAWARE GROUP PREMIUM FUND, INC.

REIT Series

DREYFUS VARIABLE INVESTMENT FUND

Capital Appreciation Portfolio
Small Cap Portfolio

FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND

Equity-Income Portfolio

Growth Portfolio

High Income Portfolio

FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II

Asset Manager Portfolio

SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.

Salomon Brothers Variable Investors Fund

TEMPLETON VARIABLE PRODUCTS SERIES FUND

Templeton Asset Allocation Fund (Class 1)

Templeton Bond Fund (Class 1)

Templeton Stock Fund (Class 1)

TRAVELERS SERIES FUND, INC.

Alliance Growth Portfolio

MFS Total Return Portfolio

Putnam Diversified Income Portfolio

Smith Barney High Income Portfolio

Smith Barney International Equity Portfolio

Smith Barney Large Capitalization Growth

Portfolio

Smith Barney Large Cap Value Portfolio

Smith Barney Money Market Portfolio

THE TRAVELERS SERIES TRUST

Convertible Bond Portfolio

Disciplined Mid Cap Stock Portfolio

Disciplined Small Cap Stock Portfolio

MFS Mid Cap Growth Portfolio

MFS Research Portfolio

Social Awareness Stock Portfolio

Strategic Stock Portfolio

Travelers Quality Bond Portfolio

U.S. Government Securities Portfolio

Utilities Portfolio

5. EXPENSES.

Because of the size of these Contracts, the possible involvement of Third Party
Administrators, and a competitive bidding process which may include negotiation,
many of the charges imposed in the Contract are likely to vary from one Contract
to the next. Maximum levels for sales-related expense, mortality and expense
risk charges and administrative expense charges are set forth in this summary.

SALES CHARGES. Purchase payments are not subject to front-end sales load.
However, the Company will charge either a surrender charge or a contingent
deferred sales charge, as negotiated. The maximum contingent deferred sales
charge is 5% of each purchase payment for a period of five years from the date
the purchase payment was made. The maximum surrender charge is 5% during
contract years one and two, 4% during contract years three and four, 3% during
contract years five and six, 2% during contract years seven and eight, and if
you withdraw all amounts under the contract, or if you begin receiving annuity
payments, the Company may be required by your state to deduct a premium tax of
0% - 5%.

ii
<PAGE> 6

ADMINISTRATIVE AND MORTALITY AND EXPENSE RISK FEES. The Contract has insurance
features and investment features, and there are costs related to each. For
allocated contracts only, the Company deducts a maximum semiannual
administrative charge of $15. A maximum sub-account administrative charge of
.10% annually will be charged in addition to or instead of the semiannual
administrative charge, depending upon the terms of your allocated Contract. The
maximum annual mortality and expense risk charge is 1.20% of the amounts you
direct to the funding options.

FUNDING OPTION EXPENSES. Each funding option charges for management and other
expenses. The charges range from 0.28% to 2.11% annually, of the average daily
net asset balance of the funding option, depending on the funding option.

The following table is designed to help you understand the Contract charges. The
column "Total Annual Insurance Charge" shows the total of the $15 semiannual
contract charge (which is represented as 0.274% below), the maximum insurance
charge of 1.20% and the 0.10% administrative charge. The investment charges for
each portfolio are also shown. Each of the American Odyssey Portfolios is listed
twice, once with the optional CHART asset allocation fee of 1.25% reflected, and
once without the optional asset allocation fee. The columns under the heading
"Examples" show you how much you would pay under the Contract for a one-year
period and for a 10-year period. The examples assume that you invested $1,000 in
a Contract that earns 5% annually and that you withdraw your money at the end of
year one and at the end of year 10. For year 1, the Total Annual Charges are
assessed as well as the maximum contingent deferred surrender charge and maximum
surrender charge. For year 10, the examples shows the aggregate of all the
annual charges assessed during that time, but no withdrawal charges are shown.
For these examples, the premium tax is assumed to be 0%. Please refer to the Fee
Table in the prospectus for more details.

<TABLE>
<CAPTION>
TOTAL 1 YEAR
TOTAL ANNUAL WITH 1 YEAR
ANNUAL FUNDING TOTAL DEFERRED WITH
INSURANCE OPTION ANNUAL SALES SURRENDER
PORTFOLIO NAME CHARGES EXPENSES CHARGES CHARGE CHARGE 10 YEAR
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------

<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Dreyfus Stock Index Fund........................ 1.57% 0.28% 1.85% $69 $70 $217
Capital Appreciation Fund....................... 1.57% 0.84% 2.41% 74 76 275
High Yield Bond Trust........................... 1.57% 0.84% 2.41% 74 76 275
Managed Assets Trust............................ 1.57% 0.63% 2.20% 72 74 254
AMERICAN ODYSSEY FUNDS, INC.:
Core Equity Fund............................ 1.57% 0.65% 2.22% 73 74 256
Emerging Opportunities Fund................. 1.57% 0.86% 2.43% 75 76 277
Global High-Yield Bond Fund................. 1.57% 0.68% 2.25% 73 74 259
Intermediate-Term Bond Fund................. 1.57% 0.63% 2.20% 72 74 254
International Equity Fund................... 1.57% 0.77% 2.34% 74 75 268
Long-Term Bond Fund......................... 1.57% 0.62% 2.19% 72 74 253
AMERICAN ODYSSEY FUNDS, INC.:*
Core Equity Fund............................ 2.82% 1.90% 4.72% 85 86 375
Emerging Opportunities Fund................. 2.82% 2.11% 4.93% 87 88 394
Global High-Yield Bond Fund................. 2.82% 1.93% 4.75% 85 86 378
Intermediate-Term Bond Fund................. 2.82% 1.88% 4.70% 85 86 373
International Equity Fund................... 2.82% 2.02% 4.84% 86 87 386
Long-Term Bond Fund......................... 2.82% 1.87% 4.69% 85 85 372
DELAWARE GROUP PREMIUM FUND, INC.
REIT Series................................. 1.57% 0.85% 2.42% 75 76 276
DREYFUS VARIABLE INVESTMENT FUND
Capital Appreciation Portfolio.............. 1.57% 0.80% 2.37% 74 75 271
Small Cap Portfolio......................... 1.57% 0.78% 2.35% 74 75 269
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND
Equity-Income Portfolio..................... 1.57% 0.58% 2.15% 72 73 249
Growth Portfolio............................ 1.57% 0.69% 2.26% 73 74 260
High Income Portfolio....................... 1.57% 0.71% 2.28% 73 75 262
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II
Asset Manager Portfolio..................... 1.57% 0.65% 2.22% 73 74 256
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
Salomon Brothers Variable Investors Fund.... 1.57% 1.00% 2.57% 76 77 291
TEMPLETON VARIABLE PRODUCTS SERIES FUND
Templeton Asset Allocation Fund............. 1.57% 0.78% 2.35% 74 75 269
Templeton Bond Fund......................... 1.57% 0.68% 2.25% 73 74 259
Templeton Stock Fund........................ 1.57% 0.88% 2.45% 75 76 279
</TABLE>

iii
<PAGE> 7

<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
TRAVELERS SERIES FUND, INC.
Alliance Growth Portfolio................... 1.57% 0.82% 2.39% 74 $76 $273
MFS Total Return Portfolio.................. 1.57% 0.86% 2.43% 75 76 277
Putnam Diversified Income Portfolio......... 1.57% 0.88% 2.45% 75 76 279
Smith Barney High Income Portfolio.......... 1.57% 0.70% 2.27% 73 74 261
Smith Barney International Equity
Portfolio................................. 1.57% 1.01% 2.58% 76 77 292
Smith Barney Large Capitalization Growth
Portfolio................................. 1.57% 1.00% 2.57% 76 77 291
Smith Barney Large Cap Value Portfolio...... 1.57% 0.69% 2.26% 73 74 260
Smith Barney Money Market Portfolio......... 1.57% 0.65% 2.22% 73 74 256
THE TRAVELERS SERIES TRUST
Convertible Bond Portfolio.................. 1.57% 0.80% 2.37% 74 75 271
Disciplined Mid Cap Stock Portfolio......... 1.57% 0.95% 2.52% 76 77 286
Disciplined Small Cap Stock Portfolio....... 1.57% 1.00% 2.57% 76 77 291
MFS Mid Cap Growth Portfolio................ 1.57% 1.00% 2.57% 76 77 291
MFS Research Portfolio...................... 1.57% 1.00% 2.57% 76 77 291
Social Awareness Stock Portfolio............ 1.57% 0.98% 2.55% 76 77 289
Strategic Stock Portfolio................... 1.57% 0.90% 2.47% 75 76 281
Travelers Quality Bond Portfolio............ 1.57% 0.75% 2.32% 74 75 266
U.S. Government Securities Portfolio........ 1.57% 0.58% 2.15% 72 73 249
Utilities Portfolio......................... 1.57% 1.06% 2.63% 77 78 297
</TABLE>

* Includes CHART asset allocation fee of 1.25%.

6. TAXES. The payments you make to the Contract during the accumulation phase
are made with before-tax dollars or after-tax dollars. You may be taxed on your
purchase payments and will be taxed on any earnings when you make a withdrawal
or begin receiving payments. If you are younger than 59 1/2 when you take money
out, you may be charged a 10% federal penalty tax on the amount withdrawn.

For owners of qualified Contracts, if you reach a certain age, you may be
required by federal tax laws to begin receiving payments from your annuity or
risk paying a penalty tax. In those cases, the Company can calculate and pay you
the minimum distribution amount required by federal law.

7. ACCESS TO YOUR MONEY. You can take withdrawals at any time during the
accumulation phase. A withdrawal charge (a deferred sales charge or surrender
charge) may apply. The amount of the charge depends on a number of factors,
including the length of time since the purchase payment was made (for deferred
sales charges) or the length of time the Contract has been in force (for
surrender charges). After the first contract year, you may withdraw up to 10% of
the cash value (as of the end of the previous contract year) without a deferred
sales charge. You may also have to pay income taxes, a federal tax penalty or
premium taxes on any money you take out.

You may choose to receive monthly, quarterly, semiannual or annual
("systematic") withdrawals of at least $50 if your Contract's cash value is
$5,000 or more. All applicable withdrawal charges and premium taxes will be
deducted.

8. PERFORMANCE. The value of the Contract will vary depending upon the
investment performance of the funding options you choose. The following chart
shows total returns for each funding option for the time periods shown. The rate
of return reflects the maximum insurance charges, administrative charge,
investment charges and all other expenses of the funding option. The rate of
return does not reflect any withdrawal charge, which, if applied, would reduce
such performance. Past performance is not a guarantee of future results.
Performance information that predates the separate account is considered
"nonstandard" by the SEC. Such nonstandard performance information is shown in
the Statement of Additional Information that you may request free of charge.

iv
<PAGE> 8

LAST TEN CALENDAR YEARS (OR FULL YEARS SINCE INCEPTION):

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
PORTFOLIO NAME 1997 INCEPTION DATE
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Dreyfus Stock Index Fund.................................... 31.04% 10/1/96
Capital Appreciation Fund................................... 24.29% 10/1/96
High Yield Bond Trust....................................... 14.78% 10/1/96
Managed Assets Trust........................................ 19.45% 10/1/96
AMERICAN ODYSSEY FUNDS(1)
International Equity Fund............................... 3.41% 10/1/96
Emerging Opportunities Fund............................. 5.38% 10/1/96
Core Equity Fund........................................ 29.93% 10/1/96
Long-Term Bond Fund..................................... 10.32% 10/1/96
Intermediate-Term Bond Fund............................. 5.85% 10/1/96
Global High-Yield Bond Fund(3).......................... 4.47% 10/1/96
AMERICAN ODYSSEY FUNDS(2)
International Equity Fund............................... 2.11% 10/1/96
Emerging Opportunities Fund............................. 4.06% 10/1/96
Core Equity Fund........................................ 28.37% 10/1/96
Long-Term Bond Fund..................................... 8.98% 10/1/96
Intermediate-Term Bond Fund............................. 4.54% 10/1/96
Global High-Yield Bond Fund(3).......................... 3.18% 10/1/96
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND
Equity-Income Portfolio................................. 26.22% 10/1/96
Growth Portfolio........................................ 21.64% 10/1/96
High Income Portfolio................................... 15.87% 10/1/96
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II
Asset Manager Portfolio................................. 18.84% 10/1/96
TEMPLETON VARIABLE PRODUCTS SERIES FUND
Templeton Asset Allocation Fund......................... 13.76% 10/1/96
Templeton Bond Fund..................................... 0.91% 10/1/96
Templeton Stock Fund.................................... 10.16% 10/1/96
TRAVELERS SERIES FUND, INC.
Alliance Growth Portfolio............................... 27.09% 10/1/96
MFS Total Return Portfolio.............................. 19.36% 10/1/96
Putnam Diversified Income Portfolio..................... 6.03% 10/1/96
Smith Barney High Income Portfolio...................... 12.13% 10/1/96
Smith Barney International Equity Portfolio............. 1.12% 10/1/96
Smith Barney Large Cap Value Portfolio (formerly Smith
Barney Income and Growth Portfolio).................. 24.74% 10/1/96
Smith Barney Money Market Portfolio..................... 3.46% 10/1/96
THE TRAVELERS SERIES TRUST
Social Awareness Stock Portfolio........................ 25.39% 10/1/96
U.S. Government Securities Portfolio.................... 10.91% 10/1/96
Utilities Portfolio..................................... 23.41% 10/1/96
</TABLE>

(1) Reflects expenses that would be incurred for those Contract Owners who DO
NOT participate in the CHART Asset Allocation program.

(2) Reflects expenses that would be incurred for those Contract Owners who DO
participate in the CHART Asset Allocation program.

(3) Formerly American Odyssey Short-Term Bond Fund. The name, investment
objective and investment subadviser of this fund were changed pursuant to a
shareholder vote effective May 1, 1998.

Those funding options not illustrated above do not yet have one full year of
performance history.

9. DEATH BENEFIT.

DEATH PRIOR TO MATURITY DATE: The death benefit applies upon the first death of
the owner, joint owner or annuitant. Assuming you are the Annuitant, if you die
before you move to the income phase, or before you reach age 75, whichever
occurs first, the person you have chosen as your beneficiary will receive a
death benefit.

For allocated contracts, the death benefit equals the greatest of: (1) the cash
value of the participant's individual account or (2) the total purchase payments
made under the Contract less any applicable premium tax, minus outstanding loan
amounts and prior surrenders not previously deducted as of the date we receive
due proof of death. Assuming you are the annuitant, if you die on or after age
75, and before the annuity commencement date, the death benefit payable will

v
<PAGE> 9

be the cash value of the participant's individual account, less any applicable
premium tax or outstanding loans.

DEATH AFTER MATURITY DATE. If the annuitant dies after the maturity date, we
will pay the beneficiary a death benefit consisting of any benefit remaining
under the annuity option in effect at the time of death.

10. OTHER INFORMATION

RIGHT TO RETURN

If you cancel the Contract or Certificate, as applicable, within ten days after
you receive it, you receive a full refund of the cash value (including charges).
Where state law requires a longer right to return (free look), or the return of
the purchase payments, we will comply. You bear the investment risk during the
free look period; therefore, the cash value returned to you may be greater or
less than your purchase payment. The cash value will be determined as of the
close of business on the day we receive a written request for a refund.

You can transfer between the funding options as frequently as you wish without
any current tax implications. Currently there is no charge for transfers, nor a
limit to the number of transfers allowed. We may, in the future, charge a fee
for any transfer request, or limit the number of transfers allowed. At the
minimum, we would always allow at least one transfer every six months. There may
be restrictions on transfers between certain funding options.

11. ADDITIONAL FEATURES

This Contract has other features you may be interested in. These include:

DOLLAR COST AVERAGING. This is a program that allows you to invest a fixed
amount of money in Funding Options each month, theoretically giving you a lower
average cost per unit over time as compared to a single one-time purchase.
Dollar cost averaging requires regular investments regardless of fluctuating
price levels, and does not guarantee a profit nor prevent loss in a declining
market. Potential investors should consider their financial ability to continue
purchases through periods of low price levels.

ASSET ALLOCATION ADVICE. If allowed, you may elect to enter into a separate
advisory agreement with Copeland Financial Services, Inc. ("Copeland"), an
affiliate of the Company, for the purpose of receiving asset allocation advice
under Copeland's CHART Program. The CHART Program allocates all purchase
payments among the American Odyssey Funds. The CHART Program and applicable fees
are fully disclosed in a separate Disclosure Statement.

12. INQUIRIES. If you need more information, please contact us at (800)
842-9368 or:

Travelers Insurance Company
Annuity Services
One Tower Square

Hartford, CT 06183

vi
<PAGE> 10

THE TRAVELERS INSURANCE COMPANY

THE TRAVELERS SEPARATE ACCOUNT QP FOR VARIABLE ANNUITIES

The group variable annuity contracts (the "Contracts") described in this
prospectus are designed to fund plans ("Plans") established under certain
sections of the Internal Revenue Code of 1986 (the "Code"). The Contract may
also be issued for nonqualified and unfunded deferred compensation plans which
do not qualify for special tax treatment under the Code.

The Contracts are designed for use in conjunction with qualified pension and
profit-sharing plans, tax deferred annuity plans (for public school teachers and
employees of certain other tax exempt and qualifying employers), and deferred
compensation plans for state and local governments. These Plans also allow for
Third Party Administrator involvement. Amounts held under the Plans may be
entitled to tax-deferred treatment under certain sections of the Code.

The funding options available under the Contracts are listed below. They may not
all be available under an employer's plan or in all states. This prospectus is
not valid without the current prospectuses for these funding options. A Fixed
Account Option is also available and is described in a separate prospectus.
Unless specified otherwise, this prospectus refers to the funding options.

<TABLE>
<S> <C>
Capital Appreciation Fund TEMPLETON VARIABLE PRODUCTS SERIES FUND
Dreyfus Stock Index Fund Templeton Asset Allocation Fund (Class 1)
High Yield Bond Trust Templeton Bond Fund (Class 1)
Managed Assets Trust Templeton Stock Fund (Class 1)
AMERICAN ODYSSEY FUNDS, INC. TRAVELERS SERIES FUND, INC.
Core Equity Fund Alliance Growth Portfolio
Emerging Opportunities Fund MFS Total Return Portfolio
International Equity Fund Putnam Diversified Income Portfolio
Global High-Yield Bond Fund Smith Barney High Income Portfolio
Intermediate-Term Bond Fund Smith Barney International Equity Portfolio
Long-Term Bond Fund Smith Barney Large Capitalization Growth Portfolio
DELAWARE GROUP PREMIUM FUND, INC. Smith Barney Large Cap Value Portfolio
REIT Series Smith Barney Money Market Portfolio
DREYFUS VARIABLE INVESTMENT FUND THE TRAVELERS SERIES TRUST
Capital Appreciation Portfolio Convertible Bond Portfolio
Small Cap Portfolio Disciplined Mid Cap Stock Portfolio
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND Disciplined Small Cap Stock Portfolio
Equity-Income Portfolio MFS Mid Cap Growth Portfolio
Growth Portfolio MFS Research Portfolio
High Income Portfolio Social Awareness Stock Portfolio
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II Strategic Stock Portfolio
Asset Manager Portfolio Travelers Quality Bond Portfolio
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC. U.S. Government Securities Portfolio
Salomon Brothers Variable Investors Fund Utilities Portfolio
</TABLE>

This prospectus sets forth the information that you should know before
investing. Please read it and retain it for future reference. Additional
information about the Separate Account has been filed with the Securities and
Exchange Commission and is available without charge upon request. To obtain the
Statement of Additional Information ("SAI") send a written request to The
Travelers Insurance Company, Attn: Annuity Marketing, One Tower Square,
Hartford, CT 06183, call 1-800-842-9368, or access the SEC's website
(http://www.sec.gov). The Table of Contents for the SAI dated May 1, 1998,
appears in Appendix B. The SAI is incorporated by reference to this prospectus.
For more information about the Contract, contact your registered representative,
or write to us at the above address.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUSES FOR
THE FUNDING OPTIONS. THE PROSPECTUSES FOR THE SEPARATE ACCOUNT AND THE FUNDING
OPTIONS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.

VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR
GUARANTEED BY ANY BANK, NOR ARE THEY FEDERALLY INSURED OR OTHERWISE PROTECTED BY
THE FDIC, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY; THEY ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL INVESTMENT.

PROSPECTUS DATED: MAY 1, 1998

<PAGE> 11

TABLE OF CONTENTS

<TABLE>
<S> <C>
INDEX OF SPECIAL TERMS..................... 2
FEE TABLE.................................. 3
CONDENSED FINANCIAL INFORMATION............ 8
THE CONTRACTS.............................. 8
General.................................. 8
Allocated Contracts...................... 8
Unallocated Contracts.................... 8
Application of Purchase Payments......... 9
Accumulation Units....................... 9
Transfers................................ 9
The Funding Options...................... 9
CHARGES UNDER THE CONTRACT................. 13
Sales Charges............................ 13
Free Withdrawal Allowance.............. 14
Mortality and Expense Risk Charge........ 14
Funding Option Charges................... 14
Administrative Charges................... 14
Semiannual Policy Fee.................. 14
Administrative Expense................. 14
Premium Tax Deductions................... 15
TPA Administrative Charges............... 15
PAYMENT OF BENEFITS........................ 15
Death Benefit Proceeds Prior to Maturity
Date................................... 15
Death Proceeds After the Maturity Date... 16
Election of Settlement Options........... 16
Minimum Amounts.......................... 17
Misstatement............................. 17
Retired Life Certificate................. 17
Allocation of Cash Surrender Value During
the Annuity Period..................... 17
Annuity Options.......................... 17
Variable Annuity......................... 18
Amount of First Payment................ 18
Annuity Unit Value..................... 18
Initial Payment and Number of Annuity
Units................................ 18
Amount of Subsequent Payments.......... 18
Fixed Annuity............................ 19
THE SEPARATE ACCOUNT....................... 19
Performance Information.................. 19
Standardized Method...................... 19
Nonstandardized Method................... 20
General.................................. 20
MISCELLANEOUS CONTRACT PROVISIONS.......... 20
Right to Return.......................... 20
Contract and Participant's Individual
Account Termination.................... 20
Dollar Cost Averaging (Automated
Transfers)............................. 21
Asset Allocation Advice.................. 21
Contract Exchanges....................... 22
Postponement of Payment (Emergency
Procedure)............................. 22
Account Value............................ 22
FEDERAL TAX CONSIDERATIONS................. 22
General Taxation of Annuities............ 22
Types of Contracts: Qualified or
Nonqualified........................... 23
Investor Control......................... 23
Mandatory Distributions for Qualified
Plans.................................. 23
Nonqualified Annuity Contracts........... 23
Qualified Annuity Contracts.............. 24
Penalty Tax for Premature
Distributions.......................... 24
Diversification Requirements............. 24
OTHER INFORMATION.......................... 25
The Insurance Company.................... 25
Year 2000 Compliance..................... 25
Distribution of Variable Annuity
Contracts.............................. 25
Conformity with State and Federal Laws... 26
Voting Rights............................ 26
Contract Modification.................... 26
Legal Proceedings........................ 26
APPENDIX A: CONDENSED FINANCIAL
INFORMATION.............................. A-1
APPENDIX B: CONTENTS OF THE STATEMENT OF
ADDITIONAL INFORMATION................... B-1
</TABLE>

INDEX OF SPECIAL TERMS

The following terms are italicized throughout the prospectus. Refer to the page
listed for an explanation of each term.

<TABLE>
<S> <C>
Accumulation Unit.......................... 9
Annuitant.................................. 8
Annuity Payments........................... 8
Annuity Unit............................... 9
Cash Value................................. 8
Contract Date.............................. 8
Contract Owner (You, Your)................. 8
Contract Value............................. 8
Contract Year.............................. 8
Funding Option(s).......................... 9
Income Payments............................ 8
Individual Account......................... 8
Maturity Date.............................. 8
Participant................................ 8
Purchase Payment........................... 8
Written Request............................ 8
</TABLE>

2
<PAGE> 12

SEPARATE ACCOUNT QP

FEE TABLE
- --------------------------------------------------------------------------------

MAXIMUM CONTRACT OWNER TRANSACTION CHARGE

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
YEARS SINCE
PURCHASE PAYMENT
CONTINGENT DEFERRED SALES CHARGE MADE PERCENTAGE
- -------------------------------------------------------------------------------------
<S> <C> <C>
As a percentage of purchase payments 0-5 5%
6+ 0%
OR
</TABLE>

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
SURRENDER CHARGE CONTRACT YEAR PERCENTAGE
- -------------------------------------------------------------------------------------
<S> <C> <C>
As a percentage of amount surrendered 1-2 5%
3-4 4%
5-6 3%
7-8 2%
9+ 0%
</TABLE>

MAXIMUM CONTRACT ADMINISTRATIVE CHARGE

<TABLE>
<S> <C> <C>
Semiannual Contract Administrative Charge (allocated
contracts only) $ 15
AND/OR
Funding Option Administrative Charge .10%
(As a percentage of amounts allocated to the variable
funding options under allocated contracts)
</TABLE>

MAXIMUM SEPARATE ACCOUNT ANNUAL EXPENSES

<TABLE>
<S> <C> <C>
Mortality and Expense Risk Fees 1.20%
</TABLE>

(As a percentage of average daily net assets of the Separate Account)

3
<PAGE> 13

FUNDING OPTION EXPENSES

(as a percentage of average daily net assets of the funding option as of
December 31, 1997, unless otherwise noted.)

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
MANAGEMENT FEE OTHER EXPENSES TOTAL
(AFTER EXPENSE (AFTER EXPENSE UNDERLYING
UNDERLYING FUNDS: REIMBURSEMENT) REIMBURSEMENT) FUND EXPENSES
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dreyfus Stock Index Fund................................ 0.25% 0.03% 0.28%
Capital Appreciation Fund............................... 0.75% 0.09% 0.84%
High Yield Bond Trust................................... 0.50% 0.34% 0.84%
Managed Assets Trust.................................... 0.50% 0.13% 0.63%
AMERICAN ODYSSEY FUNDS, INC.
Core Equity Fund.................................... 0.57% 0.08%(1) 0.65%
Emerging Opportunities Fund......................... 0.60% 0.26%(1) 0.86%
Global High-Yield Bond Fund......................... 0.43% 0.25%(2) 0.68%
Intermediate-Term Bond Fund......................... 0.50% 0.13%(1) 0.63%
International Equity Fund........................... 0.65% 0.12%(1) 0.77%
Long-Term Bond Fund................................. 0.50% 0.12%(1) 0.62%
AMERICAN ODYSSEY FUNDS, INC.*
Core Equity Fund.................................... 0.57% 1.33%(1) 1.90%
Emerging Opportunities Fund......................... 0.60% 1.51%(1) 2.11%
Global High-Yield Bond Fund......................... 0.43% 1.50%(2) 1.93%
Intermediate-Term Bond Fund......................... 0.50% 1.38%(1) 1.88%
International Equity Fund........................... 0.65% 1.37%(1) 2.02%
Long-Term Bond Fund................................. 0.50% 1.37%(1) 1.87%
DELAWARE GROUP PREMIUM FUND, INC.
REIT Series......................................... 0.75% 0.10%(3) 0.85%
DREYFUS VARIABLE INVESTMENT FUND
Capital Appreciation Portfolio...................... 0.75% 0.05% 0.80%
Small Cap Portfolio................................. 0.75% 0.03% 0.78%
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND
Equity-Income Portfolio............................. 0.50% 0.08%(4) 0.58%
Growth Portfolio.................................... 0.60% 0.09%(4) 0.69%
High Income Portfolio............................... 0.59% 0.12%(4) 0.71%
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II
Asset Manager Portfolio............................. 0.55% 0.10%(4) 0.65%
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
Salomon Brothers Variable Investors Fund............ 0.70% 0.30%(5) 1.00%
TEMPLETON VARIABLE PRODUCTS SERIES FUND
Templeton Asset Allocation Fund..................... 0.60% 0.18%(6) 0.78%
Templeton Bond Fund................................. 0.50% 0.18% 0.68%
Templeton Stock Fund................................ 0.69% 0.19%(6) 0.88%
TRAVELERS SERIES FUND, INC.
Alliance Growth Portfolio........................... 0.80% 0.02%(7) 0.82%
MFS Total Return Portfolio.......................... 0.80% 0.06%(7) 0.86%
Putnam Diversified Income Portfolio................. 0.75% 0.13%(7) 0.88%
Smith Barney High Income Portfolio.................. 0.60% 0.10%(7) 0.70%
Smith Barney International Equity Portfolio......... 0.90% 0.11%(7) 1.01%
Smith Barney Large Capitalization Growth
Portfolio......................................... 0.75% 0.25%(8) 1.00%
Smith Barney Large Cap Value Portfolio.............. 0.65% 0.04%(7) 0.69%
Smith Barney Money Market Portfolio................. 0.60% 0.05%(9) 0.65%
THE TRAVELERS SERIES TRUST
Convertible Bond Portfolio.......................... 0.60% 0.20%(10) 0.80%
Disciplined Mid Cap Stock Portfolio................. 0.70% 0.25%(11) 0.95%
Disciplined Small Cap Stock Portfolio............... 0.80% 0.20%(10) 1.00%
MFS Mid Cap Growth Portfolio........................ 0.80% 0.20%(10) 1.00%
MFS Research Portfolio.............................. 0.80% 0.20%(10) 1.00%
Social Awareness Stock Portfolio.................... 0.65% 0.33% 0.98%
Strategic Stock Portfolio........................... 0.60% 0.30%(10) 0.90%
Travelers Quality Bond Portfolio.................... 0.32% 0.43%(11) 0.75%
U.S. Government Securities Portfolio................ 0.32% 0.26% 0.58%
Utilities Portfolio................................. 0.65% 0.41% 1.06%
</TABLE>

* Includes CHART asset allocation fee of 1.25%.

4
<PAGE> 14

NOTES:

The purpose of this Fee Table is to assist Contract Owners in understanding the
various maximum costs and expenses that Contract Owners or Participants will
bear, directly or indirectly, under the Contract. See "Charges and Deductions"
in this prospectus for additional information. Expenses shown do not include
premium taxes, which may be applicable. "Other Expenses" include operating costs
of the fund. These expenses are reflected in each funding option's net asset
value and are not deducted from the account value under the contract.

(1) These fees reflect an expense reimbursement arrangement with the Funds'
investment adviser. Without reimbursement, Total Underlying Fund Expenses
would have been 0.79% for the INTERNATIONAL EQUITY FUND and 0.67% for the
CORE EQUITY FUND. The figures After Expense Reimbursement may be greater
than the figures Before Expense Reimbursement because of repayments by the
Fund to the Manager once the Fund is operating below the expense
limitation.

(2) The Management Fees and Other Expenses for the GLOBAL HIGH-YIELD BOND FUND
are estimates and are not based on actual 1997 Fund expenses. Prior to May
1, 1998, the Global High-Yield Bond Fund was named the "Short-Term Bond
Fund" and had a substantially different investment objective and investment
program. Information about the Short-Term Bond Fund is unlikely to be
helpful to investors in the Global High-Yield Bond Fund.

(3) The adviser for the DELAWARE REIT SERIES has agreed to voluntarily waive
its fee and pay the expenses of the Series to the extent that the Series'
annual operating expenses, exclusive of taxes, interest, brokerage
commissions and extraordinary expenses, do not exceed 0.85% of its average
daily net assets through June 30, 1998.

(4) A portion of the brokerage commissions that certain funds pay was used to
reduce funds' expenses. In addition, certain funds have entered into
arrangements with their custodian whereby credits realized, as a result of
uninvested cash balances were used to reduce custodian expenses. Without
these reductions, the Total underlying Fund Expenses presented in this
table would have been 0.64% for ASSET MANAGER PORTFOLIO, 0.57% for EQUITY
INCOME PORTFOLIO, 0.67% for GROWTH PORTFOLIO, and 0.71% for HIGH INCOME
PORTFOLIO.

(5) The amounts set forth for Other Expenses are based on estimates for the
current fiscal year and will include fees for shareholder services,
administrative fees, custodial fees, legal and accounting fees, printing
costs and registration fees. These expenses reflect the voluntary agreement
by the Fund's adviser to impose an expense cap of 1.00% for the fiscal year
ending December 31, 1998 on the total operating expenses of the Fund
(exclusive of taxes, interest and extraordinary expenses such as litigation
and indemnification expenses). Absent such agreement, the ratio of other
expenses and total operating expenses to the average daily net assets would
be 1.91% and 2.61%, respectively, for the SALOMON BROTHERS VARIABLE
INVESTORS FUND.

(6) Management Fees and Total Fund Operating Expenses have been restated to
reflect the management fee schedule approved by shareholders and effective
May 1, 1997. Actual Management Fees and Total Expenses during 1997 were
lower.

(7) Other expenses are as of October 31, 1997 (the Fund's fiscal year end).
There were no fees waived or expenses reimbursed for these funds in 1997.

(8) Other Expenses are based on estimates for the current fiscal year ending
October 31, 1998. Additionally, these fees reflect a voluntary expense
limitation of 1.00% of the Portfolio's average net assets.

(9) Other expenses are as of October 31, 1997 and take into account the current
expense limitations agreed to by the Portfolios' investment manager (the
"Manager"). The Manager waived all of its fees for the period and
reimbursed the Portfolios for their expenses. Without such arrangements,
the Total Expenses for the SMITH BARNEY MONEY MARKET PORTFOLIO would have
been 0.67%.

(10) Other Expenses are based on estimates for the current fiscal year and will
include fees for shareholder services, administrative fees, custodial fees
, legal and accounting fees, printing costs and registration fees.
Additionally, these fees reflect a voluntary expense reimbursement
arrangement by Travelers to reimburse the Portfolios for the amount by
which their aggregate total operating expenses exceed 1.00% for the
DISCIPLINED SMALL CAP STOCK PORTFOLIO, MFS MID CAP GROWTH PORTFOLIO, MFS
RESEARCH PORTFOLIO; 0.80% for the CONVERTIBLE BOND PORTFOLIO; and 0.90% for
the STRATEGIC STOCK PORTFOLIO. These expenses have been illustrated at a
limit which the Portfolios' adviser believes to be in line with the actual
projected expenses of the Portfolios.

(11) Other Expenses reflect the current expense reimbursement arrangement with
Travelers where Travelers has agreed to reimburse the Portfolios for the
amount by which their aggregate expenses (including management fees, but
excluding brokerage commissions, interest charges and taxes) exceeds 0.95%
(0.75% for the Quality Bond Portfolio). Without such arrangements, the
Total Funding Option Expenses would have been 1.82% for DISCIPLINED MID CAP
STOCK PORTFOLIO, and 1.13% for TRAVELERS QUALITY BOND PORTFOLIO.

5
<PAGE> 15

EXAMPLE WITH DEFERRED SALES CHARGES (PERCENTAGE OF PURCHASE PAYMENT)*

Assuming a 5% annual return on assets, a $1,000 investment would be subject to
the following expenses:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
IF CONTRACT IS NOT SURRENDERED OR
IF CONTRACT IS SURRENDERED AT THE ANNUITIZED AT END OF PERIOD
END OF PERIOD SHOWN: SHOWN:
------------------------------------- -------------------------------------
UNDERLYING FUNDING OPTIONS: 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Dreyfus Stock Index Fund......................... $69 $108 $150 $217 $19 $58 $100 $217
Capital Appreciation Fund........................ 74 125 179 275 24 75 129 275
High Yield Bond Trust............................ 74 125 179 275 24 75 129 275
Managed Assets Trust............................. 72 119 168 254 22 69 118 254
AMERICAN ODYSSEY FUNDS, INC.(1):
Core Equity Fund.............................. 73 120 169 256 23 70 119 256
Emerging Opportunities Fund................... 75 126 180 277 25 76 130 277
Global High-Yield Bond Fund................... 73 120 171 259 23 70 121 259
Intermediate-Term Bond Fund................... 72 119 168 254 22 69 118 254
International Equity Fund..................... 74 123 175 268 24 73 125 268
Long-Term Bond Fund........................... 72 119 168 253 22 69 118 253
AMERICAN ODYSSEY FUNDS, INC.(2):
Core Equity Fund.............................. 85 157 230 375 35 107 180 375
Emerging Opportunities Fund................... 87 163 240 394 37 113 190 394
Global High-Yield Bond Fund................... 85 158 232 378 35 108 182 378
Intermediate-Term Bond Fund................... 85 156 230 373 35 106 180 373
International Equity Fund..................... 86 160 236 386 36 110 186 386
Long-Term Bond Fund........................... 85 156 229 372 35 106 179 372
DELAWARE GROUP PREMIUM FUND, INC.
REIT Series................................... 75 126 179 276 25 76 129 276
DREYFUS VARIABLE INVESTMENT FUND
Capital Appreciation Portfolio................ 74 124 177 271 24 74 127 271
Small Cap Portfolio........................... 74 123 176 269 24 73 126 269
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND
Equity-Income Portfolio....................... 72 117 166 249 22 67 116 249
Growth Portfolio.............................. 73 121 171 260 23 71 121 260
High Income Portfolio......................... 73 121 172 262 23 71 122 262
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II
Asset Manager Portfolio....................... 73 120 169 256 23 70 119 256
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
Salomon Brothers Variable Investors Fund...... 76 130 187 291 26 80 137 291
TEMPLETON VARIABLE PRODUCTS SERIES FUND
Templeton Asset Allocation Fund............... 74 123 176 269 24 73 126 269
Templeton Bond Fund........................... 73 120 171 259 23 70 121 259
Templeton Stock Fund.......................... 75 126 181 279 25 76 131 279
TRAVELERS SERIES FUND, INC.
Alliance Growth Portfolio..................... 74 125 178 273 24 75 128 273
MFS Total Return Portfolio.................... 75 126 180 277 25 76 130 277
Putnam Diversified Income Portfolio........... 75 126 181 279 25 76 131 279
Smith Barney High Income Portfolio............ 73 121 172 261 23 71 122 261
Smith Barney International Equity Portfolio... 76 130 187 292 26 80 137 292
Smith Barney Large Capitalization Growth
Portfolio................................... 76 130 187 291 26 80 137 291
Smith Barney Large Cap Value Portfolio........ 73 121 171 260 23 71 121 260
Smith Barney Money Market Portfolio........... 73 120 169 256 23 70 119 256
THE TRAVELERS SERIES TRUST
Convertible Bond Portfolio.................... 74 124 177 271 24 74 127 271
Disciplined Mid Cap Stock Portfolio........... 76 129 184 286 26 79 134 286
Disciplined Small Cap Stock Portfolio......... 76 130 187 291 26 80 137 291
MFS Mid Cap Growth Portfolio.................. 76 130 187 291 26 80 137 291
MFS Research Portfolio........................ 76 130 187 291 26 80 137 291
Social Awareness Stock Portfolio.............. 76 129 186 289 26 79 136 289
Strategic Stock Portfolio..................... 75 127 182 281 25 77 132 281
Travelers Quality Bond Portfolio.............. 74 123 174 266 24 73 124 266
U.S. Government Securities Portfolio.......... 72 118 166 249 22 68 116 249
Utilities Portfolio........................... 77 132 190 297 27 82 140 297
</TABLE>

* THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THE
EXAMPLE REFLECTS THE $15 SEMIANNUAL CONTRACT FEE AS AN ANNUAL CHARGE OF
0.274% OF ASSETS.

(1) Reflects expenses that would be incurred for those Contract Owners who DO
NOT participate in the CHART Asset Allocation program.

(2) Reflects expenses that would be incurred for those Contract Owners who DO
participate in the CHART Asset Allocation program.

6
<PAGE> 16

EXAMPLE WITH SURRENDER CHARGES (PERCENTAGE OF AMOUNT SURRENDERED)*

Assuming a 5% annual return on assets, a $1,000 investment would be subject to
the following expenses:

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
IF CONTRACT IS SURRENDERED AT THE IF CONTRACT IS NOT SURRENDERED OR
END OF PERIOD SHOWN: ANNUITIZED AT END OF PERIOD SHOWN:
------------------------------------- -------------------------------------
UNDERLYING FUNDING OPTIONS: 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Dreyfus Stock Index Fund................ $70 $102 $135 $217 $19 $58 $100 $217
Capital Appreciation Fund............... 76 118 163 275 24 75 129 275
High Yield Bond Trust................... 76 118 163 275 24 75 129 275
Managed Assets Trust.................... 74 112 153 254 22 69 118 254
AMERICAN ODYSSEY FUNDS, INC.(1):
Core Equity Fund..................... 74 113 154 256 23 70 119 256
Emerging Opportunities Fund.......... 76 119 164 277 25 76 130 277
Global High-Yield Bond Fund.......... 74 114 155 259 23 70 121 259
Intermediate-Term Bond Fund.......... 74 112 153 254 22 69 118 254
International Equity Fund............ 75 116 159 268 24 73 125 268
Long-Term Bond Fund.................. 74 112 152 253 22 69 118 253
AMERICAN ODYSSEY FUNDS, INC.(2):
Core Equity Fund..................... 86 148 213 375 35 107 180 375
Emerging Opportunities Fund.......... 88 154 222 394 37 113 190 394
Global High-Yield Bond Fund.......... 86 149 214 378 35 108 182 378
Intermediate-Term Bond Fund.......... 86 148 212 373 35 106 180 373
International Equity Fund............ 87 152 218 386 36 110 186 386
Long-Term Bond Fund.................. 85 148 211 372 35 106 179 372
DELAWARE GROUP PREMIUM FUND, INC.
REIT Series.......................... 76 119 163 276 25 76 129 276
DREYFUS VARIABLE INVESTMENT FUND
Capital Appreciation Portfolio....... 75 117 161 271 24 74 127 271
Small Cap Portfolio.................. 75 117 160 269 24 73 126 269
FIDELITY'S VARIABLE INSURANCE PRODUCTS
FUND
Equity-Income Portfolio.............. 73 111 150 249 22 67 116 249
Growth Portfolio..................... 74 114 156 260 23 71 121 260
High Income Portfolio................ 75 115 157 262 23 71 122 262
FIDELITY'S VARIABLE INSURANCE PRODUCTS
FUND II
Asset Manager Portfolio.............. 74 113 154 256 23 70 119 256
SALOMON BROTHERS VARIABLE SERIES FUNDS,
INC.
Salomon Brothers Variable Investors
Fund............................... 77 123 171 291 26 80 137 291
TEMPLETON VARIABLE PRODUCTS SERIES FUND
Templeton Asset Allocation Fund...... 75 117 160 269 24 73 126 269
Templeton Bond Fund.................. 74 114 155 259 23 70 121 259
Templeton Stock Fund................. 76 120 165 279 25 76 131 279
TRAVELERS SERIES FUND, INC.
Alliance Growth Portfolio............ 76 118 162 273 24 75 128 273
MFS Total Return Portfolio........... 76 119 164 277 25 76 130 277
Putnam Diversified Income
Portfolio.......................... 76 120 165 279 25 76 131 279
Smith Barney High Income Portfolio... 74 114 156 261 23 71 122 261
Smith Barney International Equity
Portfolio.......................... 77 123 171 292 26 80 137 292
Smith Barney Large Capitalization
Growth Portfolio................... 77 123 171 291 26 80 137 291
Smith Barney Large Cap Value
Portfolio.......................... 74 114 156 260 23 71 121 260
Smith Barney Money Market Portfolio.. 74 113 154 256 23 70 119 256
THE TRAVELERS SERIES TRUST
Convertible Bond Portfolio........... 75 117 161 271 24 74 127 271
Disciplined Mid Cap Stock
Portfolio.......................... 77 122 168 286 26 79 134 286
Disciplined Small Cap Stock
Portfolio.......................... 77 123 171 291 26 80 137 291
MFS Mid Cap Growth Portfolio......... 77 123 171 291 26 80 137 291
MFS Research Portfolio............... 77 123 171 291 26 80 137 291
Social Awareness Stock Portfolio..... 77 122 170 289 26 79 136 289
Strategic Stock Portfolio............ 76 120 166 281 25 77 132 281
Travelers Quality Bond Portfolio..... 75 116 158 266 24 73 124 266
U.S. Government Securities
Portfolio.......................... 73 111 150 249 22 68 116 249
Utilities Portfolio.................. 78 125 173 297 27 82 140 297
</TABLE>

(1) Reflects expenses that would be incurred for those Contract Owners who DO
NOT participate in the CHART Asset Allocation program.

(2) Reflects expenses that would be incurred for those Contract Owners who DO
participate in the CHART Asset Allocation program.

7
<PAGE> 17

CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

See Appendix A on page A-1.

THE CONTRACTS

- --------------------------------------------------------------------------------

GENERAL

The Contracts, issued on a group basis, are designed for use only with plans
which qualify for special tax treatment under the Internal Revenue Code, such as
tax deferred annuity plans for public school teachers and employees and
employees of certain other tax-exempt organizations; pension and profit-sharing
plans; and deferred compensation plans for state and local governments.
Contracts issued under nonqualified deferred compensation plans do not qualify
for special tax treatment under the Code.

Gold Track is a variable annuity designed to help contract owners and
participants accumulate money for retirement. Certificates are issued to
individual participants under a group contract. Under the Contract, you (the
contract owner or participant, as applicable) make purchase payments to us and
we credit them to your account. The Company promises to pay the owner or the
participant, as provided in an employer's plan, an income, in the form of
annuity payments, beginning on the maturity date (a future date chosen on which
annuity payments begin). The annuitant is the individual on whose life the
maturity date and the amount of the monthly annuity payments depend. The
annuitant may not be changed after the contract is in effect. The purchase
payments accumulate tax deferred in the funding options of your choice, or as
provided in the plan under which the Contract is issued. You assume the risk of
gain or loss according to the performance of the funding options. The cash value
is the amount of purchase payments, plus or minus any investment experience. The
cash value also reflects all withdrawals made and charges deducted. There is
generally no guarantee that at the maturity date the cash value will equal or
exceed the total purchase payments made under the Contract, except as specified
or elected under the death benefit provisions described in this prospectus. The
date the Contract and its benefits became effective is referred to as the
contract date. Each 12-month period following this contract date is called a
contract year. The record of accumulation units credited to an owner is called
the owner's account. The record of accumulation units credited to a participant
is called the individual account.

Certain changes and elections must be made in writing to the Company. Where the
term "written request" is used, it means that written information must be sent
to the Company's Home Office in a form and content satisfactory to us.

The Contracts may be issued on either an allocated or an unallocated basis. Both
the allocated and unallocated contracts provide for fixed (Fixed Acccount
Option) and variable (Separate Account) accumulations and annuity payouts. The
Fixed Account Option is described in a separate prospectus.

ALLOCATED CONTRACTS

A group allocated Contract will cover all present and future participants under
the Contract. A participant under an allocated Contract receives a certificate
which evidences participation in the Contract.

UNALLOCATED CONTRACTS

We offer an unallocated annuity Contract, designed for use with certain
Qualified Plans where the employer has secured the services of a TPA.

The Contracts will be issued to an employer or the trustee(s) or custodian of an
employer's Qualified Plan. All purchase payments are held under the Contract, as
directed by the contract owner. There are no individual allocations under the
unallocated Contracts for individual participants in the Qualified Plan.

8
<PAGE> 18

APPLICATION OF PURCHASE PAYMENTS

Each purchase payment will be applied to the Contract to provide accumulation
units of the funding options, as selected by the contract owner. A funding
option is a fixed interest account, a managed separate account or available
underlying fund to which assets under a variable annuity contract may be
allocated. Such accumulation units will be credited to an owner's account or
individual account, as directed or as provided in the plan. If the Contract
application is in good order, the Company will apply the initial purchase
payment within two business days of receipt at the Company's Home Office. If the
application is not in good order, the Company will attempt to secure the missing
information within five business days. If the application is not complete at the
end of this period, the Company will inform the applicant of the reason for the
delay. The purchase payment will be returned immediately unless the applicant
specifically consents to the Company keeping the purchase payment until the
application is complete. Once it is complete, the purchase payment will be
applied within two business days. Our business day ends when the New York Stock
Exchange closes, usually 4:00 p.m. Eastern time.

ACCUMULATION UNITS

An accumulation unit is used to calculate the value of a Contract. An
accumulation unit works like a share of a mutual fund. Each funding option has a
corresponding accumulation unit value. The accumulation units are valued each
business day and may increase or decrease from day to day. The number of
accumulation units we will credit to the Contract once we receive a purchase
payment is determined by dividing the amount directed to each funding option by
the value of the accumulation unit. We calculate the value of an accumulation
unit for each funding option each day after the New York Stock Exchange closes.
After the value is calculated, your account is credited. During the annuity
period (i.e., after the maturity date), you are credited with annuity units.

TRANSFERS

You may transfer cash values from one or more funding options to other funding
options, subject to the terms and conditions of the Contract (and your Plan). If
authorized by the contract owner, participants under allocated Contracts may
transfer all or any of their cash value from one funding option to another up to
30 days before the due date of the first annuity payment.

THE FUNDING OPTIONS

You choose which of the following variable funding options to have your purchase
payments allocated to. You will find detailed information about the options and
their inherent risks in the current prospectuses for the funding options which
must accompany this prospectus. Since each option has varying degrees of risk,
please read the prospectuses carefully before investing. Additional copies of
the prospectuses may be obtained by contacting your registered representative or
by calling 1-800-842-9368.

The funding options and their investment objectives and advisers are as follows:

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<PAGE> 19

AMERICAN ODYSSEY FUNDS,
INC.
Core Equity Fund Seeks maximum long-term total return by investing American Odyssey Funds
primarily in common stocks of well-established Management, Inc.
companies. Subadviser: Equinox
Capital Management, Inc.

Emerging Opportunities Seeks maximum long-term total return by investing American Odyssey Funds
Fund primarily in common stocks of small, rapidly growing Management, Inc.
companies. Subviser: Cowen Asset
Management and Chartwell
Investment Partners

Global High-Yield Bond Seeks maximum long-term total return (capital American Odyssey Funds
Fund*(1) appreciation and income) by investing primarily in Management, Inc.
high-yield debt securities from the United States and Subadviser: BEA Associates
abroad.

Intermediate-Term Bond Seeks maximum long-term total return by investing American Odyssey Funds
Fund* primarily in intermediate-term corporate debt Management, Inc.
securities, U.S. government securities, mortgage-related Subadviser: TAMIC
securities and asset-backed securities, as well as money
market instruments.

International Equity Fund Seeks maximum long-term total return by investing American Odyssey Funds
primarily in common stocks of established non-U.S. Management, Inc.
companies. Subadviser: Bank of
Ireland Asset Management
(U.S.) Limited

DELAWARE GROUP PREMIUM
FUND, INC.
REIT Series Seeks maximum long-term total return by investing in Delaware Management
securities of companies primarily engaged in the real Company, Inc.
estate industry. Subadviser: Lincoln
Investment Management,
Inc.

DREYFUS VARIABLE INVESTMENT
FUND
Capital Appreciation Seeks primarily to provide long-term capital growth The Dreyfus Corporation
Portfolio consistent with the preservation of capital; current Subadviser: Fayez Sarofim
income is a secondary investment objective. The & Co.
portfolio invests primarily in the common stocks of
domestic and foreign issuers.

Small Cap Portfolio Seeks to maximize capital appreciation. The Dreyfus Corporation

FIDELITY'S VARIABLE
INSURANCE PRODUCTS FUND
VIP Equity-Income Seeks reasonable income by investing primarily in Fidelity Management &
Portfolio income- producing equity securities; in choosing these Research Company
securities, the portfolio manager will also consider the
potential for capital appreciation.
</TABLE>

10
<PAGE> 20

<TABLE>
- -----------------------------------------------------------------------------------------------------------------
INVESTMENT INVESTMENT INVESTMENT
OPTIONS OBJECTIVE ADVISER/SUBADVISER
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
VIP Growth Portfolio Seeks capital appreciation by purchasing common stocks Fidelity Management &
of well-known, established companies, and small emerging Research Company
growth companies, although its investments are not
restricted to any one type of security. Capital
appreciation may also be found in other types of
securities, including bonds and preferred stocks.
VIP High Income Seeks to obtain a high level of current income by Fidelity Management &
Portfolio* investing primarily in high yielding, lower-rated, Research Company
fixed-income securities, while also considering growth
of capital.
FIDELITY'S VARIABLE
INSURANCE PRODUCTS FUND II
VIP II Asset Manager Seeks high total return with reduced risk over the Fidelity Management &
Portfolio** long-term by allocating its assets among stocks, bonds Research Company
and short-term fixed-income instruments.
SALOMON BROTHERS VARIABLE
SERIES FUND, INC.
Salomon Brothers Variable Seeks long-term growth of capital. Current income is a Salomon Brothers Asset
Investors Fund secondary objective. Management
TEMPLETON VARIABLE PRODUCTS
SERIES FUND
Templeton Asset Seeks a high level of total return with reduced risk Templeton Investment
Allocation Fund** over the long term through a flexible policy of Counsel, Inc.
(Class 1) investing in stocks of companies in any nation and debt
obligations of companies and governments of any nation.
Templeton Bond Fund* Seeks high current income by investing primarily in debt Templeton Global Bond
(Class 1) securities of companies, governments and government Managers
agencies of various nations throughout the world.
Templeton Stock Fund Seeks capital growth by investing primarily in common Templeton Investment
(Class 1) stocks issued by companies, large and small, in various Counsel, Inc.
nations throughout the world.
TRAVELERS SERIES FUND, INC.
Alliance Growth Portfolio Seeks long-term growth of capital by investing Travelers Investment
predominantly in equity securities of companies with a Adviser ("TIA")
favorable outlook for earnings and whose rate of growth Subadviser: Alliance
is expected to exceed that of the U.S. economy over Capital Management L.P.
time. Current income is only an incidental
consideration.
MFS Total Return Seeks to obtain above-average income (compared to a TIA
Portfolio** portfolio entirely invested in equity securities) Subadviser: Massachusetts
consistent with the prudent employment of capital. Finance Services Company
Generally, at least 40% of the Portfolio's assets will ("MFS")
be invested in equity securities.
Putnam Diversified Income Seeks high current income consistent with preservation TIA
Portfolio** of capital. The Portfolio will allocate its investments Subadviser: Putnam
among the U.S. Government Sector, the High Yield Sector, Investment Management,
and the International Sector of the fixed income Inc.
securities markets.
Smith Barney High Income Seeks high current income. Capital appreciation is a Mutual Management Corp.
Portfolio* secondary objective. The Portfolio will invest at least ("MMC")
65% of its assets in high-yielding corporate debt
obligations and preferred stock.
Smith Barney Seeks total return on assets from growth of capital and MMC
International Equity income by investing at least 65% of its assets in a
Portfolio diversified portfolio of equity securities of
established non-U.S. issuers.
Smith Barney Large Seeks long-term growth of capital by investing in equity MMC
Capitalization Growth securities of companies with large market
Portfolio capitalization.
Smith Barney Large Cap Seeks current income and long-term growth of income and MMC
Value Portfolio (formerly capital by investing primarily, but not exclusively, in
"Smith Barney Income and common stocks.
Growth Portfolio")
</TABLE>

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<PAGE> 21

TRAVELERS SERIES FUND,
INC., CONTINUED
Smith Barney Money Market Seeks maximum current income and preservation of capital MMC
Portfolio* by investing in high quality, short-term money market
instruments. An investment in this fund is neither
insured nor guaranteed by the U.S. Government, and there
is no assurance that a stable $1 value per share will be
maintained.
THE TRAVELERS SERIES TRUST
Convertible Bond Seeks current income and capital appreciation by TAMIC
Portfolio* investing in convertible securities and in combinations
of nonconvertible fixed-income securities and warrants
or call options that together resemble convertible
securities ("synthetic convertible securities").
Disciplined Mid Cap Stock Seeks growth of capital by investing primarily in a TAMIC
Fund broadly diversified portfolio of common stocks. Subadviser: TIMCO
Disciplined Small Cap Seeks long term capital appreciation by investing TAMIC
Fund primarily (at least 65% of its total assets) in the Subadviser: TIMCO
common stocks of U.S. Companies with relatively small
market capitalizations at the time of investment.
MFS Mid Cap Growth Seeks to obtain long term growth of capital by TAMIC
Portfolio investing, under normal market conditions, at least 65% Subadviser: MFS
of its total assets in equity securities of companies
with medium market capitalization which the investment
adviser believes have above-average growth potential.
MFS Research Portfolio Seeks to provide long-term growth of capital and future TAMIC
income. Subadviser: MFS
Social Awareness Stock Seeks long-term capital appreciation and retention of MMC
Portfolio net investment income by selecting investments,
primarily common stocks, which meet the social criteria
established for the Portfolio. Social criteria currently
excludes companies that derive a significant portion of
their revenues from the production of tobacco, tobacco
products, alcohol, or military defense systems, or in
the provision of military defense related services or
gambling services.
Strategic Stock Portfolio Seeks to provide an above-average total return through a TAMIC
combination of potential capital appreciation and Subadviser: TIMCO
dividend income by investing primarily in high dividend
yield stocks periodically selected from the companies
included in (i) the Dow Jones Industrial Average and
(ii) the Russell 1000 Stock Index (the "Russell 1000").
Travelers Quality Bond Seeks current income, moderate capital volatility and TAMIC
Portfolio* total return.
U.S. Government Seeks to select investments from the point of view of an TAMIC
Securities Portfolio* investor concerned primarily with highest credit
quality, current income and total return. The assets of
the U.S. Government Securities Portfolio will be
invested in direct obligations of the United States, its
agencies and instrumentalities.
Utilities Portfolio Seeks to provide current income by investing in equity MMC
and debt securities of companies in the utility
industries.
</TABLE>

(1) Formerly American Odyssey Short-Term Bond Fund. The name investment
objective and investment subadviser of this fund were changed pursuant to a
shareholder vote effective May 1, 1998.

* The funding options marked with an asterisk (*) are considered competing
funds, and may be subject to transfer restrictions. Those marked with two
asterisks (**) are not currently considered competing funds, but may be so in
the future because of an allowable change in the funding option's investment
strategy. Please refer to the contract for transfer restrictions.

12
<PAGE> 22

Certain variable annuity separate accounts and variable life insurance separate
accounts may invest in the funding options simultaneously (called "mixed" and
"shared" funding). It is conceivable that in the future it may be
disadvantageous to do so. Although the Company and the funding options do not
currently foresee any such disadvantages either to variable annuity contract
owners or variable life insurance policyowners, each funding option's Board of
Directors intends to monitor events in order to identify any material conflicts
between such contract owners and policyowners and to determine what action, if
any, should be taken in response thereto. If a Board of Directors was to
conclude that separate funds should be established for variable life and
variable annuity separate accounts, the variable annuity contract owners would
not bear any expenses attendant to the establishment of such separate funds, but
variable annuity contract owners and variable life insurance policyowners would
no longer have the economies of scale resulting from a larger combined fund.

CHARGES UNDER THE CONTRACT

- --------------------------------------------------------------------------------

SALES CHARGES

Purchase payments made under the Contract are not subject to a front-end sales
load. However, when withdrawn, the Company will charge a surrender charge or a
contingent deferred sales charge, as negotiated. Any sales charge, penalty tax
and withholding will be deducted from either the amount surrendered or from the
remaining Contract balance, as requested by the contract owner or participant.
The maximum contingent deferred sales charge is 5% of each purchase payment for
a period of five years from the date the purchase payment was made. The maximum
surrender charge is 5% of the amount surrendered in the first two contract
years, up to 4% in years three and four; up to 3% in years five and six, up to
2% in years seven and eight and 0% beginning in the ninth year. Any applicable
sales charge will not exceed 8.5% of the aggregate amount of the purchase
payments made.

For deferred sales charge options, purchase payments will be withdrawn in the
order they were received by us and then any earnings.

The sales charges can be changed if the Company anticipates it will incur
decreased sales-related expenses due to the nature of the Plan to which the
Contract is issued or the involvement of TPAs. When considering a change in the
sales charges, the Company will take into account:

(a) The expected level of initial agent or the Company involvement during
the establishment and maintenance of the Contract including the amount
of enrollment activity required, and the amount of service required by
the contract owner in support of the Plan, and

(b) Contract Owner, agent or TPA involvement in conducting ongoing
enrollment of subsequently eligible participants, and

(d) Any other factors which the Company anticipates will increase or
decrease the sales-related expenses associated with the sale of the
Contract in connection with the Plan.

The sales charge will not be assessed for withdrawals made under the following
circumstances: retirement, separation from service, loans (if available in your
Plan), hardship (as defined by the Code), death, disability as defined in Code
section 72(m)(7), return of excess plan contributions, minimum required
distributions generally at age 70 1/2, transfers to an Employer Stock Fund,
certain Plan expenses as mutually agreed upon and annuitization under this
Contract or another Contract issued by us.

For 401 plans with less than 50 participants at the time of sale, Highly
Compensated Employees, as defined by the Internal Revenue Code, during the first
5 contract years may be subject to

13
<PAGE> 23

surrender charges for all distributions listed above except loans and return of
Excess Plan Contributions.

For unallocated Contracts, we make the deductions described above pursuant to
the terms of the various agreements among the custodian, the principal
underwriter, and us.

FREE WITHDRAWAL ALLOWANCE. For Contracts in use with deferred compensation
plans, the tax deferred annuity plans and combined qualified plans/tax-deferred
annuity plans, there is currently a 10% free withdrawal allowance available each
year after the first contract/certificate year. The available withdrawal amount
will be calculated as of the first valuation date of any given contract year.
The free withdrawal allowance applies to partial surrenders of any amount and to
full surrenders, except those full surrenders transferred directly to annuity
contracts issued by other financial institutions.

MORTALITY AND EXPENSE RISK CHARGE

A mortality and expense risk charge is deducted on each business day from
amounts held in the Separate Account. This charge is equivalent, on an annual
basis, to a maximum of 1.20% of the amounts allocated to each funding option.
The mortality risk portion compensates the Company for guaranteeing to provide
annuity payments according to the terms of the Contract regardless of how long
the annuitant lives and for guaranteeing to provide the death benefit if a
Participant dies prior to the maturity date. The expense risk charge compensates
the Company for the risk that the charges under the Contract, which cannot be
increased during the duration of the Contract, will be insufficient to cover
actual costs.

In determining the level of the mortality and expense risk charge, the Company
will consider the size of the Plan, the number of employees, plan participants,
the demographics of the participants, which may reduce mortality and expenses of
the Plan, and any other factors which the Company considers relevant.

Although variable annuity payments made under the Contracts will vary in
accordance with the investment performance of each funding option's investment
portfolio, payments will not be affected by (a) the Company's actual mortality
experience among annuitants after retirement or (b) the Company's actual
expenses, if greater than the deductions provided for in the Contracts because
of the expense and mortality undertakings by the Company.

FUNDING OPTION CHARGES

There are certain deductions from and expenses paid out of the assets of each
funding option. These are described in the applicable prospectus for each
funding option.

ADMINISTRATIVE CHARGES

The following administrative charges may apply as described in your Contract.

SEMIANNUAL POLICY FEE. A semiannual policy fee of up to $15 may be deducted from
the value of each participant's individual account. Any such deduction will be
made pro rata from each of the funding options, at the end of each 6-month
period. This fee is assessed only during the accumulation period. This charge
may apply only to allocated contracts.

ADMINISTRATIVE EXPENSE. This charge is deducted on each business day from the
variable funding options in order to compensate the Company for certain
administrative and operating expenses of the funding options. The charge is
equivalent, on an annual basis, to a maximum of 0.10% of the daily net asset
value of each funding options. This charge is assessed during the accumulation
and annuity periods.

As discussed below, the level of the semiannual policy fee and the
administrative expense charge is subject to negotiation. In determining the
level of the semiannual fee and the

14
<PAGE> 24

administrative expense charge, we consider certain factors including, but not
limited to, the following:

(a) The size and characteristics of the Contract and the group to which it
is issued including: the annual amount of purchase payments per
participant, the expected turnover of employees, whether the contract
owner will remit purchase payment allocations electronically, and any
other factors pertaining to the characteristics of the group or the
Plan which may enable the Company to reduce the expense of
administration.

(b) Determination of the Company's anticipated expenses in administering
the Contract, such as: billing for purchase payments, producing
periodic reports, providing for the direct payment of Contract charges
rather than having them deducted from Contract values, and any other
factors pertaining to the level and expense of administrative services
which will be provided under the Contract.

PREMIUM TAX DEDUCTIONS

Certain states or municipalities impose a premium tax, ranging up to 5.0%. A
premium tax is made, if applicable, on purchase payments or Contract values. On
any Contract subject to a premium tax, the tax will be deducted, as provided
under applicable law, either from purchase payments when received or from the
amount applied to effect an annuity at the time annuity payments commence.
However, we reserve the right to deduct from the Contract the state or
municipality premium tax upon our determination of when such tax is due.

TPA ADMINISTRATIVE CHARGES

The Company may be directed by the contract owner to deduct charges from
purchase payments or account values for payment to the contract owner and/or the
TPA. These charges are not levied by the Contract. Such charges may include
maintenance fees and transaction fees.

PAYMENT OF BENEFITS

- --------------------------------------------------------------------------------

DEATH BENEFIT PROCEEDS PRIOR TO MATURITY DATE

ALLOCATED CONTRACT. The allocated Contract provides that, in the event the
participant dies before the selected maturity date or the participant's age 75
(whichever occurs first), the death benefit payable will be the greater of (a)
the cash value of the participant's individual account or (b) the total purchase
payments under that participant's individual account, less, for each option, any
applicable premium tax, minus outstanding loan amounts and prior surrenders not
previously deducted as of the date we receive due proof of death.

If the participant dies on or after age 75 and before the annuity commencement
date, we will pay the beneficiary the cash value of the participant's individual
account, less any applicable premium tax or outstanding loan amounts as of the
date we receive due proof of death.

We must be notified of a participant's death no later than six months after the
participant's date of death in order for the beneficiary to receive the death
proceeds as described. If notification is received more than six months after
the participant's death, the beneficiary shall receive the cash value of the
participant's individual account less any outstanding loan amounts as of the
date we receive due proof of death.

The death benefit may be taken by the beneficiary in one of three ways: 1) in a
single sum, in which case payment will be made within seven days of our receipt
of due proof of death, unless subject to postponement as explained in
"Postponement of Payment," 2) applied to a nonlifetime annuity option, in which
case the proceeds must be distributed within 5 years of the participant's date
of death, or 3) applied to a lifetime annuity.

15
<PAGE> 25

An election to receive death benefits under a form of annuity must be made
within one year after the death. The election must be made by written notice to
us at our Home Office. The beneficiary may choose to have annuity payments made
on a variable basis, fixed basis, or a combination of the two.

No election to provide annuity payments will become operative unless the amount
placed under the annuity option is at least $2,000. The manner in which the
annuity payments are determined and in which they may vary from month to month
are the same as applicable to a participant's individual account after
retirement.

We will pay this benefit upon receiving due proof of death along with a written
request noting the cash value and the total purchase payments attributable to
the participant under the Contract. In addition, we will require copies of
records and any other reasonable proof we find necessary to verify the cash
value and total purchase payments attributable to the participant under the
unallocated Contract.

We must be notified of a participant's death no later than six months after the
participant's date of death in order for the Beneficiary to receive the death
benefits as described. If notification is received more than six months after
the participant's death, the beneficiary shall receive the cash value
attributable to the participant under the Contract as of the date we receive due
proof of death.

The death proceeds may be received in the form of annuity payments made on a
variable basis, a fixed basis, or a combination of the two. Annuity payments
will be determined as described in the "Annuity Options" section.

DEATH PROCEEDS AFTER THE MATURITY DATE

If the annuitant dies on or after the maturity date, we will pay the beneficiary
a death benefit consisting of any benefit remaining under the annuity option
then in effect.

ELECTION OF SETTLEMENT OPTIONS

Any amount distributed from the Contract may be applied to any one of the
annuity options described below.

Election of any of these options must be made by written request to our Home
Office at least 30 days prior to the date such election is to become effective.
The form of such annuity option shall be determined by the contract owner. The
following information must be provided with any such request:

a) the participant's name, address, date of birth, social security number;

b) the amount to be distributed;

c) the annuity option which is to be purchased;

d) the date the annuity option payments are to begin;

e) if the form of the annuity provides a death benefit in the event of the
participant's death, the name, relationship and address of the
beneficiary as designated by you; and

f) any other data that we may require.

The beneficiary, as specified in item (e) above, may be changed by you or the
annuitant as long as we are notified by written request while the annuitant is
alive and before payments have begun. If the beneficiary designation is
irrevocable, such designation cannot be changed or revoked without the consent
of the beneficiary. After we receive the written request and the written consent
of the beneficiary (if required), the new beneficiary designation will take
effect as of the

16
<PAGE> 26

date the notice is signed. We have no further responsibility for any payment we
made before the written request.

MINIMUM AMOUNTS

The minimum amount that can be placed under an Annuity option is $2,000 unless
we consent to a lesser amount. If any periodic payments due are less than $100,
we reserve the right to make payments at less frequent intervals.

MISSTATEMENT

If an annuitant's sex or age was misstated, all benefits of this Contract are
what the cash values would have purchased on the date of issue at the correct
sex and age.

RETIRED LIFE CERTIFICATE

We will issue to each person to whom annuity benefits are being paid under this
Contract a certificate setting forth a statement in substance of the benefits to
which such person is entitled under this Contract.

ALLOCATION OF CASH SURRENDER VALUE DURING THE ANNUITY PERIOD

At the time an annuity option is elected, you also may elect to have the
participant's cash surrender value applied to provide a variable annuity, a
fixed annuity, or a combination of both.

If no election is made to the contrary, the cash surrender value will provide an
annuity which varies with the investment experience of the corresponding funding
option(s) at the time of election. You or the participant, if you so authorize,
may elect to transfer cash values from one funding option to another, as
described in the provision "Transfers of Cash Value Between Funding Options," in
order to reallocate the basis on which annuity payments will be determined. Once
annuity payments have begun, no further transfers are allowed.

ANNUITY OPTIONS

OPTION 1 -- LIFE ANNUITY/NO REFUND. A life annuity is an annuity payable during
the lifetime of the annuitant and terminating with the last monthly payment
preceding the death of the annuitant.

OPTION 2 -- LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS ASSURED. An
annuity payable monthly during the lifetime of an annuitant with the provision
that if, at the death of the annuitant, payments have been made for less than
120,180 or 240 months, as elected, then we will continue to make payments to the
designated beneficiary during the remainder of the period.

OPTION 3 -- LIFE ANNUITY -- CASH REFUND. We will make monthly annuity payments
during the lifetime of the annuitant, ceasing with the last payment due prior to
the death of the annuitant, provided that, at the death of the annuitant, the
Beneficiary will receive an additional payment equal to the dollar value, if
any, of (a) minus (b) where, for a variable annuity:

(a) is the total amount applied under the option divided by the annuity
unit value on the due date of the first annuity payment;

(b) and is

(1) the number of annuity units represented by each payment;

times

(2) the number of payments made;

and for a Fixed Annuity:

(a) is the cash value applied on the maturity date under this option; and

(b) is the dollar amount of annuity payments already paid.

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<PAGE> 27

OPTION 4 -- JOINT AND LAST SURVIVOR LIFE ANNUITY. Monthly annuity payments
based upon the joint lifetime of two persons selected: payments made first to
the annuitant, and upon his/her death, paid to the survivor. No more payments
will be made after the death of the survivor.

OPTION 5 -- JOINT AND LAST SURVIVOR ANNUITY -- ANNUITY REDUCED ON DEATH OF
PRIMARY PAYEE. Monthly annuity payments to the annuitant during the joint
lifetime of the two persons selected. One of the two persons will be designated
as the primary payee. The other will be designated as the secondary payee. On
the death of the secondary payee, if survived by the primary payee, we will
continue to make monthly annuity payments to the primary payee in the same
amount that would have been payable during the joint lifetime of the two
persons.

On the death of the primary payee, if survived by the secondary payee, we will
continue to make monthly annuity payments to the secondary payee in an amount
equal to 50% of the payments which would have been made during the lifetime of
the primary payee. No further payments will be made following the death of the
survivor.

OPTION 6 -- FIXED PAYMENTS FOR A FIXED PERIOD OF 120, 180, OR 240 MONTHS. We
will make monthly payments for the period selected. If at the death of the
annuitant, payments have been made for less than 120, 180, or 240 months, as
elected, we will continue to make payments to the designated beneficiary during
the remainder of the period.

OPTION 7 -- OTHER ANNUITY OPTIONS. We will make other arrangements for annuity
payments as may be mutually agreed upon by you and us.

VARIABLE ANNUITY

AMOUNT OF FIRST PAYMENT. The Life Annuity Tables are used to determine the
first monthly annuity payment. They show the dollar amount of the basic first
monthly annuity payment which can be purchased with each $1,000 applied. The
amount applied to an annuity will be the cash surrender value of a participant's
individual account as of 14 days before the date annuity payments start. We
reserve the right to require satisfactory proof of the age of any persons on
whose life annuity payments are based before making the first payment under any
of these options.

ANNUITY UNIT VALUE. The initial value of an annuity unit of each funding option
was set at $1.00. On any valuation date, the annuity unit value for a funding
option equals the annuity unit value on the immediately preceding valuation
date, multiplied by the net investment factor for that funding option for the
valuation period just ended, divided by the Assumed Daily Net Investment Factor.
The Assumed Daily Net Investment Factor is given in the Contract.

The value of an annuity unit as of any date other than a valuation date will be
equal to its value as of the succeeding valuation date.

INITIAL PAYMENT AND NUMBER OF ANNUITY UNITS. We determine the number of annuity
units credited to the annuitant's individual account in each funding option by
dividing the basic first monthly annuity payment attributable to that funding
option by the funding option's annuity unit value as of 14 days before the due
date of the first annuity payment.

AMOUNT OF SUBSEQUENT PAYMENTS. The dollar amount of any subsequent payments
made to an annuitant after the first payment date may change from month to month
based on the net investment results of the funding option(s). The total amount
of each annuity payment will be equal to the sum of the payments in each funding
option allocated to that annuitant's individual account.

The amount of the payments made to an annuitant is determined by multiplying,
for each funding option, the number of annuity units credited to that annuitant
by the annuity unit value of the funding option as of the date 14 days prior to
the date on which payment is due and by adding the sums.

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<PAGE> 28

FIXED ANNUITY

A Fixed Annuity provides for payments which do not vary during the annuity
period. The minimum guaranteed amount of the fixed annuity payments will be
calculated as described under "Variable Annuity: Amount of First Payment" except
that the cash surrender value will be determined as of the day annuity payments
commence. If it would produce a larger payment, the fixed annuity payments will
be determined using the Life Annuity Tables in effect on the maturity date.

THE SEPARATE ACCOUNT

- --------------------------------------------------------------------------------

The Separate Account was established on December 26, 1995, in accordance with
authorization by the Board of Directors of the Company. It is the Separate
Account in which the Company sets aside and invests the assets attributable to
the Contracts sold under this prospectus. The Separate Account is registered as
a unit investment trust under the Investment Company Act of 1940. This
registration does not, however, involve Securities and Exchange Commission
supervision of the management or the investment practices or policies of the
Separate Account or the Company.

Under Connecticut law, the assets of the Separate Account attributable to the
Contracts offered under this prospectus are held for the benefit of the owners
of, and the persons entitled to payments under, those Contracts. The assets in
the Separate Account are not chargeable with liabilities arising out of any
other business the Company may conduct. Therefore, you will not be affected by
the rate of return of the Company's General Account, nor by the investment
performance of any of the Company's other separate accounts.

The Company does not guarantee the investment results of the Separate Account or
the funding options. There is no assurance that the account value on the
maturity date or the aggregate amount of the variable annuity payments will
equal the sum of purchase payments made under the Contract. Since each funding
option has different investment objectives, each is subject to different risks.
These risks are more fully described in the prospectuses for the funding options
which must accompany this prospectus. Additional copies of the prospectuses may
be requested from your sales representative or from the Home Office.

The Company reserves the right, subject to compliance with the law, to
substitute the shares of any other registered investment company for the shares
of any funding option held by the Separate Account. Substitution may occur if
shares of the funding option(s) become unavailable or due to changes in
applicable law or interpretations of law. Current law requires approval of the
Securities and Exchange Commission and notification to you of any such
substitution. The Company also reserves the right, subject to compliance with
the law, to offer additional funding options.

PERFORMANCE INFORMATION

From time to time, the Company may advertise different types of historical
performance for the funding options available through Separate Account QP. The
Company may advertise the "standardized average annual total returns" of each,
calculated in a manner prescribed by the SEC, as well as the "nonstandardized
average annual total returns," as described below. Specific examples of the
performance information appear in the SAI.

STANDARDIZED METHOD. Quotations of average annual total returns are computed
according to a formula in which a hypothetical initial investment of $1,000 is
applied to the funding option, and then related to ending redeemable values over
one-, five-, and ten-year periods, or for a period covering the time during
which the funding option has been in existence, if less. These quotations
reflect the deduction of all recurring charges during each period (on a pro rata
basis in the case of fractional periods). The deduction for the semiannual
administrative charge ($15) is converted to a percentage of assets based on the
actual fee collected (or anticipated to be collected, if a new product), divided
by the average net assets for Contracts sold (or anticipated to be sold). Each

19
<PAGE> 29

quotation assumes a total redemption at the end of each period with the
applicable withdrawal charges deducted at that time.

NONSTANDARDIZED METHOD. Nonstandardized "total returns" will be calculated in a
similar manner based on the performance of the funding options over a period of
time, usually for the calendar year-to-date, and for the past one-, three-,
five- and ten-year periods. Nonstandardized total returns will not reflect the
deduction of the $15 semiannual contract administrative charge, which, if
reflected, would decrease the level of performance shown. The withdrawal charge
is not reflected because the Contract is designed for long-term investments.

For underlying funds that were in existence prior to the date they became
available under the Separate Account, the standardized average annual total
return quotations may be accompanied by returns showing the investment
performance that such underlying funds would have achieved (reduced by the
applicable charges) had they been held under the Contract for the period quoted.
The total return quotations are based upon historical earnings and are not
necessarily representative of future performance.

GENERAL Within the guidelines prescribed by the SEC and the National
Association of Securities Dealers, Inc. ("NASD"), performance information may be
quoted numerically or may be presented in a table, graph or other illustration.
Advertisements may include data comparing performance to well-known indices of
market performance (including, but not limited to, the Dow Jones Industrial
Average, the Standard & Poor's (S&P) 500 Index and the S&P 400 Index, the Lehman
Brothers Long T-Bond Index, the Russell 1000, 2000 and 3000 indices, the Value
Line Index, and the Morgan Stanley Capital International's EAFE Index).
Advertisements may also include published editorial comments and performance
rankings compiled by independent organizations (including, but not limited to,
Lipper Analytical Services, Inc. and Morningstar, Inc.) and publications that
monitor the performance of the Separate Account and the variable funding
options.

MISCELLANEOUS CONTRACT PROVISIONS

- --------------------------------------------------------------------------------

RIGHT TO RETURN

For Contracts in use with deferred compensation plans, tax-deferred annuity
plans, and combined qualified plans/tax deferred annuity plans, you may return
the Contract for a full refund of the cash value (including charges) within ten
days after you receive it (the "right to return period"). Where state law
requires a longer right to return period, or the return of purchase payments,
the Company will comply. The contract owner bears the investment risk during the
right to return period; therefore, the cash value returned may be greater or
less than your purchase payment. All cash values will be determined as of the
next valuation following the Company's receipt of your written request for
refund.

CONTRACT AND PARTICIPANT'S INDIVIDUAL ACCOUNT TERMINATION

Under the allocated Contracts, if the cash value in a participant's individual
account is less than the termination amount as stated in your Contract, we
reserve the right to terminate that account and move the cash value of that
participant's individual account to your account.

Any cash value to which a terminating participant is not entitled under the Plan
will be moved to your account at your direction.

You may discontinue this Contract by written request at any time for any reason.
We reserve the right to discontinue this Contract if:

a) the cash value of the Contract is less than the termination amount; or

20
<PAGE> 30

b) We determine within our sole discretion and judgment that the Plan or
administration of the Plan is not in conformity with applicable law; or

c) We receive notice that is satisfactory to us of plan termination.

If we discontinue this Contract or we receive your written request to
discontinue the Contract, we will, in our sole discretion and judgment:

a) accept no further payments for this Contract; and

b) pay you the cash surrender value of the funding options within 7 days of
the date of our written notice to you, or distribute the cash surrender
value of each participant's individual account as described in the
settlement provisions section at your direction; and

c) pay you an amount as described in the Fixed Account prospectus.

If the Contract is discontinued, we will distribute the cash surrender value to
you no later than 7 days following our mailing the written notice of
discontinuance to you at the most current address available on our records.
Discontinuance of the Contract will not affect payments we are making under
annuity options which began before the date of discontinuance.

DOLLAR COST AVERAGING (AUTOMATED TRANSFERS)*

Dollar cost averaging permits the contract owner or participant to transfer a
fixed dollar amount to other funding options on a monthly or quarterly basis so
that more accumulation units are purchased if the cost per unit is low and fewer
accumulation units are purchased if the cost per unit is high. Therefore, a
lower-than-average cost per unit may be achieved over the long run.

You may elect automated transfers through written request or other method
acceptable to the Company. Certain minimums apply to amounts transferred and/or
to enroll in the program.

You may start or stop participation in the Dollar Cost Averaging program at any
time, but you must give the Company at least 30 days' notice to change any
automated transfer instructions that are currently in place. Automated transfers
are subject to all of the other provisions and terms of the Contract, including
provisions relating to the transfer of money between funding options. The
Company reserves the right to suspend or modify transfer privileges at any time
and to assess a processing fee for this service.

Before transferring any part of the cash value, contract owners should consider
the risks involved in switching between investments available under this
Contract. Dollar cost averaging requires regular investments regardless of
fluctuating price levels, and does not guarantee profits or prevent losses in a
declining market. Potential investors should consider their financial ability to
continue purchases through periods of low price levels.

* Automated transfers are subject to the terms and conditions of the Contract
(and your plan).

ASSET ALLOCATION ADVICE

Owners may elect to enter into a separate advisory agreement with Copeland
Financial Services, Inc. ("Copeland"), an affiliate of the Company, if the
program is available. Copeland provides asset allocation advice under its CHART
program, which is fully described in a separate disclosure statement. Under the
CHART Program, purchase payments and cash values are allocated among the
specified asset allocation funds. Copeland's charge for this advisory service is
equal to a maximum of 1.50% of the assets subject to the CHART Program. The
CHART Program fee will be paid by quarterly withdrawals from the cash values
allocated to the asset allocation funds. The fee is in addition to the Contract
charges described in "Charges Under the Contract." The Company will not treat
these withdrawals as taxable distributions. The CHART Program may not be
available in all marketing programs through which this Contract is sold.

21
<PAGE> 31

CONTRACT EXCHANGES

a) You may transfer all or any part of Your Account's cash surrender value from
any funding option to any contract not issued by us. Such transfers may be
subject to a sales charge, as described in the Contract. If authorized by the
contract owner, a participant may transfer all or any part of the individual
account's cash surrender value from one funding option to any contract not
issued by us.

b) Under specific conditions, we may allow you to transfer to this Contract
funds held by you in another group annuity contract issued by us or to
transfer amounts from this Contract to another Contract issued by us without
applying a sales charge to the funds being transferred. Once the transfer is
complete and we have established an account for you at your direction, a new
sales charge may apply, as described in the new Contract.

c) Under specific conditions, when authorized by state insurance law, we may
credit a Plan up to 4% of the amount transferred to us from another group
annuity not issued by us as reimbursement to the Plan for any exit penalty
assessed by the other issuer. We may recover this credit through reduced
compensation paid to the servicing agent or broker.

POSTPONEMENT OF PAYMENT (EMERGENCY PROCEDURE)

Payment of any benefit or values may be postponed whenever (1) the New York
Stock Exchange is closed; (2) when trading on the New York Stock Exchange is
restricted; (3) when an emergency exists as determined by the SEC so that
disposal of the securities held in the funding options is not reasonably
practicable or it is not reasonably practicable to determine the value of the
funding option's net assets; or (4) during any other period when the SEC, by
order, so permits for the protection of security holders.

ACCOUNT VALUE

During the accumulation period, the account value can be determined by
multiplying the total number of funding option accumulation units credited to
that account by the current accumulation unit value for the appropriate funding
option and adding the sums for each funding option. There is no assurance that
the value in any of the funding options will equal or exceed the purchase
payments made to such funding options.

FEDERAL TAX CONSIDERATIONS

- --------------------------------------------------------------------------------

The following description of the federal income tax consequences under this
Contract is not exhaustive and is not intended to cover all situations and is
not meant to provide tax advice. Because of the complexity of the law and the
fact that the tax results will vary depending on many factors, you should
consult your tax advisor regarding your personal situation. For your
information, a more detailed discussion is contained in the SAI.

GENERAL TAXATION OF ANNUITIES

Congress has recognized the value of saving for retirement by providing certain
tax benefits, in the form of tax deferral, for money put into an annuity. The
Internal Revenue Code (Code) governs how this money is ultimately taxed,
depending upon the type of contract, qualified or non-qualified, and the manner
in which the money is distributed, as briefly described below.

22
<PAGE> 32

TYPES OF CONTRACTS: QUALIFIED OR NONQUALIFIED

If you purchase an annuity contract with proceeds of an eligible rollover
distribution from any pension plan, specially sponsored program, or individual
retirement annuity (IRA) with pre-tax dollars, your contract is referred to as a
qualified contract. Some examples of qualified contracts are: IRAs, 403(b)
annuities, pension and profit-sharing plans (including 401(k) plans), Keogh
Plans and certain other qualified deferred compensation plans. If you purchase
the contract on an individual basis and with after-tax dollars and not under one
of the programs described above, your contract is referred to as nonqualified.

INVESTOR CONTROL

In certain circumstances, owners of variable annuity contracts may be considered
the owners, for federal income tax purposes, of the assets of the separate
accounts used to support their contract. In those circumstances, income and
gains from the separate account assets would be includable in the variable
contract owner's gross income.

The IRS has stated in published rulings that a variable contract owner will be
considered the owner of separate account assets if the contract owner possesses
incidents of ownership in those assets, such as the ability to exercise
investment control over the assets. The U.S. Treasury Department has also
announced, in connection with the issuance of regulations concerning
diversification, that those regulations "do not provide guidance concerning the
circumstances in which investor control of the investments of a segregated asset
account may cause the investor (i.e., the contract owner), rather than the
insurance company, to be treated as the owner of the assets in the account."
This announcement also stated that guidance would be issued by way of
regulations or rulings on the "extent to which policyholders may direct their
investments to particular sub-accounts without being treated as owners of the
underlying assets." As of the date of this prospectus, no such guidance has been
issued.

The ownership rights under the Contract are similar to, but different in certain
respects from, those described by the IRS in rulings in which it determined that
the owners were not owners of separate account assets. For example, a contract
owner or participant of this Contract has additional flexibility in allocating
payments and cash values. These differences could result in the contract owner
being treated as the owner of the assets of Fund QP. In addition, the Company
does not know what standard will be set forth in the regulations or rulings
which the Treasury is expected to issue, nor does the Company know if such
guidance will be issued. The Company therefore reserves the right to modify the
Contract as necessary to attempt to prevent the contract owner from being
considered the owner of a pro rata share of the assets of Fund QP.

The remaining tax discussion assumes that the Contract qualifies as an annuity
contract for federal income tax purposes.

MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS

Federal tax law requires that minimum annual distributions begin by April 1st of
the calendar year following the calendar year in which an IRA owner attains age
70 1/2. Participants in qualified plans and 403(b) annuities may defer minimum
distributions until the later of April 1st of the calendar year following the
calendar year in which they attain age 70 1/2 or retirement. Distributions must
begin or be continued according to required patterns following the death of the
contract owner or annuitant of both qualified and nonqualified annuities.

NONQUALIFIED ANNUITY CONTRACTS

23
<PAGE> 33

of the withdrawal that is considered earnings. Similarly, when you receive an
annuity payment, part of each payment is considered a return of your purchase
payments and will not be taxed. The remaining portion of the annuity payment
(i.e., any earnings) will be considered ordinary income for tax purposes.

If a nonqualified annuity is owned by other than an individual, however, (e.g.,
by a corporation), increases in the value of the contract attributable to
purchase payments made after February 28, 1986 are includable in income
annually. Furthermore, for contracts issued after April 22, 1987, if you
transfer the contract without adequate consideration all deferred increases in
value will be includable in your income at the time of the transfer.

If you make a partial withdrawal, this money will generally be taxed as first
coming from earnings, (income in the contract), and then from your purchase
payments. These withdrawn earnings are includable in your income. (See "Penalty
Tax for Premature Distributions" below). There is income in the contract to the
extent the cash value exceeds your investment in the contract. The investment in
the contract equals the total purchase payments you paid less any amount
received previously which was excludable from gross income. Any direct or
indirect borrowing against the value of the contract or pledging of the contract
as security for a loan will be treated as a cash distribution under the tax law.

Federal tax law requires that nonqualified annuity contracts meet minimum
mandatory distribution requirements upon the death of the contract owner,
including the first of joint owners. If these requirements are not met, the
surviving joint owner, or the beneficiary, will have to pay taxes prior to
distribution. The distribution required depends, among other things, upon
whether an annuity option is elected or whether the new contract owner is the
surviving spouse. We will administer Contracts in accordance with these rules
and we will notify you when you should begin receiving payments.

QUALIFIED ANNUITY CONTRACTS

Under a qualified annuity, since amounts paid into the contract have not yet
been taxed, the full amount of all distributions, including lump-sum withdrawals
and annuity payments are taxed at the ordinary income tax rate unless the
distribution is transferred to an eligible rollover account or contract. The
Contract is available as a vehicle for IRA rollovers and for other qualified
contracts. There are special rules which govern the taxation of qualified
contracts, including withdrawal restrictions, requirements for mandatory
distributions, and contribution limits. We have provided a more complete
discussion in the SAI.

PENALTY TAX FOR PREMATURE DISTRIBUTIONS

Taxable distributions taken before the contract owner has reached the age of
59 1/2 will be subject to a 10% additional tax penalty unless the distribution
is taken in a series of periodic distributions, for life or life expectancy, or
unless the distribution follows the death or disability of the Contract Owner.
Other exceptions may be available in certain tax-qualified plans.

DIVERSIFICATION REQUIREMENTS

The Code states that in order to qualify for the tax benefits described above,
investments made in the separate account of any nonqualified variable annuity
contract must satisfy certain diversification requirements. Tax regulations
define how separate accounts must be diversified. We monitor the investments
constantly and believe that our accounts are adequately diversified. We intend
to administer all contracts subject to this provision of law in a manner that
will maintain adequate diversification.

24
<PAGE> 34

OTHER INFORMATION

- --------------------------------------------------------------------------------

THE INSURANCE COMPANY

The Travelers Insurance Company is a stock insurance company chartered in 1864
in Connecticut and continuously engaged in the insurance business since that
time. It is licensed to conduct life insurance business in all states of the
United States, the District of Columbia, Puerto Rico, Guam, the U.S. and British
Virgin Islands and the Bahamas. The Company is an indirect wholly owned
subsidiary of Travelers Group Inc., a financial services holding company. The
Company's Home Office is located at One Tower Square, Hartford, Connecticut
06183.

YEAR 2000 COMPLIANCE

Generally, computer programs were designed without considering the impact of the
upcoming change in the century. As a result, software and computer systems may
need to be upgraded or replaced in order to comply with "Year 2000"
requirements. If not corrected, these computer applications could fail or create
erroneous results by or at the Year 2000. The business, financial condition, and
results of operations of a company could be materially and adversely affected by
the failure of its systems and applications (or those either provided or
operated by third-parties) to properly operate or manage dates beyond the year
1999.

The Company has investigated the nature and extent of the work required for our
computer systems to process beyond the turn of the century, and has made
progress toward achieving this goal, including upgrading and/or replacing
existing systems. We are confirming with our service providers that they are
also in the process of replacing or modifying their systems with the same goal.
We expect that our principal systems will be Year 2000 compliant by early 1999.
While these efforts involve substantial costs, we closely monitor associated
costs and continue to evaluate associated risks based on actual expenses. While
it is likely that these efforts will be successful, if necessary modifications
and conversions are not completed in a timely manner, the Year 2000 requirements
could have a material adverse effect on certain operations of the Company.

DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS

The Company intends to sell the Contract in all jurisdictions where the Company
is licensed to do business, except the Bahamas. The Contract may be purchased
from agents who are licensed by state insurance authorities to sell variable
annuity contracts issued by the Company, and who are also registered
representatives of Tower Square Securities, Inc. ("Tower Square") and broker-
dealers which have Selling Agreements with Tower Square. Tower Square, whose
principal business address is One Tower Square, Hartford, Connecticut, serves as
the principal underwriter for the variable annuity contracts described herein.
The offering is continuous. Tower Square is a registered broker-dealer with the
SEC under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. ("NASD"). Tower Square is an affiliate
of the Company and an indirect wholly owned subsidiary of Travelers Group Inc.,
and serves as principal underwriter pursuant to a Distribution and Management
Agreement to which the Separate Accounts, the Company and Tower Square are
parties. No amounts have been or will be retained by Tower Square for acting as
principal underwriter for the Contracts. It is currently anticipated that
Travelers Distribution Company, an affiliated broker-dealer, may become the
principal underwriter for the Contracts during 1998.

Agents will be compensated for sales of the Contracts on a commission and
service fee basis. The compensation paid to sales agents will not exceed 7.0% of
the payments made under the Contract. In addition, certain production,
persistency and managerial bonuses may be paid.

From time to time the Company may pay or permit other promotional incentives, in
cash, credit or other compensation.

25
<PAGE> 35

CONFORMITY WITH STATE AND FEDERAL LAWS

The Contract is governed by the laws of the state in which it is delivered. Any
paid-up annuity, cash surrender value or death benefits that are available under
the Contract are not less than the minimum benefits required by the statutes of
the state in which the Contract is delivered. We reserve the right to make any
changes, including retroactive changes, in the Contract to the extent that the
change is required to meet the requirements of any law or regulation issued by
any governmental agency to which the Company, the Contract or the contract owner
is subject.

VOTING RIGHTS

The Company is the legal owner of the shares of the funding options. However, we
believe that when a funding option solicits proxies in conjunction with a vote
of shareholders we are required to obtain from you and from other owners
instructions on how to vote those shares. When we receive those instructions, we
will vote all of the shares we own in proportion to those instructions. This
will also include any shares we own on our own behalf. Should we determine that
we are no longer required to comply with the above, we will vote the shares in
our own right.

CONTRACT MODIFICATION

The Company reserves the right to modify the Contract to keep it qualified under
all related law and regulations which are in effect during the term of this
Contract. We will obtain the approval of any regulatory authority needed for the
modifications.

LEGAL PROCEEDINGS

There are no pending material legal proceedings affecting the separate account.
There is one material pending legal proceeding, other than ordinary routine
litigation incidental to the business, to which the Company is a party. In March
1997, a purported class action entitled Patterman v. The Travelers, Inc. was
commenced in the Superior Court of Richmond County, Georgia, alleging, among
other things, violations of the Georgia RICO statute and other state laws by an
affiliate of the Company, Primerica Financial Services, Inc. and certain of its
affiliates. Plaintiffs seek unspecified compensatory and punitive damages and
other relief. In April 1997, the lawsuit was removed to the U.S. District Court
for the Southern District of Georgia, and in October, 1997, the lawsuit was
remanded to the Superior Court of Richmond County. Later in October 1997, the
defendants, including the Company, answered the complaint, denied liability and
asserted numerous affirmative defenses. In February 1998, the Superior Court of
Richmond County transferred the lawsuit to the Superior Court of Gwinnett
County, Georgia, and certified the transfer order for immediate appellate
review. Also in February 1998, plaintiffs served an application for appellate
review of the transfer order; defendants subsequently opposed that application;
and later in February 1998, the Court of Appeals of the State of Georgia granted
plaintiffs' application for appellate review. Pending appeal proceedings in the
trial court have been stayed. The Company intends to vigorously contest the
litigation.

Legal matters in connection with the federal laws and regulations affecting the
issue and sale of the Contract described in this prospectus, as well as the
organization of the Company, its authority to issue variable annuity contracts
under Connecticut law, have been passed on by the General Counsel of the
Company.

26
<PAGE> 36

APPENDIX A
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

THE TRAVELERS SEPARATE ACCOUNT QP FOR VARIABLE ANNUITIES
ACCUMULATION UNIT VALUES

For the period ended December 31, 1996, all contract owner units and values had
a mortality and expense risk charge equivalent to 0.95%.

For the fiscal year ended 1997, accumulation units and associated unit values
noted as P1, P2(1), P3(2), P4, P5 and P6 represent a mortality and expense risk
charge of 0.60%, 0.80%, 0.90%, 0.95%, 1.15% and 1.20%, respectively.

<TABLE>
<CAPTION>
PERIOD FROM
OCTOBER 1, 1996
(EFFECTIVE DATE)
PORTFOLIO NAME YEAR ENDED 1997 TO DECEMBER 31, 1996
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------

<CAPTION>
P1 P3 P4 P5 P6
------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL APPRECIATION FUND
Unit Value at beginning of
year......................... $ 1.000 $ 1.000 $ 1.028 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.290 1.285 1.285 1.282 1.279 1.028
Number of units outstanding at
end of year.................. 68,643 126,822 1,445,911 58,734 350,624 293,629
HIGH YIELD BOND TRUST
Unit Value at beginning of
year......................... $ 1.000 $ 1.000 $ 1.031 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.196 1.191 1.191 1.188 1.186 1.031
Number of units outstanding at
end of year.................. 197 7,092 28,158 3,683 3,815 6,520
MANAGED ASSETS TRUST
Unit Value at beginning of
year......................... $ 1.000 $ 1.000 $ 1.043 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.258 1.254 1.253 1.250 1.247 1.043
Number of units outstanding at
end of year.................. 5,565 74,574 287,178 12,488 223,823 78,508
U.S. GOVERNMENT SECURITIES
PORTFOLIO
Unit Value at beginning of
year......................... $ - $ 1.000 $ 1.025 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.145 1.144 1.141 1.139 1.025
Number of units outstanding at
end of year.................. 3,011 81,229 2,710 14,373 51,072
SOCIAL AWARENESS STOCK PORTFOLIO
Unit Value at beginning of
year......................... $ 1.000 $ 1.000 $ 1.036 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.311 1.307 1.306 1.303 1.300 1.036
Number of units outstanding at
end of year.................. 1,465 6,831 124,610 4,603 58,974 35,689
UTILITIES PORTFOLIO
Unit Value at beginning of
year......................... $ 1.000 $ 1.000 $ 1.034 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.289 1.284 1.283 1.280 1.278 1.034
Number of units outstanding at
end of year.................. 1,494 1,816 23,673 538 462 7,796
TRAVELERS QUALITY BOND PORTFOLIO
(9/97)*
Unit Value at beginning of
year......................... $ - $ - $ 1.000 $ 1.000 $ 1.000 n/a
Unit Value at end of year...... 1.020 1.020 1.019
Number of units outstanding at
end of year.................. 5,949 9,879 9,055
LAZARD INTERNATIONAL STOCK
PORTFOLIO(8/97)*
Unit Value at beginning of
year......................... $ - $ 1.000 $ - $ 1.000 $ 1.000 n/a
Unit Value at end of year...... 0.979 0.978 0.978
Number of units outstanding at
end of year.................. 3,686 896 513
</TABLE>

A-1
<PAGE> 37
APPENDIX A
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

THE TRAVELERS SEPARATE ACCOUNT QP FOR VARIABLE ANNUITIES
ACCUMULATION UNIT VALUES (CONTINUED)

<CAPTION>
P1 P3 P4 P5 P6
------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
FEDERATED STOCK PORTFOLIO(7/97)*
Unit Value at beginning of
year......................... $ - $ 1.000 $ - $ 1.000 $ 1.000 n/a
Unit Value at end of year...... 1.083 1.082 1.081
Number of units outstanding at
end of year.................. 21,106 1,133 205
FEDERATED HIGH YIELD
PORTFOLIO(10/97)*
Unit Value at beginning of
year......................... $ - $ 1.000 $ - $ 1.000 $ - n/a
Unit Value at end of year...... 1.011 1.010
Number of units outstanding at
end of year.................. 3,118 123
LARGE CAP PORTFOLIO(7/97)*
Unit Value at beginning of
year......................... $ - $ 1.000 $ - $ 1.000 $ - n/a
Unit Value at end of year...... 1.028 1.027
Number of units outstanding at
end of year.................. 15,144 3,857
EQUITY INCOME PORTFOLIO(7/97)*
Unit Value at beginning of
year......................... $ - $ 1.000 $ - $ 1.000 $ 1.000 n/a
Unit Value at end of year...... 1.062 1.061 1.060
Number of units outstanding at
end of year.................. 66,733 3,543 2,047
TEMPLETON BOND FUND
Unit Value at beginning of
year......................... $ - $ - $ 1.035 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.051 1.048 1.047 1.035
Number of units outstanding at
end of year.................. 26,610 397 6,032 15,303
TEMPLETON STOCK FUND
Unit Value at beginning of
year......................... $ 1.000 $ - $ 1.080 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.202 1.197 1.194 1.192 1.080
Number of units outstanding at
end of year.................. 44,138 1,718,317 129,091 218,117 369,698
TEMPLETON ASSET ALLOCATION FUND
Unit Value at beginning of
year......................... $ 1.000 $ - $ 1.067 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.226 1.221 1.218 1.216 1.067
Number of units outstanding at
end of year.................. 7,711 463,517 23,178 358,096 70,211
FIDELITY VIP HIGH INCOME
PORTFOLIO
Unit Value at beginning of
year......................... $ 1.000 $ - $ 1.013 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.186 1.181 1.178 1.176 1.013
Number of units outstanding at
end of year.................. 921 320,529 75,810 40,547 91,884
FIDELITY VIP GROWTH PORTFOLIO
Unit Value at beginning of
year......................... $ 1.000 $ - $ 0.993 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.220 1.215 1.212 1.209 0.993
Number of units outstanding at
end of year.................. 18,843 2,899,381 226,450 318,582 804,434
FIDELITY VIP EQUITY-INCOME
PORTFOLIO
Unit Value at beginning of
year......................... $ 1.000 $ - $ 1.043 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.329 1.324 1.321 1.318 1.043
Number of units outstanding at
end of year.................. 11,243 1,680,061 68,894 313,762 417,374
</TABLE>

A-2
<PAGE> 38
APPENDIX A
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

THE TRAVELERS SEPARATE ACCOUNT QP FOR VARIABLE ANNUITIES
ACCUMULATION UNIT VALUES (CONTINUED)

<CAPTION>
P1 P3 P4 P5 P6
------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
FIDELITY VIP II ASSET MANAGER
PORTFOLIO
Unit Value at beginning of
year......................... $ 1.000 $ - $ 1.048 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.258 1.253 1.249 1.247 1.048
Number of units outstanding at
end of year.................. 873 924,065 46,494 244,401 290,881
DREYFUS STOCK INDEX FUND
Unit Value at beginning of
year......................... $ 1.000 $ - $ 1.076 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.424 1.418 1.415 1.412 1.076
Number of units outstanding at
end of year.................. 13,090 1,416,791 87,374 343,089 204,067
AMERICAN ODYSSEY INTERNATIONAL
EQUITY FUND
Unit Value at beginning of
year......................... $ 1.000 $ 1.000 $ 1.091 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.141 1.136 1.136 1.133 1.131 1.091
Number of units outstanding at
end of year.................. 3,405 145,853 1,647,285 25,147 16,165 239,079
AMERICAN ODYSSEY EMERGING
OPPORTUNITIES FUND
Unit Value at beginning of
year......................... $ 1.000 $ 1.000 $ 0.885 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 0.942 0.939 0.938 0.936 0.934 0.885
Number of units outstanding at
end of year.................. 5,090 129,811 2,458,031 24,064 33,718 404,384
AMERICAN ODYSSEY CORE EQUITY FUND
Unit Value at beginning of
year......................... $ 1.000 $ 1.000 $ 1.080 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.417 1.412 1.411 1.408 1.405 1.080
Number of units outstanding at
end of year.................. 1,292 185,044 2,781,580 95,491 42,002 496,794
AMERICAN ODYSSEY LONG-TERM BOND
FUND
Unit Value at beginning of
year......................... $ - $ 1.000 $ 1.022 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.135 1.135 1.132 1.130 1.022
Number of units outstanding at
end of year.................. 115,168 1,504,310 24,590 22,291 232,943
AMERICAN ODYSSEY INTERMEDIATE-
TERM BOND FUND
Unit Value at beginning of
year......................... $ - $ 1.000 $ 1.107 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.083 1.083 1.080 1.078 1.017
Number of units outstanding at
end of year.................. 58,486 940,500 12,156 10,975 195,701
AMERICAN ODYSSEY GLOBAL HIGH-
YIELD BOND FUND**
Unit Value at beginning of
year......................... $ - $ 1.000 $ 1.010 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.062 1.062 1.059 1.057 1.010
Number of units outstanding at
end of year.................. 29,906 472,674 4,094 5,622 116,408
SMITH BARNEY INCOME AND GROWTH
PORTFOLIO
Unit Value at beginning of
year......................... $ 1.000 $ 1.000 $ 1.058 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.334 1.329 1.328 1.324 1.322 1.058
Number of units outstanding at
end of year.................. 7,515 75,718 1,048,182 9,074 51,250 270,469
</TABLE>

A-3
<PAGE> 39
APPENDIX A
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

THE TRAVELERS SEPARATE ACCOUNT QP FOR VARIABLE ANNUITIES
ACCUMULATION UNIT VALUES (CONTINUED)

<CAPTION>
P1 P3 P4 P5 P6
------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE GROWTH PORTFOLIO
Unit Value at beginning of
year......................... $ 1.000 $ 1.000 $ 1.065 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.367 1.362 1.361 1.358 1.355 1.065
Number of units outstanding at
end of year.................. 10,959 27,182 315,371 25,227 46,772 44,777
SMITH BARNEY INTERNATIONAL EQUITY
PORTFOLIO
Unit Value at beginning of
year......................... $ 1.000 $ 1.000 $ 1.017 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.040 1.036 1.035 1.033 1.031 1.017
Number of Units outstanding at
end of year.................. 6,580 17,229 97,802 4,658 5,601 8,808
PUTNAM DIVERSIFIED INCOME
PORTFOLIO
Unit Value at beginning of
year......................... $ 1.000 $ 1.000 $ 1.019 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.092 1.088 1.088 1.085 1.083 1.019
Number of units outstanding at
end of year.................. 6,058 1,776 36,214 2,136 17,658 12,636
SMITH BARNEY HIGH INCOME
PORTFOLIO
Unit Value at beginning of
year......................... $ - $ 1.000 $ 1.042 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.176 1.176 1.173 1.171 1.042
Number of units outstanding at
end of year.................. 3,775 34,790 2,552 6,261 278
MFS TOTAL RETURN PORTFOLIO
Unit Value at beginning of
year......................... $ 1.000 $ 1.000 $ 1.045 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.260 1.256 1.255 1.252 1.249 1.045
Number of units outstanding at
end of year.................. 9,157 11,241 20,522 23,942 89,438 2,087
SMITH BARNEY MONEY MARKET
PORTFOLIO
Unit Value at beginning of
year......................... $ - $ 1.000 $ 1.010 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year...... 1.052 1.051 1.048 1.047 1.010
Number of units outstanding at
end of year.................. 19,062 124,936 24,063 39,703 56,124
</TABLE>

The financial statements of Separate Account QP are contained in the Annual
Report which should be read along with this information and which is
incorporated by reference into the SAI. The consolidated financial statements of
The Travelers Insurance Company and Subsidiaries are contained in the SAI.

Funding options not listed above were not yet available through the Separate
Account as of December 31, 1997.

* Reflects date money first came into funding option through the Separate
Account.

** Formerly American Odyssey Short-Term Bond Fund. The name, investment
objective, and investment subadviser of this fund were changed pursuant to a
shareholder vote effective May 1, 1998.

(1) As of December 31, 1997 no contracts had been sold with a mortality and
expense risk charge of .80%.

(2) The .90% mortality and expense risk charge is currently sold only through
Gold Track Select Contracts.

A-4
<PAGE> 40

APPENDIX B
CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

The Statement of Additional Information contains more specific information and
financial statements relating to the Separate Account and the Company. A list of
the contents of the Statement of Additional Information is set forth below:

The Insurance Company
Principal Underwriter
Distribution and Management Agreement
Valuation of Assets
Federal Tax Considerations
Performance Information
Independent Accountants
Financial Statements

- --------------------------------------------------------------------------------

COPIES OF THE STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 1998 (FORM NO. L
12549S) ARE AVAILABLE WITHOUT CHARGE. TO REQUEST A COPY, PLEASE COMPLETE THE
COUPON FOUND BELOW AND MAIL IT TO: THE TRAVELERS INSURANCE COMPANY, ANNUITY
SERVICES, ONE TOWER SQUARE, HARTFORD, CONNECTICUT, 06183-9061.

Name:
- --------------------------------------------------------------------------------
Address:
================================================================================

B-1
<PAGE> 41

THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE> 42

THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE> 43

THE TRAVELERS SEPARATE ACCOUNT QP
FOR VARIABLE ANNUITIES

L-12549 Printed in U.S.A.
TIC Ed. 5-98
<PAGE> 44

TRAVELERS GOLD TRACK SELECT
VARIABLE ANNUITY CONTRACT PROFILE

MAY 1, 1998

1. THE VARIABLE ANNUITY CONTRACT. The Contract offered by Travelers Insurance
Company is a variable annuity that is intended for retirement savings or other
long-term investment purposes. The Contract provides a death benefit as well as
guaranteed income options. You will be issued a certificate summarizing the
provisions of the group Contract. For convenience, we refer to Contracts and
Certificates as "Contracts." Under a qualified Contract, you can make one or
more payments, as you choose, on a tax-deferred basis. Under a nonqualified
Contract, you can make one or more payments with after-tax dollars. You direct
your payment(s) to one or more of the variable funding options listed in Section
4 and/or to the Fixed Account. We guarantee money directed to the Fixed Account
as to principal and interest. The variable funding options are designed to
produce a higher rate of return than the Fixed Account; however, this is not
guaranteed. You may also lose money in the variable funding options.

The Contract, like all deferred variable annuity contracts has two phases: the
accumulation phase and the income phase. During the accumulation phase, under a
qualified contract, your pre-tax contributions accumulate on a tax-deferred
basis and are taxed as income when you make a withdrawal, presumably when you
are in a lower tax bracket. During the accumulation phase, under a nonqualified
Contract, earnings on your after-tax contributions accumulate on a tax-deferred
basis and are taxed as income when you make a withdrawal. The income phase
occurs when you begin receiving payments from your Contract. The amount of money
you accumulate in your Contract determines the amount of income (annuity
payments) you receive during the income phase.

3. PURCHASE. The minimum purchase payment allowed is an average of $1,000
annually per individual certificate, or $10,000 annually per group contract.

<PAGE> 45

WHO MAY PURCHASE THIS CONTRACT?

The Contract is currently available for use in connection with qualified
retirement plans, which include contracts qualifying under Section 401, 403(b)
or 457 of the Internal Revenue Code.

4. INVESTMENT OPTIONS. You can direct your money into the Fixed Account and/or
to any or all of the following variable funding options. These funding options
and the Fixed Account are described in the applicable prospectuses for the
funds. Depending on market conditions, you may make or lose money in any of
these options.

High Yield Bond Trust

Managed Assets Trust

Money Market Portfolio

AMERICAN ODYSSEY FUNDS, INC.

Core Equity Fund

Emerging Opportunities Fund

Global High-Yield Bond Fund

Intermediate-Term Bond Fund

International Equity Fund

Long-Term Bond Fund

DELAWARE GROUP PREMIUM FUND, INC.

REIT Series

Small Cap Value Series

DREYFUS VARIABLE INVESTMENT FUND

Capital Appreciation Portfolio
Small Cap Portfolio

MONTGOMERY FUNDS III

Montgomery Variable Series: Growth Fund

OCC ACCUMULATION TRUST
Equity Portfolio

SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.

Salomon Brothers Variable Capital Fund

Salomon Brothers Variable Investors Fund

Salomon Brothers Variable Total Return Fund

STRONG VARIABLE INSURANCE FUNDS, INC.

Strong Schafer Value Fund II

TRAVELERS SERIES FUND, INC.

Alliance Growth Portfolio

MFS Total Return Portfolio

Putnam Diversified Income Portfolio

Smith Barney High Income Portfolio

Smith Barney International Equity Portfolio

Smith Barney Large Capitalization Growth Portfolio

THE TRAVELERS SERIES TRUST

Disciplined Mid Cap Stock Portfolio

Disciplined Small Cap Stock Portfolio

Equity Income Portfolio

Federated Stock Portfolio

Large Cap Portfolio
Lazard International Stock Portfolio

MFS Mid Cap Growth Portfolio

MFS Research Portfolio

Social Awareness Stock Portfolio

Strategic Stock Portfolio

Travelers Quality Bond Portfolio

U.S. Government Securities Portfolio

Utilities Portfolio

WARBURG PINCUS TRUST

Emerging Markets Portfolio

5. EXPENSES.

SALES CHARGES. Purchase payments are not subject to front-end sales load.
However, the Company will deduct a surrender charge. The maximum surrender
charge is 5% during the first two contract/certificate years, 4% during the
third and fourth years, 3% during the fifth and sixth years, 2% during the
seventh and eighth contract years, and 0% beginning in the ninth contract year.
If you withdraw all amounts under the contract, or if you begin receiving
annuity payments, the Company may be required by your state to deduct a premium
tax of 0% - 5%.

ii
<PAGE> 46

ADMINISTRATIVE AND MORTALITY AND EXPENSE RISK FEES. The Contract has insurance
features and investment features, and there are costs related to each. A maximum
sub-account administrative charge of .10% annually will be charged, depending
upon the terms of your allocated Contract. The maximum annual mortality and
expense risk charge is 1.20% of the amounts you direct to the funding options.

FUNDING OPTION EXPENSES. Each funding option charges for management and other
expenses. The charges range from .58% to 2.11% annually, of the average daily
net asset balance of the funding option, depending on the funding option.

The following table is designed to help you understand the Contract charges. The
column "Total Annual Insurance Charge" shows the maximum insurance charge of
1.20% and the 0.10% administrative charge. The investment charges for each
portfolio are also shown. Each of the American Odyssey Portfolios is listed
twice, once with the optional CHART asset allocation fee of 1.25% reflected, and
once without the optional asset allocation fee. The columns under the heading
"Examples" show you how much you would pay under the Contract for a one-year
period and for a 10-year period. The examples assume that you invested $1,000 in
a Contract that earns 5% annually and that you withdraw your money at the end of
year one and at the end of year 10. For year 1, the Total Annual Charges are
assessed as well as the withdrawal charges. For year 10, the examples shows the
aggregate of all the annual charges assessed during that time, but no withdrawal
charges are shown. For these examples, the premium tax is assumed to be 0%.
Please refer to the Fee Table in the prospectus for more details.

<TABLE>
<CAPTION>
EXAMPLES:
TOTAL TOTAL TOTAL ANNUAL
ANNUAL FUNDING TOTAL EXPENSES
INSURANCE OPTION ANNUAL AT END OF:
PORTFOLIO NAME CHARGE EXPENSES CHARGES 1 YEAR 10 YEARS
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Capital Appreciation Fund*........................ 1.30% 0.84% 2.14% $73 $247
High Yield Bond Trust............................. 1.30% 0.84% 2.14% 73 247
Managed Assets Trust.............................. 1.30% 0.63% 1.93% 71 225
Money Market Portfolio............................ 1.30% 0.40% 1.70% 69 201
AMERICAN ODYSSEY FUNDS, INC.(1)
Core Equity Fund.............................. 1.30% 0.65% 1.95% 71 227
Emerging Opportunities Fund................... 1.30% 0.86% 2.16% 73 249
Global High-Yield Bond Fund................... 1.30% 0.68% 1.98% 72 231
Intermediate-Term Bond Fund................... 1.30% 0.63% 1.93% 71 225
International Equity Fund..................... 1.30% 0.77% 2.07% 72 240
Long-Term Bond Fund........................... 1.30% 0.62% 1.92% 71 224
AMERICAN ODYSSEY FUNDS, INC.(2)
Core Equity Fund.............................. 1.30% 1.90% 3.20% 83 350
Emerging Opportunities Fund................... 1.30% 2.11% 3.41% 85 369
Global High-Yield Bond Fund................... 1.30% 1.93% 3.23% 83 353
Intermediate-Term Bond Fund................... 1.30% 1.88% 3.18% 83 348
International Equity Fund..................... 1.30% 2.02% 3.32% 84 361
Long-Term Bond Fund........................... 1.30% 1.87% 3.17% 83 348
DELAWARE GROUP PREMIUM FUND, INC.
REIT Series................................... 1.30% 0.85% 2.15% 73 248
Small Cap Value Series........................ 1.30% 0.85% 2.15% 73 248
DREYFUS VARIABLE INVESTMENT FUND
Capital Appreciation Portfolio................ 1.30% 0.80% 2.10% 73 243
Small Cap Portfolio........................... 1.30% 0.78% 2.08% 73 241
MONTGOMERY FUNDS III
Montgomery Variable Series: Growth Fund....... 1.30% 1.25% 2.55% 77 289
OCC ACCUMULATION TRUST
Equity Portfolio.............................. 1.30% 0.99% 2.29% 75 263
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
Salomon Brothers Variable Capital Fund........ 1.30% 1.00% 2.30% 75 264
Salomon Brothers Variable Investors Fund...... 1.30% 1.00% 2.30% 75 264
Salomon Brothers Variable Total Return Fund... 1.30% 1.00% 2.30% 75 264
</TABLE>

* Not available to new Contract Owners after May 1, 1998 in most states.

(1) Reflects expenses that would be incurred for those Contract Owners who DO
NOT participate in the CHART Asset Allocation program.

(2) Reflects expenses that would be incurred for those Contract Owners who DO
participate in the CHART Asset Allocation program.

iii
<PAGE> 47

<TABLE>
<CAPTION>
EXAMPLES:
TOTAL TOTAL TOTAL ANNUAL
ANNUAL FUNDING TOTAL EXPENSES
INSURANCE OPTION ANNUAL AT END OF:
PORTFOLIO NAME CHARGE EXPENSES CHARGES 1 YEAR 10 YEARS
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Schafer Value Fund II.................. 1.30% 1.20% 2.50% $77 $284
TRAVELERS SERIES FUND, INC.
Alliance Growth Portfolio..................... 1.30% 0.82% 2.12% 73 245
MFS Total Return Portfolio.................... 1.30% 0.86% 2.12% 73 249
Putnam Diversified Income Portfolio........... 1.30% 0.88% 2.18% 74 251
Smith Barney High Income Portfolio............ 1.30% 0.70% 2.00% 72 233
Smith Barney International Equity Portfolio... 1.30% 1.01% 2.31% 75 265
Smith Barney Large Capitalization Growth
Portfolio................................... 1.30% 1.00% 2.30% 75 264
Smith Barney Large Cap Value Portfolio*....... 1.30% 0.69% 1.99% 72 232
(formerly Smith Barney Income and Growth
Portfolio)
Smith Barney Money Market Portfolio*.......... 1.30% 0.65% 1.95% 71 227
THE TRAVELERS SERIES TRUST
Disciplined Mid Cap Stock Portfolio........... 1.30% 0.95% 2.25% 74 258
Disciplined Small Cap Stock Portfolio......... 1.30% 1.00% 2.30% 75 264
Equity Income Portfolio....................... 1.30% 0.95% 2.25% 74 258
Federated High Yield Portfolio*............... 1.30% 0.95% 2.25% 74 258
Federated Stock Portfolio..................... 1.30% 0.95% 2.25% 74 258
Large Cap Portfolio........................... 1.30% 0.95% 2.25% 74 258
Lazard International Stock Portfolio.......... 1.30% 1.25% 2.55% 77 289
MFS Mid Cap Growth Portfolio.................. 1.30% 1.00% 2.30% 75 264
MFS Research Portfolio........................ 1.30% 1.00% 2.30% 75 264
Social Awareness Stock Portfolio.............. 1.30% 0.98% 2.28% 74 262
Strategic Stock Portfolio..................... 1.30% 0.90% 2.20% 74 253
Travelers Quality Bond Portfolio.............. 1.30% 0.75% 2.05% 72 238
U.S. Government Securities Portfolio.......... 1.30% 0.58% 1.88% 71 220
Utilities Portfolio........................... 1.30% 1.06% 2.36% 75 270
WARBURG PINCUS TRUST
Emerging Markets Portfolio.................... 1.30% 1.40% 2.70% 78 303
</TABLE>

* Not available to new Contract Owners after May 1, 1998 in most states.

7. ACCESS TO YOUR MONEY. You can take withdrawals at any time during the
accumulation phase. A withdrawal charge (a surrender charge) may apply. The
amount of the charge depends on a number of factors, including the length of
time the contract/certificate has been in effect. After the first
contract/certificate year, you may withdraw up to 10% of the cash value (as of
the end of the previous contract year) without a deferred sales charge. You may
also have to pay income taxes, a federal tax penalty or premium taxes on any
money you take out.

You may choose to receive monthly, quarterly, semi-annual or annual
("systematic") withdrawals of at least $50 if your Contract's cash value is
$5,000 or more. All applicable sales charges and premium taxes will be deducted.

iv
<PAGE> 48

performance. Past performance is not a guarantee of future results. Performance
information that predates the separate account is considered "nonstandard" by
the SEC. Such nonstandard performance information is shown in the Statement of
Additional Information that you may request free of charge.

LAST TEN CALENDAR YEARS (OR FULL YEARS SINCE INCEPTION)

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
PORTFOLIO NAME 1997 INCEPTION DATE
- -------------------------------------------------------------------------------------
<S> <C> <C>
High Yield Bond Trust....................................... 13.94% 10/1/96
Managed Assets Trust........................................ 19.72% 10/1/96
AMERICAN ODYSSEY FUNDS, INC.(1)
Core Equity Fund........................................ 30.21% 10/1/96
Emerging Opportunities Fund............................. 5.66% 10/1/96
Global High-Yield Bond Fund(3).......................... 4.75% 10/1/96
Intermediate-Term Bond Fund............................. 6.12% 10/1/96
International Equity Fund............................... 3.69% 10/1/96
Long-Term Bond Fund..................................... 10.60% 10/1/96
AMERICAN ODYSSEY FUNDS, INC.(2)
Core Equity Fund........................................ 28.65% 10/1/96
Emerging Opportunities Fund............................. 4.33% 10/1/96
Global High-Yield Bond Fund(3).......................... 3.46% 10/1/96
Intermediate-Term Bond Fund............................. 4.82% 10/1/96
International Equity Fund............................... 2.38% 10/1/96
Long-Term Bond Fund..................................... 9.25% 10/1/96
TRAVELERS SERIES FUND, INC.
Alliance Growth Portfolio............................... 27.37% 10/1/96
MFS Total Return Portfolio.............................. 19.63% 10/1/96
Putnam Diversified Income Portfolio..................... 6.30% 10/1/96
Smith Barney High Income Portfolio...................... 12.41% 10/1/96
Smith Barney International Equity Portfolio............. 1.39% 10/1/96
THE TRAVELERS SERIES TRUST
Social Awareness Stock Portfolio........................ 25.66% 10/1/96
U.S. Government Securities Portfolio.................... 11.18% 10/1/96
Utilities Portfolio..................................... 23.68% 10/1/96
</TABLE>

(1) Reflects expenses that would be incurred for those Contract Owners who DO
NOT participate in the CHART Asset Allocation program.

(2) Reflects expenses that would be incurred for those Contract Owners who DO
participate in the CHART Asset Allocation program.

(3) Formerly American Odyssey Short-Term Bond Fund. The name, investment
objective and investment subadviser of this fund were changed pursuant to a
shareholder vote effective May 1, 1998.

Those funding options not illustrated above do not yet have one full year of
performance history.

9. DEATH BENEFIT

DEATH PRIOR TO MATURITY DATE: The death benefit applies upon the first death of
the owner, joint owner or annuitant. Assuming you are the annuitant, if you die
before you move to the income phase, or before you reach age 75, whichever
occurs first, the person you have chosen as your beneficiary will receive a
death benefit.

For unallocated contracts, the death benefit equals the greatest of: (1) the
cash value attributable to the participant or (2) the total purchase payments
attributable to the participant under the

v
<PAGE> 49

Contract less any applicable premium tax, minus outstanding loan amounts and
prior surrenders not previously deducted as of the date we receive due proof of
death. If you die on or after age 75, and before the annuity commencement date,
the death benefit payable will be the cash value atttributable to the
Participant under the Contract, less any applicable premium tax or outstanding
loans. (THIS DEATH BENEFIT IS AVAILABLE ONLY WITH OUR CONSENT, AND MAY NOT BE
AVAILABLE IN ALL JURISDICTIONS)

In all cases described above, any amount paid will be reduced by any applicable
premium tax, outstanding loans or surrenders not previously deducted. Certain
states may have varying age requirements. Please refer to the Contract
prospectus.

10. OTHER INFORMATION

RIGHT TO RETURN

11. ADDITIONAL FEATURES

This Contract has other features you may be interested in. These include:

12. INQUIRIES. If you need more information, please contact us at 888-453-8722
or:

Travelers Insurance Company
Annuity Services
One Tower Square

Hartford, CT 06183

vi
<PAGE> 50

THE TRAVELERS INSURANCE COMPANY

THE TRAVELERS SEPARATE ACCOUNT QP (SELECT)
FOR VARIABLE ANNUITIES

High Yield Bond Trust

Managed Assets Trust

Money Market Portfolio

AMERICAN ODYSSEY FUNDS, INC.

Core Equity Fund
Emerging Opportunities Fund

Global High-Yield Bond Fund

Intermediate-Term Bond Fund
International Equity Fund
Long-Term Bond Fund

DELAWARE GROUP PREMIUM FUND, INC.

REIT Series

Small Cap Value Series

DREYFUS VARIABLE INVESTMENT FUND
Capital Appreciation Portfolio
Small Cap Portfolio

MONTGOMERY FUNDS III

Montgomery Variable Series: Growth Fund

OCC ACCUMULATION TRUST
Equity Portfolio

SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.

Salomon Brothers Variable Capital Fund
Salomon Brothers Variable Investors Fund
Salomon Brothers Variable Total Return Fund
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Schafer Value Fund II
TRAVELERS SERIES FUND, INC.
Alliance Growth Portfolio
MFS Total Return Portfolio
Putnam Diversified Income Portfolio
Smith Barney High Income Portfolio
Smith Barney International Equity Portfolio

Smith Barney Large Capitalization Growth Portfolio

THE TRAVELERS SERIES TRUST

Disciplined Mid Cap Stock Portfolio

Disciplined Small Cap Stock Portfolio

Equity Income Portfolio

Federated Stock Portfolio

Large Cap Portfolio
Lazard International Stock Portfolio
MFS Mid Cap Growth Portfolio
MFS Research Portfolio

Social Awareness Stock Portfolio

Strategic Stock Portfolio

Travelers Quality Bond Portfolio

U.S. Government Securities Portfolio

Utilities Portfolio

WARBURG PINCUS TRUST

Emerging Markets Portfolio

This prospectus sets forth the information that you should know before
investing. Please read it and retain it for future reference. Additional
information about the Separate Account has been filed with the Securities and
Exchange Commission and is available without charge upon request. To obtain the
Statement of Additional Information ("SAI") send a written request to The
Travelers Insurance Company, Attn: Annuity Marketing, One Tower Square,
Hartford, CT 06183, call 1-888-453-8722 or access the SEC's website
(http://www.sec.gov). The Table of Contents for the SAI dated May 1, 1998,
appears in Appendix B. The SAI is incorporated by reference to this prospectus.
For more information about the Contract, contact your registered representative,
or write to us at the above address.

PROSPECTUS DATED: MAY 1, 1998

<PAGE> 51

TABLE OF CONTENTS

<TABLE>
<S> <C>
FEE TABLE....................................... 3
CONDENSED FINANCIAL INFORMATION................. 7
THE ANNUITY CONTRACTS........................... 7
General....................................... 7
Allocated Contracts........................... 8
Unallocated Contracts......................... 8
Application of Purchase Payments.............. 8
Accumulation Units............................ 8
Transfers..................................... 8
The Funding Options........................... 8
CHARGES UNDER THE CONTRACT...................... 12
Sales Charges................................. 12
Free Withdrawal Allowance................... 13
Mortality and Expense Risk Charge............. 13
Funding Option Charges........................ 13
Administrative Charge......................... 13
Premium Tax Deductions........................ 13
TPA Administrative Charges.................... 14
PAYMENT OF BENEFITS............................. 14
Death Benefits Proceeds Prior to Maturity
Date........................................ 14
Death Proceeds After the Maturity Date........ 15
Election of Settlement Options................ 15
Minimum Amounts............................... 16
Misstatement.................................. 16
Retired Life Certificate...................... 16
Allocation of Cash Surrender Value During the
Annuity Period.............................. 16
Annuity Options............................... 16
Variable Annuity.............................. 17
Amount of First Payment..................... 17
Annuity Unit Value.......................... 17
Initial Payment and Number of Annuity
Units..................................... 17
Amount of Subsequent Payments............... 17
Fixed Annuity................................. 17
THE SEPARATE ACCOUNT............................ 18
Performance Information....................... 18
FEDERAL TAX CONSIDERATIONS...................... 21
General Taxation of Annuities................. 21
Types of Contracts: Qualified or
Nonqualified................................ 21
Investor Control.............................. 21
Mandatory Distributions for Qualified Plans... 22
Nonqualified Annuity Contracts................ 22
Qualified Annuity Contracts................... 23
Penalty Tax for Premature Distributions....... 23
Diversification Requirements.................. 23
MISCELLANEOUS CONTRACT PROVISIONS............... 19
Right to Return............................... 19
Dollar Cost Averaging (Automated Transfers)... 20
Asset Allocation Advice....................... 20
Contract Exchanges............................ 20
Contract and Participant's Individual Account
Termination................................. 19
Postponement of Payment (Emergency
Procedure).................................. 21
Account Value................................. 21
OTHER INFORMATION............................... 23
The Insurance Company......................... 23
Year 2000 Compliance.......................... 24
Distribution of Variable Annuity Contracts.... 24
Conformity with State and Federal Laws........ 24
Voting Rights................................. 25
Contract Modification......................... 25
Legal Proceedings and Opinions................ 25
APPENDIX A: CONDENSED FINANCIAL INFORMATION..... A-1
APPENDIX B: CONTENTS OF THE STATEMENT OF
ADDITIONAL INFORMATION........................ B-1
</TABLE>

INDEX OF SPECIAL TERMS

The following terms are italicized throughout the prospectus. Refer to the page
listed for an explanation of each term.

<TABLE>
<S> <C>
Accumulation Unit............................... 8
Annuitant....................................... 7
Annuity Unit.................................... 8
Annuity Payments................................ 7
Cash Value...................................... 8
Contract Date................................... 7
Contract Owner (You, Your)...................... 7
Individual Account.............................. 7
Contract Value.................................. 7
Contract Year................................... 7
Funding Option(s)............................... 8
Income Payments................................. 7
Maturity Date................................... 7
Purchase Payment................................ 7
Written Request................................. 7
Participant..................................... 7
</TABLE>

2
<PAGE> 52

SEPARATE ACCOUNT QP

FEE TABLE
- --------------------------------------------------------------------------------

MAXIMUM CONTRACT/CERTIFICATE OWNER TRANSACTION CHARGES

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
CONTRACT/
CERTIFICATE
SURRENDER CHARGE YEAR PERCENTAGE
- -------------------------------------------------------------------------------------
<S> <C> <C>
As a percentage of amount surrendered 1-2 5%
3-4 4
5-6 3
7-8 2
9+ 0
</TABLE>

MAXIMUM SEPARATE ACCOUNT ANNUAL EXPENSES

<TABLE>
<S> <C> <C>
Mortality and Expense Risk Fees 1.20%
</TABLE>

(As a percentage of average daily net assets of the Separate Account)

MAXIMUM CONTRACT/CERTIFICATE ADMINISTRATIVE CHARGE

<TABLE>
<S> <C> <C>
Funding Option Administrative Charge 0.10%
</TABLE>

(As a percentage of amounts allocated to the variable funding options under the
contracts)

FUNDING OPTION EXPENSES

(as a percentage of average daily net assets of the funding option as of
December 31, 1997, unless otherwise noted.)

3
<PAGE> 53

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
MANAGEMENT FEE OTHER EXPENSES TOTAL
(AFTER EXPENSE (AFTER EXPENSE UNDERLYING
UNDERLYING FUNDING OPTIONS REIMBURSEMENT) REIMBURSEMENT) FUND EXPENSES
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Small Cap Value Series.............................. 0.75% 0.10%(4) 0.85%
DREYFUS VARIABLE INVESTMENT FUND
Capital Appreciation Portfolio...................... 0.75% 0.05% 0.80%
Small Cap Portfolio................................. 0.75% 0.03% 0.78%
MONTGOMERY FUNDS III
Montgomery Variable Series: Growth Fund............. 1.00% 0.25%(5) 1.25%
OCC ACCUMULATION TRUST
Equity Portfolio.................................... 0.80% 0.19%(6) 0.99%
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
Salomon Brothers Variable Capital Fund.............. 0.85% 0.15%(7) 1.00%
Salomon Brothers Variable Investors Fund............ 0.70% 0.30%(7) 1.00%
Salomon Brothers Variable Total Return Fund......... 0.80% 0.20%(7) 1.00%
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Schafer Value Fund II........................ 1.00% 0.20%(8) 1.20%
TRAVELERS SERIES FUND, INC.
Alliance Growth Portfolio........................... 0.80% 0.02%(9) 0.82%
MFS Total Return Portfolio.......................... 0.80% 0.06%(9) 0.86%
Putnam Diversified Income Portfolio................. 0.75% 0.13%(9) 0.88%
Smith Barney High Income Portfolio.................. 0.60% 0.10%(9) 0.70%
Smith Barney International Equity Portfolio......... 0.90% 0.11%(9) 1.01%
Smith Barney Large Capitalization Growth
Portfolio......................................... 0.75% 0.25%(10) 1.00%
Smith Barney Large Cap Value Portfolio**............ 0.65% 0.04%(9) 0.69%
(formerly Smith Barney Income and Growth Portfolio)
Smith Barney Money Market Portfolio**............... 0.60% 0.05%(11) 0.65%
THE TRAVELERS SERIES TRUST
Disciplined Mid Cap Stock Portfolio................. 0.70% 0.25%(13) 0.95%
Disciplined Small Cap Stock Portfolio............... 0.80% 0.20%(12) 1.00%
Equity Income Portfolio............................. 0.75% 0.20%(13) 0.95%
Federated High Yield Portfolio...................... 0.65% 0.30%(13) 0.95%
Federated Stock Portfolio**......................... 0.63% 0.32%(13) 0.95%
Large Cap Portfolio................................. 0.75% 0.20%(13) 0.95%
Lazard International Stock Portfolio................ 0.83% 0.42%(13) 1.25%
MFS Mid Cap Growth Portfolio........................ 0.80% 0.20%(12) 1.00%
MFS Research Portfolio.............................. 0.80% 0.20%(12) 1.00%
Social Awareness Stock Portfolio.................... 0.65% 0.33% 0.98%
Strategic Stock Portfolio........................... 0.60% 0.30%(12) 0.90%
Travelers Quality Bond Portfolio.................... 0.32% 0.43%(13) 0.75%
U.S. Government Securities Portfolio................ 0.32% 0.26% 0.58%
Utilities Portfolio................................. 0.65% 0.41% 1.06%
WARBURG PINCUS TRUST
Emerging Markets Portfolio.......................... 0.45% 0.95%(14) 1.40%
</TABLE>

NOTES:

The purpose of this Fee Table is to assist Contract Owners in understanding the
various costs and expenses that a Contract Owner will bear, directly or
indirectly. See "Charges and Deductions" in this prospectus for additional
information. Expenses shown do not include premium taxes, which may be
applicable. "Other Expenses" include operating costs of the fund. These expenses
are reflected in each funding option's net asset value and are not deducted from
the account value under the Contract.

* Includes CHART Asset Allocation Fee of 1.25%.

** Not available to new Contract Owners after May 1, 1998 in most states.

(1) Other Expenses have been restated to reflect the current expense
reimbursement arrangement with The Travelers Insurance Company. Travelers
has agreed to reimburse the Fund for the amount by which its aggregate
expenses (including the management fee, but excluding brokerage
commissions, interest charges and taxes) exceeds 0.40%. Without such
arrangement, Total Expenses would have been 1.39% for the MONEY MARKET
PORTFOLIO.

(2) These fees reflect an expense reimbursement arrangement with the Funds'
investment adviser. Without reimbursement, Total Underlying Fund Expenses
would have been 0.79% for the INTERNATIONAL EQUITY FUND and 0.67% for the
CORE EQUITY FUND. The figures After Expense Reimbursement may be greater
than the figures Before Expense Reimbursement because of repayments by the
Fund to the Manager once the Fund is operating below the expense
limitation.

4
<PAGE> 54

(3) The Management Fees and Other Expenses for the GLOBAL-HIGH YIELD BOND FUND
are estimates and are not based on actual 1997 Fund expenses. Prior to May
1, 1998, the Global High Yield Bond Fund was named the "Short-Term Bond
Fund" and had a substantially different investment objective and investment
program. Information about the Short-Term Bond Fund is unlikely to be
helpful to investors in the Global High-Yield Bond Fund.

(4) The adviser for the DELAWARE REIT SERIES and the DELAWARE SMALL CAP VALUE
SERIES has agreed to voluntarily waive its fee and pay the expenses of the
Series to the extent that the Series' annual operating expenses, exclusive
of taxes, interest, brokerage commissions and extraordinary expenses, do
not exceed 0.85%. This arrangement will be reviewed by the adviser, and is
subject to change at any time.

(5) The Manager has agreed to reduce some or all of its management fees if
necessary to keep total annual operating expenses for the Growth Fund at or
below 1.25% of its average net assets. The Manager may also voluntarily
reduce additional amounts to increase the return to investors. Without such
reduction by the Manager, the Fund's actual total operating expenses would
have been 6.98% for the period ended December 31, 1997.

(6) The Fund's manager has agreed to reimburse the Fund the amount by which its
total operating expenses (net of any expense offsets) exceeds 1.00% of its
average daily net assets. There were no fees waived or expenses reimbursed
for the fiscal year ended December 31, 1997.

(7) The amounts set forth for Other Expenses are based on estimates for the
current fiscal year and will include fees for shareholder services,
administrative fees, custodial fees, legal and accounting fees, printing
costs and registration fees. These expenses reflect the voluntary agreement
by the Fund's adviser to impose an expense cap for the fiscal year ending
December 31, 1998 on the total operating expenses of each Fund (exclusive
of taxes, interest and extraordinary expenses such as litigation and
indemnification expenses) at the amounts shown in the table through the
reimbursement of expenses. Absent such agreement, the ratio of other
expenses and total operating expenses to the average daily net assets would
be 1.91% and 2.61%, respectively, for the INVESTORS FUND; 1.91% and 2.71%,
respectively, for the TOTAL RETURN FUND; and 1.91% and 2.76%, respectively,
for the CAPITAL FUND.

(8) Other Expenses are estimated for the current fiscal year. Additionally,
these fees reflect a voluntary expense reimbursement arrangement whereby
the Portfolio's adviser has voluntarily agreed to cap the Portfolio's total
operating expenses at 1.20%.

(9) Other expenses are as of October 31, 1997 (the Fund's fiscal year end).
There were no fees waived or expenses reimbursed for these funds in 1997.

(10) Other Expenses are based on estimates for the current fiscal year ending
October 31, 1998. Additionally, these fees reflect a voluntarily expense
limitation of 1.00% of the Portfolio's average net assets.

(11) Other expenses are as of October 31, 1997 and take into account the current
expense limitations agreed to by the Portfolios' investment manager (the
"Manager"). The Manager waived all of its fees for the period and
reimbursed the Portfolios for their expenses. Without such arrangements,
the Total Expenses for the SMITH BARNEY MONEY MARKET PORTFOLIO would have
been 0.67%.

(12) Other Expenses are based on estimates for the current fiscal year and will
include fees for shareholder services, administrative fees, custodial fees
, legal and accounting fees, printing costs and registration fees.
Additionally, these fees reflect a voluntary expense reimbursement
arrangement by Travelers to reimburse the Portfolios for the amount by
which their aggregate total operating expenses exceed 1.00% for the
DISCIPLINED SMALL CAP STOCK PORTFOLIO, MFS MID CAP GROWTH PORTFOLIO, MFS
RESEARCH PORTFOLIO; 0.80% for the CONVERTIBLE BOND PORTFOLIO; and 0.90% for
the STRATEGIC STOCK PORTFOLIO. These expenses have been illustrated at a
limit which the Portfolios' adviser believes to be in line with the actual
projected expenses of the Portfolios.

(13) Other Expenses reflect the current expense reimbursement arrangement with
Travelers where Travelers has agreed to reimburse the Portfolios for the
amount by which their aggregate expenses (including management fees, but
excluding brokerage commissions, interest charges and taxes) exceeds 0.95%
(1.25% for the Lazard International Stock Portfolio and 0.75% for the
Quality Bond Portfolio). Without such arrangements, the Total Funding
Option Expenses for the Portfolios would have been as follows: 1.10% for
FEDERATED HIGH YIELD PORTFOLIO; 1.14% for FEDERATED STOCK PORTFOLIO; 1.90%
for EQUITY INCOME PORTFOLIO; 2.65% for LARGE CAP PORTFOLIO; 1.82% for
DISCIPLINED MID CAP STOCK PORTFOLIO; 1.76% for LAZARD INTERNATIONAL STOCK
PORTFOLIO; and 1.13% for QUALITY BOND PORTFOLIO.

(14) The WARBURG PINCUS EMERGING MARKETS PORTFOLIO'S investment advisor and
co-administrator have agreed to limit the Portfolio's total operating
expenses to 1.40% through December 31, 1998. Absent this waiver of fees,
the Portfolio's management fees, other expenses and total operating
expenses would equal 1.25%, 0.95% and 2.20%, respectively. The Portfolio's
other expenses are based on annualized estimates of expenses for the fiscal
year ending December 31, 1998, net of any fee waivers or expense
reimbursements.

5
<PAGE> 55

EXAMPLE* WITH SURRENDER CHARGES (PERCENTAGE OF AMOUNT SURRENDERED)

Assuming a 5% annual return on assets, a $1,000 investment would be subject to
the following expenses:

<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Capital Appreciation Fund**............. $73 $111 $149 $247 $22 $67 $115 $247
High Yield Bond Trust................... 73 111 149 247 22 67 115 247
Managed Assets Trust.................... 71 104 139 225 20 61 104 225
Money Market Portfolio.................. 69 98 128 201 17 54 92 201
AMERICAN ODYSSEY FUNDS, INC.(1)
Core Equity Fund..................... 71 105 140 227 20 61 105 227
Emerging Opportunities Fund.......... 73 111 150 249 22 68 116 249
Global High-Yield Bond Fund.......... 72 106 142 231 20 62 107 231
Intermediate-Term Bond Fund.......... 71 104 139 225 20 61 104 225
International Equity Fund............ 72 108 146 240 21 65 111 240
Long-Term Bond Fund.................. 71 104 139 224 20 60 104 224
AMERICAN ODYSSEY FUNDS, INC.(2)
Core Equity Fund..................... 83 141 200 350 32 99 167 350
Emerging Opportunities Fund.......... 85 147 210 369 34 105 177 369
Global High-Yield Bond Fund.......... 83 142 202 353 33 100 169 353
Intermediate-Term Bond Fund.......... 83 140 199 348 32 98 166 348
International Equity Fund............ 84 144 206 361 33 102 173 361
Long-Term Bond Fund.................. 83 140 199 348 32 98 166 348
DELAWARE GROUP PREMIUM FUND, INC.
REIT Series.......................... 73 111 150 248 22 67 115 248
Small Cap Value Series............... 73 111 150 248 22 67 115 248
DREYFUS VARIABLE INVESTMENT FUND
Capital Appreciation Portfolio....... 73 109 147 243 21 66 113 243
Small Cap Portfolio.................. 73 109 147 241 21 65 112 241
MONTGOMERY FUNDS III
Montgomery Variable Series: Growth
Fund............................... 77 122 169 289 26 79 136 289
OCC ACCUMULATION TRUST
Equity Portfolio..................... 75 115 157 263 23 72 123 263
SALOMON BROTHERS VARIABLE SERIES FUNDS,
INC.
Salomon Brothers Variable Capital
Fund............................... 75 115 157 264 23 72 123 264
Salomon Brothers Variable Investors
Fund............................... 75 115 157 264 23 72 123 264
Salomon Brothers Variable Total
Return Fund........................ 75 115 157 264 23 72 123 264
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Schafer Value Fund II......... 77 121 167 284 25 78 133 284
TRAVELERS SERIES FUND, INC.
Alliance Growth Portfolio............ 73 110 148 245 22 66 114 245
MFS Total Return Portfolio........... 73 111 150 249 22 68 116 249
Putnam Diversified Income
Portfolio.......................... 74 112 151 251 22 68 117 251
Smith Barney High Income Portfolio... 72 106 143 233 20 63 108 233
Smith Barney International Equity
Portfolio.......................... 75 115 158 265 23 72 124 265
Smith Barney Large Capitalization
Growth Portfolio................... 75 115 157 264 23 72 123 264
Smith Barney Large Cap Value
Portfolio**........................ 72 106 142 232 20 62 107 232
(formerly Smith Barney Income and
Growth Portfolio)
Smith Barney Money Market
Portfolio**........................ 71 105 140 227 20 61 105 227
THE TRAVELERS SERIES TRUST
Disciplined Mid Cap Stock
Portfolio.......................... 74 114 155 258 23 70 120 258
Disciplined Small Cap Stock
Portfolio.......................... 75 115 157 264 23 72 123 264
Equity Income Portfolio.............. 74 114 155 258 23 70 120 258
Federated High Yield Portfolio**..... 74 114 155 258 23 70 120 258
Federated Stock Portfolio............ 74 114 155 258 23 70 120 258
Large Cap Portfolio.................. 74 114 155 258 23 70 120 258
Lazard International Stock
Portfolio.......................... 77 122 169 289 26 79 136 289
MFS Mid Cap Growth Portfolio......... 75 115 157 264 23 72 123 264
MFS Research Portfolio............... 75 115 157 264 23 72 123 264
Social Awareness Stock Portfolio..... 74 115 156 262 23 71 122 262
Strategic Stock Portfolio............ 74 112 152 253 22 69 118 253
Travelers Quality Bond Portfolio..... 72 108 145 238 21 64 110 238
U.S. Government Securities
Portfolio.......................... 71 103 137 220 19 59 102 220
Utilities Portfolio.................. 75 117 160 270 24 74 126 270
</TABLE>

6
<PAGE> 56

<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WARBURG PINCUS TRUST
Emerging Markets Portfolio........... 78 127 177 303 27 84 143 303
</TABLE>

* The Example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.

** Not available to new Contract Owners after May 1, 1998 in most states.

(1) Reflects expenses that would be incurred for those Contract Owners who DO
NOT participate in the CHART Asset Allocation program.

(2) Reflects expenses that would be incurred for those Contract Owners who DO
participate in the CHART Asset Allocation program.

CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

See Appendix A, page A-1.

THE CONTRACTS

- --------------------------------------------------------------------------------

GENERAL

Gold Track Select is a variable annuity designed to help contract owners and
participants accumulate money for retirement. Certificates are issued to
individual participants under a group contract. Under the Contract, you (the
contract owner or participant, as applicable) make purchase payments to us and
we credit them to your account. The Company promises to pay the owner or the
participant, as provided in an employer's plan, an income, in the form of
annuity payments, beginning on the maturity date (a future date chosen on which
annuity payments begin). The annuitant is the individual on whose life the
maturity date and the amount of the monthly annuity payments depend. The
annuitant may not be changed after the contract is in effect. The purchase
payments accumulate tax deferred in the funding options of your choice, or as
provided in the plan under which the Contract is issued. You assume the risk of
gain or loss according to the performance of the funding options. The cash value
is the amount of purchase payments, plus or minus any investment experience. The
cash value also reflects all withdrawals made and charges deducted. There is
generally no guarantee that at the maturity date the cash value will equal or
exceed the total purchase payments made under the Contract, except as specified
or elected under the death benefit provisions described in this prospectus. The
date the Contract and its benefits became effective is referred to as the
contract date. Each 12-month period following this contract date is called a
contract year. The record of accumulation units credited to an owner is called
the owner's account. The record of accumulation units credited to a participant
is called the individual account.

7
<PAGE> 57

ALLOCATED CONTRACTS

A group allocated Contract will cover all present and future participants under
the Contract. A participant under an allocated Contract may receive a
certificate which evidences participation in the Contract.

UNALLOCATED CONTRACTS

We offer an unallocated annuity Contract, designed for use with certain
Qualified Plans where the employer has secured the services of a TPA.

APPLICATION OF PURCHASE PAYMENTS

Each purchase payment will be applied to the Contract to provide accumulation
units of the funding options, as selected by the contract owner. A funding
option is a fixed interest account or available underlying fund to which assets
under a variable annuity contract may be allocated. Such accumulation units will
be credited to an owner's account or individual account, as directed or as
provided in the plan. If the Contract application is in good order, the Company
will apply the initial purchase payment within two business days of receipt at
the Company's Home Office. If the application is not in good order, the Company
will attempt to secure the missing information within five business days. If the
application is not complete at the end of this period, the Company will inform
the applicant of the reason for the delay. The purchase payment will be returned
immediately unless the applicant specifically consents to the Company keeping
the purchase payment until the application is complete. Once it is complete, the
purchase payment will be applied within two business days. Our business day ends
when the New York Stock Exchange closes, usually 4:00 p.m. Eastern time.

ACCUMULATION UNITS

TRANSFERS

THE FUNDING OPTIONS

8
<PAGE> 58

The funding options and their investment objectives and advisers are as follows:

Managed Assets Trust** Seeks high total investment return through a fully TAMIC
managed investment policy in a portfolio of equity, debt Subadviser: Travelers
and convertible securities. Investment Management
Company ("TIMCO")

Money Market Portfolio* Seeks high current income from short-term money market TAMIC
(formerly "Cash Income instruments while preserving capital and maintaining a
Trust") high degree of liquidity.

AMERICAN ODYSSEY FUNDS, INC.
Core Equity Fund Seeks maximum long-term total return by investing American Odyssey Funds
primarily in common stocks of well-established Management, Inc.
companies. Subadviser: Equinox
Capital Management, Inc.

Emerging Opportunities Seeks maximum long-term total return by investing American Odyssey Funds
Fund primarily in common stocks of small, rapidly growing Management, Inc.
companies. Subadviser: Cowen Asset
Management and Chartwell
Investment Partners

Long-Term Bond Fund* Seeks maximum long-term total return by investing American Odyssey Funds
primarily in long-term corporate debt securities, U.S. Management, Inc.
government securities, mortgage-related securities, and Subadviser: Western Asset
asset-backed securities, as well as money market Management Company
instruments.
DELAWARE GROUP PREMIUM
FUND, INC.
REIT Series Seeks maximum long-term total return by investing in Delaware Management
securities of companies primarily engaged in the real Company, Inc.
estate industry. Subadviser: Lincoln
Investment Management,
Inc.

Small Cap Value Series Seeks capital appreciation by investing primarily in Delaware Management
common stocks whose market values appear low relative to Company, Inc.
their underlying value or future potential.
DREYFUS VARIABLE INVESTMENT
FUND
Capital Appreciation Seeks primarily to provide long-term capital growth The Dreyfus Corporation
Portfolio consistent with the preservation of capital; current Subadviser: Fayez Sarofim
income is a secondary investment objective. The & Co. ("Sarofim")
portfolio invests primarily in the common stocks of
domestic and foreign issuers.
Small Cap Portfolio Seeks to maximize capital appreciation. The Dreyfus Corporation

MONTGOMERY FUNDS III
Montgomery Variable Seeks capital appreciation. Under normal conditions, it Montgomery Asset
Series: Growth Fund invests at least 65% of its assets in equity securities. Management
</TABLE>

9
<PAGE> 59

Salomon Brothers Variable Seeks long-term growth of capital. Current income is a SBAM
Investors Fund secondary objective.
Salomon Brothers Variable Seeks capital appreciation through investments primarily SBAM
Capital Fund in common stock, or securities convertible to common
stocks, which are believed to have above-average price
appreciation potential and which may also involve above-
average risk.
STRONG VARIABLE INSURANCE
FUNDS, INC.
Strong Shafer Value Seeks primarily long-term capital appreciation. Current Strong Capital Management,
Fund II income is a secondary objective when selecting Inc.
investments. Subadviser: Shafer Capital
Management, Inc.
TRAVELERS SERIES FUND, INC.
Alliance Growth Portfolio Seeks long-term growth of capital by investing Travelers Investment
predominantly in equity securities of companies with a Adviser ("TIA")
favorable outlook for earnings and whose rate of growth Subadviser: Alliance
is expected to exceed that of the U.S. economy over Capital Management L.P.
time. Current income is only an incidental
consideration.
MFS Total Return Seeks to obtain above-average income (compared to a TIA
Portfolio** portfolio entirely invested in equity securities) Subadviser: Massachusetts
consistent with the prudent employment of capital. Financial Services Company
Generally, at least 40% of the Portfolio's assets will ("MFS")
be invested in equity securities.
Putman Diversified Income Seeks high current income consistent with preservation TIA
Portfolio** of capital. The Portfolio will allocate its investments Subadviser: Putnam
among the U.S. Government Sector, the High Yield Sector, Investment Management,
and the International Sector of the fixed income Inc.
securities markets.
Smith Barney High Income Seeks high current income. Capital appreciation is a Mutual Management
Portfolio* secondary objective. The Portfolio will invest at least Corporation ("MMC")
65% of its assets in high-yielding corporate debt (formerly Smith Barney
obligations and preferred stock. Mutual Fund Management,
Inc.)
Smith Barney Seeks total return on assets from growth of capital and MMC
International Equity income by investing at least 65% of its assets in a
Portfolio diversified portfolio of equity securities of
established non-U.S. issuers.
Smith Barney Large Seeks long-term growth of capital by investing in equity MMC
Capitalization Growth securities of companies with large market
Portfolio capitalizations.
TRAVELERS SERIES TRUST
Disciplined Mid Cap Stock Seeks growth of capital by investing primarily in a TAMIC
Fund broadly diversified portfolio of common stocks. Subadviser: TIMCO
Disciplined Small Cap Seeks long term capital appreciation by investing TAMIC
Fund primarily (at least 65% of its total assets) in the Subadviser: TIMCO
common stocks of U.S. Companies with relatively small
market capitalizations at the time of investment.
Equity Income Portfolio Seeks reasonable income by investing at least 65% in TAMIC
income-producing equity securities. The balance may be Subadviser: Fidelity
invested in all types of domestic and foreign Management & Research
securities, including bonds. The Portfolio seeks to Company
achieve a yield that exceeds that of the securities
comprising the S&P 500. The Subadviser also considers
the potential for capital appreciation.
Federated Stock Portfolio Seeks growth of income and capital by investing TAMIC
principally in a professionally managed and diversified Subadviser: Federated
portfolio of common stock of high-quality companies Investment Counseling,
(i.e., leaders in their industries and characterized by Inc.
sound management and the ability to finance expected
growth).
</TABLE>

10
<PAGE> 60

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
INVESTMENT INVESTMENT INVESTMENT
OPTIONS OBJECTIVE ADVISER/SUBADVISER
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TRAVELERS SERIES TRUST (CONT.)
Large Cap Portfolio Seeks long-term growth of capital by investing primarily TAMIC
in equity securities of companies with large market Subadviser: Fidelity
capitalizations. Management & Research
Company
Lazard International Seeks capital appreciation by investing primarily in the TAMIC
Stock Portfolio equity securities of non-United States companies (i.e., Subadviser: Lazard Asset
incorporated or organized outside the United States). Management
MFS Mid Cap Growth Seeks to obtain long term growth of capital by TAMIC
Portfolio investing, under normal market conditions, at least 65% Subadviser: MFS
of its total assets in equity securities of companies
with medium market capitalization which the investment
adviser believes have above-average growth potential.
MFS Research Portfolio Seeks to provide long-term growth of capital and future TAMIC
income. Subadviser: MFS
Social Awareness Stock Seeks long-term capital appreciation and retention of MMC
Portfolio net investment income by selecting investments,
primarily common stocks, which meet the social criteria
established for the Portfolio. Social criteria currently
excludes companies that derive a significant portion of
their revenues from the production of tobacco, tobacco
products, alcohol, or military defense systems, or in
the provision of military defense related services or
gambling services.
Strategic Stock Portfolio Seeks to provide an above-average total return through a TAMIC
combination of potential capital appreciation and Subadviser: TIMCO
dividend income by investing primarily in high dividend
yield stocks periodically selected from the companies
included in (i) the Dow Jones Industrial Average and
(ii) the Standard & Poor's 100 Stock Index.
Travelers Quality Bond Seeks current income, moderate capital volatility and TAMIC
Portfolio* total return.
U.S. Government Seeks to select investments from the point of view of an TAMIC
Securities Portfolio* investor concerned primarily with highest credit
quality, current income and total return. The assets of
the U.S. Government Securities Portfolio will be
invested in direct obligations of the United States, its
agencies and instrumentalities.
Utilities Portfolio Seeks to provide current income by investing in equity MMC
and debt securities of companies in the utility
industries.
WARBURG PINCUS TRUST
Emerging Markets Seeks long-term growth of capital by investing primarily Warburg Pincus Asset
Portfolio in equity securities of non-U.S. issuers consisting of Management, Inc.
companies in emerging market securities.
</TABLE>

* The Funding Options marked with an asterisk (*) are considered Competing
Funds, and may be subject to transfer restrictions. Those marked with two
asterisks (**) are not currently considered Competing Funds, but may be so in
the future because of an allowable change in the Funding Option's investment
strategy. Please refer to the Contract for transfer restrictions.

(1) Formerly American Odyssey Short-Term Bond Fund. The name, investment
objective and investment subadviser of this fund was changed pursuant to
shareholder vote effective May 1, 1998.

11
<PAGE> 61

An asset allocation program is available for certain funding options under the
Contract. See "Asset Allocation Advice."

CHARGES UNDER THE CONTRACT

- --------------------------------------------------------------------------------

SALES CHARGES

Purchase payments made under the Contract pursuant to the terms of the contracts
are not subject to a front-end sales load. However, when withdrawn, the Company
will charge a surrender charge. Any sales charge, penalty tax and withholding
will be deducted from either the amount surrendered or from the remaining
Contract balance, as requested by the contract owner or participant. The Company
will charge a maximum surrender charge of 5% of the amount surrendered in the
first and second Contract/Certificate Years, up to 4% in years three and four,
up to 3% in years five and six, up to 2% in years seven and eight, and 0%
beginning in year nine. Any applicable sales charge will not exceed 8.5% of the
aggregate amount of the purchase payments made.

(b) Contract owner, agent or TPA involvement in conducting ongoing
enrollment of subsequently eligible participants, and

(d) Any other factors which the Company anticipates will increase or
decrease the sales-related expenses associated with the sale of the
Contract in connection with the Plan.

The surrender charge will not be assessed for withdrawals made under the
following circumstances: retirement, separation from service, loans (if
available in your Plan), hardship (as defined by the Code), death, disability as
defined in Code section 72(m)(7), return of Excess Plan Contributions, minimum
required distributions generally at age 70 1/2, transfers to an Employer Stock
Fund, certain Plan expenses as mutually agreed upon and annuitization under this
Contract or another contract issued by us.

For 401 plans with less than 50 participants at the time of sale, Highly
Compensated Employees, as defined by the Internal Revenue Code, during the first
5 Contract years may be subject to

12
<PAGE> 62

surrender charges for all distributions listed above except loans and return of
Excess Plan Contributions.

For unallocated Contracts, we make the deductions described above pursuant to
the terms of the various agreements among the custodian, the principal
underwriter, and us.

FREE WITHDRAWAL ALLOWANCE. For Contracts in use with deferred compensation
plans, tax deferred annuity plans and combined qualified plans/tax-deferred
annuity plans, there is currently a 10% free withdrawal allowance available each
year after the first contract/certificate year. The available withdrawal amount
will be calculated as of the first valuation date of any given
contract/certificate year. The free withdrawal allowance applies to partial
surrenders of any amount and to full surrenders, except those full surrenders
transferred directly to annuity contracts not issued by us.

MORTALITY AND EXPENSE RISK CHARGE

A mortality and expense risk charge is deducted on each business day from
amounts held in the Separate Account. This charge is equivalent, on an annual
basis, to a maximum of 1.20% of the amounts allocated to each funding option.
The mortality risk portion compensates the Company for guaranteeing to provide
annuity payments according to the terms of the Contract regardless of how long
the annuitant lives and for guaranteeing to provide the death benefit if a
participant dies prior to the maturity date. The expense risk charge compensates
the Company for the risk that the charges under the Contract, which cannot be
increased during the duration of the Contract, will be insufficient to cover
actual costs.

In determining the level of the mortality and expense risk charge, the Company
will consider the size of the Plan, the number of employees, Plan participants,
the demographics of the participants, which may reduce mortality and expenses of
the Plan, and any other factors which the Company considers relevant.

FUNDING OPTION CHARGES

There are certain deductions from and expenses paid out of the assets of each
funding option. These are described in the applicable prospectus for each
funding option.

ADMINISTRATIVE CHARGES

This charge is deducted on each business day from the variable funding options
in order to compensate the Company for certain administrative and operating
expenses of the funding options. The charge is equivalent on an annual basis to
a maximum of 0.10% of the daily net asset value of each funding option. This
charge is assessed during the accumulation and annuity periods from each
participant's individual account.

PREMIUM TAX DEDUCTIONS

Certain states or municipalities impose a premium tax, ranging from 0% to 5%. A
premium tax is made, if applicable, on purchase payments or contract values. On
any Contract subject to a premium tax, the tax will be deducted, as provided
under applicable law, either from purchase payments when received or from the
amount applied to effect an annuity at the time annuity payments commence.
However, we reserve the right to deduct from the Contract the state or
municipality premium tax upon our determination of when such tax is due.

13
<PAGE> 63

TPA ADMINISTRATIVE CHARGES

The Company may be directed by the contract owner to deduct charges from
purchase payments or account values for payment to the Contract Owner and/or the
TPA. These charges are not levied by the Contract. Such charges may include
maintenance fees and transaction fees.

PAYMENT OF BENEFITS
- --------------------------------------------------------------------------------

DEATH BENEFIT PROCEEDS PRIOR TO MATURITY DATE

ALLOCATED CONTRACT. The allocated Contract provides that, in the event the
participant dies before the selected maturity date or the participant's age 75
(whichever occurs first), the death benefit payable will be the greater of (a)
the cash value of the participant's individual account or (b) the total purchase
payments under that participant's individual account, less any applicable
premium tax, minus outstanding loan amounts and prior surrenders not previously
deducted as of the date we receive due proof of death.

If the participant dies on or after age 75 and before the annuity commencement
date, we will pay the beneficiary the cash value of the participant's individual
account, less, for each option, any applicable premium tax or outstanding loan
amounts as of the date we receive due proof of death.

UNALLOCATED CONTRACT. (This death benefit is available only with our consent
and by endorsement to the Contract and may not be available in all
jurisdictions.) The unallocated Contract provides that, in the event the
participant dies before the selected maturity date, or the participant's
attainment of age 75 (whichever occurs first), the death benefit payable will be
the greater of (a) the cash value attributable to the participant under the
Contract or (b) the total purchase payments attributable to the participant
under the Contract, less any applicable premium tax, prior surrenders not
previously deducted and any outstanding loan balance (if applicable) as of the
date we receive Due Proof of Death.

If the participant dies on or after attainment of age 75 and before the maturity
date, we will pay the beneficiary the cash value attributable to the participant
under the Contract, less any applicable premium tax, prior surrenders not
previously deducted and any outstanding loan balance (if applicable) as of the
date we receive Due Proof of Death.

14
<PAGE> 64

We will pay this benefit upon receiving Due Proof of Death along with a written
request noting the cash value and the total purchase payments attributable to
the participant under the Contract. In addition, we will require copies of
records and any other reasonable proof we find necessary to verify the cash
value and total purchase payments attributable to the participant under the
unallocated Contract.

We must be notified of a participant's death no later than six months after the
participant's date of death in order for the beneficiary to receive the death
benefits as described. If notification is received more than six months after
the participant's death, the beneficiary shall receive the cash value
attributable to the participant under the Contract as of the date we receive due
proof of death. The death benefit may be taken by the beneficiary in one of
three ways: 1) in a single sum, in which case payment will be made within seven
days of our receipt of due proof of death, unless subject to postponement as
explained below; 2) applied to a Fixed Period Annuity Option, in which case the
proceeds must be distributed within five years of the participant's date of
death, or; 3) applied to a Life Annuity Option available under the Contract.

A written request electing the distribution of death proceeds in the form of an
annuity option must be received by Us within one year from the date of death.
The minimum amount that can be placed under an annuity option is $2,000.

DEATH PROCEEDS AFTER THE MATURITY DATE

If the annuitant dies on or after the maturity date, we will pay the beneficiary
a death benefit consisting of any benefit remaining under the annuity option
then in effect.

ELECTION OF SETTLEMENT OPTIONS

Any amount distributed from the Contract may be applied to any one of the
annuity options described below.

Election of any of these options must be made by written request to our Home
Office at least 30 days prior to the date such election is to become effective.
The form of such annuity option shall be determined by the Contract/Certificate
owner. The following information must be provided with any such request:

a) the participant's name, address, date of birth, social security number;

b) the amount to be distributed;

c) the annuity option which is to be purchased;

d) the date the annuity option payments are to begin;

e) if the form of the annuity provides a death benefit in the event of the
participant's death, the name, relationship and address of the
beneficiary as designated by you; and

f) any other data that we may require.

The beneficiary, as specified in item (e) above, may be changed by you or the
annuitant as long as we are notified by written request while the annuitant is
alive and before payments have begun. If the beneficiary designation is
irrevocable, such designation cannot be changed or revoked without the consent
of the beneficiary. After we receive the Written Request and the written consent
of the beneficiary (if required), the new beneficiary designation will take
effect as of the date the notice is signed. We have no further responsibility
for any payment we made before the written request.

15
<PAGE> 65

MINIMUM AMOUNTS

The minimum amount that can be placed under an annuity option is $2,000 unless
we consent to a lesser amount. If any periodic payments due are less than $100,
we reserve the right to make payments at less frequent intervals.

MISSTATEMENT

If an annuitant's sex or age was misstated, all benefits of this Contract are
what the cash values would have purchased on the date of issue at the correct
sex and age.

RETIRED LIFE CERTIFICATE

ALLOCATION OF CASH SURRENDER VALUE DURING THE ANNUITY PERIOD

At the time an annuity option is elected, you also may elect to have the
participant's cash surrender value applied to provide a variable annuity, a
fixed annuity, or a combination of both.

ANNUITY OPTIONS

OPTION 1 -- LIFE ANNUITY/NO REFUND. A life annuity is an annuity payable during
the lifetime of the annuitant and terminating with the last monthly payment
preceding the death of the annuitant.

OPTION 3 -- LIFE ANNUITY -- CASH REFUND. We will make monthly annuity payments
during the lifetime of the annuitant, ceasing with the last payment due prior to
the death of the annuitant, provided that, at the death of the annuitant, the
beneficiary will receive an additional payment equal to the dollar value, if
any, of (a) minus (b) where, for a variable annuity:

(a) is the total amount applied under the option divided by the annuity
unit value on the due date of the first annuity payment;

(b) and is

(1) the number of annuity units represented by each payment;

times

(2) the number of payments made;

and for a Fixed Annuity:

(a) is the cash value applied on the maturity date under this option; and

(b) is the dollar amount of annuity payments already paid.

16
<PAGE> 66

OPTION 7 -- OTHER ANNUITY OPTIONS. We will make other arrangements for annuity
payments as may be mutually agreed upon by you and us.

VARIABLE ANNUITY

AMOUNT OF FIRST PAYMENT. The Life Annuity Tables are used to determine the
first monthly Annuity payment. They show the dollar amount of the basic first
monthly annuity payment which can be purchased with each $1,000 applied. The
amount applied to an Annuity will be the cash surrender value of a participant's
individual account as of 14 days before the date annuity payments start. We
reserve the right to require satisfactory proof of the age of any persons on
whose life annuity payments are based before making the first payment under any
of these options.

The value of an annuity unit as of any date other than a valuation date will be
equal to its value as of the succeeding valuation date.

FIXED ANNUITY

17
<PAGE> 67

determined as of the day annuity payments commence. If it would produce a larger
payment, the fixed annuity payments will be determined using the Life Annuity
Tables in effect on the maturity date.

THE SEPARATE ACCOUNT
- --------------------------------------------------------------------------------

PERFORMANCE INFORMATION

From time to time, we may advertise different types of historical performance
for the Contract's funding options. We may advertise the "standardized average
annual total returns" of the funding options, calculated in a manner prescribed
by the SEC as well as the "nonstandardized total returns," as described below.
Specific examples of the performance information appear in the SAI.

STANDARDIZED METHOD. Quotations of average annual total returns are computed
according to a formula in which a hypothetical initial investment of $1,000 is
applied to the funding option, and then related to ending redeemable values over
one-, five-, and ten-year periods, or for a period covering the time during
which the funding option has been in existence, if less. These quotations
reflect the deduction of all recurring charges during each period (on a pro rata
basis in the case of fractional periods). Each quotation assumes a total
redemption at the end of each period with the applicable withdrawal charges
deducted at that time.

18
<PAGE> 68

GENERAL. Within the guidelines prescribed by the SEC and the National
Association of Securities Dealers, Inc. ("NASD"), performance information may be
quoted numerically or may be presented in a table, graph or other illustration.
Advertisements may include data comparing performance to well-known indices of
market performance (including, but not limited to, the Dow Jones Industrial
Average, the Standard & Poor's (S&P) 500 Index and the S&P 400 Index, the Lehman
Brothers Long T-Bond Index, the Russell 1000, 2000 and 3000 Indices, the Value
Line Index, and the Morgan Stanley Capital International's EAFE Index).
Advertisements may also include published editorial comments and performance
rankings compiled by independent organizations (including, but not limited to,
Lipper Analytical Services, Inc. and Morningstar, Inc.) and publications that
monitor the performance of the Separate Account and the variable funding
options.

MISCELLANEOUS CONTRACT PROVISIONS

- --------------------------------------------------------------------------------

RIGHT TO RETURN

CONTRACT AND PARTICIPANT'S INDIVIDUAL ACCOUNT TERMINATION

Any cash value to which a terminating participant is not entitled under the Plan
will be moved to your account at your direction.

You may discontinue this Contract by written request at any time for any reason.
We reserve the right to discontinue this Contract if:

a) the cash value of the Contract is less than the termination amount; or

b) We determine within our sole discretion and judgment that the Plan or
administration of the Plan is not in conformity with applicable law; or

c) We receive notice that is satisfactory to us of plan termination.

If we discontinue this Contract or we receive your written request to
discontinue the Contract, we will, in our sole discretion and judgment:

19
<PAGE> 69

a) accept no further payments for this Contract; and

c) pay you an amount as described in the Fixed Account prospectus.

DOLLAR COST AVERAGING (AUTOMATED TRANSFERS)*

You may elect automated transfers through written request or other method
acceptable to the Company. Certain minimums apply to amounts transferred and/or
to enroll in the program.

* Automated transfers are subject to the terms and conditions of the Contract
(and your plan).

ASSET ALLOCATION ADVICE

CONTRACT EXCHANGES

20
<PAGE> 70

POSTPONEMENT OF PAYMENT (EMERGENCY PROCEDURE)

Payment of any benefit or values may be postponed whenever (1) the New York
Stock Exchange is closed; (2) when trading on the New York Stock Exchange is
restricted; (3) when an emergency exists as determined by the Securities and
Exchange Commission so that disposal of the securities held in the funding
options is not reasonably practicable or it is not reasonably practicable to
determine the value of the funding option'snet assets; or (4) during any other
period when the Securities and Exchange Commission, by order, so permits for the
protection of security holders. Any provision of the Contract which specifies a
valuation date will be superseded by this Emergency Procedure.

ACCOUNT VALUE

FEDERAL TAX CONSIDERATIONS
- --------------------------------------------------------------------------------

The following description of the federal income tax consequences under this
Contract is not exhaustive, is not intended to cover all situations and is not
meant to provide tax advice. Because of the complexity of the law and the fact
that the tax results will vary depending on many factors, you should consult
your tax advisor regarding your personal situation. For your information, a more
detailed discussion is contained in the SAI.

GENERAL TAXATION OF ANNUITIES

TYPES OF CONTRACTS: QUALIFIED OR NONQUALIFIED

21
<PAGE> 71

INVESTOR CONTROL

The remaining tax discussion assumes that the Contract qualifies as an annuity
contract for federal income tax purposes.

MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS

NONQUALIFIED ANNUITY CONTRACTS

As the owner of a nonqualified annuity, you do not receive any tax benefit
(deduction or deferral of income) on purchase payments, but you will not be
taxed on increases in the value of your contract until a distribution
occurs -- either as a withdrawal (distribution made prior to the maturity date),
or as annuity payments. When a withdrawal is made, you are taxed on the amount
of the withdrawal that is considered earnings. Similarly, when you receive an
annuity payment, part of each payment is considered a return of your purchase
payments and will not be taxed. The remaining portion of the annuity payment
(i.e., any earnings) will be considered ordinary income for tax purposes.

22
<PAGE> 72

QUALIFIED ANNUITY CONTRACTS

PENALTY TAX FOR PREMATURE DISTRIBUTIONS

DIVERSIFICATION REQUIREMENTS

OTHER INFORMATION

- --------------------------------------------------------------------------------

THE INSURANCE COMPANY

23
<PAGE> 73

YEAR 2000 COMPLIANCE

DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS

From time to time the Company may pay or permit other promotional incentives, in
cash, credit or other compensation.

CONFORMITY WITH STATE AND FEDERAL LAWS

24
<PAGE> 74

VOTING RIGHTS

CONTRACT MODIFICATION

LEGAL PROCEEDINGS AND OPINIONS

Legal matters in connection with the federal laws and regulations affecting the
issue and sale of the Contract described in this prospectus, as well as the
organization of the Company, its authority to issue variable annuity contracts
under Connecticut law and the validity of the forms of the variable annuity
contracts under Connecticut law, have been passed on by the General Counsel of
the Company.

25
<PAGE> 75

APPENDIX A

CONDENSED FINANCIAL INFORMATION

- --------------------------------------------------------------------------------

THE TRAVELERS SEPARATE ACCOUNT QP FOR VARIABLE ANNUITIES

ACCUMULATION UNIT VALUES

For the period ended December 31, 1996, all contract owner units and values had
a mortality and expense risk charge equivalent to 0.95%.

For the fiscal year ended 1997, accumulation units and associated unit values
noted as P1,(1) P2,(2) P3, P4(3), P5 and P6 represent a mortality and expense
risk charge of 0.60%, 0.80%, 0.90%, 0.95%, 1.15% and 1.20%, respectively.

<CAPTION>
P1 P3 P4 P5 P6
------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL APPRECIATION FUND(4)
Unit Value at beginning of year.... $ 1.000 $ 1.000 $ 1.028 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 1.290 1.285 1.285 1.282 1.279 1.028
Number of units outstanding at end
of year.......................... 68,643 126,822 1,445,911 58,734 350,624 293,629
HIGH YIELD BOND TRUST
Unit Value at beginning of year.... $ 1.000 $ 1.000 $ 1.031 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 1.196 1.191 1.191 1.188 1.186 1.031
Number of units outstanding at end
of year.......................... 197 7,092 28,158 3,683 3,815 6,520
MANAGED ASSETS TRUST
Unit Value at beginning of year.... $ 1.000 $ 1.000 $ 1.043 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 1.258 1.254 1.253 1.250 1.247 1.043
Number of units outstanding at end
of year.......................... 5,565 74,574 287,178 12,488 223,823 78,508
U.S. GOVERNMENT SECURITIES PORTFOLIO
Unit Value at beginning of year.... $ - $ 1.000 $ 1.025 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 1.145 1.144 1.141 1.139 1.025
Number of units outstanding at end
of year.......................... 3,011 81,229 2,710 14,373 51,072
SOCIAL AWARENESS STOCK PORTFOLIO
Unit Value at beginning of year.... $ 1.000 $ 1.000 $ 1.036 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 1.311 1.307 1.306 1.303 1.300 1.036
Number of units outstanding at end
of year.......................... 1,465 6,831 124,610 4,603 58,974 35,689
UTILITIES PORTFOLIO
Unit Value at beginning of year.... $ 1.000 $ 1.000 $ 1.034 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 1.289 1.284 1.283 1.280 1.278 1.034
Number of units outstanding at end
of year.......................... 1,494 1,816 23,673 538 462 7,796
LAZARD INTERNATIONAL STOCK
PORTFOLIO(8/97)*
Unit Value at beginning of year.... $ - $ 1.000 $ - $ 1.000 $ 1.000 n/a
Unit Value at end of year.......... 0.979 0.978 0.978
Number of units outstanding at end
of year.......................... 3,686 896 513
FEDERATED STOCK PORTFOLIO(7/97)*
Unit Value at beginning of year.... $ - $ 1.000 $ - $ 1.000 $ 1.000 n/a
Unit Value at end of year.......... 1.083 1.082 1.081
Number of units outstanding at end
of year.......................... 21,106 1,133 205
</TABLE>

A-1
<PAGE> 76

APPENDIX A

CONDENSED FINANCIAL INFORMATION

- --------------------------------------------------------------------------------

THE TRAVELERS SEPARATE ACCOUNT QP FOR VARIABLE ANNUITIES

ACCUMULATION UNIT VALUES (CONTINUED)

<CAPTION>
P1 P3 P4 P5 P6
------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
FEDERATED HIGH YIELD
PORTFOLIO(10/97)*(3)
Unit Value at beginning of year.... $ - $ 1.000 $ - $ 1.000 $ - n/a
Unit Value at end of year.......... 1.011 1.010
Number of units outstanding at end
of year.......................... 3,118 123
LARGE CAP PORTFOLIO(7/97)*
Unit Value at beginning of year.... $ - $ 1.000 $ - $ 1.000 $ - n/a
Unit Value at end of year.......... 1.028 1.027
Number of units outstanding at end
of year.......................... 15,144 3,857
EQUITY INCOME PORTFOLIO(7/97)*
Unit Value at beginning of year.... $ - $ 1.000 $ - $ 1.000 $ 1.000 n/a
Unit Value at end of year.......... 1.062 1.061 1.060
Number of units outstanding at end
of year.......................... 66,733 3,543 2,047
AMERICAN ODYSSEY INTERNATIONAL EQUITY
FUND
Unit Value at beginning of year.... $ 1.000 $ 1.000 $ 1.091 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 1.141 1.136 1.136 1.133 1.131 1.091
Number of units outstanding at end
of year.......................... 3,405 145,853 1,647,285 25,147 16,165 239,079
AMERICAN ODYSSEY EMERGING
OPPORTUNITIES FUND
Unit Value at beginning of year.... $ 1.000 $ 1.000 $ 0.885 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 0.942 0.939 0.938 0.936 0.934 0.885
Number of units outstanding at end
of year.......................... 5,090 129,811 2,458,031 24,064 33,718 404,384
AMERICAN ODYSSEY CORE EQUITY FUND
Unit Value at beginning of year.... $ 1.000 $ 1.000 $ 1.080 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 1.417 1.412 1.411 1.408 1.405 1.080
Number of units outstanding at end
of year.......................... 1,292 185,044 2,781,580 95,491 42,002 496,794
AMERICAN ODYSSEY LONG-TERM BOND FUND
Unit Value at beginning of year.... $ - $ 1.000 $ 1.022 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 1.135 1.135 1.132 1.130 1.022
Number of units outstanding at end
of year.......................... 115,168 1,504,310 24,590 22,291 232,943
AMERICAN ODYSSEY INTERMEDIATE-TERM
BOND FUND
Unit Value at beginning of year.... $ - $ 1.000 $ 1.107 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 1.083 1.083 1.080 1.078 1.017
Number of units outstanding at end
of year.......................... 58,486 940,500 12,156 10,975 195,701
AMERICAN ODYSSEY GLOBAL HIGH-YIELD
BOND FUND**
Unit Value at beginning of year.... $ - $ 1.000 $ 1.010 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 1.062 1.062 1.059 1.057 1.010
Number of units outstanding at end
of year.......................... 29,906 472,674 4,094 5,622 116,408
</TABLE>

A-2
<PAGE> 77

APPENDIX A

CONDENSED FINANCIAL INFORMATION

- --------------------------------------------------------------------------------

THE TRAVELERS SEPARATE ACCOUNT QP FOR VARIABLE ANNUITIES

ACCUMULATION UNIT VALUES (CONTINUED)

<CAPTION>
P1 P3 P4 P5 P6
------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
SMITH BARNEY LARGE CAP VALUE
PORTFOLIO(3)
(FORMERLY INCOME AND GROWTH
PORTFOLIO)
Unit Value at beginning of year.... $ 1.000 $ 1.000 $ 1.058 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 1.334 1.329 1.328 1.324 1.322 1.058
Number of units outstanding at end
of year.......................... 7,515 75,718 1,048,182 9,074 51,250 270,469
ALLIANCE GROWTH PORTFOLIO
Unit Value at beginning of year.... $ 1.000 $ 1.000 $ 1.065 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 1.367 1.362 1.361 1.358 1.355 1.065
Number of units outstanding at end
of year.......................... 10,959 27,182 315,371 25,227 46,772 44,777
SMITH BARNEY INTERNATIONAL EQUITY
PORTFOLIO
Unit Value at beginning of year.... $ 1.000 $ 1.000 $ 1.017 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 1.040 1.036 1.035 1.033 1.031 1.017
Number of Units outstanding at end
of year.......................... 6,580 17,229 97,802 4,658 5,601 8,808
PUTNAM DIVERSIFIED INCOME PORTFOLIO
Unit Value at beginning of year.... $ 1.000 $ 1.000 $ 1.019 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 1.092 1.088 1.088 1.085 1.083 1.019
Number of units outstanding at end
of year.......................... 6,058 1,776 36,214 2,136 17,658 12,636
SMITH BARNEY HIGH INCOME PORTFOLIO
Unit Value at beginning of year.... $ - $ 1.000 $ 1.042 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 1.176 1.176 1.173 1.171 1.042
Number of units outstanding at end
of year.......................... 3,775 34,790 2,552 6,261 278
MFS TOTAL RETURN PORTFOLIO
Unit Value at beginning of year.... $ 1.000 $ 1.000 $ 1.045 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 1.260 1.256 1.255 1.252 1.249 1.045
Number of units outstanding at end
of year.......................... 9,157 11,241 20,522 23,942 89,438 2,087
SMITH BARNEY MONEY MARKET
PORTFOLIO(3)
Unit Value at beginning of year.... $ - $ 1.000 $ 1.010 $ 1.000 $ 1.000 $ 1.000
Unit Value at end of year.......... 1.052 1.051 1.048 1.047 1.010
Number of units outstanding at end
of year.......................... 19,062 124,936 24,063 39,703 56,124
</TABLE>

Funding options not listed above were not yet available through the Separate
Account as of December 31, 1997.

* Reflects date many first came into funding option through the Separate
Account.

** Formerly American Odyssey Short-Term Bond Fund. The name, investment
objective, and investment subadviser of this fund were changed pursuant to a
shareholder vote effective May 1, 1998.

(1) The .60% mortality and expense risk charge is currently available only in
New York.

(2) As of December 31, 1997 no contracts had been sold with a mortality and
expense risk charge of .80%.

(3) The .95% mortality and expense risk charge is currently sold only through
Gold Track Contracts.

(4) Not available to new Contract Owners after May 1, 1998 in most states.

A-3
<PAGE> 78

APPENDIX B
CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

The Insurance Company
Principal Underwriter
Distribution and Management Agreement
Valuation of Assets
Federal Tax Considerations
Performance Information
Independent Accountants
Financial Statements

- --------------------------------------------------------------------------------

Name:
- --------------------------------------------------------------------------------
Address:
================================================================================

B-1
<PAGE> 79

THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE> 80

THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE> 81

THE TRAVELERS SEPARATE ACCOUNT QP
FOR VARIABLE ANNUITIES

L-12549 Printed in U.S.A.
TIC Ed. 5-98
<PAGE> 82
PART B

Information Required in a Statement of Additional Information

<PAGE> 83
GOLD TRACK
GOLD TRACK SELECT

STATEMENT OF ADDITIONAL INFORMATION

dated

May 1, 1998

for

THE TRAVELERS FUND QP FOR VARIABLE ANNUITIES

ISSUED BY

THE TRAVELERS INSURANCE COMPANY

This Statement of Additional Information ("SAI") is not a prospectus but
relates to, and should be read in conjunction with, the Group Variable Annuity
Contract Prospectus dated May 1, 1998. A copy of the Prospectus may be
obtained by writing to The Travelers Insurance Company, Annuity Services, One
Tower Square, Hartford, Connecticut 06183-5030, or by calling 1-800-842-9368.
This SAI should be read in conjunction with the accompanying 1997 Annual Report
for the Fund.

TABLE OF CONTENTS

<TABLE>
<S> <C>
THE INSURANCE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

PRINCIPAL UNDERWRITER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

DISTRIBUTION AND MANAGEMENT AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

VALUATION OF ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

FEDERAL TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

INDEPENDENT ACCOUNTANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
</TABLE>
<PAGE> 84

THE INSURANCE COMPANY

The Travelers Insurance Company (the "Company"), is a stock insurance
company chartered in 1864 in Connecticut and continuously engaged in the
insurance business since that time. It is licensed to conduct life insurance
business in all states of the United States, the District of Columbia, Puerto
Rico, Guam, the U.S. and British Virgin Islands and the Bahamas. The Company's
Home Office is located at One Tower Square, Hartford, Connecticut 06183.

The Company is a wholly owned subsidiary of The Travelers Insurance
Group Inc., which is indirectly owned through a wholly owned subsidiary, by
Travelers Group Inc., a financial services holding company engaged, through its
subsidiaries, principally in four business segments: (i) Investment Services;
(ii) Consumer Finance Services; (iii) Life Insurance Services; and (iv)
Property and Casualty Insurance Services.

STATE REGULATION. The Company is subject to the laws of the state of
Connecticut governing insurance companies and to regulation by the Insurance
Commissioner of the state of Connecticut (the "Commissioner"). An annual
statement covering the operations of the Company for the preceding year, as
well as its financial conditions as of December 31 of such year, must be filed
with the Commissioner in a prescribed format on or before March 1 of each year.
The Company's books and assets are subject to review or examination by the
Commissioner or his agents at all times, and a full examination of its
operations is conducted at least once every four years.

The Company is also subject to the insurance laws and regulations of
all other states in which it is licensed to operate. However, the insurance
departments of each of these states generally apply the laws of the
jurisdiction of domicile in determining the field of permissible investments.

THE SEPARATE ACCOUNT. Fund QP meets the definition of a separate account under
the federal securities laws, and will comply with the provisions of the 1940
Act. Additionally, the operations of Fund QP are subject to the provisions of
Section 38a-433 of the Connecticut General Statutes which authorizes the
Commissioner to adopt regulations under it. Section 38a-433 contains no
restrictions on the investments of the Separate Account, and the Commissioner
has adopted no regulations under the Section that affect the Separate Account.

PRINCIPAL UNDERWRITER

Tower Square Securities, Inc. ("Tower Square "), an indirect
wholly-owned subsidiary of the Company, serves as principal underwriter for
Fund QP and the Contracts. The offering is continuous. Tower Square's
principal executive offices are located at One Tower Square, Hartford,
Connecticut. It is anticipated that Travelers Distribution Company, an
affiliated broker-dealer, will become the principal underwriter for the
Contracts in 1998.

1
<PAGE> 85

DISTRIBUTION AND MANAGEMENT AGREEMENT

Under the terms of the Distribution and Management Agreement among
Fund QP, the Company and Tower Square, the Company provides all administrative
services and mortality and expense risk guarantees related to variable annuity
contracts sold by the Company in connection with the Fund QP. Tower Square
performs the sales functions related to the Contracts. The Company reimburses
TSSI for commissions paid, other sales expenses and certain overhead expenses
connected with sales functions. The Company also pays all costs (including
costs associated with the preparation of sales literature); all costs of
qualifying the Fund QP and the variable annuity contract with regulatory
authorities; the costs of proxy solicitation; and all custodian, accountant's
and legal fees. The Company also provides without cost to the Fund QP all
necessary office space, facilities, and personnel to manage its affairs.

VALUATION OF ASSETS

FUNDING OPTIONS: The value of the assets of each Underlying Fund is determined
on each Valuation Date as of the close of the New York Stock Exchange. Each
security traded on a national securities exchange is valued at the last
reported sale price on the Valuation Date. If there has been no sale on that
day, then the value of the security is taken to be the mean between the
reported bid and asked prices on the Valuation Date or on the basis of
quotations received from a reputable broker or any other recognized source.

Any security not traded on a securities exchange but traded in the
over-the-counter-market and for which market quotations are readily available
is valued at the mean between the quoted bid and asked prices on the Valuation
Date or on the basis of quotations received from a reputable broker or any
other recognized source.

Securities traded on the over-the-counter-market and listed securities
with no reported sales are valued at the mean between the last reported bid and
asked prices or on the basis of quotations received from a reputable broker or
other recognized source.

Short-term investments for which a quoted market price is available
are valued at market. Short-term investments maturing in more than sixty days
for which there is no reliable quoted market price are valued by "marking to
market" (computing a market value based upon quotations from dealers or issuers
for securities of a similar type, quality and maturity.) "Marking to market"
takes in account unrealized appreciation or depreciation due to changes in
interest rates or other factors which would influence the current fair values
of such securities. Short-term investments maturing in sixty days or less for
which there is no reliable quoted market price are valued at amortized cost
which approximates market.

THE CASH VALUE: The value of an Accumulation Unit on any Valuation Date is
determined by multiplying the value on the immediately preceding Valuation Date
by the net investment factor for the Valuation Period just ended. The net
investment factor is used to measure the investment performance of a Funding
Option from one Valuation Period to the next. The net investment factor for a
Funding Option for any Valuation Period is equal to the sum of 1.000000 plus
the net investment rate (the gross investment rate less any applicable Funding
Option deductions during the Valuation Period relating to

2
<PAGE> 86
the Insurance Charge and the Funding Option Administrative Charge). The gross
investment rate of a Funding Option is equal to (a - b) / c where:

(a) = investment income plus capital gains and losses (whether
realized or unrealized);
(b) = any deduction for applicable taxes (presently zero); and
(c) = the value of the assets of the Funding Option at the beginning
of the Valuation Period.

The gross investment rate may be either positive or negative. A
Funding Option's investment income includes any distribution whose ex-dividend
date occurs during the Valuation Period.

PERFORMANCE INFORMATION

YIELD QUOTATIONS OF MONEY MARKET ACCOUNTS
Yield quotations of Money Market Accounts are calculated using the
base period return for a seven-day period. The base period return is
calculated using a hypothetical pre-existing account having a balance of one
accumulation unit at the beginning of the period; base period return per
accumulation unit is equal to accrued interest on portfolio securities plus or
minus amortized purchase discount or premium less all accrued expenses for
investment advisory fees and mortality and expense guarantees, and less a pro
rata portion of the contract administrative charge (calculated in the manner
described under "Average Annual Total Return" below), divided by the
accumulation unit value at the beginning of the period. Realized capital gains
or losses and unrealized appreciation or depreciation of the portfolio are not
included in the base period return, but are included in accumulation unit
values.

Current yield is equal to the base period return multiplied by 365,
and the result divided by 7. There are various current yields for the Smith
Barney Money Market Portfolio for the seven-day period ended December 31, 1997,
depending on the charges assessed under the contract. The current yields were
as follows:

4.46% (for .60% mortality and expense risk charge ("m&e")
4.25% (for .80% m&e)
4.15% (for .90% m&e)
4.11% (for .95% m&e)
3.91% (for 1.15% m&e)
3.76% (for 1.20% m&e and .10% admin. charge)

Effective yield, which includes the effects of compounding, is equal
to the sum of 1 plus the base period return, raised to a power equal to 365
divided by 7, minus 1. There are various effective yields for the Smith Barney
Money Market Portfolio for the seven-day period ended December 31, 1997
depending on the charges assessed under the contract. The effective yields
were as follows:

4.56% (for .60% mortality and expense risk charge ("m&e")
4.34% (for .80% m&e)
4.24% (for .90% m&e)
4.19 (for .95% m&e)
3.99% (for 1.15% m&e)
3.83% (for 1.20% m&e and .10% admin. charge)

3
<PAGE> 87
These quotations do not reflect a deduction for any applicable
surrender charge or deferred sales charge. If the surrender charge/deferred
sales charge was included, the applicable yield and effective yield would be
reduced.

TOTAL RETURN PERFORMANCE

From time to time, the Company may advertise several types of
historical performance for the Funding Options of Fund QP. The Company may
advertise the "standardized average annual total returns" of the Funding
Option, calculated in a manner prescribed by the Securities and Exchange
Commission, as well as the "nonstandardized average annual total return," as
described below:

STANDARDIZED METHOD. Quotations of average annual total return are
computed according to a formula in which a hypothetical initial investment of
$1,000 is applied to the Funding Option, and then related to ending redeemable
values over one-, five-, and ten-year periods, or for a period covering the
time during which the Funding Option has been in existence if less. If a
Funding Option has been in existence for less than one year, the "Since
Inception" total return quotations are year-to-date and are not average annual
total returns. These quotations reflect the deduction of all maximum recurring
charges during each period (on a pro rata basis in the case of fractional
periods). The deduction for the $15 semiannual account charge is converted to
a percentage of assets based on the actual fees collected (or anticipated, if a
new product), divided by the average net assets (or anticipated average net
assets, if a new product) for contracts sold under the Prospectus to which this
Statement of Additional Information relates. Each quotation assumes a total
redemption at the end of each period with the assessment of any applicable
maximum surrender charge or deferred sales charge at that time.

NONSTANDARDIZED METHOD. Nonstandardized "average annual total return"
will be calculated in a similar manner based on the performance of the Funding
Options over a period of time, usually for the calendar year-to-date, and for
the past one-, three-, five- and ten-year periods. Non-standardized total
return will not reflect the deduction of any applicable surrender or deferred
sales charge or the $15 semiannual account charge, which, if reflected, would
decrease the level of performance shown. The surrender charge or deferred
sales charge is not reflected because the Contract is designed for long-term
investment.

For Funding Options that were in existence prior to the date they
became available under the Separate Account, the standardized average annual
total return quotations may be accompanied by returns showing the investment
performance that such Funding Options would have achieved (reduced by the
applicable maximum charges) had they been held under the Contract for the
period quoted. The total return quotations are based upon historical earnings
and are not necessarily representative of future performance.

GENERAL. Within the guidelines prescribed by the SEC and the National
Association of Securities Dealers, Inc. ("NASD"), performance information may
be quoted numerically or may be presented in a table, graph or other
illustration. Advertisements may include data comparing performance to
well-known indices of market performance (including, but not limited to, the
Dow Jones Industrial Average, the Standard & Poor's (S&P) 500 Index and the S&P
400 Index, the Lehman Brothers Long T-Bond Index, the Russell 1000, 2000 and
3000 Indices, the Value Line Index, and the Morgan Stanley Capital
International's EAFE Index). Advertisements may also include published
editorial comments and performance rankings compiled by independent
organizations (including, but not

4
<PAGE> 88
limited to, Lipper Analytical Services, Inc. and Morningstar, Inc.) and
publications that monitor the performance of Fund QP and the Funding Options.

Average annual total returns for each of the Funding Options computed
according to the standardized and non-standardized methods for the periods
ending December 31, 1997 are set forth in the following tables. The tables
represent the various levels of mortality and expense risk and administration
charges.

5
<PAGE> 89
TOTAL RETURN CALCULATIONS
FUNDING OPTIONS OF FUND QP

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
MAXIMUM: M&E: 1.20% PLUS -----------------------------------------
ADMIN. CHARGE: .10% (taking into account all charges and fees)

- ------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME SUBACCOUNT 1 YEAR 5 YEAR 10 YEAR
INCEPTION
DATE (1)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dreyfus Stock Index Fund 10/1/96 24.42% 26.21%* ---
- ------------------------------------------------------------------------------------------------------------------
Capital Appreciation Fund 10/1/96 18.03% 16.62%* ---
- ------------------------------------------------------------------------------------------------------------------
High Yield Bond Trust 10/1/96 9.02% 9.73%* ---
- ------------------------------------------------------------------------------------------------------------------
Managed Assets Trust 10/1/96 13.44% 14.30%* ---
- ------------------------------------------------------------------------------------------------------------------
AMERICAN ODYSSEY FUNDS 1:
- ------------------------------------------------------------------------------------------------------------------
International Equity Fund 10/1/96 -1.76% 5.65%* ---
- ------------------------------------------------------------------------------------------------------------------
Emerging Opportunities Fund 10/1/96 0.10% -9.31%* ---
- ------------------------------------------------------------------------------------------------------------------
Core Equity Fund 10/1/96 23.38% 25.73%* ---
- ------------------------------------------------------------------------------------------------------------------
Long-Term Bond Fund 10/1/96 4.79% 5.59%* ---
- ------------------------------------------------------------------------------------------------------------------
Intermediate-Term Bond Fund 10/1/96 0.54% 1.68%* ---
- ------------------------------------------------------------------------------------------------------------------
Global High-Yield Bond Fund 10/1/96 -0.76% 0.10%* ---
- ------------------------------------------------------------------------------------------------------------------
AMERICAN ODYSSEY FUNDS 2:
- ------------------------------------------------------------------------------------------------------------------
International Equity Fund 10/1/96 -3.00% -0.34% * ---
- ------------------------------------------------------------------------------------------------------------------
Emerging Opportunities Fund 10/1/96 -1.16% -14.50%* ---
- ------------------------------------------------------------------------------------------------------------------
Core Equity Fund 10/1/96 21.90% 18.67%* ---
- ------------------------------------------------------------------------------------------------------------------
Long-Term Bond Fund 10/1/96 3.51% -0.40%* ---
- ------------------------------------------------------------------------------------------------------------------
Intermediate-Term Bond Fund 10/1/96 -0.69% -4.10%* ---
- ------------------------------------------------------------------------------------------------------------------
Global High-Yield Bond Fund 10/1/96 -1.98% -5.60%* ---
- ------------------------------------------------------------------------------------------------------------------
DELAWARE GROUP PREMIUM FUND, INC.
- ------------------------------------------------------------------------------------------------------------------
REIT Series 5/1/98 --- --- ---
- ------------------------------------------------------------------------------------------------------------------
DREYFUS VARIABLE INVESTMENT FUND
- ------------------------------------------------------------------------------------------------------------------
Capital Appreciation Portfolio 5/198 --- --- ---
- ------------------------------------------------------------------------------------------------------------------
Small Cap Portfolio 5/1/98 --- --- ---
- ------------------------------------------------------------------------------------------------------------------
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND
- ------------------------------------------------------------------------------------------------------------------
Equity-Income Portfolio 10/1/96 19.85% 19.45%* ---
- ------------------------------------------------------------------------------------------------------------------
Growth Portfolio 10/1/96 15.52% 11.50%* ---
- ------------------------------------------------------------------------------------------------------------------
High Income Portfolio 10/1/96 10.05% 9.01%* ---
- ------------------------------------------------------------------------------------------------------------------
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II
- ------------------------------------------------------------------------------------------------------------------
Asset Manager Portfolio 10/1/96 12.87% 14.27%* ---
- ------------------------------------------------------------------------------------------------------------------
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
- ------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable Investors Fund 5/1/98 --- --- ---
- ------------------------------------------------------------------------------------------------------------------
TEMPLETON VARIABLE PRODUCTS SERIES FUND
- ------------------------------------------------------------------------------------------------------------------
Templeton Asset Allocation Fund 10/1/96 8.04% 11.98%* ---
- ------------------------------------------------------------------------------------------------------------------
Templeton Bond Fund 10/1/96 -4.14% -0.70%* ---
- ------------------------------------------------------------------------------------------------------------------

<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
NONSTANDARDIZED TOTAL RETURNS
MAXIMUM: M&E: 1.20% PLUS ------------------------------
ADMIN. CHARGE: .10% (taking into account all charges and fees except
deferred sales charges and contract administrative charge)
- ------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME FUND 1 YEAR 3 YEAR 5 YEAR 10 YEAR
INCEPTION
DATE (2)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dreyfus Stock Index Fund 9/89 31.31% 28.91% 18.16% 14.35%*
- ------------------------------------------------------------------------------------------------------------------------------
Capital Appreciation Fund 5/83 24.57% 28.47% 17.75% 14.92%
- ------------------------------------------------------------------------------------------------------------------------------
High Yield Bond Trust 5/83 15.06% 14.52% 10.50% 8.85%
- ------------------------------------------------------------------------------------------------------------------------------
Managed Assets Trust 5/83 19.72% 19.02% 11.93% 11.60%
- ------------------------------------------------------------------------------------------------------------------------------
AMERICAN ODYSSEY FUNDS 1:
- ------------------------------------------------------------------------------------------------------------------------------
International Equity Fund 5/1/93 3.69% 13.57% 10.40%* ---
- ------------------------------------------------------------------------------------------------------------------------------
Emerging Opportunities Fund 5/1/93 5.66% 9.65% 9.67%* ---
- ------------------------------------------------------------------------------------------------------------------------------
Core Equity Fund 5/1/93 30.21% 29.33% 17.70%* ---
- ------------------------------------------------------------------------------------------------------------------------------
Long-Term Bond Fund 5/1/93 10.60% 10.15% 6.61%* ---
- ------------------------------------------------------------------------------------------------------------------------------
Intermediate-Term Bond Fund 5/1/93 6.12% 7.31% 4.46%* ---
- ------------------------------------------------------------------------------------------------------------------------------
Global High-Yield Bond Fund 5/1/93 4.75% 5.50% 3.61%* ---
- ------------------------------------------------------------------------------------------------------------------------------
AMERICAN ODYSSEY FUNDS 2:
- ------------------------------------------------------------------------------------------------------------------------------
International Equity Fund 5/1/93 2.38% 12.16% 9.09%* ---
- ------------------------------------------------------------------------------------------------------------------------------
Emerging Opportunities Fund 5/1/93 4.33% 8.27% 8.36%* ---
- ------------------------------------------------------------------------------------------------------------------------------
Core Equity Fund 5/1/93 28.65% 27.77% 16.32%* ---
- ------------------------------------------------------------------------------------------------------------------------------
Long-Term Bond Fund 5/1/93 9.25% 8.80% 5.35% * ---
- ------------------------------------------------------------------------------------------------------------------------------
Intermediate-Term Bond Fund 5/1/93 4.82% 5.99% 3.22% * ---
- ------------------------------------------------------------------------------------------------------------------------------
Global High-Yield Bond Fund 5/1/93 3.46% 4.20% 2.38%* ---
- ------------------------------------------------------------------------------------------------------------------------------
DELAWARE GROUP PREMIUM FUND, INC.
- ------------------------------------------------------------------------------------------------------------------------------
REIT Series --- --- --- ---
- ------------------------------------------------------------------------------------------------------------------------------
DREYFUS VARIABLE INVESTMENT FUND
- ------------------------------------------------------------------------------------------------------------------------------
Capital Appreciation Portfolio 4/5/93 --- --- --- ---
- ------------------------------------------------------------------------------------------------------------------------------
Small Cap Portfolio 8/31/90 ---
- ------------------------------------------------------------------------------------------------------------------------------
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND
- ------------------------------------------------------------------------------------------------------------------------------
Equity-Income Portfolio 10/86 26.49% 23.89% 18.60% 15.20%
- ------------------------------------------------------------------------------------------------------------------------------
Growth Portfolio 10/86 21.91% 22.61% 16.47% 15.67%
- ------------------------------------------------------------------------------------------------------------------------------
High Income Portfolio 9/85 16.14% 15.87% 12.46% 11.34%
- ------------------------------------------------------------------------------------------------------------------------------
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II
- ------------------------------------------------------------------------------------------------------------------------------
Asset Manager Portfolio 9/89 19.12% 15.85% 11.49% 11.28%*
- ------------------------------------------------------------------------------------------------------------------------------
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
- ------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable Investors Fund 1/2/98 --- --- --- ---
- ------------------------------------------------------------------------------------------------------------------------------
TEMPLETON VARIABLE PRODUCTS SERIES FUND
- ------------------------------------------------------------------------------------------------------------------------------
Templeton Asset Allocation Fund 8/88 14.03% 17.39% 14.04% 11.20%*
- ------------------------------------------------------------------------------------------------------------------------------
Templeton Bond Fund 8/88 1.18% 7.42% 5.07% 6.02%*
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

6
<PAGE> 90

<TABLE>
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Templeton Stock Fund 10/1/96 4.63% 10.20%* --- 8/88
- ----------------------------------------------------------------------------------------------------------------------------------
TRAVELERS SERIES FUND, INC.
- ----------------------------------------------------------------------------------------------------------------------------------
Alliance Growth Portfolio 10/1/96 20.69% 22.13%* --- 6/20/94
- ----------------------------------------------------------------------------------------------------------------------------------
MFS Total Return Portfolio 10/1/96 13.35% 14.44%* --- 6/20/94
- ----------------------------------------------------------------------------------------------------------------------------------
Putnam Diversified Income Portfolio 10/1/96 0.72% 2.05%* --- 6/20/94
- ----------------------------------------------------------------------------------------------------------------------------------
Smith Barney High Income Portfolio 10/1/96 6.50% 8.64%* --- 6/20/94
- ----------------------------------------------------------------------------------------------------------------------------------
Smith Barney International Equity Portfolio 10/1/96 -3.94% -1.90%* --- 6/20/94
- ----------------------------------------------------------------------------------------------------------------------------------
Smith Barney Large Cap Value Portfolio 10/1/96 18.45% 19.74%* --- 6/20/94
(formerly Smith Barney Income and Growth)
- ----------------------------------------------------------------------------------------------------------------------------------
Smith Barney Money Market Portfolio 10/1/96 -1.72% -0.70%* --- 6/20/94
- ----------------------------------------------------------------------------------------------------------------------------------
THE TRAVELERS SERIES TRUST
- ----------------------------------------------------------------------------------------------------------------------------------
Convertible Bond Portfolio 5/1/98 --- --- --- 5/1/98
- ----------------------------------------------------------------------------------------------------------------------------------
Disciplined Mid Cap Stock Portfolio 5/1/98 --- --- --- 5/1/98
- ----------------------------------------------------------------------------------------------------------------------------------
Disciplined Small Cap Stock Portfolio 5/1/98 --- --- --- 5/1/98
- ----------------------------------------------------------------------------------------------------------------------------------
MFS Mid Cap Growth Portfolio 5/1/98 --- --- --- 5/1/98
- ----------------------------------------------------------------------------------------------------------------------------------
MFS Research Portfolio 5/1/98 --- --- --- 5/1/98
- ----------------------------------------------------------------------------------------------------------------------------------
Social Awareness Stock Portfolio 10/1/96 19.07% 18.16%* --- 5/1/92
- ----------------------------------------------------------------------------------------------------------------------------------
Strategic Stock Portfolio 5/1/98 --- --- --- 5/1/98
- ----------------------------------------------------------------------------------------------------------------------------------
Travelers Quality Bond Portfolio 3/97 -3.38%* --- --- 3/10/97
- ----------------------------------------------------------------------------------------------------------------------------------
U.S. Government Securities Portfolio 10/1/96 5.34% 6.28%* --- 1/24/92
- ----------------------------------------------------------------------------------------------------------------------------------
Utilities Portfolio 10/1/96 17.19% 16.50%* --- 2/94
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
Templeton Stock Fund 10.43% 18.13% 16.05% 11.85%*
- -----------------------------------------------------------------------------------------------------------------
TRAVELERS SERIES FUND, INC.
- -----------------------------------------------------------------------------------------------------------------
Alliance Growth Portfolio 27.37% 29.33% 26.04%* ---
- -----------------------------------------------------------------------------------------------------------------
MFS Total Return Portfolio 19.63% 18.80% 15.04%* ---
- -----------------------------------------------------------------------------------------------------------------
Putnam Diversified Income Portfolio 6.30% 9.57% 8.31%* ---
- -----------------------------------------------------------------------------------------------------------------
Smith Barney High Income Portfolio 12.41% 13.84% 11.24%* ---
- -----------------------------------------------------------------------------------------------------------------
Smith Barney International Equity Portfolio 1.39% 8.96% 6.15%* ---
- -----------------------------------------------------------------------------------------------------------------
Smith Barney Large Cap Value Portfolio 25.01% 24.72% 19.99%* ---
(formerly Smith Barney Income and Growth)
- -----------------------------------------------------------------------------------------------------------------
Smith Barney Money Market Portfolio 3.73% 3.79% 3.65%* ---
- -----------------------------------------------------------------------------------------------------------------
THE TRAVELERS SERIES TRUST
- -----------------------------------------------------------------------------------------------------------------
Convertible Bond Portfolio --- --- --- ---
- -----------------------------------------------------------------------------------------------------------------
Disciplined Mid Cap Stock Portfolio --- --- --- ---
- -----------------------------------------------------------------------------------------------------------------
Disciplined Small Cap Stock Portfolio --- --- --- ---
- -----------------------------------------------------------------------------------------------------------------
MFS Mid Cap Growth Portfolio --- --- --- ---
- -----------------------------------------------------------------------------------------------------------------
MFS Research Portfolio --- --- --- ---
- -----------------------------------------------------------------------------------------------------------------
Social Awareness Stock Portfolio 25.66% 25.11% 14.85% 14.64%*
- -----------------------------------------------------------------------------------------------------------------
Strategic Stock Portfolio --- --- --- ---
- -----------------------------------------------------------------------------------------------------------------
Travelers Quality Bond Portfolio 5.99% * --- --- ---
- -----------------------------------------------------------------------------------------------------------------
U.S. Government Securities Portfolio 11.18% 11.00% 6.60% 6.67%*
- -----------------------------------------------------------------------------------------------------------------
Utilities Portfolio 23.68% 18.73% 14.25%* ---
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
* Figures represent period "Since Inception," as defined below.

(1) Subaccount Inception Date reflects the actual date that the underlying fund
became available under the Separate Account, as determined by the effective
date of the Separate Account's 1940 Act Registration Statement.

(2) Fund Inception Date reflects the date that the underlying fund commenced
operations. For those funds that were in existence prior to the date that
they became available under the Separate Account, the performance figures
represent actual returns of the fund adjusted to reflect the charges that
would have been assessed under the Separate Account during the period(s)
shown. As illustrated herein, periods greater than 1 year reflect
Hypothetical Adjusted Returns.

7
<PAGE> 91
TOTAL RETURN CALCULATIONS
FUNDING OPTIONS OF FUND QP
GOLD TRACK SELECT

<TABLE>
<CAPTION>
STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS
-----------------------------------------
M&E: 1.20% PLUS (taking into account all charges and fees)
ADMIN. CHARGE: 0.10%
- -------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME SUBACCOUNT 1 YEAR 5 YEAR 10 YEAR
INCEPTION
DATE (1)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Appreciation Fund 10/1/96 18.34% 16.88% * ---
- -------------------------------------------------------------------------------------------------------------------
High Yield Bond Trust 10/1/96 9.30% 9.99% * ---
- -------------------------------------------------------------------------------------------------------------------
Managed Assets Trust 10/1/96 13.74% 14.56% * ---
- -------------------------------------------------------------------------------------------------------------------
Money Market Portfolio 10/1/96 --- --- ---
- -------------------------------------------------------------------------------------------------------------------
AMERICAN ODYSSEY FUNDS 1:
- -------------------------------------------------------------------------------------------------------------------
Core Equity Fund 10/1/96 23.70% 22.41% * ---
- -------------------------------------------------------------------------------------------------------------------
Emerging Opportunities Fund 10/1/96 0.37% -9.10% * ---
- -------------------------------------------------------------------------------------------------------------------
Global High Yield Bond Fund 10/1/96 --- --- ---
- -------------------------------------------------------------------------------------------------------------------
Intermediate-Term Bond Fund 10/1/96 0.81% 1.92% * ---
- -------------------------------------------------------------------------------------------------------------------
International Equity Fund 10/1/96 -1.50% 5.90% * ---
- -------------------------------------------------------------------------------------------------------------------
Long-Term Bond Fund 10/1/96 5.07% 5.83% * ---
- -------------------------------------------------------------------------------------------------------------------
AMERICAN ODYSSEY FUNDS 2:
- -------------------------------------------------------------------------------------------------------------------
Core Equity Fund 10/1/96 22.45% 24.45% * ---
- -------------------------------------------------------------------------------------------------------------------
Emerging Opportunities Fund 10/1/96 -0.88 -10.66% * ---
- -------------------------------------------------------------------------------------------------------------------
Global High Yield Bond Fund 10/1/96 - - * ---
- -------------------------------------------------------------------------------------------------------------------
Intermediate-Term Bond Fund 10/1/96 -0.44% -0.36% * ---
- -------------------------------------------------------------------------------------------------------------------
International Equity Fund 10/1/96 -2.75% -4.34% * ---
- -------------------------------------------------------------------------------------------------------------------
Long-Term Bond Fund 10/1/96 3.82% -4.27% * ---
- -------------------------------------------------------------------------------------------------------------------
DELAWARE GROUP PREMIUM FUND, INC.
- -------------------------------------------------------------------------------------------------------------------
REIT Series 5/1/98 --- --- ---
- -------------------------------------------------------------------------------------------------------------------
Small Cap Value Series 5/1/98 --- --- ---
- -------------------------------------------------------------------------------------------------------------------
DREYFUS VARIABLE INVESTMENT FUND
- -------------------------------------------------------------------------------------------------------------------
Capital Appreciation Portfolio 5/1/98 --- --- ---
- -------------------------------------------------------------------------------------------------------------------
Small Cap Portfolio 5/1/98 --- --- ---
- -------------------------------------------------------------------------------------------------------------------
MONTGOMERY VARIABLE SERIES
- -------------------------------------------------------------------------------------------------------------------
Growth Fund 5/1/98 --- --- ---
- -------------------------------------------------------------------------------------------------------------------
OCC ACCUMULATION TRUST
- -------------------------------------------------------------------------------------------------------------------
Equity Portfolio 5/1/98 --- --- ---
- -------------------------------------------------------------------------------------------------------------------
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
- -------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable Capital Fund 5/1/98 --- --- ---
- -------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable Investors Fund 5/1/98 --- --- ---
- -------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable Total Return Fund 5/1/98 --- --- ---
- -------------------------------------------------------------------------------------------------------------------

<CAPTION>
NONSTANDARDIZED TOTAL RETURNS
------------------------------
M&E: 1.20% PLUS (taking into account all charges and fees except
ADMIN. CHARGE: 0.10% deferred sales charges and contract administrative charge)
- -----------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME FUND 1 YEAR 3 YEAR 5 YEAR 10 YEAR
INCEPTION
DATE (2)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Capital Appreciation Fund 5/83 24.57% 28.47% 17.75% 14.92%
- -----------------------------------------------------------------------------------------------------------------------------
High Yield Bond Trust 5/83 15.06% 14.52% 10.50% 8.85%
- -----------------------------------------------------------------------------------------------------------------------------
Managed Assets Trust 5/83 19.72% 19.02% 11.93% 11.60%
- -----------------------------------------------------------------------------------------------------------------------------
Money Market Portfolio
- -----------------------------------------------------------------------------------------------------------------------------
AMERICAN ODYSSEY FUNDS 1:
- -----------------------------------------------------------------------------------------------------------------------------
Core Equity Fund 5/1/93 30.21% 29.33% 7.70% * ---
- -----------------------------------------------------------------------------------------------------------------------------
Emerging Opportunities Fund 5/1/93 5.66% 9.65% 9.67% * ---
- -----------------------------------------------------------------------------------------------------------------------------
Global High Yield Bond Fund 5/1/93 4.75% 5.50% 3.61% * ---
- -----------------------------------------------------------------------------------------------------------------------------
Intermediate-Term Bond Fund 5/1/93 6.12% 7.31% 4.46% * ---
- -----------------------------------------------------------------------------------------------------------------------------
International Equity Fund 5/1/93 3.69% 13.57% 10.40% * ---
- -----------------------------------------------------------------------------------------------------------------------------
Long-Term Bond Fund 5/1/93 10.60% 10.15% 6.61% * ---
- -----------------------------------------------------------------------------------------------------------------------------
AMERICAN ODYSSEY FUNDS 2:
- -----------------------------------------------------------------------------------------------------------------------------
Core Equity Fund 5/1/93 28.65% 27.77% 16.32% * ---
- -----------------------------------------------------------------------------------------------------------------------------
Emerging Opportunities Fund 5/1/93 4.33% 8.27% 8.36% * ---
- -----------------------------------------------------------------------------------------------------------------------------
Global High Yield Bond Fund 5/1/93 3.46% 4.20% 2.38% * ---
- -----------------------------------------------------------------------------------------------------------------------------
Intermediate-Term Bond Fund 5/1/93 4.82% 5.99% 3.22% * ---
- -----------------------------------------------------------------------------------------------------------------------------
International Equity Fund 5/1/93 2.38% 12.16% 9.09% * ---
- -----------------------------------------------------------------------------------------------------------------------------
Long-Term Bond Fund 5/1/93 9.25% 8.80% 5.35% * ---
- -----------------------------------------------------------------------------------------------------------------------------
DELAWARE GROUP PREMIUM FUND, INC.
- -----------------------------------------------------------------------------------------------------------------------------
REIT Series --- --- --- ---
- -----------------------------------------------------------------------------------------------------------------------------
Small Cap Value Series --- --- --- ---
- -----------------------------------------------------------------------------------------------------------------------------
DREYFUS VARIABLE INVESTMENT FUND
- -----------------------------------------------------------------------------------------------------------------------------
Capital Appreciation Portfolio 4/5/93 --- --- --- --
- -----------------------------------------------------------------------------------------------------------------------------
Small Cap Portfolio 8/31/90 --- --- --- ---
- -----------------------------------------------------------------------------------------------------------------------------
MONTGOMERY VARIABLE SERIES
- -----------------------------------------------------------------------------------------------------------------------------
Growth Fund 2/9/96 --- --- --- ---
- -----------------------------------------------------------------------------------------------------------------------------
OCC ACCUMULATION TRUST
- -----------------------------------------------------------------------------------------------------------------------------
Equity Portfolio 9/16/94 --- --- --- ---
- -----------------------------------------------------------------------------------------------------------------------------
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
- -----------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable Capital Fund --- --- --- ---
- -----------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable Investors Fund --- --- --- ---
- -----------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable Total Return Fund --- --- --- ---
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>

8
<PAGE> 92

<TABLE>
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
STRONG VARIABLE INSURANCE FUNDS, INC.
- -------------------------------------------------------------------------------------------------------------------------------
Strong Schafer Value Fund III 5/1/98 --- --- --- 10/10/97
- -------------------------------------------------------------------------------------------------------------------------------
TRAVELERS SERIES FUND, INC.
- -------------------------------------------------------------------------------------------------------------------------------
Alliance Growth Portfolio 10/1/96 21.00% 22.41% * --- 6/20/94
- -------------------------------------------------------------------------------------------------------------------------------
MFS Total Return Portfolio 10/1/96 13.65% 14.70% * --- 6/20/94
- -------------------------------------------------------------------------------------------------------------------------------
Putnam Diversified Income Portfolio 10/1/96 0.99% 2.29% * --- 6/20/94
- -------------------------------------------------------------------------------------------------------------------------------
Smith Barney High Income Portfolio 10/1/96 6.79% 8.89% * --- 6/20/94
- -------------------------------------------------------------------------------------------------------------------------------
Smith Barney International Equity Portfolio 10/1/96 -3.68% -1.67% * --- 6/20/94
- -------------------------------------------------------------------------------------------------------------------------------
Smith Barney Large Cap Growth Portfolio 5/1/98 --- --- --- 2/28/98
- -------------------------------------------------------------------------------------------------------------------------------
Smith Barney Large Cap Value Portfolio 10/1/96 18.76% 20.01% * --- 6/20/94
- -------------------------------------------------------------------------------------------------------------------------------
Smith Barney Money Market Portfolio 10/1/96 -1.45% -0.47% * --- 6/20/94
- -------------------------------------------------------------------------------------------------------------------------------
THE TRAVELERS SERIES TRUST
- -------------------------------------------------------------------------------------------------------------------------------
Convertible Bond Portfolio 5/1/98 --- --- --- 5/1/98
- -------------------------------------------------------------------------------------------------------------------------------
Disciplined Mid Cap Stock Portfolio 5/1/98 --- --- --- 51/98
- -------------------------------------------------------------------------------------------------------------------------------
Disciplined Small Cap Stock Portfolio 5/1/98 --- --- --- 5/1/98
- -------------------------------------------------------------------------------------------------------------------------------
Equity Income Portfolio 5/1/97 0.70% * --- --- 8/30/96
- -------------------------------------------------------------------------------------------------------------------------------
Federated High Yield Portfolio 5/1/97 -4.06% * --- --- 8/30/96
- -------------------------------------------------------------------------------------------------------------------------------
Federated Stock Portfolio 5/1/97 2.68% * --- --- 8/30/96
- -------------------------------------------------------------------------------------------------------------------------------
Large Cap Portfolio 5/1/97 -2.54% * --- --- 8/30/96
- -------------------------------------------------------------------------------------------------------------------------------
Lazard International Stock Portfolio 5/1/97 -7.11% * --- --- 8/30/96
- -------------------------------------------------------------------------------------------------------------------------------
MFS Mid Cap Growth Portfolio 5/1/98 --- --- --- 5/1/98
- -------------------------------------------------------------------------------------------------------------------------------
MFS Research Portfolio 5/1/98 --- --- --- 5/1/98
- -------------------------------------------------------------------------------------------------------------------------------
Social Awareness Stock Portfolio 10/1/96 19.38% 18.42% * --- 5/1/92
- -------------------------------------------------------------------------------------------------------------------------------
Strategic Stock Portfolio 5/1/98 --- --- --- 5/1/98
- -------------------------------------------------------------------------------------------------------------------------------
Travelers Quality Bond Portfolio 3/97 --- --- --- 3/10/97
- -------------------------------------------------------------------------------------------------------------------------------
U.S. Government Securities Portfolio 10/1/96 5.62% 6.53% * --- 1/24/92
- -------------------------------------------------------------------------------------------------------------------------------
Utilities Portfolio 10/1/96 17.50% 16.77% * --- 2/94
- -------------------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS TRUST
- -------------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Emerging Markets Portfolio 5/1/98 --- --- ---
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
STRONG VARIABLE INSURANCE FUNDS, INC.
- --------------------------------------------------------------------------------------------------------------------
Strong Schafer Value Fund III --- --- --- ---
- --------------------------------------------------------------------------------------------------------------------
TRAVELERS SERIES FUND, INC.
- --------------------------------------------------------------------------------------------------------------------
Alliance Growth Portfolio 27.37% 29.33% 26.04% * ---
- --------------------------------------------------------------------------------------------------------------------
MFS Total Return Portfolio 19.63% 18.80% 15.04% * ---
- --------------------------------------------------------------------------------------------------------------------
Putnam Diversified Income Portfolio 6.30% 9.57% 8.31% * ---
- --------------------------------------------------------------------------------------------------------------------
Smith Barney High Income Portfolio 12.41% 13.84% 11.24% * ---
- --------------------------------------------------------------------------------------------------------------------
Smith Barney International Equity Portfolio 1.39% 8.96% 6.15% * ---
- --------------------------------------------------------------------------------------------------------------------
Smith Barney Large Cap Growth Portfolio --- --- --- ---
- --------------------------------------------------------------------------------------------------------------------
Smith Barney Large Cap Value Portfolio 25.01% 24.72% 19.99% * ---
- --------------------------------------------------------------------------------------------------------------------
Smith Barney Money Market Portfolio 3.73% 3.79% 3.65% * ---
- --------------------------------------------------------------------------------------------------------------------
THE TRAVELERS SERIES TRUST
- --------------------------------------------------------------------------------------------------------------------
Convertible Bond Portfolio --- --- --- ---
- --------------------------------------------------------------------------------------------------------------------
Disciplined Mid Cap Stock Portfolio --- --- --- ---
- --------------------------------------------------------------------------------------------------------------------
Disciplined Small Cap Stock Portfolio --- --- --- ---
- --------------------------------------------------------------------------------------------------------------------
Equity Income Portfolio 29.99% 31.73% * --- ---
- --------------------------------------------------------------------------------------------------------------------
Federated High Yield Portfolio 13.94% 0.74% * --- ---
- --------------------------------------------------------------------------------------------------------------------
Federated Stock Portfolio 31.72% 33.85% * --- ---
- --------------------------------------------------------------------------------------------------------------------
Large Cap Portfolio 20.43% 25.75% * --- ---
- --------------------------------------------------------------------------------------------------------------------
Lazard International Stock Portfolio 6.84% 10.26% * --- ---
- --------------------------------------------------------------------------------------------------------------------
MFS Mid Cap Growth Portfolio --- --- --- ---
- --------------------------------------------------------------------------------------------------------------------
MFS Research Portfolio --- --- --- ---
- --------------------------------------------------------------------------------------------------------------------
Social Awareness Stock Portfolio 25.66% 25.11% 14.85% 14.64% *
- --------------------------------------------------------------------------------------------------------------------
Strategic Stock Portfolio --- --- --- ---
- --------------------------------------------------------------------------------------------------------------------
Travelers Quality Bond Portfolio --- --- ---
- --------------------------------------------------------------------------------------------------------------------
U.S. Government Securities Portfolio 11.18% 11.00% 6.60% 6.67% *
- --------------------------------------------------------------------------------------------------------------------
Utilities Portfolio 23.68% 18.73% 14.25% * ---
- --------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS TRUST
- --------------------------------------------------------------------------------------------------------------------
Warburg Pincus Emerging Markets Portfolio --- --- --- ---
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

* Figures represent period "Since Inception," as defined below.

1 Reflects expenses that would be incurred for those Contract Owners who
DO NOT participate in the CHART Asset Allocation program.

2 Reflects expenses that would be incurred for those Contract Owners who
DO participate in the CHART Asset Allocation program.

9
<PAGE> 93
FEDERAL TAX CONSIDERATIONS

The following description of the federal income tax consequences under
this Contract is not exhaustive and is not intended to cover all situations.
Because of the complexity of the law and the fact that the tax results will
vary according to the factual status of the individual involved, tax advice may
be needed by a person contemplating purchase of an annuity contract and by a
contract owner or beneficiary who may make elections under a contract. For
further information, please consult a qualified tax adviser.

MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS
Federal tax law requires that minimum annual distributions begin by
April 1st of the calendar year following the calendar year in which a
participant under a qualified plan, a Section 403(b) annuity, or an IRA attains
age 701/2. Distributions must also begin or be continued according to required
patterns following the death of the contract owner or the annuitant.

NONQUALIFIED ANNUITY CONTRACTS
Individuals may purchase tax-deferred annuities without tax law
funding limits. The purchase payments receive no tax benefit, deduction or
deferral, but increases in the value of the contract are generally deferred
from tax until distribution. If a nonqualified annuity is owned by other than
an individual, however, (e.g., by a corporation), the increases in value
attributable to purchase payments made after February 28, 1986 are includable
in income annually. Furthermore, for contracts issued after April 22, 1987,
all deferred increases in value will be includable in the income of a contract
owner when the contract owner transfers the contract without adequate
consideration.

If two or more annuity contracts are purchased from the same insurer
within the same calendar year, distributions from any of them will be taxed
based upon the amount of income in all of the same calendar year series of
annuities. This will generally have the effect of causing taxes to be paid
sooner on the deferred gain in the contracts.

Those receiving partial distributions made before the maturity date
will generally be taxed on an income-first basis to the extent of income in the
contract. If you are exchanging another annuity contract for this annuity,
certain pre-August 14, 1982 deposits into an annuity contract that have been
placed in the contract by means of a tax-deferred exchange under Section 1035
of the Code may be withdrawn first without income tax liability. This
information on deposits must be provided to the Company by the other insurance
company at the time of the exchange. There is income in the contract generally
to the extent the cash value exceeds the investment in the contract. The
investment in the contract is equal to the amount of premiums paid less any
amount received previously which was excludable from gross income. Any direct
or indirect borrowing against the value of the contract or pledging of the
contract as security for a loan will be treated as a cash distribution under
the tax law.

The federal tax law requires that nonqualified annuity contracts meet
minimum mandatory distribution requirements upon the death of the contract
owner, including the first of joint owners. Failure to meet these requirements
will cause the surviving joint owner, or the beneficiary to lose the tax
benefits associated with annuity contracts, i.e., primarily the tax deferral
prior to distribution. The distribution required depends, among other things,
upon whether an annuity option is elected or whether the new contract owner is
the surviving spouse. Contracts will be administered by the Company

10
<PAGE> 94
in accordance with these rules and the Company will make a notification when
payments should be commenced.

INDIVIDUAL RETIREMENT ANNUITIES
To the extent of earned income for the year and not exceeding $2,000
per individual, an individual may make deductible contributions to an
individual retirement annuity (IRA). There are certain limits on the
deductible amount based on the adjusted gross income of the individual and
spouse and based on their participation in a retirement plan. If an individual
is married and the spouse does not have earned income, the individual may
establish IRAs for the individual and spouse. Purchase payments may then be
made annually into IRAs for both spouses in the maximum amount of 100% of
earned income up to a combined limit of $4,000.

The Code provides for the purchase of a Simplified Employee Pension
(SEP) plan. A SEP is funded through an IRA with an annual employer
contribution limit of 15% of compensation up to $30,000 for each participant.

SIMPLE PLAN IRA FORM

Effective January 1, 1997, employers may establish a savings incentive
match plan for employees ("SIMPLE plan") under which employees can make
elective salary reduction contributions to an IRA based on a percentage of
compensation of up to $6,000. (Alternatively, the employer can establish a
SIMPLE cash or deferred arrangement under IRS Section 401(k)). Under a SIMPLE
plan IRA, the employer must either make a matching contribution of 100% on the
first 3% or 7% contribution for all eligible employees. Early withdrawals are
subject to the 10% early withdrawal penalty generally applicable to IRAs,
except that an early withdrawal by an employee under a SIMPLE plan IRA, within
the first two years of participation, shall be subject to a 25% early
withdrawal tax.

ROTH IRAs

Effective January 1, 1998, Section 408A of the Code permits certain
individuals to contribute to a Roth IRA. Eligibility to make contributions is
based upon income, and the applicable limits vary based on marital status
and/or whether the contribution is a rollover contribution from another IRA or
an annual contribution. Contributions to a Roth IRA, which are subject to
certain limitations ($2,000 per year for annual contributions), are not
deductible and must be made in cash or as a rollover or transfer from another
Roth IRA or other IRA. A conversion of a "traditional" IRA to a Roth IRA may
be subject to tax and other special rules apply. You should consult a tax
adviser before combining any converted amounts with other Roth IRA
contributions, including any other conversion amounts from other tax years.

Qualified distributions from a Roth IRA are tax-free. A qualified
distribution requires that the Roth IRA has been held for at least 5 years, and
the distribution is made after age 59 1/2, on death or disability of the owner,
or for a limited amount ($10,000) for a qualified first time home purchase for
the owner or certain relatives. Income tax and a 10% penalty tax may apply to
distributions made (1) before age 59 1/2 (subject to certain exceptions) or (2)
during five taxable years starting with the year in which the first
contribution is made to the Roth IRA.

11
<PAGE> 95
QUALIFIED PENSION AND PROFIT-SHARING PLANS
Under a qualified pension or profit-sharing plan, purchase payments
made by an employer are not currently taxable to the participant and increases
in the value of a contract are not subject to taxation until received by a
participant or beneficiary.

Distributions are taxable to the participant or beneficiary as
ordinary income in the year of receipt. Any distribution that is considered
the participant's "investment in the contract" is treated as a return of
capital and is not taxable. Certain lump-sum distributions may be eligible for
special forward averaging tax treatment for certain classes of individuals.

FEDERAL INCOME TAX WITHHOLDING
The portion of a distribution which is taxable income to the recipient
will be subject to federal income tax withholding as follows:

1. ELIGIBLE ROLLOVER DISTRIBUTION FROM SECTION 403(b) PLANS OR ARRANGEMENTS
OR FROM QUALIFIED PENSION AND PROFIT-SHARING PLANS

There is a mandatory 20% tax withholding for plan distributions that
are eligible for rollover to an IRA or to another retirement plan but that are
not directly rolled over. A distribution made directly to a participant or
beneficiary may avoid this result if:

(a) a periodic settlement distribution is elected based upon a life or
life expectancy calculation, or

(b) a term-for-years settlement distribution is elected for a period of
ten years or more, payable at least annually, or

(c) a minimum required distribution as defined under the tax law is
taken after the attainment of the age of 701/2 or as otherwise
required by law.

A distribution including a rollover that is not a direct rollover will
be subject to the 20% withholding, and a 10% additional tax penalty may apply
to any amount not added back in the rollover. The 20% withholding may be
recovered when the participant or beneficiary files a personal income tax
return for the year if a rollover was completed within 60 days of receipt of
the funds, except to the extent that the participant or spousal beneficiary is
otherwise underwithheld or short on estimated taxes for that year.

2. OTHER NON-PERIODIC DISTRIBUTIONS (FULL OR PARTIAL REDEMPTIONS)

To the extent not described as requiring 20% withholding in 1 above,
the portion of a non-periodic distribution which constitutes taxable income
will be subject to federal income tax withholding, if the aggregate
distributions exceed $200 for the year, unless the recipient elects not to have
taxes withheld. If no such election is made, 10% of the taxable distribution
will be withheld as federal income tax. Election forms will be provided at the
time distributions are requested. This form of withholding applies to all
annuity programs.

12
<PAGE> 96

3. PERIODIC DISTRIBUTIONS (DISTRIBUTIONS PAYABLE OVER A PERIOD GREATER THAN
ONE YEAR)

The portion of a periodic distribution which constitutes taxable
income will be subject to federal income tax withholding under the wage
withholding tables as if the recipient were married claiming three exemptions.
A recipient may elect not to have income taxes withheld or have income taxes
withheld at a different rate by providing a completed election form. Election
forms will be provided at the time distributions are requested. This form of
withholding applies to all annuity programs. As of January 1, 1998, a
recipient receiving periodic payments (e.g., monthly or annual payments under
an annuity option) which total $15,200 or less per year, will generally be
exempt from periodic withholding.

Recipients who elect not to have withholding made are liable for
payment of federal income tax on the taxable portion of the distribution. All
recipients may also be subject to penalties under the estimated tax payment
rules if withholding and estimated tax payments are not sufficient to cover tax
liabilities.

Recipients who do not provide a social security number or other
taxpayer identification number will not be permitted to elect out of
withholding. Additionally, U.S citizens residing outside of the country, or
U.S. legal residents temporarily residing outside the country, are not
permitted to elect out of withholding.

INDEPENDENT ACCOUNTANTS

Financial statements as of and for the year ended December 31, 1997 of
Fund QP, included in the Annual Report incorporated by reference in this SAI,
have been incorporated herein in reliance on the report of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as experts
in accounting and auditing.

The consolidated financial statements of The Travelers Insurance
Company and Subsidiaries as of December 31, 1997 and 1996, and for each of the
years in the three-year period ended December 31, 1997, have been included
herein in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, appearing elsewhere herein, and upon the
authority of said firm as experts in accounting and auditing.

13
<PAGE> 97
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholder
The Travelers Insurance Company and Subsidiaries:

We have audited the accompanying consolidated balance sheets of The Travelers
Insurance Company and Subsidiaries as of December 31, 1997 and 1996, and the
related consolidated statements of income and retained earnings and cash flows
for each of the years in the three-year period ended December 31, 1997. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of The Travelers
Insurance Company and Subsidiaries as of December 31, 1997 and 1996, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1997, in conformity with generally accepted
accounting principles.

/s/ KPMG Peat Marwick LLP
Hartford, Connecticut
January 26, 1998

F-1
<PAGE> 98
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
($ IN MILLIONS)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1997 1996 1995
------ ------ ------
<S> <C> <C> <C>
REVENUES
Premiums $1,583 $1,387 $1,504
Net investment income 2,037 1,950 1,884
Realized investment gains 199 65 106
Other revenues 354 284 204
- -------------------------------------------------------------------------------------------
Total Revenues $4,173 $3,686 $3,698
- -------------------------------------------------------------------------------------------

BENEFITS AND EXPENSES
Current and future insurance benefits 1,341 1,187 1,206
Interest credited to contractholders 829 863 997
Amortization of deferred acquisition costs and value of
insurance in force 293 281 290
General and administrative expenses 427 380 368
- -------------------------------------------------------------------------------------------
Total Benefits and Expenses 2,890 2,711 2,861
- -------------------------------------------------------------------------------------------

Income from continuing operations before federal income taxes 1,283 975 837
- -------------------------------------------------------------------------------------------

Federal income taxes:
Current expense 434 284 233
Deferred 10 58 57
- -------------------------------------------------------------------------------------------
Total Federal Income Taxes 444 342 290
- -------------------------------------------------------------------------------------------

Income from continuing operations 839 633 547
- -------------------------------------------------------------------------------------------
Discontinued operations, net of income taxes
Income from operations (net of taxes of $0, $0 and $18) -- -- 72
Gain on disposition (net of taxes of $0, $14 and $68) -- 26 131
- -------------------------------------------------------------------------------------------
Income from Discontinued Operations -- 26 203
- -------------------------------------------------------------------------------------------

Net income 839 659 750
Retained earnings beginning of year 2,471 2,312 1,562
Dividends to parent 500 500 --
- -------------------------------------------------------------------------------------------
Retained Earnings End of Year $2,810 $2,471 $2,312
===========================================================================================
</TABLE>

See Notes to Consolidated Financial Statements.

F-2
<PAGE> 99
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ IN MILLIONS)

<TABLE>
<CAPTION>
December 31, 1997 1996
- ----------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Fixed maturities, available for sale at fair value (cost,
$20,682; $19,284) $21,511 $19,637
Equity securities, at fair value (cost, $480; $330) 512 338
Mortgage loans 2,869 2,920
Real estate held for sale 134 297
Trading securities, at market value 800 --
Policy loans 1,872 1,910
Short-term securities 1,102 902
Other invested assets 1,702 1,253
- ----------------------------------------------------------------------------------
Total Investments $30,502 $27,257
- ----------------------------------------------------------------------------------

Cash 58 74
Investment income accrued 338 355
Premium balances receivable 106 105
Reinsurance recoverables 4,339 3,858
Deferred acquisition costs and value of insurance in force 2,312 2,133
Separate and variable accounts 11,319 8,127
Other assets 1,052 1,064
- ----------------------------------------------------------------------------------
Total Assets $50,026 $42,973
- ----------------------------------------------------------------------------------

LIABILITIES
Contractholder funds 14,913 14,189
Future policy benefits 12,569 11,762
Policy and contract claims 378 536
Trading securities sold not yet purchased, at market value 462 --
Separate and variable accounts 11,309 8,115
Commercial paper -- 50
Deferred federal income taxes 409 57
Other liabilities 2,661 1,936
- ----------------------------------------------------------------------------------
Total Liabilities $42,701 $36,645
- ----------------------------------------------------------------------------------

SHAREHOLDER'S EQUITY
Common stock, par value $2.50; 40 million shares authorized,
issued and outstanding 100 100
Additional paid-in capital 3,187 3,170
Retained earnings 2,810 2,471
Unrealized investment gains, net of taxes 1,228 587
- ----------------------------------------------------------------------------------
Total Shareholder's Equity $ 7,325 $ 6,328
- ----------------------------------------------------------------------------------

Total Liabilities and Shareholder's Equity $50,026 $42,973
==================================================================================
</TABLE>

See Notes to Consolidated Financial Statements.

F-3
<PAGE> 100
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
($ IN MILLIONS)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Premiums collected $ 1,519 $ 1,387 $ 1,346
Net investment income received 2,059 1,910 1,855
Other revenues received 180 131 90
Benefits and claims paid (1,230) (1,060) (846)
Interest credited to contractholders (853) (820) (960)
Operating expenses paid (445) (343) (615)
Income taxes paid (368) (328) (63)
Trading account investments, (purchases) sales, net (54) -- --
Other 18 (70) (137)
- ----------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 826 807 670
Net cash used in discontinued operations -- (350) (596)
- ----------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Operations $ 826 $ 457 $ 74
- ----------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of investments
Fixed maturities 2,259 1,928 1,974
Mortgage loans 663 917 680
Proceeds from sales of investments
Fixed maturities 7,592 9,101 6,773
Equity securities 341 479 379
Mortgage loans 207 178 704
Real estate held for sale 169 210 253
Purchases of investments
Fixed maturities (11,143) (11,556) (10,748)
Equity securities (483) (594) (305)
Mortgage loans (771) (470) (144)
Policy loans, net 38 (23) (325)
Short-term securities, (purchases) sales, net (2) 498 291
Other investments, (purchases) sales, net (260) (137) (267)
Securities transactions in course of settlement 311 (52) 258
Net cash provided by investing activities of discontinued operations -- 348 1,425
- ----------------------------------------------------------------------------------------------------------------------
Net Cash Provided by (used in) Investing Activities $ (1,079) $ 827 $ 948
- ----------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
Redemption of commercial paper, net (50) (23) (1)
Contractholder fund deposits 3,544 2,493 2,705
Contractholder fund withdrawals (2,757) (3,262) (3,755)
Dividends to parent company (500) (500) --
Other -- 9 --
- ----------------------------------------------------------------------------------------------------------------------
Net Cash Provided by (used in) Financing Activities $ 237 $ (1,283) $ (1,051)
- ----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash $ (16) $ 1 $ (29)
- ----------------------------------------------------------------------------------------------------------------------
Cash at December 31, $ 58 $ 74 $ 73
======================================================================================================================
</TABLE>

See Notes to Consolidated Financial Statements.

F-4
<PAGE> 101
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies used in the preparation of the accompanying
financial statements follow.

Basis of Presentation

The Travelers Insurance Company and Subsidiaries (the Company) is a wholly
owned subsidiary of The Travelers Insurance Group Inc. (TIGI), an indirect
wholly owned subsidiary of Travelers Group Inc. (Travelers Group). The
consolidated financial statements include the accounts of the Company and its
insurance and non-insurance subsidiaries on a fully consolidated basis. The
primary insurance subsidiaries of the Company are The Travelers Life and
Annuity Company (TLAC) and Primerica Life Insurance Company (Primerica Life)
and its subsidiary National Benefit Life Insurance Company (NBL).

- TRAVELERS LIFE AND ANNUITY offers fixed and variable deferred annuities,
payout annuities and term, universal and variable life and long-term care
insurance to individuals and small businesses. It also provides group
pension products, including guaranteed investment contracts and group
annuities for employer-sponsored retirement and savings plans. These
products are primarily marketed through The Copeland Companies (Copeland),
an indirect, wholly owned subsidiary of the Company, the Financial
Consultants of Salomon Smith Barney, an affiliate of the Company, and a
nationwide network of independent agents. The Company's Corporate and
Other Segment was absorbed into Travelers Life and Annuity during the
second quarter of 1996.

- PRIMERICA LIFE INSURANCE offers individual life products, primarily term
insurance, to consumers through a nationwide sales force of approximately
80,000 full and part-time independent agents.

As discussed in Note 2 of Notes to Consolidated Financial Statements, in
January 1995 the group life insurance and related businesses of the Company
were sold to Metropolitan Life Insurance Company (MetLife). Also in January
1995, the group medical component was exchanged for a 42% interest in The
MetraHealth Companies, Inc. (MetraHealth). The Company's interest in
MetraHealth was sold on October 2, 1995 and through that date was accounted
for on the equity method. The Company's discontinued operations reflect the
results of the medical insurance business not transferred, the equity
interest in the earnings of MetraHealth through October 2, 1995 (date of
sale) and the gains from the sales of these businesses.

In September 1995, Travelers Group made a pro rata distribution to its
stockholders of shares of Class A Common Stock of Transport Holdings Inc.,
which at the time was a wholly owned subsidiary of Travelers Group and was
the indirect owner of the business of Transport Life Insurance Company
(Transport Life). Immediately prior to this distribution, the Company
distributed Transport Life, an indirect wholly owned subsidiary of the
Company, to TIGI, as a return of capital.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and benefits and expenses during the
reporting period. Actual results could differ from those estimates.

Certain prior year amounts have been reclassified to conform with the 1997
presentation.
F-5
<PAGE> 102
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Accounting Changes

EMPLOYERS' DISCLOSURES ABOUT PENSIONS AND OTHER POSTRETIREMENT BENEFITS

In February, 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits" (FAS 132). FAS 132
supersedes the disclosure requirements in FASB Statements No. 87, "Employers'
Accounting for Pensions," No. 88, "Employers' Accounting for Settlements and
Curtailments of Defined Benefits Pension Plans and Termination of Benefits,"
and No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions." FAS 132 addresses disclosure only and does not address measurement
or recognition. In addition to other disclosure changes, FAS 132 allows
employers to disclose total contributions to multi-employer plans without
disaggregating the amounts attributable to pensions and other postretirement
benefits. This statement is effective for fiscal years beginning after
December 15, 1997. Earlier application is encouraged. Effective December 31,
1997, the Company adopted FAS 132. The adoption of this standard did not have
any impact on results of operations, financial condition or liquidity.

ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL ASSETS AND
EXTINGUISHMENTS OF LIABILITIES

Effective January 1, 1997, the Company adopted Statement of Financial
Accounting Standards No. 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities" (FAS 125). FAS 125
establishes accounting and reporting standards for transfers and servicing of
financial assets and extinguishments of liabilities. These standards are
based on an approach that focuses on control. Under this approach, after a
transfer of financial assets, an entity recognizes the financial and
servicing assets it controls and the liabilities it has incurred,
derecognizes financial assets when control has been surrendered, and
derecognizes liabilities when extinguished. FAS 125 provides standards for
distinguishing transfers of financial assets that are sales from transfers
that are secured borrowings. The requirements of FAS 125 are effective for
transfers and servicing of financial assets and extinguishments of
liabilities occurring after December 31, 1996, and are to be applied
prospectively. However, in December 1996 the FASB issued Statement of
Financial Accounting Standards No. 127, "Deferral of the Effective Date of
Certain Provisions of FASB Statement No. 125," which delays until January 1,
1998 the effective date for certain provisions. Application of FAS 125 prior
to the effective date or retroactively is not permitted. The adoption of the
provisions of FAS 125 effective January 1, 1997 did not have a material
impact on results of operations, financial condition or liquidity. The
adoption of the provisions of FAS 127 effective January, 1998 are
not expected to have a material impact on the results of operations,
financial condition or liquidity.

ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS
TO BE DISPOSED OF

Effective January 1, 1996, the Company adopted Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of." This statement
establishes accounting standards for the impairment of long-lived assets and
certain identifiable intangibles to be disposed. This statement requires a
write down to fair value when long-lived assets to be held and used are
impaired. The statement also requires long-lived assets to be disposed (e.g.,
real estate held for sale) be carried at the lower of cost or fair value less
cost to sell, and does not allow such assets to be depreciated. The adoption
of this standard did not have a material impact on the Company's financial
condition, results of operations or liquidity.

F-6
<PAGE> 103
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

ACCOUNTING FOR STOCK-BASED COMPENSATION

In October 1995, the FASB issued Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation" (FAS 123). This statement
establishes financial accounting and reporting standards for stock-based
employee compensation plans as well as transactions in which an entity issues
its equity instruments to acquire goods or services from non-employees. This
statement defines a fair value-based method of accounting for employee stock
options or similar equity instruments, and encourages all entities to adopt
this method of accounting for all employee stock compensation plans. However,
it also allows an entity to continue to measure compensation cost for those
plans using the intrinsic value-based method of accounting prescribed by
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" (APB 25). Entities electing to remain with the accounting method
prescribed in APB 25 must make pro-forma disclosures of net income and
earnings per share, as if the fair value-based method of accounting defined
by FAS 123 had been applied. FAS 123 is applicable to fiscal years beginning
after December 15, 1995. The Company has elected to continue to account for
its stock-based employee compensation plans using the accounting method
prescribed by APB 25 and has included in the notes to consolidated financial
statements the pro-forma disclosures required by FAS 123. See Note 9. The
Company has adopted FAS 123 for its stock-based non-employee compensation
plans.

Accounting Policies

INVESTMENTS

Fixed maturities include bonds, notes and redeemable preferred stocks. Fair
values of investments in fixed maturities are based on quoted market prices
or dealer quotes or, if these are not available, discounted expected cash
flows using market rates commensurate with the credit quality and maturity of
the investment. Also included in fixed maturities are loan-backed and
structured securities, which are amortized using the retrospective method.
Fixed maturities are classified as "available for sale" and are reported at
fair value, with unrealized investment gains and losses, net of income taxes,
charged or credited directly to shareholder's equity.

Equity securities, which include common and nonredeemable preferred stocks,
are classified as "available for sale" and carried at fair value based
primarily on quoted market prices. Changes in fair values of equity
securities are charged or credited directly to shareholder's equity, net of
income taxes.

Mortgage loans are carried at amortized cost. A mortgage loan is considered
impaired when it is probable that the Company will be unable to collect
principal and interest amounts due. For mortgage loans that are determined to
be impaired, a reserve is established for the difference between the
amortized cost and fair market value of the underlying collateral. In
estimating fair value, the Company uses interest rates reflecting the higher
returns required in the current real estate financing market. Impaired loans
were insignificant at December 31, 1997 and 1996.

Real estate held for sale is carried at the lower of cost or fair value less
estimated cost to sell. Fair value of foreclosed properties is established at
the time of foreclosure by internal analysis or external appraisers, using
discounted cash flow analyses and other accepted techniques. Thereafter, an
allowance for losses on real estate held for sale is established if the
carrying value of the property exceeds its current fair value less estimated
costs to sell. There was no such allowance at December 31, 1997 and 1996.

F-7
<PAGE> 104
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Trading securities are carried at market value. Realized and unrealized gains
and losses on trading securities are included in investment income.

Short-term securities, consisting primarily of money market instruments and
other debt issues purchased with a maturity of less than one year, are
carried at amortized cost which approximates market.

Accrual of income, included in other assets, is suspended on fixed maturities
or mortgage loans that are in default, or on which it is likely that future
payments will not be made as scheduled. Interest income on investments in
default is recognized only as payment is received.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses derivative financial instruments, including financial
futures contracts, equity options, forward contracts and interest rate swaps
and caps, as a means of hedging exposure to interest rate, equity price and
foreign currency risk. Hedge accounting is used to account for derivatives.
To qualify for hedge accounting the changes in value of the derivative must
be expected to substantially offset the changes in value of the hedged item.
Hedges are monitored to ensure that there is a high correlation between the
derivative instruments and the hedged investment.

Gains and losses arising from financial futures contracts are used to adjust
the basis of hedged investments and are recognized in net investment income
over the life of the investment.

Forward contracts, equity options, and interest rate swaps and caps were not
significant at December 31, 1997 and 1996. Information concerning derivative
financial instruments is included in Note 6.

INVESTMENT GAINS AND LOSSES

Realized investment gains and losses are included as a component of pretax
revenues based upon specific identification of the investments sold on the
trade date. Also included are gains and losses arising from the remeasurement
of the local currency value of foreign investments to U.S. dollars, the
functional currency of the Company. The foreign exchange effects of Canadian
operations are included in unrealized gains and losses.

POLICY LOANS

Policy loans are carried at the amount of the unpaid balances that are not in
excess of the net cash surrender values of the related insurance policies.
The carrying value of policy loans, which have no defined maturities, is
considered to be fair value.

DEFERRED ACQUISITION COSTS AND VALUE OF INSURANCE IN FORCE

Costs of acquiring individual life insurance, annuities and long-term care
business, principally commissions and certain expenses related to policy
issuance, underwriting and marketing, all of which vary with and are
primarily related to the production of new business, are deferred.
Acquisition costs relating to traditional life insurance, including term
insurance and long-term care insurance, are amortized in relation to
anticipated premiums; universal life in relation to estimated gross profits;
and annuity contracts employing a level yield method. For life insurance, a
10- to 25-year amortization period is used; for long-term care business, a
10- to 20-year period is used, and a 10- to 20-year period is employed for
annuities. Deferred acquisition costs are reviewed periodically for
recoverability to determine if any adjustment is required.

F-8
<PAGE> 105
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

The value of insurance in force is an asset recorded at the time of
acquisition of an insurance company. It represents the actuarially determined
present value of anticipated profits to be realized from life insurance,
annuities and health contracts at the date of acquisition using the same
assumptions that were used for computing related liabilities where
appropriate. The value of insurance in force was the actuarially determined
present value of the projected future profits discounted at interest rates
ranging from 14% to 18%. Traditional life insurance and guaranteed renewable
health policies are amortized in relation to anticipated premiums; universal
life is amortized in relation to estimated gross profits; and annuity
contracts are amortized employing a level yield method. The value of
insurance in force is reviewed periodically for recoverability to determine
if any adjustment is required.

SEPARATE AND VARIABLE ACCOUNTS

Separate and variable accounts primarily represent funds for which investment
income and investment gains and losses accrue directly to, and investment
risk is borne by, the contractholders. Each account has specific investment
objectives. The assets of each account are legally segregated and are not
subject to claims that arise out of any other business of the Company. The
assets of these accounts are carried at market value. Certain other separate
accounts provide guaranteed levels of return or benefits and the assets of
these accounts are primarily carried at market value. Amounts assessed to the
contractholders for management services are included in revenues. Deposits,
net investment income and realized investment gains and losses for these
accounts are excluded from revenues, and related liability increases are
excluded from benefits and expenses.

GOODWILL

Goodwill represents the cost of acquired businesses in excess of net assets
and is being amortized on a straight-line basis principally over a 40-year
period. The carrying amount is regularly reviewed for indication of
impairment in value that in the view of management would be other than
temporary. Impairments would be recognized in operating results if a
permanent diminution in value is deemed to have occurred.

CONTRACTHOLDER FUNDS

Contractholder funds represent receipts from the issuance of universal life,
pension investment and certain deferred annuity contracts. Contractholder
fund balances are increased by such receipts and credited interest and
reduced by withdrawals, mortality charges and administrative expenses charged
to the contractholders. Interest rates credited to contractholder funds range
from 3.5% to 9.45%.

FUTURE POLICY BENEFITS

Benefit reserves represent liabilities for future insurance policy benefits.
Benefit reserves for life insurance and annuities have been computed based
upon mortality, morbidity, persistency and interest assumptions applicable to
these coverages, which range from 2.5% to 10.0%, including adverse deviation.
These assumptions consider Company experience and industry standards. The
assumptions vary by plan, age at issue, year of issue and duration.
Appropriate recognition has been given to experience rating and reinsurance.

F-9
<PAGE> 106
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

PERMITTED STATUTORY ACCOUNTING PRACTICES

The Company, whose insurance subsidiaries are domiciled principally in
Connecticut and Massachusetts, prepares statutory financial statements in
accordance with the accounting practices prescribed or permitted by the
insurance departments of those states. Prescribed statutory accounting
practices include certain publications of the National Association of
Insurance Commissioners as well as state laws, regulations, and general
administrative rules. Permitted statutory accounting practices encompass all
accounting practices not so prescribed. The impact of any permitted
accounting practices on statutory surplus of the Company is not material.

PREMIUMS

Premiums are recognized as revenues when due. Reserves are established for
the portion of premiums that will be earned in future periods and for
deferred profits on limited-payment policies that are being recognized in
income over the policy term.

OTHER REVENUES

Other revenues include surrender, mortality and administrative charges and
fees as earned on investment, universal life and other insurance contracts.
Other revenues also include gains and losses on dispositions of assets and
operations other than realized investment gains and losses and revenues of
non-insurance subsidiaries.

INTEREST CREDITED TO CONTRACTHOLDERS

Interest credited to contractholders represents amounts earned by universal
life, pension investment and certain deferred annuity contracts in accordance
with contract provisions.

FEDERAL INCOME TAXES

The provision for federal income taxes is comprised of two components,
current income taxes and deferred income taxes. Deferred federal income taxes
arise from changes during the year in cumulative temporary differences
between the tax basis and book basis of assets and liabilities. The deferred
federal income tax asset is recognized to the extent that future realization
of the tax benefit is more likely than not, with a valuation allowance for
the portion that is not likely to be recognized.

Future Application of Accounting Standards

In December 1997, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of
Position 97-3, "Accounting by Insurance and Other Enterprises for
Insurance-Related Assessments" (SOP 97-3). SOP 97-3 provides guidance for
determining when an entity should recognize a liability for guaranty-fund and
other insurance-related assessments, how to measure that liability, and when
an asset may be recognized for the recovery of such assessments through
premium tax offsets or policy surcharges. This SOP is effective for financial
statements for fiscal years beginning after December 15, 1998, and the effect
of initial adoption is to be reported as a cumulative catch-up adjustment.
Restatement of previously issued financial statements is not allowed. The
Company has not yet determined when it will implement this SOP and does not
anticipate any material impact on the Company's financial condition, results
of operations or liquidity.

F-10
<PAGE> 107
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

In June 1997, the FASB issued Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income" (FAS 130). FAS 130 establishes
standards for the reporting and display of comprehensive income and its
components in a full set of general-purpose financial statements. All items
that are required to be recognized under accounting standards as components
of comprehensive income are to be reported in a financial statement that is
displayed with the same prominence as other financial statements. FAS 130
stipulates that comprehensive income reflect the change in equity of an
enterprise during a period from transactions and other events and
circumstances from non-owner sources. Comprehensive income will thus
represent the sum of net income and other comprehensive income, although FAS
130 does not require the use of the terms comprehensive income or other
comprehensive income. The accumulated balance of other comprehensive income
shall be displayed separately from retained earnings and additional paid-in
capital in the statement of financial position. FAS 130 is effective for
fiscal years beginning after December 15, 1997. The Company anticipates that
the adoption of FAS 130 will result primarily in reporting unrealized gains
and losses on investments in debt and equity securities in comprehensive
income.

In June 1997, the FASB also issued Statement of Financial Accounting
Standards No. 131, "Disclosures About Segments of an Enterprise and Related
Information" (FAS 131). FAS 131 establishes standards for the way that public
enterprises report information about operating segments in annual financial
statements and requires that selected information about those operating
segments be reported in interim financial statements. FAS 131 supersedes
Statement of Financial Accounting Standards No. 14, "Financial Reporting for
Segments of a Business Enterprise" (FAS 14). FAS 131 requires that all
public enterprises report financial and descriptive information about its
reportable operating segments. Operating segments are defined as components
of an enterprise about which separate financial information is available that
is evaluated regularly by the chief operating decision maker in deciding how
to allocate resources and in assessing performance. FAS 131 is effective for
fiscal years beginning after December 15, 1997. The Company is currently
determining the impact of the adoption of FAS 131.

2. DISPOSITIONS AND DISCONTINUED OPERATIONS

On January 3, 1995, the Company and its affiliates completed the sale of
their group life and related non-medical group insurance businesses to
MetLife for $350 million and recognized in the first quarter of 1995 a gain
of $20 million net of taxes. In connection with the sale, the Company ceded
100% of its risks in the group life and related businesses to MetLife on an
indemnity reinsurance basis, effective January 1, 1995. In connection with
the reinsurance transaction, the Company transferred assets with a fair
market value of approximately $1.5 billion to MetLife, equal to the statutory
reserves and other liabilities transferred.

On January 3, 1995, the Company and MetLife and certain of their affiliates,
formed the MetraHealth joint venture by contributing their group medical
businesses to MetraHealth, in exchange for shares of common stock of
MetraHealth. No gain was recognized as a result of this transaction . Upon
formation of the joint venture, the Company owned 42% of the outstanding
capital stock of MetraHealth, TIGI owned 8% and the other 50% was owned by
MetLife and its affiliates. In March 1995, MetraHealth acquired HealthSpring,
Inc. for common stock of MetraHealth resulting in a reduction in the
participation of the Company and TIGI, and MetLife in the MetraHealth venture
to 48.25% each. As the medical insurance business of the Company came due for
renewal, the risks were transferred to MetraHealth and the related operating
results for this medical insurance business were reported by the Company in
1995 as part of discontinued operations.

F-11
<PAGE> 108
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

On October 2, 1995, the Company and its affiliates completed the sale of
their ownership in MetraHealth to United HealthCare Corporation and through
that date had accounted for its interest in MetraHealth on the equity method.
Gross proceeds to the Company in 1995 were $708 million in cash, an after-tax
gain of $111 million was recognized. During 1996 the Company received a
contingency payment based on MetraHealth's 1995 results. In conjunction with
this payment, certain reserves associated with the group medical business and
exit costs related to the discontinued operations were reevaluated resulting
in a final after-tax gain of $26 million.

All of the businesses sold to MetLife or contributed to MetraHealth were
included in the Company's Managed Care and Employee Benefit Operations
(MCEBO) segment prior to 1995. The Company's discontinued operations in 1996
and 1995 reflect the results of the medical insurance business not
transferred, the equity interest in the earnings of MetraHealth through
October 2, 1995 (date of sale) and the gains from sales of these businesses.
Revenues from discontinued operations were insignificant for the year ended
December 31, 1996 and $1.2 billion for the year ended December 31, 1995.

In September 1995, Travelers Group made a pro rata distribution to its
stockholders of shares of Class A Common Stock of Transport Holdings Inc.,
which at the time was a wholly owned subsidiary of Travelers Group and was
the indirect owner of the business of Transport Life. Immediately prior to
this distribution, the Company distributed Transport, an indirect wholly
owned subsidiary of the Company, to TIGI as a return of capital, resulting in
a reduction in additional paid-in capital of $334 million. The results of
Transport through September 1995 are included in income from continuing
operations.

3. COMMERCIAL PAPER AND LINES OF CREDIT

The Company issues commercial paper directly to investors. No commercial
paper was outstanding at December 31, 1997 and $50 million was outstanding at
December 31, 1996. The Company maintains unused credit availability under
bank lines of credit at least equal to the amount of the outstanding
commercial paper. Interest expense related to the commercial paper was not
significant in 1997 or 1996.

Travelers Group, Commercial Credit Company (CCC) (an indirect wholly owned
subsidiary of Travelers Group) and the Company have an agreement with a
syndicate of banks to provide $1.0 billion of revolving credit, to be
allocated to any of Travelers Group, CCC or the Company. The Company's
participation in this agreement is limited to $250 million. The revolving
credit facility consists of a five-year revolving credit facility that
expires in 2001. At December 31, 1997, $50 million was allocated to the
Company. Under this facility the Company is required to maintain certain
minimum equity and risk-based capital levels. At December 31, 1997, the
Company was in compliance with these provisions. There were no amounts
outstanding under this agreement at December 31, 1997 and 1996. If the
Company had borrowings on this facility, the interest rate would be based
upon LIBOR plus a negotiated margin.

F-12
<PAGE> 109
\ THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

4. REINSURANCE

The Company participates in reinsurance in order to limit losses, minimize
exposure to large risks, provide additional capacity for future growth and to
effect business-sharing arrangements. Reinsurance is accomplished through
various plans of reinsurance, primarily yearly renewable term coinsurance and
modified coinsurance. The Company remains primarily liable as the direct
insurer on all risks reinsured. During 1997, new universal life business was
reinsured under an 80%/20% quota share reinsurance program and new term life
business was reinsured under a 90%/10% quota share reinsurance program.
Maximum retention of $1.5 million is generally reached on policies in excess
of $7.5 million. For other plans of insurance, it is the policy of the
Company to obtain reinsurance for amounts above certain retention limits on
individual life policies, which limits vary with age and underwriting
classification. Generally, the maximum retention on an ordinary life risk is
$1.5 million.

The Company writes workers' compensation business through its Accident
Department. This business is ceded 100% to an affiliate, The Travelers
Indemnity Company.

A summary of reinsurance financial data reflected within the consolidated
statement of operations and retained earnings is presented below ($ in
millions):

<TABLE>
<CAPTION>
---------------------------------------------------------------------
WRITTEN PREMIUMS 1997 1996 1995
---------------------------------------------------------------------
<S> <C> <C> <C>
Direct $2,148 $1,982 $2,166
Assumed from:
Non-affiliated companies 1 5 --
Ceded to:
Affiliated companies (280) (284) (374)
Non-affiliated companies (273) (309) (302)
---------------------------------------------------------------------
Total Net Written Premiums $1,596 $1,394 $1,490
=====================================================================

<CAPTION>
---------------------------------------------------------------------
EARNED PREMIUMS 1997 1996 1995
---------------------------------------------------------------------
<S> <C> <C> <C>
Direct $2,170 $1,897 $2,067
Assumed from:
Non-affiliated companies 1 5 --
Ceded to:
Affiliated companies (321) (219) (283)
Non-affiliated companies (291) (315) (298)
---------------------------------------------------------------------
Total Net Earned Premiums $1,559 $1,368 $1,486
=====================================================================
</TABLE>

F-13
<PAGE> 110
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Reinsurance recoverables at December 31, 1997 and 1996 include amounts
recoverable on unpaid and paid losses and were as follows ($ in millions):

<TABLE>
<CAPTION>
----------------------------------------------------------
REINSURANCE RECOVERABLES 1997 1996
----------------------------------------------------------
<S> <C> <C>
Life and Accident and Health
Business:
Non-affiliated companies $1,362 $1,497
Property-Casualty Business:
Affiliated companies 2,977 2,361
----------------------------------------------------------
Total Reinsurance Recoverables $4,339 $3,858
==========================================================
</TABLE>

Total reinsurance recoverables at December 31, 1997 and 1996 include $697
million and $720 million, respectively, from MetLife in connection with the
sale of the Company's group life and related businesses. See Note 2.

5. SHAREHOLDER'S EQUITY

Additional Paid-In Capital

The increase of $17 million in additional paid-in capital during 1997 is due
to tax benefits related to exercising Travelers Group stock options by the
Company's employees.

Unrealized Investment Gains (Losses)

An analysis of the change in unrealized gains and losses on investments is
shown in Note 13.

Shareholder's Equity and Dividend Availability

The Company's statutory net income, which includes all insurance
subsidiaries, was $754 million, $656 million, and $235 million for the years
ended December 31, 1997, 1996 and 1995, respectively.

The Company's statutory capital and surplus was $4.12 billion and $3.44
billion at December 31, 1997 and 1996, respectively.

The Company is currently subject to various regulatory restrictions that
limit the maximum amount of dividends available to be paid to its parent
without prior approval of insurance regulatory authorities. Statutory surplus
of $551 million is available in 1998 for dividend payments by the Company
without prior approval of the Connecticut Insurance Department. In addition,
under a revolving credit facility, the Company is required to maintain
certain minimum equity and risk based capital levels. The Company is in
compliance with these covenants at December 31, 1997 and 1996.

F-14
<PAGE> 111
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

6. DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS

Derivative Financial Instruments

The Company uses derivative financial instruments, including financial
futures, equity options, forward contracts and interest rate swaps as a means
of hedging exposure to foreign currency, equity price changes and/or interest
rate risk on anticipated transactions or existing assets and liabilities. The
Company does not hold or issue derivative instruments for trading purposes.

These derivative financial instruments have off-balance sheet risk. Financial
instruments with off-balance sheet risk involve, to varying degrees, elements
of credit and market risk in excess of the amount recognized in the balance
sheet. The contract or notional amounts of these instruments reflect the
extent of involvement the Company has in a particular class of financial
instrument. However, the maximum loss of cash flow associated with these
instruments can be less than these amounts. For forward contracts and
interest rate swaps, credit risk is limited to the amounts calculated to be
due the Company on such contracts. Financial futures contracts and purchased
listed option contracts have little credit risk since organized exchanges are
the counterparties.

The Company monitors creditworthiness of counterparties to these financial
instruments by using criteria of acceptable risk that are consistent with
on-balance sheet financial instruments. The controls include credit
approvals, limits and other monitoring procedures.

The Company uses exchange traded financial futures contracts to manage its
exposure to changes in interest rates which arise from the sale of certain
insurance and investment products, or the need to reinvest proceeds from the
sale or maturity of investments. To hedge against adverse changes in interest
rates, the Company enters long or short positions in financial futures
contracts to offset asset price changes resulting from changes in market
interest rates until an investment is purchased or a product is sold.

Margin payments are required to enter a futures contract and contract gains
or losses are settled daily in cash. The contract amount of futures contracts
represents the extent of the Company's involvement, but not future cash
requirements, as open positions are typically closed out prior to the
delivery date of the contract.

At December 31, 1997 and 1996, the Company held financial futures contracts
with notional amounts of $625 million and $169 million, respectively, and a
deferred gain of $.7 million and a deferred loss of $4.1 million and a
deferred gain of $1.2 million, and a deferred loss of $.1 million,
respectively. Total losses of $5.8 million and gains of $2.0 million from
financial futures were deferred at December 31, 1997 and 1996, respectively,
relating to anticipated investment purchases and investment product sales,
and are reported as other liabilities. At December 31, 1997 and 1996, the
Company's futures contracts had no fair value because these contracts were
marked to market and settled in cash daily.

The off-balance sheet risks of equity options, forward contracts, and
interest rate swaps were not significant at December 31, 1997 and 1996.

F-15
<PAGE> 112
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

The Company purchased a 5-year interest rate cap, with a notional amount of
$200 million, from Travelers Group in 1995 to hedge against losses that could
result from increasing interest rates. This instrument, which does not have
off-balance sheet risk, gives the Company the right to receive payments if
interest rates exceed specific levels at specific dates. The premium of $2
million paid for this instrument is being amortized over its life. The
interest rate cap asset is reported at fair value which is $0 and $1 million
at December 31, 1997 and 1996, respectively.

Financial Instruments with Off-Balance Sheet Risk

In the normal course of business, the Company issues fixed and variable rate
loan commitments and has unfunded commitments to partnerships. The
off-balance sheet risk of these financial instruments was not significant at
December 31, 1997 and 1996.

Fair Value of Certain Financial Instruments

The Company uses various financial instruments in the normal course of its
business. Fair values of financial instruments that are considered insurance
contracts are not required to be disclosed and are not included in the
amounts discussed.

At December 31, 1997 and 1996, investments in fixed maturities had a carrying
value and a fair value of $21.5 billion and $19.6 billion, respectively. See
Notes 1 and 13.

At December 31, 1997 and 1996, mortgage loans had a carrying value of $2.9
billion, which approximated fair value. In estimating fair value, the Company
used interest rates reflecting the higher returns required in the current
real estate financing market.

The carrying values of $143 million and $174 million of financial instruments
classified as other assets approximated their fair values at December 31,
1997 and 1996, respectively. The carrying values of $2.0 billion and $850
million of financial instruments classified as other liabilities also
approximated their fair values at December 31, 1997 and 1996, respectively.
Fair value is determined using various methods, including discounted cash
flows, as appropriate for the various financial instruments.

At December 31, 1997, contractholder funds with defined maturities had a
carrying value of $2.3 billion and a fair value of $2.3 billion, compared
with a carrying value of $1.4 billion and a fair value of $1.5 billion at
December 31, 1996. The fair value of these contracts is determined by
discounting expected cash flows at an interest rate commensurate with the
Company's credit risk and the expected timing of cash flows. Contractholder
funds without defined maturities had a carrying value of $9.7 billion and a
fair value of $9.5 billion at December 31, 1997, compared with a carrying
value of $9.1 billion and a fair value of $8.8 billion at December 31, 1996.
These contracts generally are valued at surrender value.

The assets of separate accounts providing a guaranteed return had a carrying
value and a fair value of $260 million and $260 million, respectively, at
December 31, 1997, compared with a carrying value and a fair value of $217
million and $217 million, respectively, at December 31, 1996. The liabilities
of separate accounts providing a guaranteed return had a carrying value and a
fair value of $209 million and $206 million, respectively, at December 31,
1997, compared with a carrying value and a fair value of $208 million and
$204 million, respectively, at December 31, 1996.

F-16
<PAGE> 113
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

The carrying values of cash, short-term securities, trading securities,
investment income accrued, trading securities sold not purchased, and
commercial paper approximated their fair values.

The carrying value of policy loans, which have no defined maturities, is
considered to be fair value.

7. COMMITMENTS AND CONTINGENCIES

Financial Instruments with Off-Balance Sheet Risk

See Note 6 for a discussion of financial instruments with off-balance sheet
risk.

Litigation

In March 1997, a purported class action entitled Patterman v. The Travelers,
Inc. was commenced in the Superior Court of Richmond County, Georgia,
alleging, among other things, violations of the Georgia RICO statute and
other state laws by an affiliate of the Company, Primerica Financial
Services, Inc. and certain of its affiliates. Plaintiffs seek unspecified
compensatory and punitive damages and other relief. In April 1997, the
lawsuit was removed to the U.S. District Court for the Southern District of
Georgia, and in October 1997, the lawsuit was remanded to the Superior Court
of Richmond County. Later in October 1997, the defendants answered the
complaint, denied liability and asserted numerous affirmative defenses. In
February 1998, the Superior Court of Richmond County transferred the lawsuit
to the Superior Court of Gwinnett County, Georgia, and certified the transfer
order for immediate appellate review. Also in February 1998, plaintiffs
served an application for appellate review of the transfer order; defendants
subsequently opposed that application; and later in February 1998, the Court
of Appeals of the State of Georgia granted plaintiffs' application for
appellate review. Pending appeal proceedings in the trial court have been
stayed. The Company intends to vigorously contest the litigation.

The Company is also a defendant or co-defendant in various other litigation
matters in the normal course of business. Although there can be no
assurances, as of December 31, 1997, the Company believes, based on
information currently available, that the ultimate resolution of these legal
proceedings would not be likely to have a material adverse effect on its
results of operations, financial condition or liquidity.

8. BENEFIT PLANS

Pension and Other Postretirement Benefits

The Company participates in a qualified, noncontributory defined benefit
pension plan sponsored by an affiliate. In addition, the Company provides
certain other postretirement benefits to retired employees through a plan
sponsored by an affiliate. The Company's share of net expense for the
qualified pension and other postretirement benefit plans was not significant
for 1997, 1996 and 1995. Beginning January 1, 1996, the Company's other
postretirement benefit plans were amended to restrict benefit eligibility to
retirees and certain retiree-eligible employees. Previously, covered
employees could become eligible for postretirement benefits if they reached
retirement age while working for the Company.

F-17
<PAGE> 114
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Through plans sponsored by TIGI, the Company also provides defined
contribution pension plans for certain agents. Company contributions are
primarily a function of production. The expense for these plans was not
significant in 1997, 1996 and 1995.

401(k) Savings Plan

Substantially all of the Company's employees are eligible to participate in a
401(k) savings plan sponsored by Travelers Group. Prior to January 1, 1996,
the Company made matching contributions to the 401(k) savings plan on behalf
of participants in the amount of 50% of the first 5% of pre-tax contributions
made by the employee, plus an additional variable matching contribution based
on the profitability of TIGI and its subsidiaries. During 1996, the Company
made matching contributions in an amount equal to the lesser of 100% of the
pre-tax contributions made by the employee or $1,000. Effective January 1,
1997, the Company discontinued matching contributions for the majority of its
employees. The Company's expenses in connection with the 401(k) savings plan
were not significant in 1997, 1996 and 1995.

9. RELATED PARTY TRANSACTIONS

The principal banking functions, including payment of salaries and expenses,
for certain subsidiaries and affiliates of TIGI are handled by two companies.
The Travelers Insurance Company (Life Department) handles banking functions
for the life and annuity operations of Travelers Life and Annuity and some of
its non-insurance affiliates. The Travelers Indemnity Company handles banking
functions for the property-casualty operations, including most of its
property-casualty insurance and non-insurance affiliates. Settlements between
companies are made at least monthly. The Company provides various employee
benefits coverages to employees of certain subsidiaries of TIGI. The premiums
for these coverages were charged in accordance with cost allocation
procedures based upon salaries or census. In addition, investment advisory
and management services, data processing services and claims processing
services are shared with affiliated companies. Charges for these services are
shared by the companies on cost allocation methods based generally on
estimated usage by department.

The Company maintains a short-term investment pool in which its insurance
affiliates participate. The position of each company participating in the
pool is calculated and adjusted daily. At December 31, 1997 and 1996, the
pool totaled approximately $2.6 billion and $2.9 billion, respectively. The
Company's share of the pool amounted to $725 million and $196 million at
December 31, 1997 and 1996, respectively, and is included in short-term
securities in the consolidated balance sheet.

The Company sells structured settlement annuities to The Travelers Indemnity
Company in connection with the settlement of certain policyholder
obligations. Such deposits were $88 million, $40 million, and $38 million for
1997, 1996 and 1995, respectively.

The Company markets deferred annuity products and life and health insurance
through its affiliate, Salomon Smith Barney. Premiums and deposits related to
these products were $1.0 billion, $820 million, and $583 million in 1997,
1996 and 1995, respectively.

At December 31, 1996, the Company had an investment of $22 million in bonds
of its affiliate, CCC. This was included in fixed maturities in the
consolidated balance sheet.

F-18
<PAGE> 115
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

The Company had an investment of $1.15 billion and $648 million in common
stock of Travelers Group at December 31, 1997 and 1996, respectively. This
investment is carried at fair value.

The Company participates in a stock option plan sponsored by Travelers Group
that provides for the granting of stock options in Travelers Group common
stock to officers and key employees. To further encourage employee stock
ownership, during 1997 Travelers Group introduced the WealthBuilder stock
option program. Under this program all employees meeting certain requirements
have been granted Travelers Group stock options.

The Company applies APB 25 and related interpretations in accounting for
stock options. Since stock options under the Travelers Group plans are issued
at fair market value on the date of award, no compensation cost has been
recognized for these awards. FAS 123 provides an alternative to APB 25
whereby fair values may be ascribed to options using a valuation model and
amortized to compensation cost over the vesting period of the options.

Had the Company applied FAS 123 in accounting for Travelers Group stock
options, net income would have been the pro forma amounts indicated below:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------
YEAR ENDING DECEMBER 31, 1997 1996 1995
($ IN MILLIONS)
-----------------------------------------------------------------------
<S> <C> <C> <C>
Net income, as reported $839 $659 $750
-----------------------------------------------------------------------
FAS 123 pro forma adjustments, (9) (3) (1)
after tax
-----------------------------------------------------------------------
Net income, pro forma $830 $656 $749
</TABLE>

The Company has an interest rate cap agreement with Travelers Group. See Note
6.

10. LEASES

Most leasing functions for TIGI and its subsidiaries are administered by TAP.
In 1996, TAP assumed the obligations for several leases. Rent expense related
to all leases are shared by the companies on a cost allocation method based
generally on estimated usage by department. Rent expense was $15 million, $24
million, and $22 million in 1997, 1996 and 1995, respectively.

<TABLE>
<CAPTION>
--------------------------------------------------
YEAR ENDING DECEMBER 31, MINIMUM OPERATING
($ in millions) RENTAL PAYMENTS
--------------------------------------------------
<S> <C>
1998 $ 49
1999 44
2000 43
2001 45
2002 43
Thereafter 337
--------------------------------------------------
Total Rental Payments $561
==================================================
</TABLE>

F-19
<PAGE> 116
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Future sublease rental income of approximately $73 million will partially
offset these commitments. Also, the Company will be reimbursed for 50% of the
rental expense for a particular lease totaling $218 million, by an affiliate.
Minimum future capital lease payments are not significant.

The Company is reimbursed for use of furniture and equipment through cost
sharing agreements by its affiliates.

11. FEDERAL INCOME TAXES

<TABLE>
<CAPTION>
EFFECTIVE TAX RATE
---------------------------------------------------------------------
For The Year Ended December 31, 1997 1996 1995
($ in millions)
---------------------------------------------------------------------
<S> <C> <C> <C>
Income Before Federal Income Taxes $1,283 $ 975 $ 837
Statutory Tax Rate 35% 35% 35%
---------------------------------------------------------------------
Expected Federal Income Taxes 449 341 293
Tax Effect of:
Non-taxable investment income (4) (3) (4)
Other, net (1) 4 1
=====================================================================
Federal Income Taxes $ 444 $ 342 $ 290
=====================================================================
Effective Tax Rate 35% 35% 35%
---------------------------------------------------------------------

COMPOSITION OF FEDERAL INCOME TAXES
Current:
United States $ 410 $ 263 $ 220
Foreign 24 21 13
---------------------------------------------------------------------
Total 434 284 233
---------------------------------------------------------------------
Deferred:
United States 10 57 52
Foreign -- 1 5
---------------------------------------------------------------------
Total 10 58 57
---------------------------------------------------------------------
Federal Income Taxes $ 444 $ 342 $ 290
=====================================================================
</TABLE>

Tax benefits allocated directly to shareholder's equity for the years ended
December 31, 1997, 1996 and 1995 were $17 million, $8 million and $7 million,
respectively.

F-20
<PAGE> 117
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

The net deferred tax liabilities at December 31, 1997 and 1996 were comprised
of the tax effects of temporary differences related to the following assets
and liabilities:

<TABLE>
<CAPTION>
($ in millions) 1997 1996
------- -------
<S> <C> <C>
Deferred Tax Assets:
Benefit, reinsurance and other reserves $ 550 $ 510
Contractholder funds 11 32
Operating lease reserves 68 71
Other employee benefits 102 104
Other 139 121
- -----------------------------------------------------------------------------------
Total 870 838
- -----------------------------------------------------------------------------------
Deferred Tax Liabilities:
Deferred acquisition costs and value of 608 571
insurance in force
Investments, net 484 131
Other 87 93
- -----------------------------------------------------------------------------------
Total 1,179 795
- -----------------------------------------------------------------------------------
Net Deferred Tax (Liability) Asset Before Valuation Allowance (309) 43
Valuation Allowance for Deferred Tax Assets (100) (100)
- -----------------------------------------------------------------------------------
Net Deferred Tax Liability After Valuation Allowance $ (409) $ (57)
- -----------------------------------------------------------------------------------
</TABLE>

Starting in 1994 and continuing for at least five years, the Company and its
life insurance subsidiaries will file a consolidated federal income tax
return. Federal income taxes are allocated to each member of the consolidated
group on a separate return basis adjusted for credits and other amounts
required by the consolidation process. Any resulting liability will be paid
currently to the Company. Any credits for losses will be paid by the Company
to the extent that such credits are for tax benefits that have been utilized
in the consolidated federal income tax return.

A net deferred tax asset valuation allowance of $100 million has been
established to reduce the deferred tax asset on investment losses to the
amount that, based upon available evidence, is more likely than not to be
realized. Reversal of the valuation allowance is contingent upon the
recognition of future capital gains in the Company's consolidated life
insurance company federal income tax return through 1998, and if
life/non-life consolidation is elected in 1999, the consolidated federal
income tax return of Travelers Group commencing in 1999, or a change in
circumstances which causes the recognition of the benefits to become more
likely than not. There was no change in the valuation allowance during 1997.
The initial recognition of any benefit produced by the reversal of the
valuation allowance will be recognized by reducing goodwill.

At December 31, 1997, the Company had no ordinary or capital loss
carryforwards.

The policyholders surplus account, which arose under prior tax law, is
generally that portion of the gain from operations that has not been
subjected to tax, plus certain deductions. The balance of this account,
which, under provisions of the Tax Reform Act of 1984, will not increase
after 1983, is estimated to be $932 million. This amount has not been
subjected to current income taxes but, under certain conditions that
management considers to be remote, may become subject to income taxes in
future years. At current rates, the maximum amount of such tax (for which no
provision has been made in the financial statements) would be approximately
$326 million.

F-21
<PAGE> 118
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

12. NET INVESTMENT INCOME

<TABLE>
<CAPTION>
---------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997 1996 1995
($ in millions)
---------------------------------------------------------------------
<S> <C> <C> <C>
GROSS INVESTMENT INCOME
Fixed maturities $1,460 $1,387 $1,248
Mortgage loans 291 334 419
Policy loans 137 156 166
Real estate held for sale 88 94 111
Other, including trading 150 77 97
securities
---------------------------------------------------------------------
2,126 2,048 2,041
---------------------------------------------------------------------
Investment expenses 89 98 157
---------------------------------------------------------------------
Net investment income $2,037 $1,950 $1,884
---------------------------------------------------------------------
</TABLE>

13. INVESTMENTS AND INVESTMENT GAINS (LOSSES)

Realized investment gains (losses) for the periods were as follows:

<TABLE>
<CAPTION>
---------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997 1996 1995
($ in millions)
---------------------------------------------------------------------
<S> <C> <C> <C>
REALIZED INVESTMENT GAINS
Fixed maturities $71 $(63) $(43)
Equity securities (9) 47 36
Mortgage loans 59 49 47
Real estate held for sale 67 33 18
Other 11 (1) 48
---------------------------------------------------------------------
Total Realized Investment Gains $199 $65 $106
---------------------------------------------------------------------
</TABLE>

F-22
<PAGE> 119
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Changes in net unrealized investment gains (losses) that are included as a
separate component of shareholder's equity were as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997 1996 1995
($ in millions)
-------------------------------------------------------------------------
<S> <C> <C> <C>
UNREALIZED INVESTMENT GAINS
Fixed maturities $ 446 $ (323) $1,974
Equity securities 25 (35) 46
Other 520 220 200
-------------------------------------------------------------------------
Total Realized Investment Gains 991 (138) 2,220
-------------------------------------------------------------------------

Related taxes 350 (43) 778
-------------------------------------------------------------------------
Change in unrealized investment gains
(losses) 641 (95) 1,442
Balance beginning of year 587 682 (760)
-------------------------------------------------------------------------
Balance End of Year $1,228 $ 587 $ 682
-------------------------------------------------------------------------
</TABLE>

Included in Other are gains of $506 million, $203 million and $214 million
for 1997, 1996 and 1995, respectively, related to appreciation of Travelers
Group stock.

Fixed Maturities

Proceeds from sales of fixed maturities classified as available for sale were
$7.6 billion, $10.2 billion and $6.8 billion in 1997, 1996 and 1995,
respectively. Gross gains of $170 million, $107 million and $80 million and
gross losses of $99 million, $175 million and $124 million in 1997, 1996 and
1995, respectively, were realized on those sales.

Fair values of investments in fixed maturities are based on quoted market
prices or dealer quotes or, if these are not available, discounted expected
cash flows using market rates commensurate with the credit quality and
maturity of the investment. The fair value of investments for which a quoted
market price or dealer quote are not available amounted to $5.1 billion and
$4.6 billion at December 31, 1997 and 1996, respectively.

F-23
<PAGE> 120
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

The amortized cost and fair value of investments in fixed maturities were as
follows:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
DECEMBER 31, 1997 GROSS GROSS
($ in millions) AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE:
Mortgage-backed securities - CMOs and
pass-through securities $ 3,842 $ 124 $ 2 $ 3,964
U.S. Treasury securities and obligations
of U.S. Government and government
agencies and authorities 1,580 149 1 1,728
Obligations of states, municipalities
and political subdivisions 78 8 -- 86
Debt securities issued by
foreign governments 622 31 4 649
All other corporate bonds 14,548 547 24 15,071
Redeemable preferred stock 12 1 -- 13
- ---------------------------------------------------------------------------------------
Total Available For Sale $20,682 860 31 $21,511
- ---------------------------------------------------------------------------------------

<CAPTION>
- ----------------------------------------------------------------------------------------
DECEMBER 31, 1996 GROSS GROSS
($ in millions) AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE:
Mortgage-backed securities - CMOs and
pass-through securities $ 3,821 $ 71 $ 23 $ 3,869
U.S. Treasury securities and obligations
of U.S. Government and government
agencies and authorities 1,329 56 4 1,381
Obligations of states, municipalities and
political subdivisions 89 1 1 89
Debt securities issued by foreign
governments 618 26 3 641
All other corporate bonds 13,421 273 43 13,651
Redeemable preferred stock 6 -- -- 6
- ----------------------------------------------------------------------------------------
Total Available For Sale $19,284 $ 427 $ 74 $19,637
- ----------------------------------------------------------------------------------------
</TABLE>

F-24
<PAGE> 121

THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

The amortized cost and fair value of fixed maturities at December 31, 1997,
by contractual maturity, are shown below. Actual maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
----------------------------------------------------------
($ in millions) AMORTIZED FAIR
COST VALUE
----------------------------------------------------------
<S> <C> <C>
MATURITY:
Due in one year or less $ 1,184 $ 1,191
Due after 1 year through 5 years 5,200 5,335
Due after 5 years through 10 years 5,332 5,515
Due after 10 years 5,124 5,506
---------------------------------------------------------
16,840 17,547
---------------------------------------------------------
Mortgage-backed securities 3,842 3,964
---------------------------------------------------------
Total Maturity $20,682 $21,511
---------------------------------------------------------
</TABLE>

The Company makes investments in collateralized mortgage obligations (CMOs).
CMOs typically have high credit quality, offer good liquidity, and provide a
significant advantage in yield and total return compared to U.S. Treasury
securities. The Company's investment strategy is to purchase CMO tranches
which are protected against prepayment risk, including planned amortization
class (PAC) tranches. Prepayment protected tranches are preferred because
they provide stable cash flows in a variety of interest rate scenarios. The
Company does invest in other types of CMO tranches if a careful assessment
indicates a favorable risk/return tradeoff. The Company does not purchase
residual interests in CMOs.

At December 31, 1997 and 1996, the Company held CMOs classified as available
for sale with a fair value of $2.1 billion and $2.0 billion, respectively.
Approximately 72% and 88%, respectively, of the Company's CMO holdings are
fully collateralized by GNMA, FNMA or FHLMC securities at December 31, 1997
and 1996. In addition, the Company held $1.9 billion and $1.9 billion of
GNMA, FNMA or FHLMC mortgage-backed pass-through securities at December 31,
1997 and 1996, respectively. Virtually all of these securities are rated AAA.

F-25
<PAGE> 122
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Equity Securities
The cost and fair values of investments in equity securities were as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------
EQUITY SECURITIES:
GROSS GROSS
($ in millions) UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DECEMBER 31, 1997
Common stocks $179 $ 34 $ 11 $202
Non-redeemable preferred stocks 301 13 4 310
-----------------------------------------------------------------------------
Total Equity Securities $480 $ 47 $ 15 $512
-----------------------------------------------------------------------------

DECEMBER 31, 1996
Common stocks $212 $ 39 $ 30 $221
Non-redeemable preferred stocks 118 2 3 117
-----------------------------------------------------------------------------
Total Equity Securities $330 $ 41 $ 33 $338
-----------------------------------------------------------------------------
</TABLE>

Proceeds from sales of equity securities were $341 million, $487 million and
$379 million in 1997, 1996 and 1995, respectively. Gross gains of $53
million, $64 million and $27 million and gross losses of $62 million, $11
million and $2 million in 1997, 1996 and 1995, respectively, were realized on
those sales.

Mortgage Loans and Real Estate Held For Sale

Underperforming assets include delinquent mortgage loans, loans in the
process of foreclosure, foreclosed loans and loans modified at interest rates
below market.

At December 31, 1997 and 1996, the Company's mortgage loan and real estate
held for sale portfolios consisted of the following ($ in millions):

<TABLE>
<CAPTION>
----------------------------------------------------------
1997 1996
----------------------------------------------------------
<S> <C> <C>
Current Mortgage Loans $2,866 $2,869
Underperforming Mortgage Loans 3 51
----------------------------------------------------------
Total 2,869 2,920
----------------------------------------------------------

Real Estate Held For Sale 134 297
----------------------------------------------------------
Total $3,003 $3,217
----------------------------------------------------------
</TABLE>

F-26
<PAGE> 123
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Aggregate annual maturities on mortgage loans at December 31, 1997 are as
follows:

<TABLE>
<CAPTION>
------------------------------------------------
YEAR ENDING DECEMBER 31,
($ in millions)
------------------------------------------------
<S> <C>
Past Maturity $ 54
1998 243
1999 252
2000 321
2001 393
2002 121
Thereafter 1,485
------------------------------------------------
Total $2,869
================================================
</TABLE>

Joint Venture

In October 1997, the Company and Tishman Speyer Properties (Tishman), a
worldwide real estate owner, developer and manager, formed a joint real
estate venture with an initial equity commitment of $792 million. The Company
and certain of its affiliates committed $420 million in real estate equity
and $100 million in cash while Tishman committed $272 million in properties
and cash. Both companies are serving as asset managers for the venture and
Tishman is primarily responsible for the venture's real estate acquisition
and development efforts.

Trading Securities

Trading securities are held in a special purpose subsidiary, Tribeca
Investments LLC.

<TABLE>
<CAPTION>
-----------------------------------------------------
TRADING SECURITIES OWNED 1997
<S> <C>
Merger arbitrage $352
Convertible bond arbitrage 370
Other 78
-----------------------------------------------------
Total $800
-----------------------------------------------------

TRADING SECURITIES SOLD NOT YET PURCHASED

Merger arbitrage $213
Convertible bond arbitrage 249
-----------------------------------------------------
Total $462
-----------------------------------------------------
</TABLE>

The Company's trading portfolio investments and related liabilities are
normally held for periods less than six months. Therefore, expected future
cash flows for these assets and liabilities are expected to be realized in
less than one year.

F-27
<PAGE> 124
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Concentrations

At December 31, 1997 and 1996, the Company had no concentration of credit
risk in a single investee exceeding 10% of consolidated shareholder's equity.

The Company participates in a short-term investment pool maintained by an
affiliate. See Note 9.

Included in fixed maturities are below investment grade assets totaling $1.4
billion and $1.1 billion at December 31, 1997 and 1996, respectively. The
Company defines its below investment grade assets as those securities rated
"Ba1" or below by external rating agencies, or the equivalent by internal
analysts when a public rating does not exist. Such assets include publicly
traded below investment grade bonds and certain other privately issued bonds
that are classified as below investment grade loans.

The Company had concentrations of investments, primarily fixed maturities, in
the following industries:

<TABLE>
<CAPTION>
-------------------------------------------------
($ in millions) 1997 1996
-------------------------------------------------
<S> <C> <C>
Banking $2,215 $1,959
Finance 1,556 1,823
Electric Utilities 1,377 1,093
Asset-Backed Credit Cards 778 688
-------------------------------------------------
</TABLE>

Below investment grade assets included in the preceding table were not
significant.

At December 31, 1997 and 1996, concentrations of mortgage loans were for
properties located in highly populated areas in the states listed below:

<TABLE>
<CAPTION>
-------------------------------------------------
($ in millions) 1997 1996
-------------------------------------------------
<S> <C> <C>
California $794 $643
New York 310 297
-------------------------------------------------
</TABLE>

Other mortgage loan investments are relatively evenly dispersed throughout
the United States, with no holdings in any state exceeding $284 million and
$258 million at December 31, 1997 and 1996, respectively.

Concentrations of mortgage loans by property type at December 31, 1997 and
1996 were as follows:

<TABLE>
<CAPTION>
-------------------------------------------------
($ in millions) 1997 1996
-------------------------------------------------
<S> <C> <C>
Office $1,382 $1,208
Agricultural 771 693
Apartment 204 291
Hotel 201 217
-------------------------------------------------
</TABLE>

F-28
<PAGE> 125
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

The Company monitors creditworthiness of counterparties to all financial
instruments by using controls that include credit approvals, limits and other
monitoring procedures. Collateral for fixed maturities often includes pledges
of assets, including stock and other assets, guarantees and letters of
credit. The Company's underwriting standards with respect to new mortgage
loans generally require loan to value ratios of 75% or less at the time of
mortgage origination.

Non-Income Producing Investments

Investments included in the consolidated balance sheets that were non-income
producing for the preceding 12 months were insignificant.

Restructured Investments

The Company had mortgage loans and debt securities that were restructured at
below market terms totaling approximately $7 million and $18 million at
December 31, 1997 and 1996, respectively. The new terms typically defer a
portion of contract interest payments to varying future periods. The accrual
of interest is suspended on all restructured assets, and interest income is
reported only as payment is received. Gross interest income on restructured
assets that would have been recorded in accordance with the original terms of
such loans amounted to $.9 million in 1997 and $5 million in 1996. Interest
on these assets, included in net investment income, aggregated $.2 million
and $2 million in 1997 and 1996, respectively.

14. DEPOSIT FUNDS AND RESERVES

At December 31, 1997, the Company had $24.0 billion of life and annuity
deposit funds and reserves. Of that total, $13.0 billion is not subject to
discretionary withdrawal based on contract terms. The remaining $11.0 billion
is for life and annuity products that are subject to discretionary withdrawal
by the contractholder. Included in the amount that is subject to
discretionary withdrawal is $2.0 billion of liabilities that are
surrenderable with market value adjustments. Also included are an additional
$5.2 billion of the life insurance and individual annuity liabilities which
are subject to discretionary withdrawals, and have an average surrender
charge of 4.8%. In the payout phase, these funds are credited at
significantly reduced interest rates. The remaining $3.8 billion of
liabilities are surrenderable without charge. More than 16.8% of these relate
to individual life products. These risks would have to be underwritten again
if transferred to another carrier, which is considered a significant
deterrent against withdrawal by long-term policyholders. Insurance
liabilities that are surrendered or withdrawn are reduced by outstanding
policy loans and related accrued interest prior to payout.

F-29
<PAGE> 126
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

15. RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES

The following table reconciles net income to net cash provided by operating
activities:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997 1996 1995
($ in millions)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Income From Continuing Operations $ 839 $ 633 $ 547
Adjustments to reconcile net income to
net cash provided by operating activities:
Realized gains (199) (65) (106)
Deferred federal income taxes 10 58 57
Amortization of deferred policy
acquisition costs and value of
insurance in force 293 281 290
Additions to deferred policy
acquisition costs (471) (350) (454)
Investment income accrued 14 2 (9)
Premium balances receivable 3 (6) (8)
Insurance reserves and accrued expenses 131 (1) 291
Other 206 255 62
- --------------------------------------------------------------------------------
Net cash provided by operating activities 826 807 670
Net cash used in discontinued operations -- (350) (596)
Net cash provided by operations $ 826 $ 457 $ 74
- --------------------------------------------------------------------------------
</TABLE>

16. NON-CASH INVESTING AND FINANCING ACTIVITIES

Significant noncash investing and financing activities include: a) the
conversion of $119 million of real estate held for sale to other invested
assets as a joint venture in 1997; b) the 1995 transfer of assets with a fair
market value of approximately $1.5 billion and statutory reserves and other
liabilities of approximately $1.5 billion to MetLife (see Note 2); c) the
1995 return of capital of Transport to TIGI (see Note 2); d) the acquisition
of real estate through foreclosures of mortgage loans amounting to $10
million, $117 million and $97 million in 1997, 1996 and 1995, respectively;
e) the acceptance of purchase money mortgages for sales of real estate
aggregating $4 million, $23 million and $27 million in 1997, 1996 and 1995,
respectively.

F-30
<PAGE> 127

GOLD TRACK
GOLD TRACK SELECT

STATEMENT OF ADDITIONAL INFORMATION

FUND QP

Group Variable Annuity Contract
issued by

The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183

L-12549S May, 1998

14
<PAGE> 128
PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) The financial statements of the Registrant and the Report of
Independent Accountants thereto are contained in the Registrant's
Annual Report and are incorporated into the Statement of Additional
Information by reference. The financial statements of the Registrant
include:

Statement of Assets and Liabilities as of December 31, 1997
Statement of Operations for the year ended December 31, 1997
Statement of Changes in Net Assets for the year ended December
31, 1997 and for the period October 8, 1996 (date
operations commenced) to December 31, 1996
Statement of Investments as of December 31, 1997
Notes to Financial Statements

The consolidated financial statements of The Travelers Insurance
Company and Subsidiaries and the report of Independent Accountants,
are contained in the Statement of Additional Information. The
consolidated financial statements of The Travelers Insurance Company
and Subsidiaries include:

Consolidated Statements of Income and Retained Earnings for
the years ended December 31, 1997, 1996 and 1995
Consolidated Balance Sheets as of December 31, 1997 and 1996
Consolidated Statements of Cash Flows for the years ended
December 31, 1997, 1996 and 1995
Notes to Consolidated Financial Statements.

(b) Exhibits

1. Resolution of The Travelers Insurance Company Board of Directors
authorizing the establishment of the Registrant. (Incorporated herein
by reference to Exhibit 1 to the Registration statement on Form N-4,
filed January 11, 1996.)

2. Exempt.

3(a). Distribution and Management Agreement among the Registrant, The
Travelers Insurance Company and Tower Square Securities, Inc.
(Incorporated herein by reference to Exhibit 3(a) to the Registration
Statement on Form N-4, filed January 11, 1996.)

3(b). Form of Selling Agreement. (Incorporated herein by reference to
Exhibit 3(b) to the Registration Statement on Form N-4, filed January
11, 1996.)

4. Variable Annuity Contract(s). (Incorporated herein by reference to
Exhibit 4 to the Registration Statement on Form N-4, filed August 27,
1996.)

5. None.

6(a). Charter of The Travelers Insurance Company, as amended on October 19,
1994. (Incorporated herein by reference to Exhibit 3(a)(i) to
Registration Statement on Form S-2, File No. 33-58677, filed via Edgar
on April 18, 1995.)
<PAGE> 129
6(b). By-Laws of The Travelers Insurance Company, as amended on October 20,
1994. (Incorporated herein by reference to Exhibit 3(b)(i) to the
Registration Statement on Form S-2, File No. 33-58677, filed via Edgar
on April 18, 1995.)

7. None.

8. None.

9. Opinion of Counsel as to the legality of securities being registered.
(Incorporated herein by reference to Exhibit 9 to Post-Effective
Amendment No. 3 to the Registration Statement on Form N-4 filed April
30, 1997.)

10(a). Consent of Coopers & Lybrand L.L.P., Independent Accountants.

10(b). Consent of KPMG Peat Marwick LLP, Independent Certified Public
Accountants.

11. Not Applicable.

12. None

13. Schedule for computation of each performance quotation - Standardized
and Non-Standardized. (Incorporated herein be reference to Exhibit
No. 13 to the Post-Effective Amendment No. 2 to the Registration
Statement on Form N-4, filed April 30, 1997.)

15(a). Powers of Attorney authorizing Jay S. Fishman or Ernest J. Wright as
signatory for Robert I. Lipp, Michael A. Carpenter, Charles O. Prince
III, Marc P. Weill, Irwin R. Ettinger, Donald T. DeCarlo and Christine
B. Mead. (Incorporated herein by reference to Exhibit 15 to the
Registration Statement on Form N-4, filed January 11, 1996.)

15(b). Powers of Attorney authorizing Ernest J. Wright or Kathleen A. McGah
as signatory for Michael A. Carpenter, Jay S. Benet, George C.
Kokulis, Ian R. Stuart, and Katherine M. Sullivan. (Incorporated
herein by reference to Exhibit 15(b) to the Registration Statement on
Form N-4, filed August 27, 1996.)

15(c). Power of Attorney authorizing Ernest J. Wright or Kathleen A. McGah as
signatory for Ian R. Stuart. (Incorporated herein by reference to
Exhibit No. 15(c) to Post-Effective Amendment No. 2 to the
Registration Statement on Form N-4, filed April 30, 1997.)
<PAGE> 130
Item 25. Directors and Officers of the Depositor

<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address with Depositor
- ---------------- -------------------------------------------
<S> <C>
Michael A. Carpenter* Director, Chairman of the Board
President and Chief Executive Officer
Jay S. Benet* Director and Senior Vice President
George C. Kokulis* Director and Senior Vice President
Robert I. Lipp* Director
Ian R. Stuart* Director, Senior Vice President,
Chief Financial Officer, Chief
Accounting Officer and Controller
Katherine M. Sullivan* Director and Senior Vice President
and General Counsel
Marc P. Weill** Director and Senior Vice President
Stuart Baritz** Senior Vice President
Jay S. Fishman* Senior Vice President
Elizabeth C. Georgakopoulos* Senior Vice President
Barry Jacobson* Senior Vice President
Russell H. Johnson* Senior Vice President
Warren H. May* Senior Vice President
Christine M. Modie* Senior Vice President
David A. Tyson* Senior Vice President
F. Denney Voss* Senior Vice President
Paula Burton* Vice President
Virginia M. Meany* Vice President
Selig Ehrlich* Vice President and Actuary
Donald R. Munson, Jr.* Second Vice President
Ernest J. Wright* Vice President and Secretary
Kathleen A. McGah* Assistant Secretary and Counsel

Principal Business Address:
* The Travelers Insurance Company **Travelers Group Inc.
One Tower Square 388 Greenwich Street
Hartford, CT 06183 New York, N.Y. 10013
</TABLE>

Item 26. Persons Controlled by or Under Common Control with the Depositor or
Registrant

Incorporated herein by reference to Item 26 to Post-Effective Amendment No. 5
to the Registration Statement on form N-4, File No. 33--73466, filed April 10,
1998.

Item 27. Number of Contract Owners

As of March 1, 1998, 9,581 contract owners held qualified and non-qualified
contracts offered through the Registrant.
<PAGE> 131
Item 28. Indemnification

Section 33-770 of the Connecticut General Statutes ("C.G.S.") regarding
indemnification of directors and officers of Connecticut corporations provides
in general that Connecticut corporations shall indemnify their officers,
directors and certain other defined individuals against judgments, fines,
penalties, amounts paid in settlement and reasonable expenses actually incurred
in connection with proceedings against the corporation. The corporation's
obligation to provide such indemnification generally does not apply unless (1)
the individual is successful on the merits in the defense of any such
proceeding; or (2) a determination is made (by persons specified in the
statute) that the individual acted in good faith and in the best interests of
the corporation; or (3) the court, upon application by the individual,
determines in view of all of the circumstances that such person is fairly and
reasonably entitled to be indemnified, and then for such amount as the court
shall determine. With respect to proceedings brought by or in the right of the
corporation, the statute provides that the corporation shall indemnify its
officers, directors and certain other defined individuals, against reasonable
expenses actually incurred by them in connection with such proceedings, subject
to certain limitations.

C.G.S. Section 33-770 provides an exclusive remedy; a Connecticut corporation
cannot indemnify a director or officer to an extent either greater or less than
that authorized by the statute, e.g., pursuant to its certificate of
incorporation, by-laws, or any separate contractual arrangement. However, the
statute does specifically authorize a corporation to procure indemnification
insurance to provide greater indemnification rights. The premiums for such
insurance may be shared with the insured individuals on an agreed basis.

Travelers Group Inc. also provides liability insurance for its directors and
officers and the directors and officers of its subsidiaries, including the
Depositor. This insurance provides for coverage against loss from claims made
against directors and officers in their capacity as such, including, subject to
certain exceptions, liabilities under the Federal securities laws.

Rule 484 Undertaking

Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liability (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE> 132
Item 29. Principal Underwriter

(a) Tower Square Securities, Inc.
One Tower Square
Hartford, CT 06183

Tower Square Securities, Inc. also serves as the principal underwriter
for:

The Travelers Growth and Income Stock Account for Variable Annuities
The Travelers Quality Bond Account for Variable Annuities
The Travelers Money Market Account for Variable Annuities
The Travelers Timed Growth and Income Stock Account for Variable
Annuities
The Travelers Timed Short-Term Bond Account for Variable Annuities
The Travelers Timed Aggressive Stock Account for Variable Annuities
The Travelers Timed Bond Account for Variable Annuities
The Travelers Fund U for Variable Annuities
The Travelers Fund VA for Variable Annuities
The Travelers Fund UL for Variable Life Insurance
The Travelers Fund UL II for Variable Life Insurance
The Travelers Fund BD for Variable Annuities
The Travelers Fund BD II for Variable Annuities
The Travelers Variable Life Insurance Separate Account One
The Travelers Variable Life Insurance Separate Account Three
The Travelers Variable Life Insurance Separate Account Two
The Travelers Variable Life Insurance Separate Account Four
The Travelers Fund ABD for Variable Annuities
The Travelers Fund ABD II for Variable Annuities
The Travelers Fund BD III for Variable Annuities
The Travelers Fund BD IV for Variable Annuities
The Travelers Separate Account PF for Variable Annuities
The Travelers Separate Account PF II for Variable Annuities

<TABLE>
<CAPTION>
(b) Name and Principal Positions and Offices
Business Address * With Underwriter
------------------ --------------------------------
<S> <C>
Russell H. Johnson Chairman of the Board, Chief Executive Officer,
President and Chief Operating Officer
William F. Scully, III Member, Board of Directors,
Senior Vice President, Treasurer
and Chief Financial Officer
Cynthia P. Macdonald Vice President, Chief Compliance Officer
and Assistant Secretary
Joanne K. Russo Member, Board of Directors
Senior Vice President
William D. Wilcox General Counsel and Secretary
Kathleen A. McGah Assistant Secretary
Jay S. Benet Member, Board of Directors
George C. Kokulis Member, Board of Directors
Warren H. May Member, Board of Directors
Donald R. Munson, Jr. Senior Vice President
Stuart L. Baritz Vice President
Michael P. Kiley Vice President
Tracey Kiff-Judson Vice President
Robin A. Jones Second Vice President
Whitney F. Burr Second Vice President
Marlene M. Ibsen Second Vice President
</TABLE>
<PAGE> 133
<TABLE>
<CAPTION>
(b) (cont'd)
<S> <C>
Name and Principal Positions and Offices
Business Address * With Underwriter
------------------ --------------------------------
John J. Williams, Jr. Director and Assistant Compliance Officer
Susan M. Cursio Director and Operations Manager
Dennis D. D'Angelo Director
Thomas P. Tooley Director
Nancy S. Waldrop Assistant Treasurer
</TABLE>

* Principal business address: One Tower Square, Hartford, Connecticut 06183

Item 30. Location of Accounts and Records

The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183

Item 31. Management Services

Not applicable.

Item 32. Undertakings

The undersigned Registrant hereby undertakes:

(a) To file a post-effective amendment to this registration statement as
frequently as is necessary to ensure that the audited financial
statements in the registration statement are never more than sixteen
months old for so long as payments under the variable annuity
contracts may be accepted;

(b) To include either (1) as part of any application to purchase a
contract offered by the prospectus, a space that an applicant can
check to request a Statement of Additional Information, or (2) a post
card or similar written communication affixed to or included in the
prospectus that the applicant can remove to send for a Statement of
Additional Information; and

(c) To deliver any Statement of Additional Information and any financial
statements required to be made available under this Form N-4 promptly
upon written or oral request.

The Company hereby represents:

(d) That the aggregate charges under the Contracts of the Registrant
described herein are reasonable in relation to the services rendered,
the expenses expected to be incurred, and the risks assumed by the
Company.

<PAGE> 134
SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets the requirements of Securities Act
Rule 485(b) for effectiveness of this post-effective amendment to this
registration statement and has duly caused this post-effective amendment to
this registration statement to be signed on its behalf in the City of Hartford,
State of Connecticut, on April 22, 1998.

THE TRAVELERS SEPARATE ACCOUNT QP FOR VARIABLE ANNUITIES
(Registrant)

THE TRAVELERS INSURANCE COMPANY
(Depositor)

By: *IAN R. STUART
--------------------------------------------------
Ian R. Stuart
Senior Vice President, Chief Financial Officer
Chief Accounting Officer and Controller

As required by the Securities Act of 1933, this amendment to this registration
statement has been signed by the following persons in the capacities indicated
on this 22nd day of April, 1998.

<TABLE>
<S> <C>
*MICHAEL A. CARPENTER Director and Chairman of the Board,
- -------------------------------------- President and Chief Executive Officer
(Michael A. Carpenter)

*JAY S. BENET Director
- --------------------------------------
(Jay S. Benet)

*GEORGE C. KOKULIS Director
- --------------------------------------
(George C. Kokulis)

*ROBERT I. LIPP Director
- --------------------------------------
(Robert I. Lipp)

*IAN R. STUART Director, Senior Vice President, Chief Financial
- -------------------------------------- Officer, Chief Accounting Officer and Controller
(Ian R. Stuart)

*KATHERINE M. SULLIVAN Director, Senior Vice President and
- -------------------------------------- General Counsel
(Katherine M. Sullivan)

*MARC P. WEILL Director
- --------------------------------------
(Marc P. Weill)

*By: Ernest J. Wright, Attorney-in-Fact
</TABLE>
<PAGE> 135
EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
No. Description Method of Filing
- -------- ----------- ----------------
<S> <C> <C>
1. Resolution of The Travelers Insurance Company Board of
Directors authorizing the establishment of the Registrant.
(Incorporated herein by reference to Exhibit 1 to the
Registration Statement on Form N-4, filed January 11, 1996.)

3(a). Distribution and Management Agreement among the Registrant,
The Travelers Insurance Company and Tower Square Securities, Inc.
(Incorporated herein by reference to Exhibit 3(a) to the Registration
Statement on Form N-4, filed January 11, 1996.)

3(b). Form of Selling Agreement. (Incorporated herein by reference
to Exhibit 3(b) to the Registration Statement on Form N-4,
filed January 11, 1996.)

4. Variable Annuity Contract(s). (Incorporated herein by reference
to Exhibit 4 to the Registration Statement on Form N-4, filed
August 27, 1996.)

6(a). Charter of The Travelers Insurance Company, as amended on
October 19, 1994. (Incorporated herein by reference to
Exhibit 3(a)(i) to the Registration Statement on Form S-2,
File No. 33-58677, filed via Edgar on April 18, 1995.)

6(b). By-Laws of The Travelers Insurance Company, as amended on
October 20, 1994. (Incorporated herein by reference to
Exhibit 3(b)(i) to the Registration Statement on Form S-2,
File No. 33-58677, filed via Edgar on April 18, 1995.)

9. Opinion of Counsel as to the legality of securities being
registered by Registrant. (Incorporated herein by reference to
xhibit 9 to Post-Effective Amendment No. 3 to the Registration
tatement on Form N-4 filed April 30, 1997.)

10(a). Consent of Coopers & Lybrand L.L.P., Independent Accountants. Electronically

10(b). Consent of KPMG Peat Marwick LLP, Independent Certified Electronically
Public Accountants.

13. Schedule of computation of each performance quotation -
Standardized and Non-Standardized. (Incorporated herein by
reference to Exhibit 13 to Post-Effective Amendment No. 2 to
the Registration Statement on Form N-4, filed April 30, 1997.)
</TABLE>
<PAGE> 136
<TABLE>
<CAPTION>
Exhibit
No. Description Method of Filing
- ---------- ----------- ----------------
<S> <C>
15. Powers of Attorney authorizing Jay S. Fishman or Ernest J.
Wright as signatory for Robert I. Lipp, Michael A Carpenter,
Charles O. Prince III, Marc P. Weill, Irwin R. Ettinger,
Donald T. DeCarlo and Christine B. Mead. (Incorporated herein
by reference to Exhibit 15 to the Registration Statement on
Form N-4, filed January 11, 1996.)

15(b). Powers of Attorney authorizing Ernest J. Wright or Kathleen A.
McGah as signatory for Michael A. Carpenter, Jay S. Benet,
George C. Kokulis, Ian R. Stuart and Katherine M. Sullivan.
(Incorporated herein by reference to Exhibit 15(b) to the Registration
Statement on Form N-4, filed August 27, 1996.)

15(c). Power of Attorney authorizing Ernest J. Wright or Kathleen A.
McGah as signatory for Ian R. Stuart. (Incorporated herein by
reference to Exhibit No. 15(c) to Post-Effective Amendment No. 2
to the Registration Statement on Form N-4, filed April 30, 1997.)
</TABLE>

<PAGE> 1
EXHIBIT 10(A)

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in this post-effective amendment
No. 3 to the registration statement of The Travelers Separate Account QP for
Variable Annuities (the "Fund") on Form N-4 (File Nos. 333-00165; 811-07487) of
our report dated February 19, 1998, on our audit of the financial statements of
the Fund, which report is included in the Fund's Annual Report for the year
ended December 31, 1997 which is incorporated by reference in the
post-effective amendment to the registration statement. We also consent to the
reference to our Firm as experts in the registration statement.

COOPERS & LYBRAND L.L.P.

Hartford, Connecticut
April 22, 1998

<PAGE> 1

EXHIBIT 10(B)

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors
The Travelers Insurance Company

We consent to the use of our report included herein and to the reference to
our firm as experts under the heading "Independent Accountants".

KPMG Peat Marwick LLP

Hartford, Connecticut
April 17, 1998