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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
THE TRAVELERS SEPARATE ACCOUNT QP II FOR VARIABLE ANNUITIES
-----------------------------------------------------------
(Exact name of Registrant)
THE TRAVELERS LIFE AND ANNUITY 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
Assistant Secretary
The Travelers Life and Annuity Company
One Tower Square
Hartford, Connecticut 06183
-----------------------------------------------------------
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as
practicable after
effectiveness of Registration
Statement.
It is proposed that this filing will become effective (check appropriate box):
N/A immediately upon filing pursuant to paragraph (b) of Rule 485
N/A on ___________ pursuant to paragraph (b) of Rule 485
N/A 60 days after filing pursuant to paragraph (a)(1) of Rule 485
N/A 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.
Pursuant to Rule 24f-2 of the Investment Company Act of 1940, the Registrant
hereby declares that an indefinite amount of Variable Annuity Contracts is
being registered under the Securities Act of 1933. Amount of registration fee:
$500.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
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THE TRAVELERS SEPARATE ACCOUNT QP II FOR VARIABLE ANNUITIES
Cross-Reference Sheet
Form N-4
<TABLE>
<CAPTION>
ITEM
NO. CAPTION IN PROSPECTUS
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<S> <C> <C>
1. Cover Page Prospectus
2. Definitions Glossary of Special Terms
3. Synopsis Summary
4. Condensed Financial Information Not Applicable
5. General Description of Registrant, The Company, The Separate
Depositor, and Portfolio Companies Account and the Funding Options
6. Deductions Fee Table; Charges Under the Contracts;
Distribution of the Contracts
7. General Description of Variable The Contracts; Operation of the Contract
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>
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PART A
INFORMATION REQUIRED IN A PROSPECTUS
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THE TRAVELERS LIFE AND ANNUITY COMPANY
PROSPECTUS:
THE TRAVELERS SEPARATE ACCOUNT QP II FOR VARIABLE ANNUITIES
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The variable annuity group contracts ("Contracts") described in this prospectus
are designed to fund plans ("Plans") established under certain sections of the
Internal Revenue Code of 1986, as amended ("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 Appendix A. Unless
specified otherwise, this prospectus refers to the Funding Options.
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Managed Assets Trust
High Yield Bond Trust
Capital Appreciation Fund
Dreyfus Stock Index Fund, Inc.
Travelers Series Trust
U.S. Government Securities Portfolio
Utilities Portfolio
Social Awareness Stock Portfolio
Templeton Variable Products Series Fund
Templeton Bond Fund
Templeton Stock Fund
Templeton Asset Allocation Fund
Variable Insurance Products Fund
Fidelity's High Income Portfolio
Fidelity's Growth Portfolio
Fidelity's Equity Income Portfolio
Variable Insurance Products Fund II
Fidelity's Asset Manager Portfolio
American Odyssey Funds, Inc.
American Odyssey Core Equity Fund
American Odyssey Emerging Opportunities Fund
American Odyssey International Equity Fund
American Odyssey Long-Term Bond Fund
American Odyssey Intermediate-Term Bond Fund
American Odyssey Short-Term Bond Fund
Smith Barney/Travelers Series Fund, Inc.
Smith Barney Income and Growth Portfolio
Alliance Growth Portfolio
Smith Barney International Equity Portfolio
Putnam Diversified Income Portfolio
Smith Barney High Income Portfolio
MFS Total Return Portfolio
Smith Barney Money Market Portfolio
This prospectus sets forth the information concerning the Separate Account that
investors ought to know before investing. 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 Life and Annuity
Company, Attn: Annuity Services, One Tower Square, Hartford, CT 06183-5030. The
Table of Contents for the SAI dated may be found on page of
this prospectus. 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.
AN INVESTMENT IN THE SMITH BARNEY MONEY MARKET PORTFOLIO IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT.
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:
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<S> <C>
GLOSSARY OF SPECIAL TERMS............................................................. 2
SUMMARY............................................................................... 4
FEE TABLE............................................................................. 6
INTRODUCTION.......................................................................... 9
THE CONTRACTS......................................................................... 9
General............................................................................. 9
Allocated Contracts................................................................. 9
Unallocated Contracts............................................................... 9
Right to Return..................................................................... 9
OPERATION OF THE CONTRACT............................................................. 10
Crediting Purchase Payments......................................................... 10
Transfers of Cash Value Between Funding Options..................................... 10
Dollar Cost Averaging (Automated Transfers)......................................... 10
Asset Allocation Advice............................................................. 11
Transfers from Funding Options to Contracts Not Issued by Us........................ 11
Transfers to or from Other Contracts Issued by Us................................... 11
Transfers from Contracts Not Issued by Us........................................... 11
Contract and Participant's Individual Account Termination........................... 11
Account Value....................................................................... 12
Accumulation Unit Value............................................................. 12
PAYMENT OF BENEFITS................................................................... 13
Death Benefits under an Allocated Contract.......................................... 13
Election of Settlement Options...................................................... 13
Minimum Amounts..................................................................... 14
Misstatement........................................................................ 14
Retired Life Certificate............................................................ 14
Allocation of Cash Value During the Annuity Period.................................. 14
Annuity Options..................................................................... 14
Variable Annuity.................................................................... 15
Amount of First Payment.......................................................... 15
Annuity Unit Value............................................................... 15
Initial Payment and Number of Annuity Units...................................... 16
Amount of Subsequent Payments.................................................... 16
Fixed Annuity....................................................................... 16
CHARGES UNDER THE CONTRACT............................................................ 16
Sales Loads......................................................................... 16
Free Withdrawal Allowance........................................................ 17
Mortality and Expense Risk Charge................................................... 17
Funding Option Charges.............................................................. 17
Administrative Charges.............................................................. 18
Semiannual Policy Fee............................................................ 18
Administrative Expense........................................................... 18
</TABLE>
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<TABLE>
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Premium Tax Deductions.............................................................. 18
TPA Administrative Charges.......................................................... 18
THE COMPANY, THE SEPARATE ACCOUNT AND THE FUNDING OPTIONS............................. 19
The Company......................................................................... 19
The Separate Account................................................................ 19
The Funding Options................................................................. 19
Investment Advisers.............................................................. 22
FEDERAL TAX CONSIDERATIONS............................................................ 24
General............................................................................. 24
Ownership of the Investments........................................................ 24
Section 403(b) Plans and Arrangements............................................... 24
Qualified Pension and Profit-Sharing Plans.......................................... 25
Section 457 Plans................................................................... 25
The Employee Retirement Income Security Act of 1974................................. 26
Federal Income Tax Withholding...................................................... 26
Tax Advice.......................................................................... 27
MISCELLANEOUS......................................................................... 27
Voting Rights....................................................................... 27
Distribution of the Contracts....................................................... 28
Postponement of Payment (the "Emergency Procedure")................................. 28
Contract Modification............................................................... 28
Legal Proceedings................................................................... 28
APPENDIX A: THE FIXED ACCOUNT......................................................... 29
APPENDIX B: TABLE OF CONTENTS TO STATEMENT OF ADDITIONAL INFORMATION.................. 31
</TABLE>
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GLOSSARY OF SPECIAL TERMS
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ACCUMULATION PERIOD -- The period before the commencement of Annuity payments.
ACCUMULATION UNIT -- An accounting unit of measure used to calculate values
before Annuity payments begin.
ANNUITANT -- A Person on whose life the Annuity payments are to be made under a
Contract.
ANNUITY -- Payment of income for a stated period or amount.
ANNUITY COMMENCEMENT DATE -- The date on which Annuity payments are to begin.
ANNUITY PERIOD -- The period following the commencement of Annuity payments.
BENEFICIARY(IES) -- The person(s) or trustee designated to receive contract
values in the event of the Participant's or Annuitant's death.
CASH SURRENDER VALUE -- The Cash Value less any amounts deducted upon surrender
and any applicable premium tax.
CASH VALUE -- The value of the Accumulation Units in Your Account or a
Participant's Individual Account less any reductions for administrative charges.
Sometimes referred to as "Account Value."
CODE -- The Internal Revenue Code of 1986, as amended.
COMMISSION -- Securities and Exchange Commission.
COMPANY (WE, US, OUR) -- The Travelers Life and Annuity Company.
COMPETING FUND -- Any investment option under the Plan, which in our opinion,
consists primarily of fixed income securities and/or money market instruments.
CONTRACT DATE -- The date on which the Contract becomes effective, as shown on
the Contract.
CONTRACT OWNER (YOU, YOUR) -- The employer or entity owning the Contract.
CONTRACT YEAR -- The twelve month period commencing with the Contract Date or
with any anniversary thereof.
DUE PROOF OF DEATH -- (i) a copy of a certified death certificate; (ii) a copy
of a certified decree of a court of competent jurisdiction as to the finding of
death; (iii) a written statement by a medical doctor who attended the deceased;
or (iv) any other proof satisfactory to us.
EXCESS PLAN CONTRIBUTIONS -- Plan contributions including excess deferrals,
excess contributions, excess aggregate contributions, excess annual additions,
and excess nondeductible contributions that require correction by the plan
administrator.
FIXED ANNUITY -- An Annuity with payments which remain fixed as to dollar amount
throughout the payment period and which do not vary with the investment
experience of a Separate Account.
FUNDING OPTIONS -- The variable investment options to which Purchase Payments
under the Contract may be allocated.
GENERAL ACCOUNT -- The Company's General Account in which amounts are held if
directed to the Fixed Account during the Accumulation Period and in which
reserves are maintained for Fixed Annuities during the Annuity Period.
HOME OFFICE -- The Travelers Life and Annuity Company, One Tower Square,
Hartford, CT 06183
PARTICIPANT -- An eligible person who is a member in the Qualified Plan.
PARTICIPANT'S INDIVIDUAL ACCOUNT -- An account to which Accumulation Units are
credited to a Participant or Beneficiary under the Contract.
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<PAGE> 8
PURCHASE PAYMENTS -- Payments made to the Contract.
QUALIFIED PLAN -- An employer's voluntary retirement plan which qualifies for
special tax treatment under a particular section of the Internal Revenue Code.
SEPARATE ACCOUNT -- The Travelers Separate Account QP II for Variable Annuities.
THIRD PARTY ADMINISTRATOR ("TPA") -- An entity which has contracted with the
Contract Owner to provide administrative and/or distribution services for the
Plan.
VALUATION DATE -- A day on which the New York Stock Exchange is open for
business. The value of the Separate Account is determined at the close of the
New York Stock Exchange on such days.
VALUATION PERIOD -- The period between the end of one Valuation Date and the end
of the next Valuation Date.
VARIABLE ANNUITY -- An Annuity providing for payments varying in amount in
accordance with the investment experience of the assets held in the underlying
securities of the Separate Account.
WRITTEN REQUEST -- Instructions in a written form, satisfactory to us, and
received at the Home Office.
YOUR ACCOUNT -- Accumulation Units credited to you under this Contract.
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SUMMARY
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CONTRACTS OFFERED
The Contracts are designed for use in conjunction with tax-qualified pension or
profit-sharing plans, tax deferred annuity plans (for public school teachers and
employees and employees of certain other tax exempt and qualifying employers)
and deferred compensation plans for state and local governments. The minimum
Purchase Payment allowed is an average of $1,000 annually, per Participant's
Individual Account or $10,000 annually per Contract.
Because of the size of these Contracts, the possible involvement of TPAs, the
allocated or unallocated nature of the Contract and a competitive bidding
process which may include negotiation, many of the charges imposed in the
Contract are likely to vary from one Plan to the next. The Contract design
allows the Company maximum flexibility, within the limitations imposed by law,
to "custom design" a charge structure which is likely to be acceptable to a
particular prospective Contract Owner.
RIGHT TO RETURN
For Contracts used with deferred compensation plans, tax-deferred annuity plans,
and combined qualified plan/deferred annuity plans, you may return the Contract
and receive a full refund of the Cash Value (including charges) within ten days
after the Contract is delivered to you, unless state law requires a longer
period. (See "Right to Return," page .)
ASSET ALLOCATION
Some Contract Owners and/or Participants may elect to enter into an asset
allocation investment advisory agreement which is fully described, including
associated fees, in a separate disclosure statement. (See "Asset Allocation
Advice" on page .)
DEATH BENEFITS
Under allocated contracts, a death benefit is provided in the event of death of
the Participant prior to the earlier of the Participant's 75th birthday or the
Annuity Commencement Date. (See "Death Benefits under an Allocated Contract" on
page .)
ANNUITY OPTIONS
The Contract Owner selects an Annuity Commencement Date and an Annuity Option
for a Participant as provided by the Plan. The Contract contains six annuity
payout options, which may be selected on either a fixed or variable annuity
basis, or a combination thereof. (See "Payment of Benefits" on page .)
CHARGES AND FEES
Maximum levels for sales-related expenses, mortality and expense risk charges
and administrative expense charges are set forth in this prospectus. These
charges, as well as allocation and transfer fees are subject to negotiation or a
competitive bidding process, or both, with the prospective Contract Owner prior
to the issuance of a Contract.
The Company may charge a surrender charge or a contingent deferred sales charge,
as negotiated. The maximum contingent deferred sales charge is 5.0% 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 the aggregate amount of the
Purchase Payments made.
The Company will make a daily charge against the value of the Contract held in
the Separate Account for the mortality and expense risk charge. The maximum rate
is 1.20% annually. (See "Mortality and Expense Risk Charge" on page .)
4
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The Company may also charge a fee of .10% for administrative expenses under the
Contract as well as a Semiannual Administrative Contract Fee (for allocated
Contracts) of $15. Deductions for the payment of any premium taxes that may be
levied against the Contract will be made as the Company deems appropriate. (See
"Charges Under the Contract" on page .)
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FEE TABLE
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The purpose of this Fee Table is to assist Contract Owners in understanding the
various maximum costs and expenses that Contract Owners or Participants may
bear, directly or indirectly, under the Contract. The information listed
reflects expenses of the Separate Account as well as of the Funding Options. For
additional information regarding the charges and deductions assessed under the
Contract, including possible waivers or reductions of these expenses, see
"Charges Under the Contract," page . Expenses shown do not include premium
taxes, which may be applicable.
MAXIMUM CONTRACT CHARGES AND EXPENSES
CONTINGENT DEFERRED SALES CHARGE
(AS A PERCENTAGE OF PURCHASE PAYMENTS): 5% for five years from date Purchase
Payment made; 0% thereafter
(OR)
<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>
SEMIANNUAL CONTRACT ADMINISTRATIVE CHARGE $15
(AND/OR)
FUNDING OPTION ADMINISTRATIVE CHARGE .10% (of amounts allocated to the variable
funding options under allocated contracts)
MAXIMUM ANNUAL EXPENSES
<TABLE>
<S> <C>
Mortality and Expense Risk Fees (as a percentage of average net assets of
the Separate Account).................................................... 1.20%
</TABLE>
FUNDING OPTION EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS OF THE FUNDING OPTION)
<TABLE>
<CAPTION>
OTHER TOTAL
EXPENSES FUNDING
MANAGEMENT (AFTER OPTION
FEE REIMBURSEMENT) EXPENSES
<S> <C> <C> <C>
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Capital Appreciation Fund......................... 0.75% 0.14%(1) 0.89%
High Yield Bond Trust............................. 0.50% 0.75%(1) 1.25%
Managed Assets Trust.............................. 0.50% 0.11%(1) 0.61%
U.S. Government Securities Portfolio.............. 0.32% 0.39%(1) 0.71%
Social Awareness Stock Portfolio.................. 0.65% 0.60%(1) 1.25%
Utilities Portfolio............................... 0.65% 0.60%(1) 1.25%
Templeton Bond Fund............................... 0.50% 0.40%(2) 0.90%
Templeton Stock Fund.............................. 0.48% 0.25%(2) 0.73%
Templeton Asset Allocation Fund................... 0.49% 0.26%(2) 0.75%
Fidelity's High Income Portfolio.................. 0.61% 0.10%(3) 0.71%
Fidelity's Equity-Income Portfolio................ 0.52% 0.06%(3) 0.58%
Fidelity's Growth Portfolio....................... 0.62% 0.07%(3) 0.69%
Fidelity's Asset Manager Portfolio................ 0.72% 0.08%(3) 0.80%
Dreyfus Stock Index Fund.......................... 0.07% 0.33%(4) 0.40%
American Odyssey International Equity Fund........ 0.70% 0.55%(5) 1.25%
American Odyssey Emerging Opportunities Fund...... 0.65% 0.18%(5) 0.83%
American Odyssey Core Equity Fund................. 0.60% 0.18%(5) 0.78%
American Odyssey Long-Term Bond Fund.............. 0.50% 0.25%(5) 0.75%
American Odyssey Intermediate-Term Bond Fund...... 0.50% 0.25%(5) 0.75%
American Odyssey Short-Term Bond Fund............. 0.50% 0.25%(5) 0.75%
Smith Barney Income and Growth Portfolio.......... 0.65% 0.10%(6) 0.75%
Alliance Growth Portfolio......................... 0.80% 0.10%(6) 0.90%
Smith Barney International Equity Portfolio....... 0.90% 0.35%(6) 1.25%
Putnam Diversified Income Portfolio............... 0.75% 0.20%(6) 0.95%
Smith Barney Money Market Portfolio............... 0.60% 0.10% 0.70%
Smith Barney High Income Portfolio................ 0.60% 0.10%(6) 0.70%
MFS Total Return Portfolio........................ 0.80% 0.15%(6) 0.95%
</TABLE>
6
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(1) Other Expenses are as of the fiscal year ended December 31, 1994,
taking into account the current expense reimbursement arrangement with the
Company. The Company has agreed to reimburse each Fund for the amount by
which its aggregate expenses (including the management fee, but excluding
brokerage commissions, interest charges and taxes) exceeds 1.25%. Without
such arrangement, Other Expenses would have been 0.83%, 2.61% and 2.84% for
HYBT, Social Awareness Stock Portfolio, and Utilities Portfolio,
respectively.
(2) Other Expenses are based on the actual operating expenses incurred by
the Fund during the year ended December 31, 1994.
(3) Management Fees and Other Expenses are as of the fiscal year ended
December 31, 1994. No reimbursement arrangement affected the High Income
Portfolio. A portion of the brokerage commissions the Fund paid was used to
reduce its expenses. Without this reduction, total Other Expenses would
have been: Equity-Income Portfolio, 0.60%; Growth Portfolio, 0.70%; and
Asset Manager Portfolio, 0.81%.
(4) The administrator and investment adviser have agreed to reimburse the
Fund for expenses in excess of 0.40%. For the fiscal year ended December
31, 1994, the Investment Management Fee and Other Expenses before
reimbursement were 0.15% and 0.42%, respectively.
(5) Other Expenses are as of the fiscal year ended December 31, 1994 taking
into account the current expense limitations agreed to by the Manager. The
Manager has agreed to continue, at least until May 1, 1996, to waive fees
or reimburse expenses to the extent a Fund's total expense ratio exceeds
the following expense limitation: International Equity Fund, 1.25%;
Emerging Opportunities Fund and Core Equity Fund, 1.00%; and Long-Term Bond
Fund, Intermediate-Term Bond Fund, Short-Term Bond Fund, 0.75%. Thereafter,
each fund is required to reimburse the Manager for any fees waived or
expenses it reimbursed provided that this reimbursement by the Fund does
not cause the total expense ratio to exceed the expense limitations above.
The Long-Term Bond Fund and the Intermediate-Bond Fund are currently
reimbursing the Manager while the Short-Term Bond Fund and the
International Equity Fund are still receiving reimbursements from the
Manager. Without these expense limitations and/or Manager reimbursements,
Other Expenses of the Funds would have been as follows: International
Equity Fund, 0.66%; Emerging Opportunities Fund, 0.27%; Core Equity Fund,
0.25%; Long-Term Bond Fund, 0.23%; Intermediate-Bond Fund, 0.25%; and
Short-Term Bond, 0.52%.
(6) Other Expenses are as of October 31, 1994, taking into account the
current expense limitations agreed to by the Manager. The Manager waived
all of its fees for the period and reimbursed the Funds for their expenses.
If such fees were not waived and expenses were not reimbursed, Total
Underlying Expenses would have been as follows: Smith Barney Income and
Growth, 2.08%; Alliance Growth Portfolio, 1.76%; Smith Barney International
Equity Portfolio, 2.00%; Putnam Diversified Income Portfolio, 2.92%; Smith
Barney High Income Portfolio, 2.60%; and MFS Return Portfolio, 2.51%.
EXAMPLE *
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
<TABLE>
<S> <C>
A $1,000 investment would be subject to If the Contract is NOT surrendered at
the following expenses, assuming a 5% the end of the period shown, or is
annual return on assets, if the annuitized without a deferred sales
Contract is surrendered at the end of charge a $1,000 investment would be
the period shown**: subject to the following expenses,
assuming a 5% annual return:
</TABLE>
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<TABLE>
<CAPTION>
ONE THREE FIVE TEN ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS YEAR YEARS YEARS YEARS
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Capital Appreciation Fund $ $ $ $ $ $ $ $
High Yield Bond Trust
Managed Assets Trust
Travelers Series Trust Portfolios:
U.S. Government Securities
Social Awareness Stock
Utilities
Templeton Variable Products Series
Funds:
Templeton Bond
Templeton Stock
Templeton Asset Allocation
Fidelity VIP Portfolios:
Fidelity's High Income
Fidelity's Equity-Income
Fidelity's Growth
Fidelity VIP II Portfolio:
Fidelity's Asset Manager
Dreyfus Stock Index Fund
American Odyssey Funds:
International Equity
Emerging Opportunities
Core Equity
</TABLE>
7
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<TABLE>
<CAPTION>
ONE THREE FIVE TEN ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS YEAR YEARS YEARS YEARS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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Long-Term Bond
Intermediate-Term Bond
Short-Term Bond
CHART Funds
Smith Barney/Travelers Series Fund,
Inc. Portfolios:
Smith Barney Income and Growth
Alliance Growth
Smith Barney International Equity
Putnam Diversified Income
Smith Barney Money Market
Smith Barney High Income
MFS Total Return
</TABLE>
* The Example reflects the $15 Semiannual Contract Fee as an annual charge
of 0.XXX% of assets.
** The applicable sales charge may be waived upon annuitization. (See
"Charges Under the Contract," page .)
8
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INTRODUCTION
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This prospectus has been designed to provide a prospective purchaser with
relevant information to make a decision on purchasing Contracts issued in
conjunction with qualified pension and profit-sharing plans, tax deferred
annuity plans (for public school teachers and employees and employees of certain
other tax exempt and qualifying employers) and deferred compensation plans for
state and local governments. This prospectus describes only the elements of the
variable Contracts. The Contracts may contain a Fixed Account Option which is
described in Appendix A to this prospectus. Please read the Glossary of Special
Terms prior to reading this prospectus to become familiar with the terms being
used.
THE CONTRACTS
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GENERAL
The Contracts, issued on a group basis, are designed for use only with plans
which qualify for special tax treatment under the 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.
Purchase Payments may be allocated to your choice of one or more Funding
Options. Net Purchase Payments are applied to purchase Separate Account
Accumulation Units of the appropriate Funding Option. The Accumulation Unit
value will be determined as of the end of the Valuation Period during which the
payments were received. The value of your investment during the Accumulation
Period will vary in accordance with the net income and performance of each
Funding Option's individual investments. While you will not receive any
distributions from the Funding Options, any such distributions would be
reflected in the value of that Funding Option's corresponding Accumulation Unit.
During the Variable Annuity payout period, both your Annuity payments and
reserve values will vary in accordance with these factors.
The Contracts may be issued on either an allocated or an unallocated basis. Both
the allocated and unallocated contracts provide for fixed (General Account) and
variable (Separate Account) accumulations and annuity payouts.
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
An unallocated annuity Contract is designed for use with certain qualified
pension and profit-sharing plans where the employer has secured the services of
a TPA.
Unallocated Contracts will be issued to an employer, the trustee(s) or the
custodian of an employer's pension or profit sharing plan. All Purchase Payments
are allocated among the available Funding Options under the Contract, as
directed by the Contract Owner. There are no individual allocations under the
unallocated Contracts for individual participants in a Plan.
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 "free-look period"). Where state
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law requires a longer free look period, or the return of Purchase Payments, the
Company will comply. The Contract Owner bears the investment risk during the
free-look 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.
OPERATION OF THE CONTRACT
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CREDITING PURCHASE PAYMENTS
Purchase Payments are applied to purchase Accumulation Units of the selected
Funding Options. With respect to an initial Purchase Payment, the Purchase
Payment is credited to the applicable account within two business days of our
receipt of a properly completed application or purchase order form and the
initial Purchase Payment. If an application or any other information provided is
incomplete when received, the Purchase Payment will be credited to the
applicable account within five business days. If an initial Purchase Payment is
not credited within five business days, it will be immediately returned unless
you consent to our holding the Purchase Payment for a longer period.
Any subsequent payment is credited as of the Valuation Period in which it is
received. For subsequent Purchase Payments, the number of Accumulation Units
credited is determined by dividing the Purchase Payment by the appropriate
Accumulation Unit value next computed following receipt of the payment in good
order at our Home Office.
TRANSFERS OF CASH VALUE BETWEEN FUNDING OPTIONS
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.
Cash Values may generally be transferred from the Funding Option(s) to the Fixed
Account at any time. Cash Values previously transferred from the Fixed Account
to the Funding Options may not be transferred back to the Fixed Account or any
Competing Fund for a period of at least three months from the date of transfer.
We reserve the right to limit the number of transfers and percentage of Cash
Value to be transferred from the Fixed Account to the Funding Options and to
Contracts not issued by us. The minimum limitation on the number of transfers
would be one in any six-month period. Refer to Appendix A for more information
regarding transfers to and from the Fixed Account.
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 value per unit is low and less
Accumulation Units are purchased if the value per unit is high. Therefore, a
lower-than-average value 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.
Certain restrictions apply for automated transfers from the Fixed Account that
do not apply to automated transfers from any of the other Funding Options. You
may establish automated transfers of Cash Values from the Fixed Account. (See
Appendix A.)
You may start or stop participation in the Dollar Cost Averaging program at any
time. In order to change any automated transfer instructions, you must notify
the Company in writing at least 30 days in advance. Automated transfers are
subject to all of the other provisions and terms of the Contract, including
provisions relating to the transfer of Cash Value between Funding Options. The
Company
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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 Funding Options 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.
ASSET ALLOCATION ADVICE
Contract Owners may elect to enter into a separate advisory agreement with
Copeland Financial Services, Inc. ("Copeland"), an affiliate of the Company.
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.
TRANSFERS FROM FUNDING OPTIONS TO CONTRACTS NOT ISSUED BY US
You may transfer all or any part of Your Account's Cash Surrender Value, subject
to the restrictions of the Fixed Account, if applicable, 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,
subject to the restrictions of the Fixed Account, if applicable.
TRANSFERS TO OR FROM OTHER CONTRACTS ISSUED BY US
Under specific conditions, we may allow you to transfer to this Contract the
Contract Value of other group annuity contracts the Company has issued to you 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.
TRANSFERS FROM CONTRACTS NOT ISSUED BY US
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 investment vehicle
as reimbursement to the Plan for any exit penalty assessed by the other
investment vehicle provider. We will recover this credit through reduced
compensation paid to the servicing agent or broker.
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.
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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, as
defined in the Contract; 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:
(a) accept no further payments for this Contract; and
(b) pay you the Cash Surrender Value of the Funding Options within seven
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 the Cash Surrender Value of the Fixed Account, if applicable,
as described in the Fixed Account Appendix.
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.
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.
ACCUMULATION UNIT VALUE
The Accumulation Unit value for each Funding Option will vary to reflect its
investment experience. Such value will be determined on each Valuation Date by
multiplying the Accumulation Unit value of the particular Funding Option on the
preceding Valuation Date by a net investment factor for that Funding Option for
the Valuation Period then ended. The value of the Accumulation Unit for each
Funding Option was initially established at $1.00 on the date that Purchase
Payments were first allocated to that Funding Option. The net investment factor
is described in the Statement of Additional Information.
You should refer to the Funding Option prospectuses which accompany this
prospectus for a description of how the net assets of each Funding Option are
valued since this valuation has a direct bearing on the Accumulation Unit value
of the Funding Options and therefore the Cash Values.
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PAYMENT OF BENEFITS
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DEATH BENEFITS UNDER AN ALLOCATED CONTRACT
The allocated Contract provides that, in the event the Participant dies before
the selected Annuity Commencement 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 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 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 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 nonlifetime 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 lifetime Annuity.
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 receive 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.
There is no Death Benefit under unallocated Contracts.
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.
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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 Annuity 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.
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 summarizing 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 Value 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
Monthly Annuity Payments during the lifetime of the Annuitant, terminating with
the last payment due before the Annuitant's death, provided that, at death, the
Beneficiary will receive in one sum the current dollar value of the number of
Annuity Units equal to (a) minus (b) (if that difference is positive) where: (a)
is the total amount applied under the option divided by the Annuity Unit Value
on the due date of the first Annuity payment, and (b) is the product of the
number of the Annuity
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Units represented by each payment and the number of payments made. (For a Fixed
Annuity (a) is the Cash Value applied on the Annuity Commencement Date under
this option, and (b) is the dollar amount of Annuity payments already paid.
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 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.
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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.
FIXED ANNUITY
A Fixed Annuity provides for payments which do not vary during the Annuity
Period. The dollar amount remains constant throughout the payment period. The
dollar amount of the first Fixed Annuity payment will be calculated as described
under "Amount of First Payment." All subsequent payments will be in the same
amount. If it would provide a larger payment, the first Fixed Annuity Payment
will be determined using the Life Annuity Tables in effect on the Maturity Date.
CHARGES UNDER THE CONTRACT
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SALES LOADS
Purchase are not subject to a front-end sales load. However, upon redemption,
the Company will charge 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% 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 the aggregate amount of
the Purchase Payments made.
For deferred sales charge options, surrenders will be taken from Purchase
Payments in the order they were received by us and then on any earnings.
Surrender charges are calculated as a percentage of the Cash Value being
surrendered.
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
(c) the expected level of commission the Company may pay to an agent or the
TPA for distribution expenses; and
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(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.
We will monitor the deductions applicable to each account for the total sales
charges to ensure they will never exceed 8.5% of the total Purchase Payments
actually made to that account.
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 at age 70 1/2, transfers to an Employer Stock Fund,
certain Plan expenses as mutually agreed upon and annuitization under this
Contract to another contract issued by us.
For unallocated Contracts, we make the deductions described above pursuant to
terms of the various agreements among the custodian, the principal underwriter,
and us. Contract distribution expenses may exceed the deduction for sales
expenses described above. To the extent that they do, they will be borne by the
Company.
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 a 10% free withdrawal allowance available each year
after the first Contract 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 Valuation Date 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 Annuity Commencement 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.
If the amount deducted for mortality and expense risks is not sufficient to
cover the mortality costs and expense shortfalls, the loss is borne by the
Company. If the deduction is more than sufficient, the excess will be a profit
to the Company. The Company expects to make a profit from the mortality and
expense risk charge.
The mortality and expense risk charge is subject to negotiation. 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.
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ADMINISTRATIVE CHARGES
The following administrative charges apply only to allocated Contracts. One
charge or the other, or both, may apply as described in your Contract.
SEMIANNUAL CONTRACT ADMINISTRATIVE FEE. A semiannual contract administrative fee
of up to $15 may be deducted from the value of each Participant's Individual
Account. This fee is assessed only during the Accumulation Period.
ADMINISTRATIVE EXPENSE. This charge is deducted on each Valuation Date 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 from each Participant's Individual Account.
Neither the semiannual contract administrative fee nor the administrative
expense charge can be increased. The charges are set at a level which does not
exceed the average expected cost of the administrative services to be provided
while the Contract is in force, and the Company does not expect to profit from
these charges.
As discussed below, the level of the semiannual contract administrative fee and
of the administrative expense charge is subject to negotiation. In determining
the level of any such charge or fee, 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.
(c) TPA and/or agent involvement.
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. We
reserve the right to deduct from the Contract Account Value the premium tax
whenever we determine that 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.
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THE COMPANY, THE SEPARATE ACCOUNT
AND THE FUNDING OPTIONS
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THE COMPANY
The Travelers Life and Annuity Company is a stock insurance company chartered in
1973 in Connecticut and continuously engaged in the insurance business since
that time. It is licensed to conduct life insurance business in a majority of
the states of the United States, and intends to seek licensure in the remaining
states, except New York. 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.
THE SEPARATE ACCOUNT
The Separate Account was established on February 19, 1996, 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, the Account Value of the
Separate Account 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 Annuity
Commencement 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. You should read them carefully before
investing. 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.
THE FUNDING OPTIONS:
MANAGED ASSETS TRUST. The objective of the Managed Assets Trust is high total
investment return through a fully managed investment policy. Assets of the
Managed Assets Trust will be invested in a portfolio of equity, debt and
convertible securities.
HIGH YIELD BOND TRUST.* The objective of the High Yield Bond Trust is generous
income. The assets of the High Yield Bond Trust will be invested in bonds which,
as a class, sell at discounts from par value and are typically high risk
securities. Please read carefully the complete risk disclosure in the Trust's
prospectus before investing.
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CAPITAL APPRECIATION FUND. The objective of the Capital Appreciation Fund is
growth of capital through the use of common stocks. Income is not an objective.
The Fund invests principally in common stocks of small to large companies which
are expected to experience wide fluctuations in price in both rising and
declining markets.
DREYFUS STOCK INDEX FUND. The objective of the Dreyfus Stock Index Fund is to
provide investment results that correspond to the price and yield performance of
publicly traded common stocks in the aggregate, as represented by the Standard &
Poor's 500 Composite Stock Price Index.
AMERICAN ODYSSEY FUNDS, INC.
AMERICAN ODYSSEY CORE EQUITY FUND. The objective of the Core Equity Fund is to
seek maximum long-term total return by investing primarily in common stocks of
well-established companies.
AMERICAN ODYSSEY EMERGING OPPORTUNITIES FUND. The objective of the Emerging
Opportunities Fund is to seek maximum long-term total return by investing
primarily in common stocks of small, rapidly growing companies.
AMERICAN ODYSSEY INTERNATIONAL EQUITY FUND. The objective of the International
Equity Fund is to seek maximum long-term total return by investing primarily in
common stocks of established non-U.S. companies.
AMERICAN ODYSSEY LONG-TERM BOND FUND.* The objective of the Long-Term Bond Fund
is to seek maximum long-term total return by investing primarily in long-term
corporate debt securities, U.S. government securities, mortgage-related
securities, and asset-backed securities, as well as money market instruments.
AMERICAN ODYSSEY INTERMEDIATE-TERM BOND FUND.* The objective of the
Intermediate-Term Bond Fund is to seek maximum long-term total return by
investing primarily in intermediate-term corporate debt securities, U.S.
government securities, mortgage-related securities and asset-backed securities,
as well as money market instruments.
AMERICAN ODYSSEY SHORT-TERM BOND FUND.* The objective of the Short-Term Bond
Fund is to seek maximum long-term total return by investing primarily in
investment-grade, short-term debt securities.
TRAVELERS SERIES TRUST
U.S. GOVERNMENT SECURITIES PORTFOLIO.* The objective of the U.S. Government
Securities Portfolio is the selection of investments from the point of view of
an 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.
SOCIAL AWARENESS STOCK PORTFOLIO. The investment objective of the Social
Awareness Stock Portfolio is long-term capital appreciation and retention of net
investment income. The Portfolio seeks to fulfill this objective 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.
UTILITIES PORTFOLIO. The objective of the Utilities Portfolio is to provide
current income by investing in equity and debt securities of companies in the
utility industries.
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TEMPLETON VARIABLE PRODUCTS SERIES
TEMPLETON BOND FUND.* The objective of the Templeton Bond Fund is high current
income through a flexible policy of investing primarily in debt securities of
companies, governments and government agencies of various nations throughout the
world.
TEMPLETON STOCK FUND. The objective of the Templeton Stock Fund is capital
growth through a policy of investing primarily in common stocks issued by
companies, large and small, in various nations throughout the world.
TEMPLETON ASSET ALLOCATION FUND.** The objective of the Templeton Asset
Allocation Fund is a high level of total return with reduced risk over the long
term through a flexible policy of investing in stocks of companies in any nation
and debt obligations of companies and governments of any nation. Changes in the
asset mix will be adjusted in an attempt to capitalize on total return potential
produced by changing economic conditions throughout the world.
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND
FIDELITY'S HIGH INCOME PORTFOLIO.* The objective of the High Income Portfolio
is to seek to obtain a high level of current income by investing primarily in
high yielding, lower-rated, fixed-income securities, while also considering
growth of capital. Please read carefully the complete risk disclosure in the
Portfolio's prospectus before investing.
FIDELITY'S GROWTH PORTFOLIO. The objective of the Growth Portfolio is to seek
capital appreciation. The Portfolio normally purchases common stocks of
well-known, established companies, and small emerging 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.
FIDELITY'S EQUITY-INCOME PORTFOLIO. The objective of the Equity-Income
Portfolio is to seek reasonable income by investing primarily in
income-producing equity securities; in choosing these securities, the portfolio
manager will also consider the potential for capital appreciation.
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II
FIDELITY'S ASSET MANAGER PORTFOLIO.** The objective of the Asset Manager
Portfolio is to seek high total return with reduced risk over the long-term by
allocating its assets among stocks, bonds and short-term fixed-income
instruments.
SMITH BARNEY/TRAVELERS SERIES FUND, INC.
SMITH BARNEY INCOME AND GROWTH PORTFOLIO. The objective of the Income and
Growth Portfolio is current income and long-term growth of income and capital by
investing primarily, but not exclusively, in common stocks.
ALLIANCE GROWTH PORTFOLIO. The objective of the Growth Portfolio is long-term
growth of capital by investing predominantly in equity securities of companies
with a favorable outlook for earnings and whose rate of growth is expected to
exceed that of the U.S. economy over time. Current income is only an incidental
consideration.
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO. The objective of the International
Equity Portfolio is total return on assets from growth of capital and income by
investing at least 65% of its assets in a diversified portfolio of equity
securities of established non-U.S. issuers.
PUTNAM DIVERSIFIED INCOME PORTFOLIO.** The objective of the Diversified Income
Portfolio is to seek high current income consistent with preservation of
capital. The Portfolio will allocate its investments among the U.S. Government
Sector, the High Yield Sector, and the International Sector of the fixed income
securities markets.
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<PAGE> 27
SMITH BARNEY HIGH INCOME PORTFOLIO.* The investment objective of the High
Income Portfolio is high current income. Capital appreciation is a secondary
objective. The Portfolio will invest at least 65% of its assets in high-yielding
corporate debt obligations and preferred stock.
MFS TOTAL RETURN PORTFOLIO.** The Total Return Portfolio's objective is to
obtain above-average income (compared to a portfolio entirely invested in equity
securities) consistent with the prudent employment of capital. Generally, at
least 40% of the Portfolio's assets will be invested in equity securities.
SMITH BARNEY MONEY MARKET PORTFOLIO.* The Money Market Portfolio's objective is
maximum current income and preservation of capital 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.
* The Funding Options marked with an asterisk (*) are considered Competing
Funds, and are subject to transfer restrictions as described in the Fixed
Account Appendix on page ___. 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.
An asset allocation program is available for certain Funding Options under the
Contract. See "Asset Allocation Advice" on page .
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.
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 notification to
you of any such substitution and approval of the Securities and Exchange
Commission. The Company also reserves the right, subject to compliance with the
law to offer additional Funding Options.
INVESTMENT ADVISERS
The Funding Options receive investment management and advisory services from the
following investment professionals:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
INVESTMENT ALTERNATIVE INVESTMENT ADVISER SUB-ADVISER
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Capital Appreciation Fund............... The Travelers Investment Management Janus Capital Corporation
Company (TIMCO)
High Yield Bond Trust................... Travelers Asset Management
International Corporation (TAMIC)
Managed Assets Trust.................... TAMIC TIMCO
U.S. Government Securities Portfolio.... TAMIC
Social Awareness Stock Portfolio........ Smith Barney Mutual Funds Management
Inc.
</TABLE>
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<PAGE> 28
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT ALTERNATIVE INVESTMENT ADVISER SUB-ADVISER
- ------------------------------------------------------------------------------------------------------------------
Utilities Portfolio..................... Smith Barney Mutual Funds Management
Inc.
Templeton Stock Fund.................... Templeton Investment Counsel, Inc.
Templeton Asset Allocation Fund......... Templeton Investment Counsel, Inc.
Templeton Bond Fund..................... Templeton Global Bond Managers
Fidelity's High Income Portfolio........ Fidelity Management & Research
Company
Fidelity's Equity-Income Portfolio...... Fidelity Management & Research
Company
Fidelity's Growth Portfolio............. Fidelity Management & Research
Company
Fidelity's Asset Manager Portfolio
Equity Fund........................... Fidelity Management & Research
Company
Dreyfus Stock Index Fund................ Wells Fargo Nikko Investment
Advisors
American Odyssey International.......... American Odyssey Funds Management, Bank of Ireland Asset Management
Inc. (U.S.) Limited
American Odyssey Emerging Opportunities
Fund.................................. American Odyssey Funds Management, Wilke/Thompson Capital Management,
Inc. Inc.
American Odyssey Core Equity Fund....... American Odyssey Funds Management, Equinox Capital Management, Inc.
Inc.
American Odyssey Long-Term Bond Fund.... American Odyssey Funds Management, Western Asset Management Company and
Inc. WLO Global Management
American Odyssey Intermediate-Term Bond
Fund.................................. American Odyssey Funds Management, TAMIC
Inc.
American Odyssey Short-Term Bond Fund... American Odyssey Funds Management, Smith Graham & Co. Asset Managers,
Inc. L.P.
Smith Barney Income and Growth
Portfolio............................. Smith Barney Mutual Funds
Management, Inc.
Alliance Growth Portfolio............... Smith Barney Mutual Funds Alliance Capital Management L.P
Management, Inc.
Smith Barney International Equity
Portfolio............................. Smith Barney Mutual Funds
Management, Inc.
Putnam Diversified Income Portfolio..... Smith Barney Mutual Funds Putnam Investment Management, Inc.
Management, Inc.
Smith Barney High Income Portfolio...... Smith Barney Mutual Funds
Management, Inc.
MFS Total Return Portfolio.............. Smith Barney Mutual Funds Massachusetts Financial Services
Management, Inc. Company
Smith Barney Money Market Portfolio..... Smith Barney Mutual Funds
Management, Inc.
</TABLE>
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<PAGE> 29
FEDERAL TAX CONSIDERATIONS
- --------------------------------------------------------------------------------
GENERAL
The Company is taxed as a life insurance company under Subchapter L of the
Internal Revenue Code (the "Code"). The Separate Accounts that form the
investment alternatives described herein are treated as part of the total
operations of the Company and are not taxed separately. Investment income and
gains of a Separate Account that are credited to a variable annuity contract
incur no current federal income tax. Generally, amounts credited to a contract
are not taxable until received by the Contract Owner, participant or
beneficiary, either in the form of Annuity Payments or other distributions. Tax
consequences and limits are described further below for each annuity program.
OWNERSHIP OF THE INVESTMENTS
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 Separate Account QP II. 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 Separate Account QP
II.
The remaining tax discussion assumes that the Contract qualifies as an annuity
contract for federal income tax purposes.
SECTION 403(b) PLANS AND ARRANGEMENTS
Purchase Payments for tax-deferred annuity contracts may be made by an employer
for employees under annuity plans adopted by public educational organizations
and certain organizations which are tax exempt under Section 501(c)(3) of the
Code. Within statutory limits, these payments are not currently includable in
the gross income of the participants. Increases in the value of the Contract
attributable to these Purchase Payments are similarly not subject to current
taxation. The income in the Contract is taxable as ordinary income whenever
distributed.
An additional tax of 10% will apply to any taxable distribution received by the
participant before the age of 59 1/2, except when due to death, disability, or
as part of a series of payments for life or life expectancy, or made after the
age of 55 with separation from service. There are other statutory exceptions.
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<PAGE> 30
Amounts attributable to salary reductions and income thereon may not be
withdrawn prior to attaining the age of 59 1/2, separation from service, death,
total and permanent disability, or in the case of hardship as defined by federal
tax law and regulations. Hardship withdrawals are available only to the extent
of the salary reduction contributions and not from the income attributable to
such contributions. These restrictions do not apply to assets held generally as
of December 31, 1988.
Distribution must begin by April 1st of the calendar year following the calendar
year in which the participant attains the age of 70 1/2. Certain other mandatory
distribution rules apply at the death of the participant.
Eligible rollover distributions, including most partial or full redemptions or
"term-for-years" distributions of less than 10 years, are eligible for direct
rollover to another 403(b) contract or to an Individual Retirement Arrangement
(IRA) without federal income tax withholding.
QUALIFIED PENSION AND PROFIT-SHARING PLANS
Under a qualified pension or profit-sharing trust described in Section 401(a) of
the Code and exempt from tax under Section 501(a) of the Code, 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 in the form of Annuity or Income Payments 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. Payments under Income
Option 3 are taxable in full. Certain lump-sum distributions described in
Section 402 of the Code may be eligible for special ten-year forward averaging
treatment for individuals born before January 1, 1936. All individuals may be
eligible for favorable five-year forward averaging of lump-sum distributions.
Certain eligible rollover distributions including most partial and full
surrenders or term-for-years distributions of less than ten years are eligible
for direct rollover to an eligible retirement plan or to an IRA without federal
income tax withholding.
An additional tax of 10% will apply to any taxable distribution received by the
Participant before the age of 59 1/2, except by reason of death, disability or
as part of a series of payments for life or life expectancy, or at early
retirement at or after the age of 55. There are other statutory exceptions.
Amounts attributable to salary reductions and income thereon may not be
withdrawn prior to attaining the age of 59 1/2, separation from service, death,
total and permanent disability, or in the case of hardship as defined by federal
tax law and regulations. Hardship withdrawals are available only to the extent
of the salary reduction contributions and not from the income attributable to
such contributions. These restrictions do not apply to assets held generally as
of December 31, 1988.
Distribution must begin by April 1st of the calendar year following the calendar
year in which the participant attains the age of 70 1/2. Certain other mandatory
distribution rules apply at the death of the Participant.
SECTION 457 PLANS
Section 457 of the Code allows employees and independent contractors of state
and local governments and tax-exempt organizations to defer a portion of their
salaries or compensation to retirement years without paying current income tax
on either the deferrals or the earnings on the deferrals.
The Owner of contracts issued under Section 457 plans is the employer or a
contractor of the Participant and amounts may not be made available to
Participants (or beneficiaries) until separation from service, retirement or
death or an unforeseeable emergency as determined by Treasury Regulations. The
proceeds of Annuity contracts purchased by Section 457 plans are subject to the
claims of general creditors of the employer or contractor.
25
<PAGE> 31
Distributions must begin generally by April 1st of the calendar year following
the calendar year in which the Participant attains the age of 70 1/2. Certain
other mandatory distribution rules apply upon the death of the Participant.
All distributions from plans that meet the requirements of Section 457 of the
Code are taxable as ordinary income in the year paid or made available to the
Participant or beneficiary.
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974
Under the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended,
certain special provisions may apply to the contract if the Owner of a Section
403(b) plan contract or certain other tax-benefited contracts requests that the
contract be issued to conform to ERISA or if the Company has notice that the
contract was issued pursuant to a plan that is subject to ERISA.
ERISA requires that certain Annuity Options, withdrawals or other payments and
any application for a loan secured by the contract may not be made until the
Participant has filed a Qualified Election with the plan administrator. Under
certain plans, ERISA also requires that a designation of a beneficiary other
than the Participant's spouse be invalid unless the Participant has filed a
Qualified Election.
A Qualified Election must include either the written consent of the
Participant's spouse, notarized or witnessed by an authorized plan
representative, or the Participant's certification that there is no spouse or
that the spouse cannot be located.
The Company intends to administer all contracts to which ERISA applies in a
manner consistent with the direction of the plan administrator regarding the
provisions of the plan, in accordance with applicable law. Because these
requirements differ according to the plan, a person contemplating the purchase
of an annuity contract should consider the provisions of the plan.
FEDERAL INCOME TAX WITHHOLDING
The portion of a distribution which is taxable income to the recipient will be
subject to federal income tax withholding, generally pursuant to Section 3405 of
the Code. The application of this provision is summarized below.
1. ELIGIBLE ROLLOVER DISTRIBUTION FROM SECTION 403(b) PLANS OR ARRANGEMENTS
OR FROM QUALIFIED PENSION AND PROFIT-SHARING PLANS
Plan distributions that are eligible for rollover to an IRA or to another
retirement plan but are not directly rolled over are subject to a
mandatory 20% federal tax withholding. 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 complete 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 upon the attainment of the age of 70 1/2 or as otherwise
required by law.
A distribution including a rollover that is not a direct rollover will
require the 20% withholding, and a 10% additional tax penalty (for
premature withdrawal) may apply to any amount not actually rolled over
due to 20% withholding. 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.
26
<PAGE> 32
2. OTHER NON-PERIODIC DISTRIBUTIONS (FULL OR PARTIAL REDEMPTIONS)
For any payment not subject to mandatory 20% withholding as described in
1 above, the portion of a non-periodic distribution which constitutes
taxable income will be subject to federal income tax withholding, to the
extent such aggregate distributions exceed $200 for the year, unless the
recipient elects not to have taxes withheld. If an election out is not
provided, 10% of the taxable distribution will automatically 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.
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, 1994, a recipient receiving periodic payments (e.g.,
monthly or annual payments under an Annuity Option) which total $13,700
or less per year, will generally be exempt from the withholding
requirements.
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 insufficient.
Recipients who do not provide a social security number or other taxpayer
identification number will not be permitted to elect out of withholding.
Additionally, United States citizens residing outside of the country, or U.S.
legal residents temporarily residing outside the country, are not permitted to
elect out of withholding.
TAX ADVICE
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 an
Owner, participant or beneficiary who may make elections under a contract. The
foregoing description of the federal income tax consequences under these
contracts is not exhaustive and that special rules are provided with respect to
situations not discussed here. It should be understood that if a tax-benefited
plan loses its exempt status, employees could lose some of the tax benefits
described. For further information about federal and any state taxes, a
qualified tax adviser should be consulted.
MISCELLANEOUS
- --------------------------------------------------------------------------------
VOTING RIGHTS
The Company shall notify the Contract Owner of any Funding Option shareholders'
meeting if the shares held for the Contract Owner's accounts may be voted at
such meetings. The Company shall also send proxy materials and a form of
instruction by means of which the Contract Owner can instruct the Company with
respect to the voting of the Funding Option shares held for the Contract Owner's
account. In connection with the voting of Funding Option shares held by it, the
Company shall arrange for the handling and tallying of proxies received from
Contract Owners. The Company as such, shall have no right, except as hereinafter
provided, to vote any Fund Option shares held by it thereunder which may be
registered in its name or the names of its nominees. The Company will, however,
vote the Funding Option shares held by it in accordance with the instructions
received from the Contract Owners for whose accounts the Funding Option shares
are held. If a Contract Owner
27
<PAGE> 33
desires to attend any meeting at which shares held for the Contract Owner's
benefit may be voted, the Contract Owner may request the Company to furnish a
proxy or otherwise arrange for the exercise of voting rights with respect to the
Funding Option shares held for such Contract Owner's account. In the event that
the Contract Owner gives no instructions or leaves the manner of voting
discretionary, the Company will vote such shares of the appropriate Funding
Option, including any of its own shares, in the same proportion as shares of
that Fund Option for which instructions have been received.
A Contract Owner or Participant, as appropriate, is entitled to one full or
fractional vote for each full or fractional Accumulation or Annuity Unit owned.
The Contract Owner has voting rights throughout the life of the Contract. Vested
Participants have voting rights for as long as participation in the Contract
continues. Voting rights attach only to Separate Account interests.
During the Annuity period under a Contract the number of votes will decrease as
the assets held to fund Annuity benefits decrease.
DISTRIBUTION OF THE CONTRACTS
Tower Square Securities, Inc. ("Tower Square") serves as Principal Underwriter
for the securities issued with respect to the Separate Account. The Company is
the custodian of the Separate Account's assets. It is currently anticipated that
an affiliated broker-dealer may become the principal underwriter for the
Contracts during late 1996 or early 1997.
The Contracts will be sold by salespersons of Tower Square who represent the
Company as insurance and variable annuity agents and who are registered
representatives or Broker-Dealers who have entered into distribution agreements
with Tower Square. The compensation paid to sales representatives will not
exceed 6.25% of payments made under the Contracts. Tower Square is registered
with the Commission under the Securities Exchange Act of 1934, as amended, as a
Broker-Dealer and is a member of the National Association of Securities Dealers,
Inc. Tower Square is an indirect wholly owned subsidiary of Travelers Group Inc.
POSTPONEMENT OF PAYMENT (THE "EMERGENCY PROCEDURE")
Payment of any benefit or values may be postponed: (1) when 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 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's net assets; or (4) during any other period when the Commission,
by order, so permits for the protection of contract holders. Any provision of
the Contract which specifies a Valuation Date will be superseded by this
Emergency Procedure.
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
The Company's Counsel with respect to federal laws and regulations applicable to
the issue and sale of the Contracts and with respect to Connecticut law is
Kathleen A. McGah, Esquire, Counsel and Assistant Secretary of The Travelers
Life and Annuity Company. She has passed on all legal matters affecting the
Separate Account. Currently, there are no material legal proceedings affecting
the Separate Account.
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<PAGE> 34
APPENDIX A: THE FIXED ACCOUNT
- --------------------------------------------------------------------------------
Under the Fixed Account, the Company assumes the risk of investment gain or
loss, guarantees a specified interest rate, and, if a Fixed Annuity option is
elected, guarantees a specified periodic payment. The investment gain or loss of
any of the Funding Options does not affect the Fixed Account portion of the
Contract Owner's Cash Value, or the dollar amount of fixed annuity payments made
under any payout option.
Interest will be compounded and credited to the Fixed Account at a daily rate
equivalent to the effective annual interest rate as determined by the Company.
The net interest rate will never be less than 3%. Any interest credited to
amounts allocated to the Fixed Account in excess of 3% per year will be
determined at our sole discretion.
The Company guarantees that, at any time, the Fixed Account Cash Value will not
be less than the amount of the Purchase Payments allocated to the Fixed Account,
plus interest credited as described above, less any applicable premium taxes or
prior surrenders. If the Contract Owner takes a surrender, the amount available
from the Fixed Account will be reduced by any applicable surrender charge as
described under "Charges under the Contract" in this prospectus.
Purchase Payments allocated to the Fixed Account and any transfers made to the
Fixed Account become part of the Company's General Account which supports
insurance and Annuity obligations. Neither the General Account nor any interest
therein is registered under, nor subject to the provisions of the Securities Act
of 1933 or 1940 Act. The Company will invest the assets of the Fixed Account at
its discretion. Investment income from such Fixed Account assets will be
allocated to the Company and to the Contracts participating in the Fixed
Account.
Investment income from the Fixed Account allocated to the Company includes
compensation for mortality and expense risks borne by the Company in connection
with Fixed Account Contracts. The amount of such investment income allocated to
the Contracts will vary from year to year in the sole discretion of the Company
at such rate or rates as the Company prospectively declares from time to time.
TRANSFERS
Transfers from the Fixed Account, either to the Funding Options or to Contracts
not issued by us, may not exceed 20% per Contract Year of the Cash Value in the
Fixed Account valued on each such anniversary. No transfers will be allowed
between the Fixed Account and any Competing Fund in the Plan. Amounts previously
transferred from the Fixed Account to the Funding Options may not be transferred
back to the Fixed Account for a period of at least three months from the date of
transfer. The Company reserves the right to modify the amount available for
transfer from the Fixed Account or to waive these restrictions in its discretion
and/or to limit the number of transfers to be transferred from the Fixed Account
to the Funding Options to not more than one in any six month period.
Automated transfers from the Fixed Account to any of the Funding Options may
begin at any time. Such dollar cost averaging cannot deplete the Fixed Account
balance in less than 12 months.
DISTRIBUTIONS
As allowed under the Contract and the Plan, you may request distributions from
the Fixed Account at any time. Upon receipt of your Written Request, we will pay
you the applicable Fixed Account Cash Surrender Value.
Distributions from the Fixed Account are processed on a last-in, first-out basis
(LIFO). The Cash Surrender Value will be determined as of the next valuation
date following receipt of your Written Request. We reserve the right to defer
payment of Fixed Account values for up to six months from the date of the
Written Request. If a payment is deferred for more than 30 days from the date
the request is received, we will pay a minimum interest rate of 3% on the amount
deferred.
29
<PAGE> 35
CONTRACT DISCONTINUANCE PROVISION
If the Contract is discontinued, no further Purchase Payments or transfers or
benefit payments will be allowed. On the date we receive your Written Request to
discontinue the Contract or within 31 days after we notify you in writing of our
intent to discontinue the Contract, all Cash Values in the Individual Accounts
will be transferred to Your Account. Any amounts transferred from the Fixed
Account to the Funding Options during the previous 30 days from the date of
discontinuance will be transferred back to the Fixed Account. If these amounts
are not available in the Individual Accounts, the equivalent Cash Values will be
transferred from Your Account.
The Fixed Account value payable upon Contract discontinuance, and the method of
payment are described in your Contract.
30
<PAGE> 36
APPENDIX B
- -------------------------------------------------------------------------------
CONTENTS OF 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
Performance Information
Independent Accountants
Financial Statements
- -------------------------------------------------------------------------------
COPIES OF THE STATEMENT OF ADDITIONAL INFORMATION DATED , 1996 (FORM
NO. L 12549S) ARE AVAILABLE WITHOUT CHARGE. TO REQUEST A COPY, PLEASE COMPLETE
THE COUPON FOUND BELOW AND MAIL IT TO: THE TRAVELERS LIFE AND ANNUITY COMPANY,
ANNUITY INVESTOR SERVICES, ONE TOWER SQUARE, HARTFORD, CONNECTICUT, 06183-9061.
Name:
Address:
31
<PAGE> 37
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
<PAGE> 38
STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
DATED
, 1996
FOR
THE TRAVELERS SEPARATE ACCOUNT QP II FOR VARIABLE ANNUITIES
ISSUED BY
THE TRAVELERS LIFE AND ANNUITY 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 , 1996. A copy of the Prospectus may be obtained by
writing to The Travelers Life and Annuity Company, Annuity Services, One Tower
Square, Hartford, Connecticut 06183-9061, or by calling 1-800-842-8573.
TABLE OF CONTENTS
<TABLE>
<S> <C>
THE INSURANCE COMPANY................................................................. 2
PRINCIPAL UNDERWRITER................................................................. 2
DISTRIBUTION AND MANAGEMENT AGREEMENT................................................. 2
VALUATION OF ASSETS................................................................... 3
PERFORMANCE INFORMATION............................................................... 4
INDEPENDENT ACCOUNTANTS............................................................... 6
FINANCIAL STATEMENTS.................................................................. 6
</TABLE>
1
<PAGE> 39
THE INSURANCE COMPANY
- --------------------------------------------------------------------------------
The Travelers Life and Annuity Company (the "Company"), is a stock insurance
company chartered in 1973 in Connecticut and continuously engaged in the
insurance business since that time. It is licensed to conduct life insurance
business in a majority of the states of the United States, and intends to seek
licensure in the remainings states, except New York. The Company is owned by The
Travelers Insurance Company, an insurance company that is owned by Travelers
Insurance Group Inc. which 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.
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
condition 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. Separate Account QP II 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 Separate Account QP II 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.
THE FIXED ACCOUNT. The Fixed Account is secured by part of the general assets of
the Company. The general assets of the Company include all assets of the Company
other than those held in Separate Account QP II or any other separate account
sponsored by the Company or its affiliates.
The staff of the Securities and Exchange Commission does not generally review
the disclosure in the prospectus relating to the Fixed Account. Disclosure
regarding the Fixed Account and the general account may, however, be subject to
certain provisions of the federal securities laws relating to the accuracy and
completeness of statements made in the prospectus.
PRINCIPAL UNDERWRITER
- --------------------------------------------------------------------------------
Tower Square Securities, Inc. ("Tower Square "), an affiliate of the Company,
serves as principal underwriter for Separate Account QP II and the Contracts.
The offering is continuous. Tower Square is an indirect wholly owned subsidiary
of Travelers Group Inc. and its principal executive offices are located at One
Tower Square, Hartford, Connecticut. It is anticipated that an affiliated
broker-dealer may become the principal underwriter for the Contracts in late
1996 or early 1997.
DISTRIBUTION AND MANAGEMENT AGREEMENT
- --------------------------------------------------------------------------------
Under the terms of the Distribution and Management Agreement among Separate
Account QP II, 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
2
<PAGE> 40
the Separate Account QP II. Tower Square performs the sales functions related to
the Contracts. The Company reimburses Tower Square 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 Separate Account QP II 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 Separate Account QP II 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 CONTRACT 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 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.
3
<PAGE> 41
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time, the Company may advertise several types of historical
performance for the Funding Options of Separate Account QP II. 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 "non-standardized 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. 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 is converted to a percentage of assets based on the actual
fee collected, divided by the average net assets per contract 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 sales charge at that time.
NON-STANDARDIZED METHOD. Non-standardized "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 seven-year periods. Non-standardized total return will not reflect the
deduction of any applicable sales charge or the $15 semiannual contract
administrative charge, which, if reflected, would decrease the level of
performance shown. The sales charge is not reflected because the Contract is
designed for long-term investment.
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 Separate Account QP II and the Underlying Funds.
For Funding Options that were in existence prior to the date they became
available under Separate Account QP II, the standardized average total return
and non-standardized total return quotations will show the investment
performance that such Funding Options 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. An Owner's Contract Value at
redemption may be more or less than original cost.
4
<PAGE> 42
Average annual total returns for each of the Funding Options computed according
to the standardized and non-standardized methods for the period ending December
31, 1995 (beginning at inception date) are set forth in the following table.
TOTAL RETURN CALCULATIONS
FUNDING OPTIONS OF SEPARATE ACCOUNT QP II
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STANDARDIZED NON-STANDARDIZED
------------------ ------------------------- INCEPTION
1-YR 5-YR 10-YR 1-YR 3-YR 5-YR 7-YR DATE
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Capital Appreciation Fund..........
High Yield Bond Trust..............
Managed Assets Trust...............
Dreyfus Stock Index Fund...........
Travelers Series Trust Portfolios:
U.S. Government Securities.......
Social Awareness Stock...........
Utilities........................
Templeton Variable Products Series
Fund:............................
Templeton Bond...................
Templeton Stock..................
Templeton Asset Allocation.......
Fidelity's Variable Insurance
Products Fund Portfolios:........
Fidelity's High Income...........
Fidelity's Equity-Income.........
Fidelity's Growth................
Fidelity's Variable Insurance
Products Fund II Portfolio.......
Fidelity's Asset Manager.........
American Odyssey Funds:
International Equity.............
Emerging Opportunities...........
Core Equity......................
Long-Term Bond...................
Intermediate-Term Bond...........
Short-Term Bond..................
Chart Funds:
Smith Barney/Travelers Series Fund,
Inc. Portfolios:.................
Smith Barney Income and Growth...
Alliance Growth..................
Smith Barney International
Equity........................
Putnam Diversified Income........
Smith Barney High Income.........
MFS Total Return.................
Smith Barney Money Market........
</TABLE>
5
<PAGE> 43
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
Coopers & Lybrand L.L.P., certified public independent accountants, 100 Pearl
Street, Hartford, Connecticut, are the independent auditors for Separate Account
QP II. The services to be provided to Separate Account QP II include primarily
the examination of the Fund's financial statements.
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Financial Statements for Separate Account QP II are not available since the Fund
had no assets as of the effective date of this SAI. Financial statements for The
Travelers Life and Annuity Company are included in this SAI.
6
<PAGE> 44
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) The financial statements of the Registrant are not provided since the
Registrant will have no assets prior to the effective date of the
Registration Statement.
The consolidated financial statements of The Travelers Life and
Annuity Company and Subsidiaries and the Reports of Independent
Accountants, will be provided in a subsequent pre-effective amendment.
(b) Exhibits
<TABLE>
<S> <C>
1. Resolution of The Travelers Life and Annuity Company Board of Directors
authorizing the establishment of the Registrant.
2. Exempt.
3(a). Form of Distribution and Management Agreement among the Registrant,
The Travelers Life and Annuity Company and Tower Square
Securities, Inc.
3(b). Form of Selling Agreement.
4. Form of Variable Annuity Contract.
5. None.
6(a). Charter of The Travelers Life and Annuity Company, dated April 10,
1990. (Incorporated herein by reference to Exhibit 6(a) to
Registration Statement on Form N-4, File No. 33-58131, filed via
Edgar on March 17, 1995.)
6(b). By-Laws of The Travelers Life and Annuity Company, as amended on
October 20, 1994. (Incorporated herein by reference to Exhibit
6(b) to Registration Statement on Form N-4, File No. 33-58131,
filed via Edgar on March 17, 1995.)
7. None.
8. None.
9. Opinion of Counsel as to the legality of securities being registered.
10. Not Applicable.
11. Not Applicable.
12. None
</TABLE>
<PAGE> 45
<TABLE>
<S> <C>
13. Schedule for computation of each performance quotation. To be filed
by amendment.
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.
27. Financial Data Schedule. (To be filed by amendment.)
</TABLE>
<PAGE> 46
Item 25. Directors and Officers of the Depositor
<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address with Depositor
- ---------------- -------------------------
<S> <C>
Robert I. Lipp* Director and Chairman
Michael A. Carpenter* Director, President and Chief Executive Officer
Jay S. Fishman* Director, Vice Chairman and Chief Financial Officer
Charles O. Prince III** Director
Marc P. Weill** Director, Senior Vice President and Chief Investment Officer
Irwin R. Ettinger** Director
Donald T. DeCarlo* Director, Senior Vice President, General Counsel
and Secretary
Stuart Baritz** Senior Vice President
Jay S. Benet* Senior Vice President
George C. Kokulis* Senior Vice President
Warren H. May* Senior Vice President
Christine B. Mead* Vice President and Controller
William H. White* Vice President and Treasurer
Ian R. Stuart* Vice President and Financial Officer
Kathleen A. D'Auria* Vice President
Charles N. Vest* Vice President and Actuary
Robert Hamilton* Second Vice President
Bethann C. Maas* Second Vice President
Elizabeth Charron* Second Vice President
Ernest J. Wright* Counsel and Assistant Secretary
Kathleen A. McGah* Counsel and Assistant Secretary
</TABLE>
Principal Business Address:
<TABLE>
<S> <C>
* The Travelers Life and Annuity Company ** Travelers Group Inc.
One Tower Square 388 Greenwich Street
Hartford, CT 06183 New York, N.Y. 10013
</TABLE>
<PAGE> 47
Item 26. Persons Controlled by or Under Common Control with the Depositor or
Registrant. (To be filed by amendment.)
<PAGE> 48
Item 27. Number of Contract Owners
Not Applicable.
Item 28. Indemnification
Section 33-320a 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 33-320a 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> 49
Item 29. Principal Underwriter
(a) In addition to The Travelers Separate Account QP II for Variable
Annuities, 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 Fund ABD for Variable Annuities
The Travelers Fund ABD II for Variable Annuities
The Travelers Separate Account QP for Variable Annuities
<TABLE>
<CAPTION>
(b) Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
------------------ --------------------- ---------------------
<S> <C> <C>
Russell H. Johnson Chairman of the Board -----
and Chief Executive Officer
Donald R. Munson, Jr. Director, President and
Chief Operating Officer -----
George C. Kokulis Director -----
Gregory C. Macdonald Director -----
Robert C. Hamilton Director and Senior Vice President -----
Thomas P. Tooley Vice President, Life Marketing -----
George A. Ryan Vice President -----
Jeffrey A. Barker Regional Vice President -----
Walter Melnik, Jr. Regional Vice President -----
Raymond W. Sheridan Regional Vice President -----
William F. Scully, III Treasurer -----
William H. White Assistant Treasurer -----
Charles B. Chamberlain Assistant Treasurer -----
George M. Quaggin Assistant Treasurer -----
Kathleen A. McGah General Counsel and Secretary -----
Cynthia P. Macdonald Chief Compliance Officer -----
John J. Williams, Jr. Assistant Compliance Officer -----
Susan M. Curcio Operations Manager -----
</TABLE>
*Principal business address: One Tower Square, Hartford, Connecticut 06183
<PAGE> 50
(c) Not Applicable.
Item 30. Location of Accounts and Records
The Travelers Life and Annuity 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.
<PAGE> 51
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant has caused this Registration Statement to be signed on its
behalf, in the City of Hartford, and State of Connecticut, on this 12th day of
March, 1996.
THE TRAVELERS SEPARATE ACCOUNT QP II FOR VARIABLE ANNUITIES
(Registrant)
THE TRAVELERS LIFE AND ANNUITY COMPANY
(Depositor)
By: /s/ Jay S. Fishman
---------------------------------
Jay S. Fishman
Vice Chairman and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
indicated on March 12, 1996.
<TABLE>
<S> <C>
*ROBERT I. LIPP Director, Chairman of the Board
- --------------------------------------
(Robert I. Lipp)
*MICHAEL A. CARPENTER Director, President and Chief Executive Officer
- --------------------------------------
(Michael A. Carpenter)
/s/JAY S. FISHMAN Director, Vice Chairman and
- --------------------------------------
(Jay S. Fishman) Chief Financial Officer
*CHARLES O. PRINCE III Director
- --------------------------------------
(Charles O. Prince III)
*MARC P. WEILL Director
- --------------------------------------
(Marc P. Weill)
*IRWIN R. ETTINGER Director
- --------------------------------------
(Irwin R. Ettinger)
*DONALD T. DeCARLO Director
- --------------------------------------
(Donald T. DeCarlo)
/s/CHRISTINE B. MEAD Vice President and Controller
- --------------------------------------
(Christine B. Mead)
*By: /s/Jay S. Fishman
-----------------------------------------------
Jay S. Fishman, Attorney-in-Fact
</TABLE>
<PAGE> 52
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description Method of Filing
--- ----------- ----------------
<S> <C> <C>
1. Resolution of The Travelers Life and Annuity Company Electronically
Board of Directors authorizing the establishment
of the Registrant.
3(a). Form of Distribution and Management Agreement Electronically
among the Registrant, The Travelers Life and Annuity
Company and Tower Square Securities, Inc.
3(b). Form of Selling Agreement. Electronically
4. Form of Variable Annuity Contract. Electronically
6(a). Charter of The Travelers Life and Annuity
Company, dated April 10, 1990. (Incorporated
herein by reference to Exhibit 6(a) to the
to Registration Statement on Form N-4,
File No. 33-58131, filed via Edgar on
March 17, 1995.)
6(b). By-Laws of The Travelers Life and Annuity
Company, as amended on October 20, 1994.
(Incorporated herein by reference to Exhibit 6(b)
to Registration Statement on Form N-4, File
No. 33-58131, filed via Edgar on March 17, 1995.)
9. Opinion of Counsel as to the legality of securities Electronically
being registered by Registrant.
13. Schedule of Computation of Total Return Calculations. To be filed by
amendment
15. Powers of Attorney authorizing Jay S. Fishman or Electronically
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.
27. Financial Data Schedule. To be filed by
amendment
</TABLE>
<PAGE> 1
EXHIBIT 1
CERTIFICATE
I, ERNEST J. WRIGHT, Assistant Secretary of THE TRAVELERS LIFE AND
ANNUITY COMPANY, DO HEREBY CERTIFY that at a meeting of the Board of Directors
of The Travelers Life and Annuity Company held on the 9th day of July, 1993, at
which a quorum was present and voting, the following resolutions were adopted:
VOTED: That pursuant to authority granted by Section 38a-433 of the
Connecticut General Statutes, the proper officers of the
Company are authorized to establish a separate account or
accounts to invest in shares of investment companies pursuant
to plans and contracts issued and sold by the Company in
connection therewith.
VOTED: That the proper officers of the Company are authorized to
take such action as may be necessary to register the separate
account or accounts as a unit investment trust investment
company under the Investment Company Act of 1940; to file any
necessary or appropriate exemptive requests, and any
amendments thereto, for such separate account or accounts
under the Investment Company Act of 1940; to file a
registration statement, and any amendments, exhibits and
other documents thereto, in order to register plans and
contracts of the Company and interests in such separate
account or accounts in connection therewith under the
Securities Act of 1933; and to take any and all action as may
in their judgment be necessary or appropriate in connection
therewith.
I FURTHER CERTIFY that by unanimous consent action of the
Board of Directors of The Travelers Life and Annuity Company effective the 21st
day of September, 1994, the following resolution was adopted:
VOTED: That each officer and director who may be required, on their
own behalf and in the name and on behalf of the Company, to
execute one or more registration statements, and any
amendments thereto, under the Securities Act of 1933 and the
Investment Company Act of 1940 relating to the separate
account or accounts to be established to invest in shares of
investment companies is authorized to execute a power of
attorney appointing representatives to act as their attorney
and agent to execute said registration statement, and any
amendments thereto, in their name, place and stead; and that
the Secretary, or any Assistant Secretary designated by the
Secretary, is designated and appointed the agent for service
of process of the Company under the Securities Act of 1933
and the Investment Company Act of 1940 in connection with
such registration statement, and any amendments thereto, with
all the powers incident to such appointment.
AND I DO FURTHER CERTIFY that the foregoing actions of the
said Board of Directors is still in full force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal
of THE TRAVELERS LIFE AND ANNUITY COMPANY at Hartford, Connecticut, this 12th
day of March, 1996.
/s/Ernest J. Wright
Ernest J. Wright
Assistant Secretary
<PAGE> 1
EXHIBIT 3(a)
FORM OF
DISTRIBUTION AND MANAGEMENT AGREEMENT
DISTRIBUTION AND MANAGEMENT AGREEMENT made this __th day of March, 1996,
by and among The Travelers Life and Annuity Company, a Connecticut stock
insurance company (hereinafter the "Company"), Tower Square Securities, Inc., a
Connecticut general business corporation (hereinafter "Tower Square"), and The
Travelers Separate Account QP II for Variable Annuities (hereinafter "Separate
Account QP II "), a separate account of the Company established on February 19,
1996 by its President and Chief Executive Officer pursuant to a resolution of
the Company's Board of Directors, pursuant to Section 38a-433 of the
Connecticut General Statutes.
1. The Company hereby agrees to provide all administrative services
relative to variable annuity contracts and revisions thereof (hereinafter
"Contracts") sold by the Company, the net proceeds of which or reserves for
which are maintained in Separate Account QP II.
2. Tower Square hereby agrees to perform all sales functions
relative to the Contracts. The Company agrees to reimburse Tower Square for
commissions paid, other sales expenses and properly allocable overhead expenses
incurred in performance thereof.
3. For providing the administrative services referred to in
paragraph 1 above and reimbursing Tower Square for the sales functions referred
to in paragraph 2 above, the Company will receive the deductions for sales and
administrative expenses which are stated in the Contracts.
4. The Company will furnish at its own expense and without cost to
Separate Account QP II the administrative expenses of Separate Account QP II,
including but not limited to:
(a) office space in the offices of the Company or in such other place
as may be agreed upon from time to time, and all necessary office
facilities and equipment;
(b) necessary personnel for managing the affairs of Separate Account
QP II, including clerical, bookkeeping, accounting and other
office personnel;
(c) all information and services, including legal services, required
in connection with registering and qualifying Separate Account QP
II or the Contracts with federal and
<PAGE> 2
state regulatory authorities, preparation of registration
statements and prospectuses, including amendments and revisions
thereto, and annual, semi-annual and periodic reports, notices
and proxy solicitation materials furnished to variable annuity
Contract Owners or regulatory authorities, including the costs of
printing and mailing such items;
(d) the costs of preparing, printing, and mailing all sales
literature;
(e) all registration, filing and other fees in connection with
compliance requirements of federal and state regulatory
authorities;
(f) the charges and expenses of any custodian or depository appointed
by Separate Account QP II for the safekeeping of its cash,
securities and other property; and
(g) the charges and expenses of independent accountants retained by
Separate Account QP II.
5. The services of the Company and Tower Square to Separate Account
QP II hereunder are not to be deemed exclusive and the Company and Tower Square
shall be free to render similar services to others so long as its services
hereunder are not impaired or interfered with thereby.
6. The Company agrees to guarantee that the annuity payments will
not be affected by mortality experience (under Contracts the reserves for which
are invested in Separate Account QP II) and as such assumes the risks (a) that
the actuarial estimate of mortality rates among annuitants may prove erroneous
and that reserves set up on the basis of such estimates will not be sufficient
to meet the Company's variable annuity payment obligations, and (b) that the
charges for services and expenses of the Company set forth in the Contracts may
not prove sufficient to cover its actual expenses. For providing these
mortality and expense risk guarantees, the Company will receive from Separate
Account QP II an amount per valuation period of Separate Account QP II, as
provided from time to time.
7. This Agreement will be effective on the date executed, and will
remain effective until terminated by any party upon sixty (60) days notice;
provided, however, that this agreement will terminate automatically in the
event of its assignment by any of the parties hereto.
8. Notwithstanding termination of this Agreement, the Company shall
continue to provide administrative services and
-2-
<PAGE> 3
mortality and expense risk guarantees provided for herein with respect to
Contracts in effect on the date of termination, and the Company shall continue
to receive the compensation provided under this Agreement.
9. This Agreement is subject to the provisions of the Investment
Company Act of 1940, as amended, and the rules of the Securities and Exchange
Commission.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officials thereunto duly authorized and, in the case
of the Company and Tower Square, seals to be affixed as of the day and year
first above written.
THE TRAVELERS LIFE AND ANNUITY COMPANY
(Seal)
By:
----------------------------------------
Title:
-------------------------------------
ATTEST:
- ----------------------------
Assistant Secretary
THE TRAVELERS SEPARATE ACCOUNT QP II
FOR VARIABLE ANNUITIES
By:
--------------------------------------
Title:
-------------------------------------
WITNESS:
- ----------------------------
TOWER SQUARE SECURITIES, INC.
By:
---------------------------------------
Title:
-------------------------------------
ATTEST: (SEAL)
- ----------------------------
Corporate Secretary
-3-
<PAGE> 1
EXHIBIT 3(b)
SELLING AGREEMENT
FOR VARIABLE CONTRACTS
THIS AGREEMENT, effective ____________________, is made by TOWER SQUARE
SECURITIES, INC., (hereafter referred to as Tower Square) as the Distributor,
and
_____________________________________________________________________________,
(hereafter referred to as Broker/Dealer).
Tower Square and the Broker/Dealer enter into this agreement for the purpose of
authorizing the Broker/Dealer, through its licensed individual agents as
described in paragraph 3, to solicit applications for such variable life
insurance, variable annuity and modified guaranteed annuity contracts (the
"Contract(s)") as may be issued by The Travelers Insurance Company, the
Travelers Life and Annuity Company and any affiliated companies (hereafter
referred to as the Insurance Companies), and identified by policy form in the
Compensation Schedules relating to this agreement as such schedules may be
amended from time to time. The parties represent and agree as follows:
1. The Insurance Companies are engaged in the issuance of the
Contracts in accordance with federal securities laws and the
applicable insurance laws of those states in which the
Contracts have been qualified for sale. The Contracts may be
considered securities under the Securities Act of 1933;
therefore, distribution of the Contracts is made through Tower
Square as a registered Broker/Dealer under the Securities
Exchange Act of 1934 and as a member of the National
Association of Securities Dealers, Inc. ("NASD"). The terms of
the offering of the Contracts are more particularly described
in the Prospectus(es) for the Contracts.
2. The Broker/Dealer certifies that it is a registered
Broker/Dealer under the Securities Exchange Act of 1934 and a
member of the NASD. The Broker/Dealer agrees to abide by all
rules and regulations of the NASD and to comply with all
applicable state and federal laws and the rules and
regulations of the authorized regulatory agencies affecting
the sale of the Contracts.
3. The Broker/Dealer will select persons whom it will employ and
supervise and who will be trained and qualified to solicit
applications for the Contracts in conformance with applicable
state and federal laws and regulations. Persons so trained
and qualified will be registered representatives of the
Broker/Dealer in accordance with the rules of the NASD and
they will be properly licensed in accordance with the state
insurance laws of those jurisdictions in which the Contracts
may lawfully be distributed and in which they solicit
applications for such Contracts. The Insurance Companies
shall have ultimate authority to determine whether they shall
appoint or terminate a particular registered representative as
an agent of the Insurance Companies with the various state
insurance departments.
4. The Broker/Dealer will review all contract proposals and
applications for suitability and for completeness and
correctness as to form. The Broker/Dealer will promptly, but
in no case later than the end of the next business day
following receipt by the Broker/Dealer, forward to the
applicable Insurance Company, at addresses provided, all
applications found suitable and in good form, together with
any payments received with such applications without deduction
or reduction. The Broker/Dealer will immediately return to
the applicant all applications together with any payments
received therewith deemed by the Broker/Dealer to be
unsuitable or not complete and correct as to form. The
Insurance Companies reserve the right to reject any Contract
application and return any payment made in connection with an
application which is rejected. Contracts issued on
applications accepted by the Insurance Companies will be
forwarded to the Broker/Dealer or at the direction of the
Broker/Dealer to the registered representative for delivery to
the Contract Owner. The Broker/Dealer shall obtain and retain
a receipt for each Contract which the Broker/Dealer delivers.
<PAGE> 2
2
5. The Broker/Dealer will perform the selling functions required
by this Agreement only in accordance with the terms and
conditions of the then current prospectus(es) applicable to
the Contract and will make no representations not included in
the prospectus or in any authorized supplemental material. No
sales solicitation, including the delivery of supplemental
sales literature or other such materials, shall occur, be
delivered to, or used with a prospective purchaser unless
accompanied or preceded by appropriate and then- current
prospectus(es). Any material prepared or used by the
Broker/Dealer or its registered representative, which
describes in whole or in part or refers by name or form to any
of the Insurance Companies' Contracts or underlying funds or
uses the name of the Insurance Companies, Tower Square, or The
Travelers Group, Inc., or the logos or service marks of any of
them, or the name, logos or service marks of any "Affiliated
Company" of any of them, as that term is defined in Section
2(a)(2) of the Investment Company Act of 1940, must be
approved by Tower Square in writing prior to any such use.
6. Compensation payable to the Broker/Dealer on sales of the
Contracts solicited by the Broker/Dealer will be paid to the
Broker/Dealer, or as necessary to meet any and all legal
requirements, to a licensed insurance affiliate, in accordance
with the Compensation Schedule(s) relating to this agreement
as they may be amended from time to time and are in effect at
the time the Contract payments are received by the applicable
Insurance Company (in the case of annuities) or at the time
the applications are received (in the case of life insurance).
In the event compensation is paid to the licensed insurance
agency affiliate as described in the preceding sentence, such
payment will be reflected in the Broker/Dealer's "Focus"
reports, and in its fee assessment reports filed with the
NASD. The Insurance Companies and Tower Square reserve the
privilege of revising the Compensation Schedules at any time.
7. If the Insurance Companies return all or a portion of a
premium paid with respect to a Contract, Broker/Dealer shall
be obligated to refund to Tower Square applicable commissions
on the amount of such premium only where:
(a) the Contract solicited is returned not taken under
the policy "free look" provisions;
(b) premiums are refunded due to overpayments, errors in
billing or in the timing of automatic premium
collection deductions, or errors resulting in policy
reissue;
(c) the check delivered in payment of any contract
premium does not clear and the premium collection
deductions, or errors resulting in policy reissue;
(d) the Contract is terminated or there is a refund of
premium and an act, error or omission of the
Broker/Dealer or its registered representative
materially contributed to the termination of the
Contract or the need to return premium;
(e) the application is rejected by the Insurance Company;
(f) the Insurance Company is directed by a judicial or
regulatory authority to return premium without
assessment of a surrender charge;
(g) the applicant's initial premium on a 1035 exchange is
returned because the expected rollover amount from
another Contract is not transferred due to the
exchange not meeting the legal requirements to
qualify for a tax-free exchange;
(h) the Insurance Company returns unearned premium on a
life insurance contract as required by the provisions
of the contract;
(i) the Insurance Company determines that it has a legal
liability to return premiums on a life insurance
contract within the first year after the Contract is
issued; or
<PAGE> 3
3
(j) the Insurance Company and Broker/Dealer mutually
agree to return all or a portion of a premium paid
with respect to a Contract.
8. If any Contract is repurchased at any time or if within
forty-five (45) days after confirmation by the Insurance
Companies of any premium payments credited to a Contract, that
Contract is tendered for full or partial surrender, or the
life at risk thereunder dies, then, at the option of the
Insurance Companies or Tower Square no commission will be
payable with respect to said premium payments and any
commission previously paid for said premium payments must be
refunded to the applicable Insurance Company or Tower Square
as directed by Tower Square. Tower Square agrees to notify
the Broker/Dealer within ten (10) business days after the
request for repurchase or redemption, or notification or death
of the life at risk is received by the applicable Insurance
Company.
9. This Agreement may not be assigned except by mutual consent
and will continue, subject to the termination by any party on
written notice to the other party, except that in the event
the Broker/Dealer ceases to be a registered Broker/Dealer or a
member of the NASD, this Agreement will immediately terminate.
Tower Square reserves the right to designate, at its sole
discretion, an alternative Principal Underwriter for the
distribution of the Contracts covered by this Agreement. The
designation will constitute substitution of parties to this
Agreement with assumption of the rights and obligations
created by this Agreement as applicable.
10. Failure of any party to terminate this Agreement for any of
the causes set forth in this agreement will not constitute a
waiver of the right to terminate this Agreement at a later
time for any of these causes.
11. For the purpose of compliance with any applicable federal or
state securities laws or regulations promulgated under them,
the Broker/Dealer acknowledges and agrees that in performing
the Broker/Dealer services covered by this Agreement, it is
acting in the capacity of an independent broker and dealer as
defined by the By-Laws of the NASD and not as an agent or
employee of either Tower Square or any registered investment
company.
The Broker/Dealer represents and warrants that it is
authorized and licensed as an agent under applicable state
insurance laws to solicit, negotiate and effect the contracts
of insurance contemplated hereunder. In the event the
Broker/Dealer is not licensed as such, an insurance agency
affiliated with the Broker/Dealer shall be licensed as an
agent under applicable state insurance laws to solicit,
negotiate and effect the contracts of insurance contemplated
hereunder.
For the purpose of compliance with any applicable state
insurance laws or regulations promulgated under them, the
Broker/Dealer acknowledges and agrees that solely in
performing the insurance-selling functions reflected by this
agreement, it or its registered representative is acting as
the agent of the Insurance Companies, and in that capacity is
authorized only to solicit applications from the public for
the Contracts. Such Contracts will not become effective until
such applications are accepted after underwriting review by
the Insurance Companies at their Home Office.
In furtherance of its responsibilities as a Broker/Dealer, the
Broker/Dealer acknowledges that it is responsible for
compliance on any business it produces concerning the
Contracts. No Broker/Dealer will be entitled to compensation
with respect to any application for or payment credited to,
any Contract(s) that is rejected by the Insurance Companies in
the event the Insurance Companies or Tower Square determine
the solicitation or obtaining of purchasers, applications or
payments by the Broker/Dealer or any of its Associated persons
was done in
<PAGE> 4
4
violation of the securities or insurance laws of the United
States or any state or other jurisdiction.
No party to this Agreement will be liable for any obligation,
act or omission of the other. Each party to this Agreement
will hold harmless and indemnify the (1) Registered Investment
Companies which are used to fund the Contracts, (2) Insurance
Companies, (3) Tower Square, and (4) the Broker/Dealer, as
appropriate, for any loss or expense suffered as a result of
the violation or noncompliance by that party or the Associated
persons of that party of any applicable law or regulation or
any provision of the Agreement; provided, however, that no
party or any of its employees or agents will be liable to the
other party for any direct, special or consequential damages
arising out of or in connection with the performance of any
services pursuant to the Agreement.
12. All notices to the Insurance Companies or Tower Square
relating to this Agreement should be sent to the attention of
The Travelers Insurance Companies, FS Law Department, One
Tower Square, Hartford, CT 06183. All notices to the
Broker/Dealer will be duly given if mailed or faxed to the
address shown below.
13. The terms "Associated Person", "member" and "rules of the
Corporation" as used herein shall be defined consistently with
the definition of similar terms as contained in Article I of
the NASD By-Laws. This Agreement will be construed in
accordance with the laws of the State of Connecticut.
In reliance on the representations set forth and in consideration of the
undertakings described herein, the parties represented below do hereby contract
and agree.
TOWER SQUARE SECURITIES, INC. The Broker/Dealer
By:
------------------------------ ----------------------------
Title:
------------------------------ ----------------------------
Street Address
Date:
------------------------------ ----------------------------
By:
----------------------------
Title:
----------------------------
Taxpayer I.D.:
----------------------------
Date:
----------------------------
Fax:
----------------------------
<PAGE> 1
Exhibit 4
THE TRAVELERS INSURANCE COMPANY - ONE TOWER SQUARE - HARTFORD CT - 06183
A STOCK COMPANY
WE ARE PLEASED TO PROVIDE YOU THE BENEFITS OF THIS ANNUITY CONTRACT.
PLEASE READ ALL ATTACHED FORMS CAREFULLY.
THE CONTRACT IS SUBJECT TO THE TERMS AND CONDITIONS STATED ON THE ATTACHED
PAGES, ALL OF WHICH ARE A PART OF IT. THE CONTRACT IS ISSUED IN CONSIDERATION
OF THE PURCHASE PAYMENTS.
EXECUTED AT HARTFORD, CONNECTICUT
[SIGNATURE]
PRESIDENT
THIS IS A LEGAL CONTRACT BETWEEN YOU AND US.
PLEASE READ YOUR CONTRACT CAREFULLY.
FLEXIBLE PREMIUM DEFERRED GROUP VARIABLE ANNUITY CONTRACT
TAX QUALIFIED
ELECTIVE OPTIONS NON-PARTICIPATING
ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON
INVESTMENT EXPERIENCE OF THE UNDERLYING FUNDS, ARE VARIABLE AND MAY INCREASE OR
DECREASE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
Contract Specifications Page 3-4
Definitions Page 5-6
Purchase Payments Page 7
General Contract Provisions Page 7-8
Valuation Information Page 9
Transfers Between Underlying Funds Page 9
Transfers from Underlying Funds to Contracts not Issued by Us Page 10
Transfers from Other Contracts Issued by Us Page 10
Transfers to Other Contracts Issued by Us Page 10
Transfers from Contracts not Issued by Us Page 10
Distributions from the Contract Page 10
Contract Charges Page 10
Contract Discontinuance Provisions Page 11
Settlement Provisions Page 11-14
Variable Annuity
Fixed Annuity
Annuity Options
Annuity Tables Page 15-17
</TABLE>
Any Riders or Endorsements follow the Life Annuity Tables.
2
<PAGE> 3
CONTRACT SPECIFICATIONS
CONTRACT OWNER TRUSTEE OF THE X RETIREMENT PLAN
PLAN NAME THE X RETIREMENT PLAN
CONTRACT NUMBER SPECIMEN
CONTRACT DATE 03/01/96
PURCHASE PAYMENT/TERMINATION AMOUNTS
Minimum Average Purchase Payment Amount: $10,000 per Contract Year
Maximum Purchase Payment Amount: $3,000,000 without prior approval by
Our Office
Termination Amount: $20,000
AMOUNTS DEDUCTED ON SURRENDER:
For the purpose of determining the amounts deducted on Surrender, the
surrender charge is calculated as a percentage of the Cash Value being
surrendered.
<TABLE>
<CAPTION>
CONTRACT YEAR SURRENDER CHARGE
-------------- -----------------
(on amounts not previously surrendered)
---------------------------------------
<S> <C>
1 - 2 5%
3 - 4 4%
5 - 6 3%
7 - 8 2%
9 and thereafter 0%
</TABLE>
ALLOWABLE DISTRIBUTIONS PRIOR TO CONTRACT DISCONTINUANCE NOT SUBJECT TO AMOUNTS
DEDUCTED ON SURRENDER: Retirement, Separation from Service, loans, hardship
withdrawals (as defined by the Internal Revenue Code), death, disability (as
defined by the Internal Revenue Code section 72 m 7 ), return of Excess
Plan Contributions, certain Plan expenses as mutually agreed upon, transfers to
an employer stock fund, and annuitization under this contract to another
contract issued by Us. Distributions may be in the form of cash payments,
Annuity Options or to a deferred Annuity issued by Us.
For distributions subject to amounts deducted on Surrender, the applicable
portion of the Cash Surrender Value of Your Account will be paid to satisfy the
requested distribution. For allowable distributions not subject to amounts
deducted on Surrender, the applicable portion of the Cash Value of Your Account
will be paid to satisfy the requested distribution
Amounts deducted on Surrender will apply to allowable distributions made to
highly compensated employees until after the fifth Contract Year.
GUARANTEED INTEREST PERIODS FOR THE FIXED ACCOUNT (IF APPLICABLE):
The initial interest rate for any Purchase Payment is declared each month and
is guaranteed for twelve months. Each Purchase Payment is placed in a "cell"
for accounting purposes. At the end of the twelve month guarantee period, a
renewal interest rate will be determined that will not be lower than the
minimum interest rate guarantee of 3%. At the end of the initial guarantee
period, the first renewal rate will be guaranteed to the end of that calendar
year. The second and all future renewal rates will be declared each subsequent
January 1 and guaranteed through December 31 of each year.
3
<PAGE> 4
CONTRACT SPECIFICATIONS
UNDERLYING FUND TRANSFER CHARGE: $0.00
We reserve the right to limit the number of transfers in an account between
Underlying Funds. The minimum number of transfers allowed would be one in any
six-month period.
THE TRAVELERS SEPARATE ACCOUNT QP FOR VARIABLE
ANNUITIES UNDERLYING FUNDS
<TABLE>
<S> <C>
Managed Assets Trust Variable Insurance Products Fund
High Yield Bond Trust* Fidelity's High Income Portfolio*
Capital Appreciation Fund Fidelity's Growth Portfolio
American Odysseey Funds, Inc. Fidelity's Equity Income Portfolio
American Odyssey Core Equity Fund Variable Insurance Products Fund II
American Odyssey Emerging Opportunities Fund Fidelity's Asset Manager Portfolio**
American Odyssey International Equity Fund Dreyfus Stock Index Fund, Inc.
American Odyssey Long-Term Bond Fund Smith Barney/Travelers Series Fund, Inc.
American Odyssey Intermediate Bond Fund Smith Barney Income & Growth Portfolio
American Odyssey Short-Term Bond Fund Alliance Growth Portfolio
The Travelers Series Trust: Smith Barney International Equity Portfolio
U.S. Government Securities Portfolio* Putnam Diversified Income Portfolio**
Utilities Portfolio Smith Barney High Income Portfolio*
Social Awareness Stock Portfolio MFS Total Return Portfolio**
Temploeton Variabe Products Series Fund Smith Barney Money Market Portfolio*
Templeton Bond Fund*
Templeton Stock Fund
Templeton Asset Allocation Fund**
</TABLE>
The annual mortality and expense risk deduction is 1.15% for all funds listed
above. This amounts to a daily deduction of .00003150 per fund.
The Assumed Daily Net Investment Factor is 1.000081 for all Underlying Funds.
The Underlying Funds marked with an asterisk (*) are considered Competing
Funds, and are subject to transfer restrictions as described in the Fixed
Account Rider (if applicable). Those marked with two asterisks (**) are not
currently considered competing, but may be so in the future based on allowable
changes in the fund's investment strategy.
Transfers from the Fixed Account, either to the Underlying Funds or to
contracts not issued by Us, as described in the Fixed Account Rider (if
applicable), may not exceed 20% per Contract Year of the Cash Value in the
Fixed Account valued on each Contract Year anniversary. We reserve the right
to modify the amount available for transfer from the Fixed Account to the
Underlying Funds available in this contract or to other contracts issued by
Us.
4
<PAGE> 5
DEFINITIONS
(A) ACCUMULATION UNIT - An accounting unit of measure used to calculate the
value of this contract. An Accumulation Unit exists for each Underlying Fund.
The value of this measure is called the Accumulation Unit Value.
(B) ANNUITANT - The person on whose life the Annuity payments are made.
(C) ANNUITY - Payment of income for a stated period or amount.
(D) ANNUITY COMMENCEMENT DATE - The date on which Annuity payments begin.
(E) BENEFICIARY(IES) - The Beneficiary of this contract is the Plan Trustee.
Any Beneficiary designated by the Participant(s) or Annuitant(s) shall be
maintained by You under the provisions of the Plan.
(F) CASH SURRENDER VALUE - The Cash Value less any amounts deducted on
Surrender shown on the Contract Specifications page and any applicable Premium
Tax.
(G) CASH VALUE - The value of the Accumulation Units in Your Account less any
reduction for administrative charges. Sometimes referred to as "Account Value."
(H) COMPETING FUND - Any investment option under the Plan which, in Our
opinion, consists primarily of fixed income securities and/or money market
instruments. Competing Funds included in this contract are indicated on the
Contract Specifications page.
(I) CONTRACT DATE - The date this contract is issued as shown on the Contract
Specifications page.
(J) CONTRACT DISCONTINUANCE - Termination of this contract by Us or by Your
Written Request.
(K) CONTRACT YEAR - The twelve-month period beginning with the Contract Date or
any anniversary thereof. This may or may not coincide with the Plan year.
(L) DUE PROOF OF DEATH - (i) A copy of a certified death certificate; (ii) a
copy of a certified decree of a court of competent jurisdiction as to the
finding of death; (iii) a written statement by a medical doctor who attended
the deceased; or (iv) any other proof satisfactory to Us.
(M) EXCESS PLAN CONTRIBUTIONS - Plan contributions including excess
deferrals, excess contributions, excess aggregate contributions, excess annual
additions, and excess nondeductible contributions that require correction by
the Plan Administrator, excluding reversions upon Plan Termination.
(N) FIXED ANNUITY - An Annuity with payments which remain fixed as to dollar
amount throughout the payment period.
(O) OUR OFFICE - The home office of the Travelers Insurance Company located at
One Tower Square, Hartford, Connecticut 06183- 5030. All correspondence
concerning this contract should be sent to the attention of Annuity Services.
(P) PARTICIPANT- An eligible person who is a member in the Plan.
(Q) PLAN - The Plan designated on the Contract Specifications page. We are not
a party to the Plan. We do not assume the responsibilities of the Plan
Administrator, nor are We bound by the terms of the Plan. All records
pertaining to the Plan will be open for inspection by Us.
(R) PLAN ADMINISTRATOR - The corporation or other entity so specified on the
application or purchase order. If none is specified, the Plan Trustee is the
Plan Administrator.
(S) PLAN TERMINATION - Termination of Your Plan, including partial Plan
Termination., as determined by Us.
5
<PAGE> 6
(T) PREMIUM TAX - The amount of tax, if any, charged by the state or
municipality. We will deduct any applicable Premium Tax from the Cash Value
either upon Surrender, annuitization, death, or at the time Purchase Payments
are made, but no earlier than when We have a tax liability under state law.
(U) PURCHASE PAYMENTS - Payments You make to this contract.
(V) SEPARATE ACCOUNT - The Separate Account shown on the Contract
Specifications page which We established under Connecticut Insurance Laws and
which purchases shares of the Underlying Funds for this class of contracts and
certain other contracts.
(W) SEPARATION FROM SERVICE - The termination or permanent severance of the
Participant's employment with the employer for any reason that is a separation
from service within the meaning of the Plan. However, termination of a
Participant's employment with the employer as a result of the sale of all or
part of the employer's business (including divisions or subsidiaries of the
employer) will not be considered Separation from Service unless the Participant
actually loses his/her job or is not immediately included in a pension or
profit sharing plan of the successor employer.
(X) SURRENDER - Funds distributed from the contract for retirement, Separation
from Service, loans, hardship withdrawals, death, disability, return of
Excess Plan Contributions, payment of certain Plan expenses as mutually agreed
upon, Contract Discontinuance, or transfers to other Plan funding vehicles.
Such surrenders may or may not be subject to charges .
(Y) SURRENDER DATE - The date We receive Your Written Request for a Surrender.
(Z) UNDERLYING FUND - An open-ended diversified investment management company
indicated on the Contract Specifications page which is an underlying investment
for the Separate Account.
(AA) VALUATION DATE - The date on which the Separate Account is valued. The
Separate Account is generally valued at the close of business on each day that
the New York Stock Exchange is open for trading.
(BB) VALUATION PERIOD - The period between successive valuations.
(CC) VARIABLE ANNUITY - An Annuity with payments which vary with the net
investment results of the Separate Account.
(DD) WE, OUR, US - The Travelers Insurance Company.
(EE) WRITTEN REQUEST - A written form satisfactory to Us and received at Our
Office.
(FF) YOU, YOUR - The contract owner.
(GG) YOUR ACCOUNT - Accumulation Units credited to You under this contract.
6
<PAGE> 7
PURCHASE PAYMENTS
PURCHASE PAYMENT
The Purchase Payments are the payments You make to this contract. An initial
lump sum Purchase Payment must be made to the contract and is due and payable
before the contract becomes effective. Each Purchase Payment is payable to Us
at Our Office. The minimum Purchase Payment is shown on the Contract
Specifications page. We reserve the right to limit the amount of the Purchase
Payment which will be accepted.
Net Purchase Payments are that part of the Purchase Payments applied to the
contract. The net Purchase Payment is equal to the Purchase Payment less any
applicable Premium Tax.
ALLOCATION OF PURCHASE PAYMENTS
The initial net Purchase Payment will be applied within two business days after
it is received in good order at Our office. Any subsequent net Purchase
Payments will be credited to Your Account using the Accumulation Unit Value
determined after We receive those payments at Our Office. Each net Purchase
Payment will be allocated to the Underlying Funds in the proportion specified
by You for this contract. By Written Request, You may change Your choice of
Underlying Funds or allocation percentages. The available Underlying Funds to
which assets may be allocated are shown on the Contract Specifications page;
funds may be subsequently added or deleted.
The net Purchase Payments will be allocated to an account established for You
by Us. At Your direction, We will deposit all net Purchase Payments to Your
Account, satisfy all distribution requests from this account, and provide
periodic reports to You as described in the "Required Reports" provision. You
may contact Us at Our Office for information about this contract or Your
Account. The Plan Administrator will be responsible for maintaining the
individual records for each Participant.
GENERAL CONTRACT PROVISIONS
OWNER
This contract belongs to You. You have sole power while the contract is in
force to exercise any rights given in the contract. In order to maintain tax
qualification, this contract may not be sold, assigned, transferred, discounted
or pledged as collateral for a loan or as security for the performance of an
obligation or for any other purpose except as may be required or permitted
under applicable sections of the Internal Revenue Code.
CREDITOR CLAIMS
No right or benefit to You, the Annuitant or Beneficiary under this contract
shall be subject to the claims of creditors or any legal process other than to
the extent permitted by law.
CONTROL OF THE CONTRACT
All rights in the contract rest with You, and You are entitled to all amounts
held under this contract. You may elect to exercise any options allowed by the
contract with respect to Your Account. Elections made under the contract must
be made by a Written Request, unless another manner is mutually agreed upon.
THE CONTRACT
The entire contract between You and Us consists of the contract and all
attached pages.
CONTRACT CHANGES
The only way this contract may be changed is by a written endorsement signed by
one of Our officers.
SUBSTITUTION OF UNDERLYING FUNDS
If it is not possible to continue to offer an Underlying Fund, or in Our
judgment becomes inappropriate for the purposes of this contract, We may
substitute another Underlying Fund without Your consent. Substitutions may be
made with respect to both existing investments and investment of future
Purchase Payments subject to applicable law.
7
<PAGE> 8
INCONTESTABILITY
We will not contest this contract from its Contract Date.
REQUIRED REPORTS
As often as required by law, but at least once in each Contract Year, We will
furnish a report to You which will show the number of Accumulation Units
credited to this contract in each Underlying Fund and the corresponding
Accumulation Unit Values as of the date of the report.
VOTING RIGHTS
If required by federal law, You may have the right to vote at the meetings of
the Shareholders of the Underlying Funds. If You have voting rights, We will
send a notice to You telling You the time and place of a meeting. The notice
will also explain matters to be voted upon and how many votes You may exercise.
MORTALITY AND EXPENSES
Our actual mortality and expense experience will not affect the values or
amounts paid under this contract.
NON-PARTICIPATING
This contract does not share in Our surplus earnings, so You will receive no
dividends under it.
CONTRACT MODIFICATION
We reserve the right to modify this contract to qualify it under all related
laws 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.
STATE LAWS
This contract is governed by the law of the state in which it is issued for
delivery. We may, at any time, make any changes, including retroactive
changes, in this 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 We or You are subject.
EMERGENCY PROCEDURE
We reserve the right to suspend or postpone the date of any payment of any
benefit or values for any Valuation Period (1) when the New York Stock Exchange
is closed; (2) when trading on the 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 Underlying Funds is not reasonably
practicable or it is not reasonably practicable to determine the value of the
Underlying Fund's net 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 this contract which specifies a Valuation
Date will be superseded by this Emergency Procedure.
RELATION OF THIS CONTRACT TO THE SEPARATE ACCOUNT
We will have exclusive and absolute ownership and control of the assets of the
Separate Account. That portion of the assets of the Separate Account equal to
the reserves and other contract liabilities with respect to such Separate
Account shall not be chargeable with liabilities arising out of any other
business We conduct. Our determination of the value of an Accumulation Unit and
an Annuity Unit by the method described in this contract will be conclusive.
8
<PAGE> 9
VALUATION INFORMATION
NUMBER OF ACCUMULATION UNITS
The number of Accumulation Units to be credited for each Underlying Fund once a
Purchase Payment has been received by Us will be determined by dividing the net
Purchase Payment allocated to each Underlying Fund by the corresponding
Accumulation Unit Value of that Underlying Fund.
ACCUMULATION UNIT VALUE
The initial value of an Accumulation Unit for each Underlying Fund is set at
$1.000000. We determine the value of an Accumulation Unit on each Valuation
Date by multiplying the value on the immediately preceding Valuation Date by
the net investment factor for that Underlying Fund for the Valuation Period
just ended.
NET INVESTMENT FACTOR
The net investment factor is a factor applied to measure the investment
performance of an Underlying Fund from one Valuation Period to the next. The
net investment factor for an Underlying Fund for any Valuation Period is equal
to the sum of 1.000000 plus the net investment rate.
Each Underlying Fund's net investment rate for a Valuation Period is equal to
the gross investment rate for that Underlying Fund less the applicable daily
mortality and expense risk deduction. The mortality and expense risk deduction
is shown on the Contract Specifications page.
The gross investment rate of an Underlying Fund for a Valuation Period is equal
to (1) divided by (2) where
(1) is:
(a) investment income; plus
(b) capital gains and losses, whether realized or unrealized;
less
(c) a deduction for any expenses levied against the Separate
Account and its Underlying Funds; and
(2) is the amount of the net assets at the beginning of the Valuation
Period.
The gross investment rate for an Underlying Fund may be either positive or
negative. Underlying Fund assets are based on the net assets held in the
Underlying Fund. Investment income includes any distribution whose ex-dividend
date occurs during the Valuation Period.
TRANSFERS BETWEEN UNDERLYING FUNDS
You may transfer all or any part of Your Cash Value, subject to the
restrictions as noted in the Fixed Account Rider (if applicable), from one
Underlying Fund to any other Underlying Fund available under Your Plan.
We reserve the right to limit the number of transfers in an account between
Underlying Funds. The minimum number of transfers allowed would be one in any
six-month period.
Transfers between Underlying Funds will result in the addition or deletion of
Accumulation Units having a total value equal to the dollar amount being
transferred to or from a particular Underlying Fund. The Number of
Accumulation Units will be determined by using the Accumulation Unit Value of
the Underlying Funds involved as of the next Valuation Date after We receive
notification of request for transfer. Transfers will be subject to any
applicable Underlying Fund Transfer Charge stated on the Contract
Specifications page.
9
<PAGE> 10
TRANSFERS FROM UNDERLYING FUNDS TO CONTRACTS NOT ISSUED BY US
You may transfer all or any part of Your Account's Cash Surrender Value,
subject to the restrictions as noted in the Fixed Account Rider (if
applicable), to any contract not issued by Us. Such transfers may be subject
to amounts deducted on Surrender as shown on the Contract Specifications page.
TRANSFERS FROM OTHER CONTRACTS ISSUED BY US
Under specific conditions, We may allow You to transfer funds held by You in
another group Annuity contract issued by Us to this contract without applying
deferred sales charges or Surrender charges to the funds being transferred.
Once the transfer is complete and We have established an account for You at
Your direction, new deferred sales charge or surrender charges may apply to
this contract as shown on the Contract Specifications page.
TRANSFERS TO OTHER CONTRACTS ISSUED BY US
Under specific conditions, We may allow You to transfer funds held by You for a
Participant in this contract to another contract issued by Us without incurring
a deferred sales charge or surrender charge as shown on the Contract
Specifications page to the funds being transferred. Once the transfer is
complete and We have established a new account for the Participant at Your
direction, new deferred sales charges or surrender charges may apply to the new
contract in accordance with the provisions of such contract.
TRANSFERS FROM CONTRACTS NOT ISSUED BY US
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 investment
vehicle as reimbursement to the Plan for any exit penalty assessed by the
other investment vehicle provider. We will recover this credit through reduced
compensation paid to the servicing agent or broker.
DISTRIBUTIONS FROM THE CONTRACT
CASH SURRENDER VALUE
The Cash Surrender Value will be determined as of the next Valuation Date
following receipt of Your Written Request. We may delay payment of the Cash
Surrender Value in the Underlying Funds for a period of not more than seven
days after We receive the request. The payment of the Cash Surrender Value of
the Fixed Account, may be delayed as described in the Fixed Account Rider.
CONTRACT CHARGES
AMOUNTS DEDUCTED ON SURRENDER
The applicable amounts deducted on Surrender are shown on the Contract
Specifications page. These amounts as well as the mortality and expense risk
deduction may be reduced or eliminated to the extent that We anticipate lower
sales expenses or perform fewer sales services due to:
1. the size of the group participating in the contract;
2. an existing relationship to the contract owner;
3. use of mass enrollment procedures, or;
4. performance of sales functions by a third party, which We
would otherwise perform.
10
<PAGE> 11
CONTRACT DISCONTINUANCE PROVISIONS
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 shown on the Contract Specifications page; 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:
a) accept no further payments for this contract; and
b) pay You the Cash Surrender Value of the Underlying Funds; and
c) pay You any Fixed Account Cash Surrender Value , as described
in the Fixed Account Rider .
If this contract is discontinued, We will distribute the Cash Surrender Value
to You at the most current address available on Our records. Discontinuance
of this contract will not affect payments We are making under any Annuity
options which began before the date of discontinuance.
SETTLEMENT PROVISIONS
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 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 You. The following
information must be provided with any such request:
a) the Participant's name, address, date of birth, social
security number; and
b) the amount which is to be distributed in the form of an
Annuity option; and
c) the Annuity option which is to be purchased; and
d) the date the Annuity option payments are to begin; and
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 as long
as We are notified by Written Request while the Annuitant is alive. 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.
11
<PAGE> 12
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 date of birth was misstated, all benefits of this
contract are what the Cash Value would have purchased at the correct sex and
age on the date of issue of the Annuity option elected.
RETIRED LIFE CERTIFICATE
We will issue to each person to whom Annuity benefits are being paid under this
contract, a certificate setting forth the benefits to which such person is
entitled under this contract.
ALLOCATION OF AN ANNUITY
When an Annuity option is elected, You may further elect to have the Cash
Value attributable to a Participant applied to provide a Variable Annuity, a
Fixed Annuity, or a combination of both.
If no election is made to the contrary, the value held in an Underlying Fund
will be applied to provide an Annuity which varies with the investment
experience of that same Underlying Fund. You may elect to transfer all or any
part of the Cash Value from one Underlying Fund to another, as described in the
provision "Transfer Between Underlying Funds," in order to reallocate the basis
on which Annuity payments will be determined. Once Annuity payments have begun,
no further transfers are allowed.
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 first monthly Annuity payment
which can be purchased with each $1,000 applied. The amount applied to an
Annuity will be the Cash Value attributable to a Participant as of 14 days
before the date Annuity payments start. We reserve the right to require
satisfactory proof of the age of any person 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 for each Underlying Fund was set at
$1.000000. On any Valuation Date, the Annuity Unit Value for an Underlying
Fund equals the Underlying Fund Annuity Unit Value on the immediately preceding
Valuation Date, multiplied by the net investment factor for that Underlying
Fund for the Valuation Period just ended, divided by the Assumed Daily Net
Investment Factor. The Assumed Daily Net Investment Factor is shown on the
Contract Specifications page.
The value of an Annuity Unit as of any date other than a Valuation Date will be
equal to its value as of the next Valuation Date.
NUMBER OF ANNUITY UNITS
We determine the number of Annuity Units credited to the Annuitant's account in
each Underlying Fund by dividing the basic first monthly Annuity payment
attributable to that Underlying Fund by the Underlying Fund's Annuity Unit
Value as of 14 days before the due date of the first Annuity payment.
AMOUNT OF SECOND AND SUBSEQUENT PAYMENTS
The dollar amount of any or all payments made to an Annuitant after the first
payment may change from month to month based on the net investment results of
the Underlying Fund(s). The total amount of each Annuity payment made to an
Annuitant will be equal to the sum of the payments in each Underlying Fund
allocated to that Annuitant's account.
The actual amount of the payments made to an Annuitant in each Underlying Fund
is found by multiplying the number of Annuity Units credited to the Annuitant's
account in that Underlying Fund by the applicable Annuity Unit Value of the
Underlying Fund as of the date 14 days prior to the date on which the
payment is due.
12
<PAGE> 13
FIXED ANNUITY
A Fixed Annuity is an Annuity with payments which remain fixed as to dollar
amount throughout the payment period. The dollar amount of the first Fixed
Annuity payment will be calculated as described above in the "Amount of First
Payment" provision. All subsequent payments will be in the same amount and
that amount will be assured throughout the payment period.
BETTERMENT OF RATES
The Cash Value applied to purchase an Annuity option will provide payments at
least equal to those provided if the same amount was applied to purchase a
single premium immediate Annuity offered by Us at that time for the same class
of contracts. If it would produce a larger payment, We agree that the Fixed
Annuity payment will be determined using the Life Annuity Tables in effect on
the Annuity Commencement Date.
ANNUITY OPTIONS
Subject to conditions stated in ELECTION OF SETTLEMENT OPTIONS and MINIMUM
AMOUNTS, all or any part of the Cash Value of this contract may be paid to the
Annuitant under one or more of the options below.
OPTION 1. LIFE ANNUITY - NO REFUND
We will make monthly Annuity payments during the lifetime of the person on
whose life the payments are based, ending with the last monthly payment
preceding death.
OPTION 2. LIFE ANNUITY WITH 120, 180, OR 240 MONTHLY PAYMENTS ASSURED
We will make monthly Annuity payments during the lifetime of the person on
whose life the payments are based and under the conditions stated below.
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 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 of the excess, if any, of (a) over (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; and
(b) 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 Annuity Commencement Date
under this option; and
(b) is the dollar amount of Annuity
payments already paid.
OPTION 4. JOINT AND LAST SURVIVOR LIFE ANNUITY
We will make monthly Annuity payments during the joint lifetime of the
Annuitant and a secondary payee, and thereafter during the remaining lifetime
of the survivor, ceasing with the last payment prior to the death of the
survivor.
OPTION 5. JOINT AND LAST SURVIVOR LIFE ANNUITY - ANNUITY REDUCED ON DEATH OF
PRIMARY PAYEE We will make monthly Annuity payments to the Annuitant during the
joint lifetime of 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.
13
<PAGE> 14
ANNUITY OPTIONS
OPTION 6. PAYMENTS FOR A FIXED PERIOD
We will make monthly payments for the period selected. If at the death of the
Annuitant, payments have been made for less than the period selected, We will
continue to make payments to the designated Beneficiary during the remainder of
that period.
OPTION 7. OTHER ANNUITY OPTIONS
We will make other arrangements for Annuity payments as may be mutually agreed
upon by You and Us.
14
<PAGE> 15
LIFE ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 APPLIED
OPTIONS 1, 2, AND 3 - SINGLE LIFE ANNUITIES
<TABLE>
<CAPTION>
MALE AND
FEMALE
ADJUSTED NUMBER OF MONTHLY PAYMENTS GUARANTEED CASH
AGE NONE 120 180 240 REFUND
<S> <C> <C> <C> <C> <C>
50 4.27 4.24 4.18 4.10 4.06
51 4.37 4.32 4.26 4.17 4.13
52 4.47 4.42 4.34 4.23 4.20
53 4.57 4.51 4.43 4.30 4.27
54 4.68 4.61 4.51 4.37 4.35
55 4.80 4.72 4.60 4.44 4.44
56 4.93 4.83 4.70 4.52 4.52
57 5.07 4.95 4.80 4.59 4.62
58 5.21 5.07 4.90 4.66 4.71
59 5.36 5.20 5.00 4.74 4.81
60 5.53 5.34 5.11 4.81 4.92
61 5.70 5.48 5.21 4.88 5.03
62 5.89 5.62 5.32 4.95 5.15
63 6.08 5.78 5.43 5.01 5.28
64 6.29 5.94 5.54 5.08 5.41
65 6.51 6.10 5.66 5.13 5.54
66 6.75 6.27 5.76 5.19 5.69
67 7.00 6.45 5.87 5.24 5.84
68 7.28 6.63 5.98 5.29 6.00
69 7.57 6.82 6.08 5.33 6.17
70 7.89 7.01 6.18 5.36 6.35
71 8.23 7.20 6.27 5.40 6.54
72 8.60 7.40 6.36 5.42 6.74
73 9.00 7.59 6.44 5.44 6.95
74 9.44 7.78 6.51 5.46 7.18
75 9.91 7.97 6.57 5.47 7.41
</TABLE>
Dollar amounts of the life Annuity payments are based on the 1994 Group Annuity
Mortality Table for males projected with mortality improvement scale AA with
ages set back two years and a net investment rate of 3%. The adjusted age of
the person on whose life the Annuity is based is determined from the actual age
last birthday on the due date of the first Annuity payment in the following
manner:
<TABLE>
<S> <C> <C> <C> <C> <C>
Calendar year in which
first payment is due 1996 - 2000 2001 - 2010 2011 - 2020 2021 - 2030 2031 and later
Adjusted age is actual age minus 0 minus 1 minus 2 minus 3 minus 4
</TABLE>
15
<PAGE> 16
LIFE ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 APPLIED
OPTION 4 - JOINT AND LAST SURVIVOR LIFE ANNUITY
<TABLE>
<CAPTION>
MALE AND
FEMALE
ADJUSTED
AGES 50 55 60 65 70 75
<S> <C> <C> <C> <C> <C> <C>
50 3.75 3.9 4.01 4.11 4.17 4.21
55 3.9 4.11 4.3 4.46 4.59 4.67
60 4.01 4.3 4.59 4.86 5.08 5.25
65 4.11 4.46 4.86 5.26 5.63 5.94
70 4.17 4.59 5.08 5.63 6.2 6.73
75 4.21 4.67 5.25 5.94 6.73 7.56
</TABLE>
Dollar amounts of the life Annuity payments are based on the 1994 Group Annuity
Mortality Table for males projected with mortality improvement scale AA with
ages set back two years and a net investment rate of 3%. The adjusted age of
the person on whose life the Annuity is based is determined from the actual age
last birthday on the due date of the first Annuity payment in the following
manner:
<TABLE>
<S> <C> <C> <C> <C> <C>
Calendar year in which
first payment is due 1996 - 2000 2001 - 2010 2011 - 2020 2021 - 2030 2031 and later
Adjusted age is actual age minus 0 minus 1 minus 2 minus 3 minus 4
</TABLE>
16
<PAGE> 17
LIFE ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 APPLIED
OPTION 5 - JOINT AND LAST SURVIVOR LIFE ANNUITY - ANNUITY REDUCED ON DEATH OF
PRIMARY PAYEE
<TABLE>
<CAPTION>
MALE AND
FEMALE
ADJUSTED
AGES 50 55 60 65 70 75
<S> <C> <C> <C> <C> <C> <C>
50 4.27 4.52 4.82 5.16 5.54 5.97
55 4.52 4.80 5.14 5.53 5.97 6.47
60 4.82 5.14 5.53 5.98 6.50 7.10
65 5.16 5.53 5.98 6.51 7.14 7.86
70 5.54 5.97 6.50 7.14 7.89 8.79
75 5.97 6.47 7.10 7.86 8.79 9.91
</TABLE>
Dollar amounts of the life Annuity payments are based on the 1994 Group Annuity
Mortality Table for males projected with mortality improvement scale AA with
ages set back two years and a net investment rate of 3%. The adjusted age of
the person on whose life the Annuity is based is determined from the actual age
last birthday on the due date of the first Annuity payment in the following
manner:
<TABLE>
<S> <C> <C> <C> <C> <C>
Calendar year in which
first payment is due 1996 - 2000 2001 - 2010 2011 - 2020 2021 - 2030 2031 and later
Adjusted age is actual age minus 0 minus 1 minus 2 minus 3 minus 4
</TABLE>
17
<PAGE> 18
ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 APPLIED
OPTION 6 - PAYMENTS FOR A DESIGNATED PERIOD
<TABLE>
<CAPTION>
MONTHLY MONTHLY
NUMBER PAYMENT NUMBER PAYMENT
OF YEARS AMOUNT OF YEARS AMOUNT
<S> <C> <C> <C>
5 17.91 18 5.96
6 15.14 19 5.73
7 13.16 20 5.51
8 11.68 21 5.32
9 10.53 22 5.15
10 9.61 23 4.99
11 8.86 24 4.84
12 8.24 25 4.71
13 7.71 26 4.59
14 7.26 27 4.47
15 6.87 28 4.37
16 6.53 29 4.27
17 6.23 30 4.18
</TABLE>
The dollar amounts of the monthly Annuity payments for the Fifth Option are
based on a net investment rate of 3% per annum.
18
<PAGE> 1
EXHIBIT 9
CERTIFICATE
I, ERNEST J. WRIGHT, Assistant Secretary of THE TRAVELERS LIFE AND
ANNUITY COMPANY, DO HEREBY CERTIFY that at a meeting of the Board of Directors
of The Travelers Life and Annuity Company held on the 9th day of July, 1993, at
which a quorum was present and voting, the following resolutions were adopted:
VOTED: That pursuant to authority granted by Section 38a-433 of the
Connecticut General Statutes, the proper officers of the Company are
authorized to establish a separate account or accounts to invest in
shares of investment companies pursuant to plans and contracts
issued and sold by the Company in connection therewith.
VOTED: That the proper officers of the Company are authorized to take such
action as may be necessary to register the separate account or
accounts as a unit investment trust investment company under the
Investment Company Act of 1940; to file any necessary or appropriate
exemptive requests, and any amendments thereto, for such separate
account or accounts under the Investment Company Act of 1940; to
file a registration statement, and any amendments, exhibits and
other documents thereto, in order to register plans and contracts of
the Company and interests in such separate account or accounts in
connection therewith under the Securities Act of 1933; and to take
any and all action as may in their judgment be necessary or
appropriate in connection therewith.
I FURTHER CERTIFY that by unanimous consent action of the Board of
Directors of The Travelers Life and Annuity Company effective the 21st day of
September, 1994, the following resolution was adopted:
VOTED: That each officer and director who may be required, on their own
behalf and in the name and on behalf of the Company, to execute one
or more registration statements, and any amendments thereto, under
the Securities Act of 1933 and the Investment Company Act of 1940
relating to the separate account or accounts to be established to
invest in shares of investment companies is authorized to execute a
power of attorney appointing representatives to act as their
attorney and agent to execute said registration statement, and any
amendments thereto, in their name, place and stead; and that the
Secretary, or any Assistant Secretary designated by the Secretary,
is designated and appointed the agent for service of process of the
Company under the Securities Act of 1933 and the Investment Company
Act of 1940 in connection with such registration statement, and any
amendments thereto, with all the powers incident to such
appointment.
AND I DO FURTHER CERTIFY that the foregoing actions of the said
Board of Directors is still in full force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of THE
TRAVELERS LIFE AND ANNUITY COMPANY at Hartford, Connecticut, this 12th day of
March, 1996.
/s/Ernest J. Wright
Ernest J. Wright
Assistant Secretary
<PAGE> 1
EXHIBIT 15
THE TRAVELERS SEPARATE ACCOUNT QP II FOR VARIABLE ANNUITIES
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, MICHAEL A. CARPENTER of Greenwich, Connecticut, Chairman,
President and Chief Executive Officer of The Travelers Life and Annuity Company
(hereafter the "Company"), do hereby make, constitute and appoint JAY S.
FISHMAN, Director, Vice Chairman and Chief Financial Officer of said Company,
and ERNEST J. WRIGHT, Assistant Secretary of said Company, or either one of
them acting alone, my true and lawful attorney-in-fact, for me, and in my name,
place and stead, to sign registration statements on behalf of said Company on
Form N-4 or other appropriate form under the Securities Act of 1933 for The
Travelers Separate Account QP II for Variable Annuities, a separate account of
the Company dedicated specifically to the funding of variable annuity contracts
to be offered by the Company, and further, to sign any and all amendments
thereto, including post-effective amendments, that may be filed by the Company
on behalf of said registrant.
IN WITNESS WHEREOF, I have hereunto set my hand this 6th day of
February, 1996.
/s/Michael A. Carpenter
Chairman, President and
Chief Executive Officer
The Travelers Life and Annuity Company
<PAGE> 2
THE TRAVELERS SEPARATE ACCOUNT QP II FOR VARIABLE ANNUITIES
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, ROBERT I. LIPP of Scarsdale, New York, Director of The
Travelers Life and Annuity Company (hereafter the "Company"), do hereby make,
constitute and appoint JAY S. FISHMAN, Director, Vice Chairman and Chief
Financial Officer of said Company, and ERNEST J. WRIGHT, Assistant Secretary of
said Company, or either one of them acting alone, my true and lawful
attorney-in-fact, for me, and in my name, place and stead, to sign registration
statements on behalf of said Company on Form N-4 or other appropriate form
under the Securities Act of 1933 for The Travelers Separate Account QP II for
Variable Annuities, a separate account of the Company dedicated specifically to
the funding of variable annuity contracts to be offered by the Company, and
further, to sign any and all amendments thereto, including post- effective
amendments, that may be filed by the Company on behalf of said registrant.
IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of
February, 1996.
/s/Robert I. Lipp
Director
The Travelers Life and Annuity Company
<PAGE> 3
THE TRAVELERS SEPARATE ACCOUNT QP II FOR VARIABLE ANNUITIES
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, CHARLES O. PRINCE III of Weston, Connecticut, director of The
Travelers Life and Annuity Company (hereafter the "Company"), do hereby make,
constitute and appoint JAY S. FISHMAN, Director, Vice Chairman and Chief
Financial Officer of said Company, and ERNEST J. WRIGHT, Assistant Secretary of
said Company, or either one of them acting alone, my true and lawful
attorney-in-fact, for me, and in my name, place and stead, to sign registration
statements on behalf of said Company on Form N- 4 or other appropriate form
under the Securities Act of 1933 for The Travelers Separate Account QP II for
Variable Annuities, a separate account of the Company dedicated specifically to
the funding of variable annuity contracts to be offered by the Company, and
further, to sign any and all amendments thereto, including post-effective
amendments, that may be filed by the Company on behalf of said registrant.
IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of
February, 1996.
/s/Charles O. Prince, III
Director
The Travelers Life and Annuity Company
<PAGE> 4
THE TRAVELERS SEPARATE ACCOUNT QP II FOR VARIABLE ANNUITIES
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, MARC P. WEILL of New York, New York, director of The Travelers
Life and Annuity Company (hereafter the "Company"), do hereby make, constitute
and appoint JAY S. FISHMAN, Director Vice Chairman, and Chief Financial Officer
of said Company, and ERNEST J. WRIGHT, Assistant Secretary of said Company, or
either one of them acting alone, my true and lawful attorney-in-fact, for me,
and in my name, place and stead, to sign registration statements on behalf of
said Company on Form N-4 or other appropriate form under the Securities Act of
1933 for The Travelers Separate Account QP II for Variable Annuities, a
separate account of the Company dedicated specifically to the funding of
variable annuity contracts to be offered by the Company, and further, to sign
any and all amendments thereto, including post- effective amendments, that may
be filed by the Company on behalf of said registrant.
IN WITNESS WHEREOF, I have hereunto set my hand this 29th day of
February, 1996.
--------------------------------------
Director
The Travelers Life and Annuity Company
<PAGE> 5
THE TRAVELERS SEPARATE ACCOUNT QP II FOR VARIABLE ANNUITIES
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, IRWIN R. ETTINGER of Stamford, Connecticut, director of The
Travelers Life and Annuity Company (hereafter the "Company"), do hereby make,
constitute and appoint JAY S. FISHMAN, Director Vice Chairman, and Chief
Financial Officer of said Company, and ERNEST J. WRIGHT, Assistant Secretary of
said Company, or either one of them acting alone, my true and lawful
attorney-in-fact, for me, and in my name, place and stead, to sign registration
statements on behalf of said Company on Form N-4 or other appropriate form
under the Securities Act of 1933 for The Travelers Separate Account QP II for
Variable Annuities, a separate account of the Company dedicated specifically to
the funding of variable annuity contracts to be offered by the Company, and
further, to sign any and all amendments thereto, including post-effective
amendments, that may be filed by the Company on behalf of said registrant.
IN WITNESS WHEREOF, I have hereunto set my hand this 2nd day of
February, 1996.
/s/Irwin R. Ettinger
Director
The Travelers Life and Annuity Company
<PAGE> 6
THE TRAVELERS SEPARATE ACCOUNT QP II FOR VARIABLE ANNUITIES
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, DONALD T. DeCARLO of Douglaston, New York, director of The
Travelers Life and Annuity Company (hereafter the "Company"), do hereby make,
constitute and appoint JAY S. FISHMAN, Director Vice Chairman and Chief
Financial Officer of said Company, and ERNEST J. WRIGHT, Assistant Secretary of
said Company, or either one of them acting alone, my true and lawful
attorney-in-fact, for me, and in my name, place and stead, to sign registration
statements on behalf of said Company on Form N-4 or other appropriate form
under the Securities Act of 1933 for The Travelers Separate Account QP II for
Variable Annuities, a separate account of the Company dedicated specifically to
the funding of variable annuity contracts to be offered by the Company, and
further, to sign any and all amendments thereto, including post-effective
amendments, that may be filed by the Company on behalf of said registrant.
IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of
February, 1996.
/s/ Donald T. DeCarlo
Director
The Travelers Life and Annuity Company
<PAGE> 7
THE TRAVELERS SEPARATE ACCOUNT QP II FOR VARIABLE ANNUITIES
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, CHRISTINE B. MEAD of Avon, Connecticut, Vice President and
Controller of The Travelers Life and Annuity Company (hereafter the "Company"),
do hereby make, constitute and appoint JAY S. FISHMAN, Director, Vice Chairman
and Chief Financial Officer of said Company, and ERNEST J. WRIGHT, Assistant
Secretary of said Company, or either one of them acting alone, my true and
lawful attorney-in-fact, for me, and in my name, place and stead, to sign
registration statements on behalf of said Company on Form N-4 or other
appropriate form under the Securities Act of 1933 for The Travelers Separate
Account QP II for Variable Annuities, a separate account of the Company
dedicated specifically to the funding of variable annuity contracts to be
offered by the Company, and further, to sign any and all amendments thereto,
including post-effective amendments, that may be filed by the Company on behalf
of said registrant.
IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of
February, 1996.
/s/Christine B. Mead
Vice President and Controller
The Travelers Life and Annuity Company
