<PAGE> 1
Registration Statement No.
-----------
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 TM FOR VARIABLE ANNUITIES
--------------------------------------------------------
(Exact name of Registrant)
THE TRAVELERS INSURANCE COMPANY
-------------------------------
(Name of Depositor)
ONE TOWER SQUARE, HARTFORD, CONNECTICUT 06183
----------------------------------------------
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including area code: (860) 277-0111
--------------
ERNEST J. WRIGHT
The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183
----------------------------
(Name and Address of Agent for Service)
Approximate Date of Proposed As soon as practicable following the
Public Offering: effectiveness of the 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.
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.
<PAGE> 2
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
Cross-Reference Sheet
Form N-4
<TABLE>
<CAPTION>
Item
No. Caption in Prospectus
- --- ---------------------
<S> <C>
1. Cover Page Prospectus
2. Definitions Index of Special Terms
3. Synopsis Contract Profile
4. Condensed Financial Information Condensed Financial Information
5. General Description of Registrant, The Insurance Company; The Separate
Depositor, and Portfolio Companies Account; the Funding Options
6. Deductions Charges and Deductions; Distribution of
Variable Annuity Contracts
7. General Description of Variable The Annuity Contract
Annuity Contracts
8. Annuity Period The Annuity Period
9. Death Benefit Death Benefit
10. Purchases and Contract Value The Annuity Contract; Distribution of Variable Annuity Contracts
11. Redemptions Access to Your Money
12. Taxes Federal Tax Considerations
13. Legal Proceedings Legal Proceedings and Opinions
14. Table of Contents of Statement Appendix A - Contents of the Statement
of Additional Information of Additional Information
<CAPTION>
Caption in Statement of Additional
Information
------------------------------------------
<S> <C>
15.Cover Page Cover Page
16.Table of Contents Table of Contents
17.General Information and History The Insurance Company
18.Services Principal Underwriter; Distribution and
Management Agreement
19.Purchase of Securities Being Offered Valuation of Assets
20.Underwriters Principal Underwriter
21.Calculation of Performance Data Performance Information
22.Annuity Payments Not Applicable
23.Financial Statements Financial Statements
</TABLE>
<PAGE> 3
PART A
Information Required in a Prospectus
<PAGE> 4
TRAVELERS MARQUIS VARIABLE ANNUITY
CONTRACT PROFILE
MAY 1, 1997
THIS PROFILE IS A SUMMARY OF SOME OF THE MORE IMPORTANT POINTS THAT YOU SHOULD
KNOW AND CONSIDER BEFORE PURCHASING THE CONTRACT. THE CONTRACT IS MORE FULLY
DESCRIBED IN THE FULL PROSPECTUS WHICH IS ATTACHED TO THIS PROFILE. PLEASE READ
THE PROSPECTUS CAREFULLY. THE TERMS "WE," "US," "OUR" AND THE "COMPANY" REFER TO
TRAVELERS INSURANCE COMPANY. "YOU" AND "YOUR" REFER TO THE CONTRACT OWNER.
1. THE VARIABLE ANNUITY CONTRACT. The Contract offered by Travelers Insurance
Company is a variable annuity that is intended for retirement savings or other
long-term investment purposes. The Contract provides a death benefit as well as
guaranteed income options. Under a qualified Contract, you can make one or more
payments, as you choose, on a tax-deferred basis. Under a nonqualified Contract,
you can make one or more payments with after-tax dollars. You direct your
payment(s) to one or more of the variable funding options listed in Section 4.
You can transfer between the funding options as frequently as you wish without
any current tax implications. Currently there is no charge for transfers, nor a
limit to the number of transfers allowed. The Company may, in the future, charge
a fee for any transfer request, or limit the number of transfers allowed. The
Company, at the minimum, would always allow one transfer every six months.
The Contract, like all deferred variable annuity contracts, has two phases: the
accumulation phase and the income phase. During the accumulation phase, under a
qualified contract, your tax-deferred contributions accumulate on a tax-deferred
basis and are taxed as income when you make a withdrawal, presumably when you
are in a lower tax bracket. During the accumulation phase, under a nonqualified
contract, earnings on your after-tax contributions accumulate on a tax-deferred
basis and are taxed as income when you make a withdrawal. The income phase
occurs when you begin receiving payments from your Contract. The amount of money
you accumulate in your Contract determines the amount of income (annuity
payments) you receive during the income phase.
2. ANNUITY PAYMENTS (THE INCOME PHASE). If you want to receive scheduled
payments from your annuity, you can choose one of the following annuity options:
Option 1 -- payments for your life (life annuity) -- assuming that you are the
annuitant; Option 2 -- payments for your life with an added guarantee that
payments will continue to your beneficiary for a certain number of months (120,
180 or 240, as you select), if you should die during that period; Option
3 -- Joint and Last Survivor Annuity, in which payments are made for your life
and the life of another person (usually your spouse); Option 4 -- Joint Survivor
Life Annuity -- the annuity is reduced on death of Primary Payee; Option
5 -- Payment for a Fixed Period.
Once you make an election of an annuity option and begin to receive payments, it
cannot be changed. During the income phase, you have the same investment choices
you had during the accumulation phase. If amounts are directed to the funding
options, the dollar amount of your payments may increase or decrease.
3. PURCHASE. You may purchase the Contract with an initial payment of at least
$25,000. You may make additional payments of at least $500 at any time during
the accumulation phase.
4. INVESTMENT OPTIONS. You can direct your money into any or all of the
following funding options. They are described in the accompanying fund
prospectuses. Depending on market conditions, you may make or lose money in any
of these options:
<TABLE>
<S> <C>
Capital Appreciation Fund Federated High Yield Portfolio
Cash Income Trust Large Cap Portfolio
Alliance Growth Portfolio Equity Income Portfolio
MFS Total Return Portfolio Mid Cap Disciplined Equity Fund
Travelers Quality Bond Portfolio Appreciation Portfolio
Lazard International Stock Portfolio Diversified Strategic
MFS Emerging Growth Portfolio Income Portfolio
Federated Stock Portfolio
</TABLE>
<PAGE> 5
5. EXPENSES. The Contract has insurance features and investment features, and
there are costs related to each. For Contracts with a value of less than
$50,000, the Company deducts an annual administrative charge of $40. For the
Standard Death Benefit the annual insurance charge is 1.55% of the amounts you
direct to the funding options. For the Enhanced Death Benefit option, the annual
insurance charge is 1.70%.
There is an administrative expense charge of 0.15% (annually) deducted from
amounts allocated to the variable funding options.
Each funding option has charges for management and other expenses. The charges
range from % to % annually, of the average daily net asset balance of
the funding option, depending on the funding option.
The following table is designed to help you understand the Contract charges. In
the table below, "(a)" represents charges and expenses for the Standard Death
Benefit and "(b)" represents charges and expenses for the Enhanced Death
Benefit. "Total Annual Insurance Charge" includes the mortality and expense risk
charge, the financing distribution charge and the administrative charges. The
column "Total Annual Charges" reflects the $40 annual contract charge (which is
represented as % below), the mortality and expense risk charge, and the
investment charges for each portfolio. The columns under the heading "Examples"
show how much you would pay under the Contract for a one-year period and for a
10-year period. As required by the SEC, the examples assume that you invested
$1,000 in a Contract that earns 5% annually and that you withdraw your money at
the end of year 1 and at the end of year 10. For years 1 and 10, the examples
show the aggregate of all the annual charges assessed during that time. For
these examples, the premium tax is assumed to be 0%.
<TABLE>
<CAPTION>
EXAMPLES:
TOTAL ANNUAL
TOTAL ANNUAL EXPENSES
TOTAL ANNUAL FUNDING OPTION TOTAL ANNUAL AT END OF:
PORTFOLIO NAME INSURANCE CHARGES EXPENSES CHARGES 1 YEAR 10 YEARS
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Capital Appreciation(a)................. % 0.83% % $ $
Capital Appreciation(b)................. % % %
Cash Income(a).......................... % % %
Cash Income(b).......................... % 0.60% %
Alliance Growth(a)...................... % 0.87% %
Alliance Growth(b)...................... % % %
MFS Total Return(a)..................... % % %
MFS Total Return(b)..................... 0.91% %
Travelers Quality Bond(a)............... % 0.75% %
Travelers Quality Bond(b)............... % % %
Lazard International Stock(a)........... % % %
Lazard International Stock(b)........... % 1.25% %
MFS Emerging Growth(a).................. % 0.95% %
MFS Emerging Growth(b).................. % % %
Federated Stock(a)...................... % % %
Federated Stock(b)...................... % 0.95% %
Federated High Yield(a)................. % 0.95% %
Federated High Yield(b)................. % % %
Large Cap(a)............................ % % %
Large Cap(b)............................ % 0.95% %
Equity Income(a)........................ % 0.95% %
Equity Income(b)........................ % % %
Mid Cap Disciplined Equity(a)........... % % %
Mid Cap Disciplined Equity(b)........... % 0.95% %
Appreciation(a)......................... % 0.85% %
Appreciation(b)......................... % % %
Diversified Strategic Income(a)......... % % %
Diversified Strategic Income(b)......... % 0.84% %
</TABLE>
6. TAXES. The payments you make to a qualified Contract during the accumulation
phase are made with before-tax dollars. You will be taxed on your purchase
payments and on any earnings when you make a withdrawal or begin receiving
annuity payments. Under a nonqualified Contract, payments to the contract are
made with after-tax dollars, and any earnings will accumulate tax-deferred. You
will be taxed on these earnings when they are withdrawn from the Contract.
ii
<PAGE> 6
For owners of qualified Contracts, if you reach a certain age, you may be
required by federal tax laws to begin receiving payments from your annuity or
risk paying a penalty tax. In those cases, we can calculate and pay you the
minimum required distribution amounts. If you are younger than 59 1/2 when you
take money out, you may be charged a 10% federal penalty tax on the amount
withdrawn.
7. ACCESS TO YOUR MONEY. You can take withdrawals any time during the
accumulation phase. No sales charges apply. Of course, you may have to pay
income taxes and a tax penalty on taxable amounts you withdraw.
8. PERFORMANCE. The value of the Contract will vary depending upon the
investment performance of the funding options you choose. The following chart
shows total returns for each funding option for the time periods shown. These
rates of return reflect the insurance charges, administrative charge, investment
charges and all other expenses of the funding option. The rates of return do not
reflect any applicable taxes, which, if applied, would reduce such performance.
Past performance is not a guarantee of future results.
LAST TEN CALENDAR YEARS (OR FULL YEARS SINCE INCEPTION):
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIO NAME 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Capital Appreciation Fund............ 26.39% 35.46% -6.12% 13.45% 15.97% 32.04% -6.89% 13.85% 8.50% -9.21%
Cash Income Trust.................... 2.69% 2.77% 3.31% 0.77% 1.80% 5.16% 6.53% 6.16% 5.60%
Travelers Series Fund, Inc.
Alliance Growth.................... 27.56% 32.97%
MFS Total Return................... 12.88% 23.93%
Greenwich Street Series Fund
Appreciation....................... 19.77% 28.84% -1.12% 7.03% 6.13%
Diversified
Strategic Income................. 11.16% 16.18% -2.81% 12.56% 1.42%
</TABLE>
Those funding options not illustrated above do not yet have one full year of
performance history.
9. DEATH BENEFIT. If the annuitant or any owner dies before the income phase,
the beneficiary will receive a death benefit. The death benefit paid depends on
the age at the time of death, and whether you elected the Standard Death Benefit
or the Enhanced Death Benefit at purchase. The death benefit value is calculated
at the close of the business day on which the Company's Home Office receives due
proof of death. Under the Standard Death Benefit if the death occurs before age
80, the death benefit equals the greater of: (1) the Contract Value; or (2) the
total purchase payments made under the Contract.
Under the Standard Benefit, if the annuitant or any owner dies on or after age
80 and before the maturity date, the death benefit payable will be the contract
value.
Under the Enhanced Death Benefit, if the annuitant or any owner dies before age
90 and before the maturity date, the death benefit equals the greatest of (1) or
(2) above, or (3) the maximum anniversary value, adjusted for subsequent partial
surrenders or purchase payments (this amount is adjusted annually through age
80, and is locked in through age 90).
Under the Enhanced Death Benefit if the annuitant or any owner dies on or after
age 90 and before the maturity date, the death benefit payable will be the
contract value.
NOTE: In all cases described above, amounts will be reduced by premium taxes
owed and partial withdrawals not previously deducted. Certain states may have
varying age requirements. Please refer to the Contract prospectus for more
details.
10. OTHER INFORMATION
RIGHT TO RETURN. If you cancel the Contract within ten days after you receive
it, you will receive a full refund of the Contract Value (including charges).
Where state law requires a longer right to return period, or the return of
purchase payments, the Company will comply. You bear the investment risk during
the right to return period; therefore, the Contract Value returned may be
greater or less than your purchase payment. If the Contract is purchased as an
Individual
iii
<PAGE> 7
Retirement Annuity, and is returned within the first seven days after delivery,
your full purchase payment will be refunded; during the remainder of the right
to return period, the Contract Value (including charges) will be refunded. The
Contract Value will be determined at the close of business on the day we receive
a written request for a refund.
WHO SHOULD PURCHASE THIS CONTRACT? The Contract is currently available for use
in connection with (1) individual nonqualified purchases; (2) rollovers for
Individual Retirement Annuities (IRAs) and (3) rollovers for other qualified
retirement plans. Qualified contracts include contracts qualifying under Section
401(a), 403(b), or 408(b) of the Internal Revenue Code of 1986, as amended.
ADDITIONAL FEATURES. This Contract has other features you may be interested in
including the SYSTEMATIC WITHDRAWAL OPTION. Before the maturity date, you can
arrange to have money sent to you at set intervals throughout the year. Of
course, any applicable income and penalty taxes will apply on amounts withdrawn.
ASSET ALLOCATION PROGRAM
If you choose, you can elect to have your contributions allocated among a set of
funding options according to an asset allocation model. The model is based on
your personal investment risk tolerance and other factors.
11. INQUIRIES. If you need more information, please contact us at (800)
842-8573 or:
Travelers Insurance Company
Annuity Services
One Tower Square
Hartford, CT 06183
iv
<PAGE> 8
PROSPECTUS
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
This prospectus describes TRAVELERS MARQUIS ANNUITY, a flexible premium variable
annuity contract (the "Contract") issued by The Travelers Insurance Company (the
"Company," "we" or "our"). The Contract is available in connection with certain
retirement plans that qualify for special federal income tax treatment
("qualified Contracts") as well as those that do not qualify for such treatment
("nonqualified Contracts"). Marquis Annuity may be issued as an individual
Contract or as a group Contract. In states where only group Contracts are
available, you will be issued a certificate summarizing the provisions of the
group Contract. For convenience, this prospectus refers to both Contracts and
certificates as "Contracts."
Your purchase payments accumulate on a variable basis through one or more of the
sub-accounts ("funding options") of the Travelers Separate Account TM for
Variable Annuities ("Separate Account TM"). Your contract value will vary daily
to reflect the investment experience of the funding options you select. The
funding options currently available are:
<TABLE>
<S> <C>
Capital Appreciation Fund Federated High Yield Portfolio
Cash Income Trust Large Cap Portfolio
Alliance Growth Portfolio Equity Income Portfolio
MFS Total Return Portfolio Mid Cap Disciplined Equity Fund
Travelers Quality Bond Portfolio Appreciation Portfolio
Lazard International Stock Portfolio Diversified Strategic
MFS Emerging Growth Portfolio Income Portfolio
Federated Stock Portfolio
</TABLE>
The contracts and/or some of the funding options may not be available in all
states. THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT
PROSPECTUSES FOR THE FUNDING OPTIONS. THESE PROSPECTUSES SHOULD BE READ AND
RETAINED FOR FUTURE REFERENCE.
This prospectus provides the information that you should know before investing
in the Contract. You can receive additional information about Separate Account
TM by requesting a copy of the Statement of Additional Information ("SAI") dated
, 1997. The SAI has been filed with the Securities and Exchange
Commission ("SEC") and is incorporated by reference into this prospectus. To
request a copy, write to The Travelers Insurance Company, Annuity Services, One
Tower Square, Hartford, Connecticut 06183, or call (800) 842-8573. The Table of
Contents of the SAI appears in Appendix B of this prospectus.
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.
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 , 1997
<PAGE> 9
TABLE OF CONTENTS
<TABLE>
<S> <C>
INDEX OF SPECIAL TERMS................. 2
FEE TABLE.............................. 3
THE ANNUITY CONTRACT................... 5
Purchase Payments...................... 5
Accumulation Units..................... 5
The Funding Options.................... 6
Substitutions and Additions............ 7
CHARGES AND DEDUCTIONS................. 7
Administrative Charges................. 7
Mortality and Expense Risk Charge...... 7
Reduction or Elimination of Contract
Charges.............................. 7
Funding Option Expenses................ 8
Premium Tax............................ 8
Changes in Taxes Based Upon Premium or
Value................................ 8
OWNERSHIP PROVISIONS................... 8
Types of Ownership..................... 8
Beneficiary............................ 8
Annuitant.............................. 9
TRANSFERS.............................. 9
ACCESS TO YOUR MONEY................... 9
Systematic Withdrawals................. 9
DEATH BENEFIT.......................... 10
Death Proceeds Before the Maturity Date . 10
Death Proceeds After the Maturity Date . 11
THE ANNUITY PERIOD..................... 11
Maturity Date.......................... 11
Allocation of Annuity.................. 12
Variable Annuity....................... 12
Fixed Annuity.......................... 13
PAYMENT OPTIONS........................ 13
Election of Options.................... 13
Annuity Options........................ 13
MISCELLANEOUS CONTRACT PROVISIONS...... 14
Right to Return........................ 14
Termination............................ 14
Required Reports....................... 14
Suspension of Payments................. 14
Transfers of Contract Values to Other
Annuities............................ 15
ASSET ALLOCATION PROGRAM............... 5
THE SEPARATE ACCOUNT................... 15
Performance Information................ 15
FEDERAL TAX CONSIDERATIONS............. 16
General Taxation of Annuities.......... 16
Nonqualified Annuity Contracts......... 16
Qualified Annuity Contracts............ 17
Penalty Tax for Premature
Distributions........................ 17
Diversification Requirements for
Variable Annuities................... 17
Ownership of the Investments........... 17
Mandatory Distributions for Qualified
Plans................................ 18
OTHER INFORMATION...................... 18
The Insurance Company.................. 18
Distribution of Variable Annuity
Contracts............................ 18
Conformity with State and Federal
Laws................................. 19
Voting Rights.......................... 19
Legal Proceedings and Opinions......... 19
APPENDIX A: Table of Contents of the
Statement of Additional
Information.......................... 20
</TABLE>
INDEX OF SPECIAL TERMS
The following terms are italicized throughout the prospectus. Refer to the page
listed for an explanation of each term.
<TABLE>
<S> <C>
Accumulation Unit...................... 5
Annuitant.............................. 8
Annuity Payments....................... 12
Annuity Unit........................... 12
Contract Date.......................... 4
Contract Owner (You, Your)............. 4
Contract Value......................... 4
Contract Year.......................... 4
Funding Option(s)...................... 5
Maturity Date.......................... 4
Purchase Payment....................... 4
Written Request........................ 4
</TABLE>
2
<PAGE> 10
SEPARATE ACCOUNT TM
- --------------------------------------------------------------------------------
CONTRACT OWNER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Annual Contract Administrative Charge
(Waived if contract value is $50,000 or more) $ 40
</TABLE>
ANNUAL SEPARATE ACCOUNT CHARGES:
(as a percentage of the average daily net assets of the Separate Account)
<TABLE>
<CAPTION>
ENHANCED
STANDARD DEATH
DEATH BENEFIT BENEFIT
<S> <C> <C>
Mortality and Expense Risk Charge................... 1.55% 1.70%
Administrative Expense Charge....................... .15% .15%
------------- --------
Total Separate Account Charges................... 1.70% 1.85%
FUNDING OPTION EXPENSES:
(as a percentage of average daily net assets of the
Funding Option)
</TABLE>
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL ANNUAL
FEE EXPENSES FUNDING
(AFTER EXPENSES (AFTER EXPENSES OPTION
PORTFOLIO NAME ARE REIMBURSED) ARE REIMBURSED) EXPENSES
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Capital Appreciation Fund.................... 0.75% 0.08%(1) 0.83%
Cash Income Trust............................ 0.32% 0.46%(1)(2) 0.78%
Alliance Growth.............................. 0.80% 0.07%(1) 0.87%
MFS Total Return............................. 0.80% 0.11%(1) 0.91%
Travelers Quality Bond....................... 0.32% 0.43%(1)(3) 0.75%
Lazard International Stock................... 0.83% 0.42%(1)(3) 1.25%
MFS Emerging Growth.......................... 0.75% 0.20%(1)(3) 0.95%
Federated Stock.............................. 0.63% 0.32%(3) 0.95%
Federated High Yield......................... 0.65% 0.30%(3) 0.95%
Large Cap (Sub-Adv. Fidelity)................ 0.75% 0.20%(1)(4) 0.95%
Equity Income (Sub-Adv. Fidelity)............ 0.75% 0.20%(1)(4) 0.95%
Mid Cap Disciplined Equity Fund.............. 0.70% 0.25%(1)(5) 0.95%
Appreciation................................. 0.75% 0.10% 0.85%
Diversified Strategic Income................. 0.65% 0.19% 0.84%
</TABLE>
NOTES:
The purpose of the Fee Table is to assist contract owners in understanding the
various costs and expenses that a contract owner will bear, directly or
indirectly. See "Charges and Deductions" in this prospectus for additional
information. Expenses shown do not include premium taxes, which may be
applicable.
(1) Includes a Sub-Administrator Charge of .06%.
(2) Other Expenses take into account the current expense reimbursement
arrangement with the Company. The Company has agreed to reimburse the Fund
for the amount by which its aggregate expenses (including the management
fee, but excluding brokerage commissions, interest charges and taxes)
exceeds 0.60%. Without such arrangement, Other Expenses would have been
1.71% for Cash Income Trust.
(3) The Travelers has waived all of its fees for the period ended December 31,
1996. In addition, the Travelers has agreed to reimburse the Portfolios'
expenses for the same period. Without such arrangements, Other Expenses for
the Travelers Series Trust Portfolios would have been: Travelers Quality
Bond, 1.76%; Lazard International Stock, 2.87%; MFS Emerging Growth, 2.09%;
Federated High Yield, 2.19%, and Federated Stock 3.03%.
(4) Other Expenses take into account the current expense reimbursement
arrangement with the Company. The Company has agreed to reimburse the
funding option for the amount by which its aggregate expenses (including the
management fee, but excluding brokerage commissions, interest charges and
taxes) exceeds 0.95%. Without such arrangements, Other Expenses for the
Travelers Series Trust Large Cap Portfolio and Equity Income Portfolios
would have been 1.55%.
(5) Other Expenses for the Mid Cap Disciplined Equity Fund are based on
estimated expenses for 1996 since the portfolio has no investment history.
They also take into account the current expense reimbursement arrangement
with the Company in which the Company has agreed to reimburse the funding
option for the amount by which its aggregate expenses (including the
management fee, but excluding brokerage commissions, interest charges and
taxes) exceeds 0.95%. Without such an arrangement. Other Expenses, based on
estimated expenses for 1997, would be 1.31%.
3
<PAGE> 11
EXAMPLE*
Assuming a 5% annual return, a $1,000 investment would be subject to the
following expenses, whether the contract has been surrendered or annuitized, or
if no withdrawals have been made:
<TABLE>
<CAPTION>
(A) = STANDARD DEATH BENEFIT
(B) = ENHANCED DEATH BENEFIT
- ------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Appreciation.................................................. $ (a) $ (a) $ (a) $ (a)
(b) (b) (b) (b)
Cash Income........................................................... (a) (a) (a) (a)
(b) (b) (b) (b)
Alliance Growth....................................................... (a) (a) (a) (a)
(b) (b) (b) (b)
MFS Total Return...................................................... (a) (a) (a) (a)
(b) (b) (b) (b)
Travelers Quality Bond................................................ (a) (a) (a) (a)
(b) (b) (b) (b)
Lazard International Stock............................................ (a) (a) (a) (a)
(b) (b) (b) (b)
MFS Emerging Growth................................................... (a) (a) (a) (a)
(b) (b) (b) (b)
Federated Stock....................................................... (a) (a) (a) (a)
(b) (b) (b) (b)
Federated High Yield.................................................. (a) (a) (a) (a)
(b) (b) (b) (b)
Large Cap............................................................. (a) (a) (a) (a)
(b) (b) (b) (b)
Equity Income......................................................... (a) (a) (a) (a)
(b) (b) (b) (b)
Mid Cap Disciplined Equity............................................ (a) (a) (a) (a)
(b) (b) (b) (b)
Appreciation.......................................................... (a) (a) (a) (a)
(b) (b) (b) (b)
Diversified Strategic Income.......................................... (a) (a) (a) (a)
(b) (b) (b) (b)
</TABLE>
* The example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown. This
example reflects the $40 annual contract administrative charge as an annual
charge of % of assets. For new funding options, expenses are given only for
years one and three.
4
<PAGE> 12
THE ANNUITY CONTRACT
- --------------------------------------------------------------------------------
Travelers Marquis Annuity is a contract between you, the contract owner, and
Travelers Insurance Company (called "us" or the "Company"). Under this contract,
you make purchase payments to us and we credit them to your Contract. The
Company promises to pay you an income, in the form of annuity payments,
beginning on a future date that you choose, the maturity date. The purchase
payments accumulate tax deferred in the funding option(s) of your choice. The
contract owner assumes the risk of gain or loss according to the performance of
the funding options. The contract value is the amount of purchase payments, plus
or minus any investment experience or interest. The contract value also reflects
all surrenders made and charges deducted. There is generally no guarantee that
at the maturity date the contract value will equal or exceed the total purchase
payments made under the Contract, except as noted under the Death Benefit
provisions described in this prospectus. The date the contract and its benefits
became effective is referred to as the contract date. Each anniversary of this
contract date is called a contract year.
Certain changes and elections must be made in writing to the Company. Where the
term "written request" is used, it means that written information must be sent
to the Company's Home Office in a form and content satisfactory to us.
PURCHASE PAYMENTS
The initial purchase payment must be at least $25,000. Additional payments of at
least $500 may be made under the Contract at any time. Under certain
circumstances, we may waive the minimum purchase payment requirement. Purchase
payments over $1,000,000 may be made with our prior consent.
We will apply the initial purchase payment within two business days after we
receive it at our Home Office in good order. Subsequent purchase payments
received in good order will be credited to a Contract within one business day.
Our business day ends when the New York Stock Exchange closes, usually 4:00 p.m.
Eastern time.
ACCUMULATION UNITS
An accumulation unit is used to calculate the value of a Contract. An
accumulation unit works like a share of a mutual fund. Each funding option has a
corresponding accumulation unit value. The accumulation units are valued each
business day and may increase or decrease from day to day. The number of
accumulation units we will credit to your Contract once we receive a purchase
payment is determined by dividing the amount directed to each funding option by
the value of the accumulation unit. We calculate the value of an accumulation
unit for each funding option each day after the New York Stock Exchange closes.
After the value is calculated, your Contract is credited. During the annuity
period (i.e., after the maturity date), you are credited with annuity units.
5
<PAGE> 13
THE FUNDING OPTIONS
You choose which of the following funding options to have your purchase payments
allocated to. You will find detailed information about the options and their
inherent risks in the current prospectuses for the funding options which must
accompany this prospectus. Since each option has varying degrees of risk, please
read the prospectuses carefully before investing. Additional copies of the
prospectuses may be obtained by contacting your Smith Barney Financial
Consultant or by calling 1-800-842-8573.
The current funding options are listed below, along with their investment
advisers and any subadviser:
<TABLE>
<CAPTION>
FUNDING OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUB-ADVISER
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Capital Appreciation Fund growth of capital Travelers Asset Management
International Corporation
("TAMIC")
Subadviser: Janus Capital
Corporation
Cash Income Trust high current income while emphasizing TAMIC
preservation of capital and maintaining a
high degree of liquidity
Alliance Growth Portfolio long-term growth of capital Travelers Investment Advisers,
Inc. ("TIA")
Subadviser: Alliance Capital
Management L.P.
MFS Total Return Portfolio obtain above-average income (compared to a TIA
portfolio entirely invested in equity Subadviser: Massachusetts
securities) consistent with the prudent Financial Services Company
employment of capital ("MFS")
Travelers Quality Bond Portfolio current income, moderate capital TAMIC
volatility and total return
Lazard International Stock capital appreciation through investing TAMIC
Portfolio primarily in the equity securities of non- Subadviser: Lazard Asset
United States companies Management
MFS emerging Growth Portfolio long-term growth of capital TAMIC
Subadviser: MFS
Federated Stock Portfolio growth of income and capital TAMIC
Subadviser: Federated
Investment Counseling, Inc.
Federated High Yield Portfolio high current income TAMIC
Subadviser: Federated
Investment Counseling, Inc.
Large Cap Portfolio long-term growth of capital TAMIC
Subadviser: Fidelity
Management & Research
Company
Equity Income Portfolio reasonable income TAMIC
Subadviser: Fidelity
Management & Research
Company
Mid Cap Disciplined Equity Fund growth of capital TAMIC
Subadviser: Travelers
Investment
Management Company
Appreciation Portfolio long-term appreciation of capital through Smith Barney Mutual Funds
investing primarily in equity securities Management Inc. ("SBMFM")
Subadviser: Smith Barney Global
Capital Management Inc.
Diversified Strategic Income high current income SBMFM
Portfolio
</TABLE>
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<PAGE> 14
SUBSTITUTIONS AND ADDITIONS
If any of the funding options become unavailable for allocating purchase
payments, or if we believe that further investment in a funding option is
inappropriate for the purposes of the Contract, we may substitute another
funding option. However, we will not make any substitutions without notifying
you and obtaining any applicable state and SEC approval. From time to time we
may make new funding options available.
CHARGES AND DEDUCTIONS
- --------------------------------------------------------------------------------
ADMINISTRATIVE CHARGES
A Contract administrative charge of $40 is deducted annually from Contracts with
a value of less than $50,000. This charge compensates us for expenses incurred
in establishing and maintaining the Contract. The charge is deducted from the
contract value on the fourth Friday of each August by canceling accumulation
units applicable to each funding option on a pro rata basis. For the first year,
this charge will be prorated (i.e. calculated) from the date of purchase. A
prorated charge will also be made if the Contract is completely withdrawn or
terminated. We will not deduct a contract administrative charge: (1) from
distributions of death proceeds; (2) after an annuity payout has begun, or (3)
if the contract value on the date of assessment is equal to or greater than
$50,000.
An administrative expense charge (sometimes called "sub-account administrative
charge") is deducted on each business day from amounts allocated to the funding
options in order to compensate the Company for certain related administrative
and operating expenses. The charge equals, on an annual basis, 0.15% of the
daily net asset value allocated to each of the funding options.
MORTALITY AND EXPENSE RISK CHARGE
Each business day, the Company deducts a mortality and expense risk charge. The
deduction is reflected in our calculation of accumulation and annuity unit
values. For the Standard Death Benefit, this charge equals, on an annual basis,
1.55% of the amounts held in each funding option. For the Enhanced Death
Benefit, the charge equals on an annual basis, 1.70%. We reserve the right to
lower the charge at any time. The mortality risk portion compensates us 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 an annuitant dies prior to the maturity date. The expense risk
portion compensates us 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.
REDUCTION OR ELIMINATION OF CONTRACT CHARGES
The administrative charges, the financing distribution charge, and/or the
mortality and expense risk charge under the Contract may be reduced or
eliminated when certain sales or administration of the Contract result in
savings or reduction of administrative or sales expenses, and/or mortality and
expense risks. Any such reduction will be based on the following: (1) the size
and type of group to which sales are to be made; (2) the total amount of
purchase payments to be received; and (3) any prior or existing relationship
with the Company. There may be other circumstances, of which we are not
presently aware, which could result in fewer sales expenses, administrative
charges, or mortality and expense risk charges. In no event will reduction or
elimination of any charges be permitted where such reduction or elimination will
be unfairly discriminatory to any person.
7
<PAGE> 15
FUNDING OPTION EXPENSES
The deductions from and expenses paid out of the assets of the various funding
options are summarized in the fee table and are described in the accompanying
prospectuses.
PREMIUM TAX
Certain state and local governments charge premium taxes ranging from 0% to 5%,
depending upon jurisdiction. The Company is responsible for paying these taxes
and will determine the method used to recover premium tax expenses incurred.
Where required, the Company will deduct any applicable premium taxes from the
contract value either upon death, surrender, annuitization, or at the time
purchase payments are made to the Contract, but no earlier than when the Company
has a tax liability under state law.
CHANGES IN TAXES BASED UPON PREMIUM OR VALUE
If there is any change in a law assessing taxes against the Company based upon
premiums, contract gains or value of the contract, we reserve the right to
charge you proportionately for this tax.
OWNERSHIP PROVISIONS
- --------------------------------------------------------------------------------
TYPES OF OWNERSHIP
Contract Owner ("you"). The Contract belongs to the contract owner named in the
Contract (on the Specifications page), or to any other person to whom the
contract is subsequently assigned. An assignment of ownership or a collateral
assignment may be made only for nonqualified contracts. You have sole power
during the annuitant's lifetime to exercise any rights and to receive all
benefits given in the contract provided you have not named an irrevocable
beneficiary and provided the Contract is not assigned.
You receive all payments while the annuitant is alive unless you direct them to
an alternate recipient. An alternate recipient does not become the contract
owner.
Joint Owner. For nonqualified contracts only, joint owners (i.e., spouses) may
be named in a written request before the contract is in effect. Joint owners may
independently exercise transfers allowed under the Contract. All other rights of
ownership must be exercised by both owners. Joint owners own equal shares of any
benefits accruing or payments made to them. All rights of a joint owner end at
death if the other joint owner survives. The entire interest of the deceased
joint owner in the Contract will pass to the surviving joint owner.
BENEFICIARY
The beneficiary is named by you in a written request. The beneficiary has the
right to receive any remaining contractual benefits upon the death of the
annuitant or the contract owner. If more than one beneficiary survives the
annuitant, they will share equally in benefits unless different shares are
recorded with the Company by written request before the death of the annuitant
or contract owner.
With nonqualified contracts, as discussed under "Death Benefit," the beneficiary
named in the contract may differ from the designated beneficiary (for example,
the joint owner or a contingent annuitant). In such cases, the designated
beneficiary receives the contract benefits (rather than the beneficiary) upon
your death.
Unless an irrevocable beneficiary has been named, you have the right to change
any beneficiary by written request during the lifetime of the annuitant and
while the Contract continues.
8
<PAGE> 16
ANNUITANT
The annuitant is designated in the Contract (on the Specifications page), and is
the individual on whose life the maturity date and the amount of the monthly
annuity payments depend. The annuitant may not be changed after the contract is
in effect.
For nonqualified Contracts only, the contract owner may also name one individual
as a contingent annuitant by written request before the Contract becomes
effective. A contingent annuitant may not be changed, deleted or added after the
Contract becomes effective. For Contracts issued in New York, a contingent
annuitant may not be named.
TRANSFERS
- --------------------------------------------------------------------------------
Before the maturity date, you may transfer all or part of the contract value
between funding options. There are no charges or restrictions on the amount or
frequency of transfers currently; however, we reserve the right to charge a fee
for any transfer request, to limit the number of transfers. We will always allow
at least one transfer in any six-month period. Since different funding options
have different expenses, a transfer of contract values from one funding option
to another could result in your investment becoming subject to higher or lower
expenses. After the maturity date, you may make transfers between funding
options only with our consent.
ACCESS TO YOUR MONEY
- --------------------------------------------------------------------------------
Any time before the maturity date, you may redeem all or any portion of the
contract value, less any premium tax not previously deducted. You must submit a
written request specifying the funding option(s) from which amounts are to be
withdrawn. If no funding options are specified, the withdrawal will be made on a
prorata basis. The contract value will be determined as of the close of business
after we receive your surrender request at the Home Office. The contract value
may be more or less than the purchase payments made.
We may defer payment of any contract value for a period of up to seven days
after the written request is received, but it is our intent to pay as soon as
possible. We cannot process requests for withdrawal that are not in good order.
We will contact you if there is a deficiency causing a delay and will advise
what is needed to act upon the withdrawal request.
SYSTEMATIC WITHDRAWALS
Beginning in the second contract year, before the maturity date, you may choose
to withdraw a specified dollar amount (at least $100) on a monthly, quarterly,
semiannual or annual basis. Any applicable withdrawal charges (on amounts in
excess of the free withdrawal allowance) and any applicable premium taxes will
be deducted. To elect systematic withdrawals, you must have a contract value of
at least $15,000 and you must make the election on the form provided by the
Company. We will surrender accumulation units pro rata from all funding options
in which you have an interest, unless you instruct us otherwise. You may begin
or discontinue systematic withdrawals at any time by notifying us in writing,
but at least 30 days' notice must be given to change any systematic withdrawal
instructions that are currently in place.
We reserve the right to discontinue offering systematic withdrawals or to assess
a processing fee for this service upon 30 days' written notice to contract
owners (where allowed by state law).
Each systematic withdrawal is subject to federal income taxes on the taxable
portion. In addition, a 10% federal penalty tax may be assessed on systematic
withdrawals if the contract owner is under age 59 1/2. You should consult with
your tax adviser regarding the tax consequences of systematic withdrawals.
9
<PAGE> 17
DEATH BENEFIT
- --------------------------------------------------------------------------------
Before the maturity date, a death benefit is payable to the beneficiary when
either the annuitant, the contract owner or the first of joint owners dies and
there is no contingent annuitant. The death benefit is calculated at the close
of the business day on which the Company's Home Office received due proof of
death (i.e., the death report date).
If the Company is notified of the death more than six months after the date of
death, the death benefit will be the contract value.
DEATH PROCEEDS BEFORE THE MATURITY DATE
STANDARD DEATH BENEFIT
DEATH OF ANY CONTRACT OWNER OR THE ANNUITANT BEFORE AGE 80. The Company will pay
the beneficiary an amount equal to the greater of (1) or (2) below, each reduced
by any applicable premium tax:
(1) the contract value; or
(2) the total purchase payments made under the Contract less any partial
withdrawals.
DEATH OF ANY OWNER OR THE ANNUITANT ON OR AFTER AGE 80. The death benefit
payable as of the death report date will be the Contract Value, less any
applicable premium tax.
ENHANCED DEATH BENEFIT
DEATH OF ANY CONTRACT OWNER OR THE ANNUITANT BEFORE AGE 80. The Company will pay
to the beneficiary the greatest of (1) or (2) above or (3).
3) the maximum of all Anniversary Values (as described below) in effect
on the death report date.
DEATH OF ANY CONTRACT OWNER OR ANNUITANT ON OR AFTER AGE 80, BUT BEFORE AGE 90.
The Company will pay to the beneficiary the greatest of (1), (2) or (3) below,
each reduced by any applicable premium tax or outstanding loans as of the death
report date:
(1) the contract value;
(2) the total purchase payments made under the Contract less any partial
withdrawals; or
(3) the maximum of all Anniversary Values (as described below) occurring
on or before the annuitant's 80th birthday.
DEATH OF ANY OWNER OR THE ANNUITANT ON OR AFTER AGE 90. The death benefit
payable as of the death report date will be the Contract Value, less any
applicable premium tax.
ANNIVERSARY VALUE. A separate Anniversary Value will be established on each
anniversary of the contract date which occurs on or before the death report date
and will initially equal the contract value on that anniversary. After an
Anniversary Value has been established, it will be recalculated each time a
purchase payment is made or a partial surrender is taken until the death report
date. Anniversary Values will be increased by the amount of each applicable
purchase payment and reduced by a Partial Surrender Reduction (as described
below) for each applicable partial surrender. Recalculations of Anniversary
Values related to any purchase payments or any partial surrenders will be made
in the order that such purchase payments or partial surrenders occur.
THE PARTIAL SURRENDER REDUCTION referenced above is equal to (1) the amount of
an Anniversary Value immediately prior to the reduction for the partial
surrender, multiplied by (2) the amount of the partial surrender divided by the
contract value immediately prior to the partial surrender.
10
<PAGE> 18
PAYMENT OF PROCEEDS
The process of paying death benefit proceeds under various situations is
described below. Generally, the person(s) receiving the benefit may request that
the proceeds be paid in a lump sum, or be applied to one of the settlement
options available under the Contract.
DEATH OF ANNUITANT WHO IS THE CONTRACT OWNER. The Company will pay the proceeds
to any surviving joint owner, or if none, to the beneficiary(ies), or if none,
to the contract owner's estate.
Under a nonqualified contract, the death benefit proceeds must be distributed to
the beneficiary within five years of the contract owner's death. Or, the
beneficiary may elect to receive payments from an annuity which begins within
one year of the contract owner's death and is payable over the life of the
beneficiary of over a period not exceeding the beneficiary's life expectancy
If the beneficiary is the contract owner's spouse, he or she may elect to
continue the contract as the new contract owner rather than receiving the
distribution. In such case, the distribution rules applicable when a contract
owner dies generally will apply when that spouse, as contract owner, dies.
DEATH OF ANNUITANT WHO IS NOT THE CONTRACT OWNER. In the case of a nonqualified
Contract, if there is no contingent annuitant, the Company will pay the death
proceeds to the beneficiary. However, if there is a contingent annuitant, he or
she becomes the annuitant and the Contract continues in effect (generally using
the original maturity date). The proceeds described above will be paid upon the
death of the last surviving contingent annuitant.
ENTITY AS OWNER. In the case of a nonqualified Contract owned by a nonnatural
person (e.g. a trust or another entity), any annuitant will be treated as the
contract owner. Any change in the annuitant will be treated as the death of the
contract owner.
DEATH PROCEEDS AFTER THE MATURITY DATE
If the death of any contract owner or annuitant occurs on or after the maturity
date, the Company will pay the beneficiary a death benefit consisting of any
benefit remaining under the annuity option then in effect.
THE ANNUITY PERIOD
- --------------------------------------------------------------------------------
MATURITY DATE
Under the Contract, you can receive regular income payments (annuity payments).
You can choose the month and the year in which those payments begin (maturity
date). We ask you to choose the maturity date and the annuity option when you
purchase the contract. While the annuitant is alive, you can change your
selection any time up to the maturity date. Annuity payments will begin on the
maturity date stated in the Contract unless the Contract has been fully
surrendered or the proceeds have been paid to the beneficiary before that date.
Annuity payments are a series of periodic payments (a) for life; (b) for life
with either a minimum number of payments or a specific amount assured; or (c)
for the joint lifetime of the annuitant and another person, and thereafter
during the lifetime of the survivor. We may require proof that the annuitant is
alive before annuity payments are made.
Unless you elect otherwise, the maturity date will be the annuitant's 70th
birthday for qualified contracts and the annuitant's 75th birthday, or ten years
after the effective date of the contract, if later, for nonqualified contracts.
(In certain states, the maturity date elected may not be later than the
annuitant's 90th birthday; refer to your Contract.)
For nonqualified Contracts, at least 30 days before the original maturity date,
a contract owner may elect to extend the maturity date to any time prior to the
annuitant's 85th birthday or, for qualified
11
<PAGE> 19
Contracts, to a later date with the Company's consent. Certain annuity options
taken at the maturity date may be used to meet the minimum required distribution
requirements of federal tax law, or a program of partial surrenders may be used
instead. These mandatory distribution requirements take effect generally upon
the death of the contract owner, or with qualified contracts upon either the
later of the contract owner's attainment of age 70 1/2 or year of retirement; or
the death of the contract owner. Independent tax advice should be sought
regarding the election of minimum required distributions.
ALLOCATION OF ANNUITY
When an annuity option is elected, it may be elected as a variable annuity, a
fixed annuity, or a combination of both. (Variable payouts under this Contract
may not be permitted in certain states; refer to your contract.) If, at the time
annuity payments begin, no election has been made to the contrary, the contract
value will be applied to provide an annuity funded by the same investment
options. At least 30 days before the maturity date, you may transfer the
contract value among the funding options in order to change the basis on which
annuity payments will be determined. (See "Transfers.")
VARIABLE ANNUITY
You may choose an annuity payout that fluctuates depending on the investment
experience of the variable funding options. The number of annuity units credited
to the Contract is determined by dividing the first monthly annuity payment
attributable to each funding option by the corresponding annuity unit value as
of 14 days before the date annuity payments begin. An annuity unit is used to
measure the dollar value of an annuity payment. The number of annuity units (but
not their value) remains fixed during the annuity period.
DETERMINATION OF FIRST ANNUITY PAYMENT. The Contract contains tables used to
determine the first monthly annuity payment. The amount applied to effect a
variable annuity will be the value of the funding options as of 14 days before
the date annuity payments begin less any applicable premium taxes not previously
deducted.
The amount of the first monthly payment depends on the annuity option elected. A
formula for determining the adjusted age is contained in the Contract. The total
first monthly annuity payment is determined by multiplying the benefit per
$1,000 of value shown in the tables of the Contract by the number of thousands
of dollars of value of the Contract applied to that annuity option. The Company
reserves the right to require satisfactory proof of age of any person on whose
life annuity payments are based before making the first payment under any of the
settlement options.
DETERMINATION OF SECOND AND SUBSEQUENT ANNUITY PAYMENTS. The dollar amount of
the second and subsequent annuity payments is not predetermined and may change
from month to month based on the investment experience of the applicable funding
option. The total amount of each annuity payment will be equal to the sum of the
basic payments in each funding option. The actual amounts of these payments are
determined by multiplying the number of annuity units credited to each funding
option by the corresponding annuity unit value as of the date 14 days before the
date the payment is due.
FIXED ANNUITY
You may choose a fixed annuity that provides payments which do not vary during
the annuity period. We will calculate the dollar amount of the first fixed
annuity payment as described under "Variable Annuity," except that the amount
applied to effect the annuity will be the cash surrender value, determined as of
the date annuity payments begin. If it would produce a larger payment, the first
fixed annuity payment will be determined using the Life Annuity Tables in effect
on the maturity date.
12
<PAGE> 20
PAYMENT OPTIONS
- --------------------------------------------------------------------------------
ELECTION OF OPTIONS
While the annuitant is alive, you can change your annuity option selection any
time up to the maturity date. Once annuity payments have begun, no further
elections are allowed.
During the annuitant's lifetime, if you do not elect otherwise before the
maturity date, we will pay you (or another designated payee) the first of a
series of monthly annuity payments based on the life of the annuitant, in
accordance with Annuity Option 2 (Life Annuity with 120 monthly payments
assured). For certain qualified contracts, Annuity Option 4 (Joint and Last
Survivor Joint Life Annuity -- Annuity Reduced on Death of Primary Payee) will
be the automatic option as described in the contract.
The minimum amount that can be placed under an annuity option will be $2,000
unless we agree to a lesser amount. If any monthly periodic payment due is less
than $100, the Company reserves the right to make payments at less frequent
intervals, or to pay the contract value in a lump-sum.
On the maturity date, we will pay the amount due under the Contract in one lump
sum (except if prohibited by state law), or in accordance with the payment
option that you select. You must elect an option in writing, in a form
satisfactory to the Company. Any election made during the lifetime of the
annuitant must be made by the contract owner.
ANNUITY OPTIONS
Subject to the conditions described in "Election of Options" above, all or any
part of the contract value may be paid under one or more of the following
annuity options. Payments under the annuity options may be elected on a monthly,
quarterly, semiannual or annual basis. We may offer additional options.
Option 1 -- Life Annuity -- No Refund. The Company will make annuity payments
during the lifetime of the annuitant ending with the last payment before death.
This option offers the maximum periodic payment, since there is no assurance of
a minimum number of payments or provision for a death benefit for beneficiaries.
Option 2 -- Life Annuity with 120, 180 or 240 Monthly Payments Assured. The
Company will make monthly annuity payments during the lifetime of the annuitant,
with the agreement that if, at the death of that person, payments have been made
for less than 120, 180 or 240 months as elected, we will continue making
payments to the beneficiary during the remainder of the period.
Option 3 -- Joint and Last Survivor Life Annuity -- No Refund. The Company will
make regular annuity payments during the lifetime of the annuitant and a second
person. When either person dies, we will continue making payments to the
survivor. No further payments will be made following the death of the survivor.
Option 4 -- Joint and Last Survivor Life Annuity -- Annuity Reduced on Death of
Primary Payee. The Company will make annuity payments during the lifetimes of
the annuitant and a second person. One will be designated the primary payee, the
other will be designated the secondary payee. On the death of the secondary
payee, the Company 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, the Company will continue
to make 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 once both payees have died.
Option 5 -- Payment for a Fixed Period. The Company will make monthly payments
for the period selected.
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<PAGE> 21
MISCELLANEOUS CONTRACT PROVISIONS
- --------------------------------------------------------------------------------
RIGHT TO RETURN
You may return the Contract for a full refund of the contract value (including
charges) within ten days after you receive it (the "right to return period").
You bear the investment risk during the right to return period; therefore, the
contract value returned may be greater or less than your purchase payment. If
the Contract is purchased as an Individual Retirement Annuity, and is returned
within the first seven days after delivery, your purchase payment will be
refunded in full; during the remainder of the right to return period, the
contract value (including charges) will be refunded. The contract value will be
determined following the close of the business day on which we receive a written
request for a refund. Where state law requires a longer period, or the return of
purchase payments or other variations of this provision, the Company will
comply. Refer to your Contract for any state-specific information.
TERMINATION
You do not need to make any purchase payments after the first to keep the
Contract in effect. However, we reserve the right to terminate the Contract on
any business day if the contract value as of that date is less than $2,000 and
no purchase payments have been made for at least two years, unless otherwise
specified by state law. Termination will not occur until 31 days after the
Company has mailed notice of termination to the contract owner's last known
address and to any assignee of record. If the Contract is terminated, we will
pay you the contract value, less any applicable contract or premium tax charges.
REQUIRED REPORTS
As often as required by law, but at least once in each contract year before the
due date of the first annuity payment, we will furnish a report showing the
number of accumulation units credited to the Contract and the corresponding
accumulation unit value(s) as of the date of the report for each funding option
to which the contract owner has allocated amounts during the applicable period.
The Company will keep all records required under federal or state laws.
SUSPENSION OF PAYMENTS
The Company reserves the right to suspend or postpone the date of any payment or
determination of values on any business day (1) when the New York Stock Exchange
("the Exchange") is closed; (2) when trading on the Exchange is restricted; (3)
when an emergency exists as determined by the SEC so that the sale of securities
held in the Separate Account may not reasonably occur or so that the Company may
not reasonably determine the value the Separate Account's net assets; or (4)
during any other period when the SEC, by order, so permits for the protection of
security holders.
TRANSFERS OF CONTRACT VALUES TO OTHER ANNUITIES
We may permit contract owners to transfer their contract values into other
annuities offered by us or our affiliated insurance companies under rules then
in effect.
ASSET ALLOCATION PROGRAM
- --------------------------------------------------------------------------------
An an asset allocation program is available to you and is offered in conjunction
with your Contract. Under this program, your contributions are allocated among a
set of funding options based on an asset allocation model that is designed
especially for you. The model is based on your personal investment risk
tolerance, investment time horizon, financial goals and other factors. In order
to
14
<PAGE> 22
participate in this program, you will need to complete the required
questionnaire and acknowledgment form. All Marquis contract features (including
the ability to make transfers) will continue to apply. Contact your registered
representative for additional information.
THE SEPARATE ACCOUNT
- --------------------------------------------------------------------------------
The Travelers Separate Account TM For Variable Annuities ("Separate Account TM")
was established on November 5, 1997 and is registered with the SEC as a unit
investment trust (separate account) under the Investment Company Act of 1940, as
amended (the "1940 Act"). The assets of Separate Account TM will be invested
exclusively in the shares of the variable funding options.
The assets of Separate Account TM are held for the exclusive benefit of the
owners of this separate account, according to the laws of Connecticut. Income,
gains and losses, whether or not realized, from assets allocated to Separate
Account TM are, in accordance with the Contracts, credited to or charged against
the Separate Account TM without regard to other income, gains and losses of the
Company. The assets held by Separate Account TM are not chargeable with
liabilities arising out of any other business which the Company may conduct.
Obligations under the Contract are obligations of the Company.
All investment income and other distributions of the funding options are payable
to Separate Account TM. All such income and/or distributions are reinvested in
shares of the respective funding option at net asset value. Shares of the
funding options are currently sold only to life insurance company separate
accounts to fund variable annuity and variable life insurance contracts.
PERFORMANCE INFORMATION
From time to time, we may advertise several types of historical performance for
the Contract's funding options. We may advertise the "standardized average
annual total returns" of the funding option, calculated in a manner prescribed
by the SEC, as well as the "nonstandardized total return," as described below.
Specific examples of the performance information appear in the SAI.
STANDARDIZED METHOD. Quotations of average annual total returns are computed
according to a formula in which a hypothetical initial investment of $1,000 is
applied to the funding option, and then related to ending redeemable values over
one-, five-, and ten-year periods, or for a period covering the time during
which the funding option has been in existence, if less. These quotations
reflect the deduction of all recurring charges during each period (on a pro rata
basis in the case of fractional periods). The deduction for the annual
administrative charge is converted to a percentage of assets based on the actual
fee collected (or anticipated to be collected, if a new product), divided by the
average net assets for Contracts sold (or anticipated to be sold). Each
quotation assumes a total redemption at the end of each period.
NONSTANDARDIZED METHOD. Nonstandardized "total returns" will be calculated in a
similar manner based on the performance of the funding options over a period of
time, usually for the calendar year-to-date, and for the past one-, three-,
five- and ten-year periods. Nonstandardized total returns will not reflect the
deduction of annual contract administrative charge, which, if reflected, would
decrease the level of performance shown.
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
15
<PAGE> 23
include published editorial comments and performance rankings compiled by
independent organizations (including, but not limited to, Lipper Analytical
Services, Inc. and Morningstar, Inc.) and publications that monitor the
performance of the Separate Account and the variable funding options.
For funding options that were in existence prior to the date they became
available under the Separate Account, the standardized and nonstandardized
average annual total return quotations may accompany illustrations showing 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. The contract value at
redemption may be more or less than original cost.
FEDERAL TAX CONSIDERATIONS
- --------------------------------------------------------------------------------
The following general discussion of the federal income tax consequences under
this Contract is not intended to cover all situations, and is not meant to
provide tax advice. Because of the complexity of the law and the fact that the
tax results will vary depending on many factors, you should consult your tax
adviser regarding your personal situation. For your information, a more detailed
tax discussion is contained in the SAI.
GENERAL TAXATION OF ANNUITIES
Congress has recognized the value of saving for retirement by providing certain
tax benefits, in the form of tax deferral, for money put into an annuity. The
Internal Revenue Code (Code) governs how this money is ultimately taxed,
depending upon the type of contract, qualified or non-qualified, and the manner
in which the money is distributed, as briefly described below.
TYPES OF CONTRACTS: QUALIFIED OR NONQUALIFIED
If you purchase an annuity contract with proceeds of an eligible rollover
distribution from any pension plan, specially sponsored program, or individual
retirement annuity (IRA) with pre-tax dollars, your contract is referred to as a
qualified contract. Some examples of qualified contracts are: IRAs, 403(b)
annuities, pension and profit-sharing plans (including 401(k) plans), Keogh
Plans, and certain other qualified deferred compensation plans. If you purchase
the contract on an individual basis with after-tax dollars and not under one of
the programs described above, your contract is referred to as nonqualified.
NONQUALIFIED ANNUITY CONTRACTS
As the owner of a nonqualified annuity, you do not receive any tax benefit
(deduction or deferral of income) on purchase payments, but you will not be
taxed on increases in the value of your contract until a distribution
occurs -- either as a withdrawal (distribution made prior to the maturity date),
or as annuity payments. When a withdrawal is made, you are taxed on the amount
of the withdrawal that is considered earnings. Similarly, when you receive an
annuity payment, part of each payment is considered a return of your purchase
payments and will not be taxed. The remaining portion of the annuity payment
(i.e., any earnings) will be considered ordinary income for tax purposes.
If a nonqualified annuity is owned by other than an individual, however, (e.g.,
by a corporation), increases in the value of the contract attributable to
purchase payments made after February 28, 1986 are includible in income
annually. Furthermore, for contracts issued after April 22, 1987, if you
transfer the contract without adequate consideration all deferred increases in
value will be includible in your income at the time of the transfer.
16
<PAGE> 24
If you make a partial withdrawal, this money will generally be taxed as first
coming from earnings, (income in the contract), and then from your purchase
payments. These withdrawn earnings are includible in your income. (See "Penalty
Tax for Premature Distributions" below). There is income in the contract to the
extent the cash value exceeds your investment in the contract. The investment in
the contract equals the total purchase payments you paid less any amount
received previously which was excludible from gross income. Any direct or
indirect borrowing against the value of the contract or pledging of the contract
as security for a loan will be treated as a cash distribution under the tax law.
Federal tax law requires that nonqualified annuity contracts meet minimum
mandatory distribution requirements upon the death of the contract owner,
including the first of joint owners. If these requirements are not met, the
surviving joint owner, or the beneficiary, will have to pay taxes prior to
distribution. The distribution required depends, among other things, upon
whether an annuity option is elected or whether the new contract owner is the
surviving spouse. We will administer Contracts in accordance with these rules
and we will notify you when you should begin receiving payments.
QUALIFIED ANNUITY CONTRACTS
Under a qualified annuity, since amounts paid into the contract have not yet
been taxed, the full amount of all distributions, including lump-sum withdrawals
and annuity payments, are taxed at the ordinary income tax rate unless the
distribution is transferred to an eligible rollover account or contract. The
Contract is available as a vehicle for IRA rollovers and for other qualified
contracts. There are special rules which govern the taxation of qualified
contracts, including withdrawal restrictions, requirements for mandatory
distributions, and contribution limits. We have provided a more complete
discussion in the SAI.
PENALTY TAX FOR PREMATURE DISTRIBUTIONS
Taxable distributions taken before the contract owner has reached the age of
59 1/2 will be subject to a 10% additional tax penalty unless the distribution
is taken in a series of periodic distributions, for life or life expectancy, or
unless the distribution follows the death or disability of the contract owner.
Other exceptions may be available in certain qualified plans.
DIVERSIFICATION REQUIREMENTS FOR VARIABLE ANNUITIES
The Code requires that any nonqualified variable annuity contracts based on a
separate account shall not be treated as an annuity for any period if
investments made in the account are not adequately diversified. Final tax
regulations define how separate accounts must be diversified. The Company
monitors the diversification of investments constantly and believes that its
accounts are adequately diversified. The consequence of any failure to diversify
is essentially the loss to the Contract Owner of tax deferred treatment. The
Company intends to administer all contracts subject to this provision of law in
a manner that will maintain adequate diversification.
OWNERSHIP OF THE INVESTMENTS
Assets in the separate accounts, also referred to as segregated asset accounts,
must be owned by the Company and not by the Contract Owner for federal income
tax purposes. Otherwise, the deferral of taxes is lost and income and gains from
the accounts would be includable annually in the Contract Owner's gross income.
The Internal Revenue Service has stated in published rulings that a variable
contract owner will be considered the owner of the assets of a segregated asset
account if the owner possesses an incident of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department announced, in connection with the issuance of temporary regulations
concerning investment diversification, that those regulations "do not provide
guidance
17
<PAGE> 25
concerning the circumstances in which investor control of the investments of a
segregated asset account may cause the investor, rather than the insurance
company, to be treated as the owner of the assets of the account." This
announcement, dated September 15, 1986, also stated that the guidance would be
issued by way of regulations or rulings on the "extent to which policyholders
may direct their investments to particular subaccounts [of a segregated asset
account] without being treated as owners of the underlying assets." As of the
date of this prospectus, no such guidance has been issued.
The Company does not know if such guidance will be issued, or if it is, what
standards it may set. Furthermore, the Company does not know if such guidance
may be issued with retroactive effect. New regulations are generally issued with
a prospective-only effect as to future sales or as to future voluntary
transactions in existing contracts. The Company therefore reserves the right to
modify the contract as necessary to attempt to prevent Contract Owners from
being considered the owner of the assets of the separate account.
MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS
Federal tax law requires that minimum annual distributions begin by April 1st of
the calendar year following the calendar year in which an IRA owner attains age
70 1/2. Participants in qualified plans and 403(b) annuities may defer minimum
distributions until the later of April 1st of the calendar year following the
calendar year in which they attain age 70 1/2. Distributions must begin or be
continued according to required patterns following the death of the contract
owner or annuitant of both qualified and nonqualified annuities.
OTHER INFORMATION
- --------------------------------------------------------------------------------
THE INSURANCE COMPANY
The Travelers Insurance Company is a stock insurance company chartered in 1864
in Connecticut and continuously engaged in the insurance business since that
time. It is licensed to conduct life insurance business in all states of the
United States, the District of Columbia, Puerto Rico, Guam, the U.S. and British
Virgin Islands and the Bahamas. The Company is an indirect wholly owned
subsidiary of Travelers Group Inc. The Company's Home Office is located at One
Tower Square, Hartford, Connecticut 06183.
DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS
The Company intends to sell the Contracts in all jurisdictions where it is
licensed to do business and where the Contract is approved. The Contracts will
be sold by life insurance sales agents who represent the Company, and who are
licensed registered representatives of Smith Barney Inc. The compensation paid
to sales representatives will not exceed 6.5% of the payments made under the
Contracts.
From time to time, the Company may pay or permit other promotional incentives,
in cash, credit or other compensation.
Any sales representative or employee will have been qualified to sell variable
annuities under applicable federal and state laws. Each broker-dealer is
registered with the SEC under the Securities Exchange Act of 1934, and all are
members of the NASD. The principal underwriter for the Contracts is Tower Square
Securities, Inc., an affiliate of the Company; however, it is currently
anticipated that an affiliated broker-dealer may become the principal
underwriter for the Contracts during 1997.
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<PAGE> 26
CONFORMITY WITH STATE AND FEDERAL LAWS
The Contract is governed by the laws of the state in which it is delivered. Any
paid-up annuity, contract value or death benefits that are available under the
Contract are not less than the minimum benefits required by the statutes of the
state in which the Contract is delivered. We reserve the right to make any
changes, including retroactive changes, in the Contract to the extent that the
change is required to meet the requirements of any law or regulation issued by
any governmental agency to which the Company, the Contract or the contract owner
is subject.
VOTING RIGHTS
The Company is the legal owner of the shares of the funding options. However, we
believe that when a funding option solicits proxies in conjunction with a vote
of shareholders we are required to obtain from you and from other owners
instructions on how to vote those shares. When we receive those instructions, we
will vote all of the shares we own in proportion to those instructions. This
will also include any shares we own on our own behalf. Should we determine that
we are no longer required to comply with the above, we will vote on the shares
in our own right.
LEGAL PROCEEDINGS AND OPINIONS
There are no pending material legal proceedings affecting Separate Account TM.
Legal matters in connection with the federal laws and regulations affecting the
issue and sale of the Contract described in this prospectus, as well as the
organization of the Company, its authority to issue variable annuity contracts
under Connecticut law and the validity of the forms of the variable annuity
contracts under Connecticut law, have been reviewed by the General Counsel of
the Company.
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<PAGE> 27
APPENDIX A
- --------------------------------------------------------------------------------
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
The Statement of Additional Information contains more specific information and
financial statements relating to The Travelers Insurance 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
Mixed and Shared Funding
Valuation of Assets
Telephone Transfers
Performance Information
Federal Tax Considerations
Independent Accountants
Financial Statements
- --------------------------------------------------------------------------------
Copies of the Statement of Additional Information dated , 1997 (Form No.
) are available without charge. To request a copy, please clip this
coupon on the dotted line above, enter your name and address in the spaces
provided below, and mail to: The Travelers Insurance Company, Annuity Services,
One Tower Square, Hartford, Connecticut 06183-9061.
Name:
Address:
20
<PAGE> 28
PART B
Information Required in a Statement of Additional Information
<PAGE> 29
STATEMENT OF ADDITIONAL INFORMATION
dated
______, 1997
for
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
ISSUED BY
THE TRAVELERS INSURANCE COMPANY
This Statement of Additional Information ("SAI") is not a prospectus but relates
to, and should be read in conjunction with, the Individual Variable Annuity
Contract Prospectus dated _____, 1997. A copy of the Prospectus may be obtained
by writing to The Travelers Insurance Company, Annuity Services, One Tower
Square, Hartford, Connecticut 06183-9061, or by calling (800) 842-9368.
TABLE OF CONTENTS
<TABLE>
<S> <C>
THE INSURANCE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PRINCIPAL UNDERWRITER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
DISTRIBUTION AND MANAGEMENT AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
VALUATION OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
PERFORMANCE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
TELEPHONE TRANSFERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
FEDERAL TAX CONSIDERATIONS . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
</TABLE>
<PAGE> 30
THE INSURANCE COMPANY
The Travelers Insurance Company (the "Company"), is a stock insurance
company chartered in 1864 in Connecticut and continuously engaged in the
insurance business since that time. It is licensed to conduct life insurance
business in all states of the United States, the District of Columbia, Puerto
Rico, Guam, the U.S. and British Virgin Islands and the Bahamas. The Company 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. An annual statement covering the operations of the
Company for the preceding year, as well as its financial conditions as of
December 31 of such year, must be filed with the Commissioner in a prescribed
format on or before March 1 of each year. The Company's books and assets are
subject to review or examination by the Commissioner or his agents at all times,
and a full examination of its operations is conducted at least once every four
years.
The Company is also subject to the insurance laws and regulations of all
other states in which it is licensed to operate. However, the insurance
departments of each of these states generally apply the laws of the home state
(jurisdiction of domicile) in determining the field of permissible investments.
THE SEPARATE ACCOUNT. Separate Account TM 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 TM are
subject to the provisions of Section 38a-433 of the Connecticut General
Statutes which authorizes the Connecticut Insurance Commissioner to adopt
regulations under it. Section 38a-433 contains no restrictions on the
investments of the Separate Account, and the Commissioner has adopted no
regulations under the Section that affect the Separate Account.
PRINCIPAL UNDERWRITER
Tower Square Securities, Inc. ("Tower Square"), an indirect,
wholly-owned subsidiary of the Company, serves as principal underwriter for
Separate Account TM and the Contracts. The offering is continuous. Tower
Square's principal executive offices are located at One Tower Square, Hartford,
Connecticut. It is anticipated that an affiliated broker dealer will become
the principal underwriter during 1997.
DISTRIBUTION AND MANAGEMENT AGREEMENT
Under the terms of the Distribution and Management Agreement among
Separate Account TM 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 Fund ABD.
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 Separate Account TM 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 Separate Account TM all necessary office space, facilities,
and personnel to manage its affairs.
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<PAGE> 31
VALUATION OF ASSETS
FUNDING OPTIONS: The value of the assets of each funding option is determined on
each business day 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 business day. 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 business day 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 business day
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
into 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 business day is
determined by multiplying the value on the preceding business day 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 mortality and expense risk charge
and the administrative expense charge). The gross investment rate of a funding
option is equal to (a) minus (b), divided by (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.
ACCUMULATION UNIT VALUE. The value of an accumulation unit on any business day
is determined by multiplying the value on the preceding business day by the net
investment factor for the valuation period just ended. The net investment factor
is calculated for each funding option and takes into account the investment
performance, expenses and the deduction of certain expenses.
2
<PAGE> 32
ANNUITY UNIT VALUE. An annuity unit value as of any business day is equal to (a)
the value of the annuity unit on the immediately preceding business day,
multiplied by (b) the corresponding net investment factor for the valuation
period just ended, divided by (c) the assumed net investment factor for the
valuation period. (For example, the assumed net investment factor based on an
annual assumed net investment rate of 3.0% for a Valuation Period of one day is
1.000081 and, for a period of two days, is 1.000081 x 1.000081.)
PERFORMANCE INFORMATION
From time to time, the Company may advertise several types of
historical performance for the Funding Options available under the Separate
Account. 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 returns are
computed according to a formula in which a hypothetical initial investment of
$1,000 is applied to the Funding Option, and then related to ending redeemable
values over one-, five-, and ten-year periods, or for a period covering the time
during which the Funding Option has been in existence, if less. If a Funding
Option has been in existence for less than one year, the "since inception" total
return performance quotations are year-to-date and are not average annual total
returns. 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 annual administrative charge is converted to a
percentage of assets based on the actual fee collected (or anticipated to be
collected, if a new product), divided by the average net assets for contracts
sold (or anticipated to be sold) under the Prospectus to which this Statement of
Additional Information relates. Each quotation assumes a total redemption at the
end of each period.
NON-STANDARDIZED METHOD. Non-standardized "total returns" will be
calculated in a similar manner based on the performance of the Funding Options
over a period of time, usually for the calendar year-to-date, and for the past
one-, three-, five- and ten-year periods. Non-standardized total returns will
not reflect the deduction of the annual contract administrative charge, which,
if reflected, would decrease the level of performance shown.
GENERAL. Within the guidelines prescribed by the SEC and the National
Association of Securities Dealers, Inc. ("NASD"), performance information may be
quoted numerically or may be presented in a table, graph or other illustration.
Advertisements may include data comparing performance to well-known indices of
market performance (including, but not limited to, the Dow Jones Industrial
Average, the Standard & Poor's (S&P) 500 Index and the S&P 400 Index, the Lehman
Brothers Long T-Bond Index, the Russell 1000, 2000 and 3000 Indices, the Value
Line Index, and the Morgan Stanley Capital International's EAFE Index).
Advertisements may also include published editorial comments and performance
rankings compiled by independent organizations (including, but not limited to,
Lipper Analytical Services, Inc. and Morningstar, Inc.) and publications that
monitor the performance of the Separate Account and the Underlying Funds.
3
<PAGE> 33
For Funding Options that were in existence prior to the date they
became available under the Separate Account, the standardized and
non-standardized average annual total return quotations may accompany returns
showing 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.
Average annual total returns for each of the Funding Options (excluding
Cash Income Trust) computed according to the standardized and non-standardized
methods for the period ending December 31, 1996 (beginning at inception date)
are set forth in the following table.
TOTAL RETURN CALCULATIONS
FUNDING OPTIONS OF SEPARATE ACCOUNT TM
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
STANDARDIZED NON-STANDARDIZED
INCEPTION
DATE
- ---------------------------------------------------------------------------------------------------------------------------
1-YR 5-YR 10-YR 1-YR 3-YR 5-YR 10-YR
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alliance Growth % %* % %* 6/94
Capital Appreciation % % % % % % % 5/83
Fund
Equity Income %* %* 8/96
Federated Stock %* %* 8/96
Large Cap %* %* 8/96
Lazard International Stock %* %* 8/96
MFS Emerging Growth %* %* 8/96
Federated High Yield %* %* 8/96
Putnam Diversified
Income % %* % %* 6/94
Travelers Quality Bond %* %* 8/96
MFS Total Return % %* % %* 6/94
Travelers Cash Income % % %* % % % %* 12/87
</TABLE>
* Since inception.
TELEPHONE TRANSFERS
A contract owner may place a transfer request by telephone. The telephone
transfer privilege is available automatically; no special election is necessary
for a contract owner to have this privilege. All transfers must be in accordance
with the terms of the Contract. In certain cases, the Company may allow you to
authorize your agent to make telephone transfers. Transfer instructions are
currently accepted on each Valuation Date between 9:00 a.m. and 4:00 p.m.,
Eastern time, at 1-800-842-8573. Once instructions have been accepted, they may
not be rescinded; however, new telephone instructions may be given the following
day. If the transfer instructions are not in good order, the Company will not
execute the transfer and will promptly notify the caller.
4
<PAGE> 34
The Company will make a reasonable effort to record each telephone transfer
conversation, but in the event that no recording is effective or available, the
contract owner will remain liable for each telephone transfer effected.
Additionally, the Company is not liable for acting upon instructions believed to
be genuine and in accordance with the procedures described above. As a result of
this policy, the contract owner may bear the risk of loss in the event that the
Company follows instructions that prove to be fraudulent.
FEDERAL TAX CONSIDERATIONS
The following description of the federal income tax consequences under this
Contract is not exhaustive and is not intended to cover all situations. Because
of the complexity of the law and the fact that the tax results will vary
according to the factual status of the individual involved, tax advice may be
needed by a person contemplating purchase of an annuity contract and by a
contract owner or beneficiary who may make elections under a contract. For
further information, please consult a qualified tax adviser.
MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS
Federal tax law requires that minimum annual distributions begin by April
1st of the calendar year following the calendar year in which a participant
under a qualified plan, a Section 403(b) annuity, or an IRA attains age 701/2.
Distributions must also begin or be continued according to required patterns
following the death of the contract owner or the annuitant.
NONQUALIFIED ANNUITY CONTRACTS
Individuals may purchase tax-deferred annuities without tax law funding
limits. The purchase payments receive no tax benefit, deduction or deferral, but
increases in the value of the contract are generally deferred from tax until
distribution. If a nonqualified annuity is owned by other than an individual,
however, (e.g., by a corporation), the increases in value attributable to
purchase payments made after February 28, 1986 are includable in income
annually. Furthermore, for contracts issued after April 22, 1987, all deferred
increases in value will be includable in the income of a contract owner when the
contract owner transfers the contract without adequate consideration.
If two or more annuity contracts are purchased from the same insurer within
the same calendar year, distributions from any of them will be taxed based upon
the amount of income in all of the same calendar year series of annuities. This
will generally have the effect of causing taxes to be paid sooner on the
deferred gain in the contracts.
Those receiving partial distributions made before the maturity date will
generally be taxed on an income-first basis to the extent of income in the
contract. If you are exchanging another annuity contract for this annuity,
certain pre-August 14, 1982 deposits into an annuity contract that have been
placed in the contract by means of a tax-deferred exchange under Section 1035 of
the Code may be withdrawn first without income tax liability. This information
on deposits must be provided to the Company by the other insurance company at
the time of the exchange. There is income in the contract generally to the
extent the cash value exceeds the investment in the contract. The investment in
the contract is equal to the amount of premiums paid less any amount received
previously which was excludable from gross income. Any direct or indirect
borrowing against the value of the contract or pledging of the contract as
security for a loan will be treated as a cash distribution under the tax law.
5
<PAGE> 35
The federal tax law requires that nonqualified annuity contracts meet
minimum mandatory distribution requirements upon the death of the contract
owner, including the first of joint owners. Failure to meet these requirements
will cause the surviving joint owner, or the beneficiary to lose the tax
benefits associated with annuity contracts, i.e., primarily the tax deferral
prior to distribution. The distribution required depends, among other things,
upon whether an annuity option is elected or whether the new contract owner is
the surviving spouse. Contracts will be administered by the Company in
accordance with these rules and the Company will make a notification when
payments should be commenced.
INDIVIDUAL RETIREMENT ANNUITIES
To the extent of earned income for the year and not exceeding $2,000 per
individual, an individual may make deductible contributions to an individual
retirement annuity (IRA). There are certain limits on the deductible amount
based on the adjusted gross income of the individual and spouse and based on
their participation in a retirement plan. If an individual is married and the
spouse does not have earned income, the individual may establish IRAs for the
individual and spouse. Purchase payments may then be made annually into IRAs for
both spouses in the maximum amount of 100% of earned income up to a combined
limit of $4,000.
The Code provides for the purchase of a Simplified Employee Pension (SEP)
plan. A SEP is funded through an IRA with an annual employer contribution limit
of 15% of compensation up to $30,000 for each participant.
SIMPLE Plan IRA Form
Effective January 1, 1997, employers may establish a savings incentive match
plan for employees ("SIMPLE plan") under which employees can make elective
salary reduction contributions to an IRA based on a percentage of compensation
of up to $6,000. (Alternatively, the employer can establish a SIMPLE cash or
deferred arrangement under IRS Section 401(k)). Under a SIMPLE plan IRA, the
employer must either make a matching contribution of 100% on the first 3% or 7%
contribution for all eligible employes. Early withdrawals are subject to the 10%
early withdrawal penalty generally applicable to IRAs, except that an early
withdrawal by an employee under a SIMPLE plan IRA, within the first two years of
participation, shall be subject to a 25% early withdrawal tax.
QUALIFIED PENSION AND PROFIT-SHARING PLANS
Under a qualified pension or profit-sharing plan, purchase payments made by
an employer are not currently taxable to the participant and increases in the
value of a contract are not subject to taxation until received by a participant
or beneficiary.
Distributions are taxable to the participant or beneficiary as ordinary
income in the year of receipt. Any distribution that is considered the
participant's "investment in the contract" is treated as a return of capital and
is not taxable. Certain lump-sum distributions may be eligible for special
forward averaging tax treatment for certain classes of individuals.
FEDERAL INCOME TAX WITHHOLDING
The portion of a distribution which is taxable income to the recipient will
be subject to federal income tax withholding as follows:
6
<PAGE> 36
1. ELIGIBLE ROLLOVER DISTRIBUTION FROM SECTION 403(b) PLANS OR ARRANGEMENTS OR
FROM QUALIFIED PENSION AND PROFIT-SHARING PLANS
There is a mandatory 20% tax withholding for plan distributions that are
eligible for rollover to an IRA or to another retirement plan but that are not
directly rolled over. A distribution made directly to a participant or
beneficiary may avoid this result if:
(a) a periodic settlement distribution is elected based upon a life or life
expectancy calculation, or
(b) a term-for-years settlement distribution is elected for a period of ten
years or more, payable at least annually, or
(c) a minimum required distribution as defined under the tax law is taken
after the attainment of the age of 701/2 or as otherwise required by law.
A distribution including a rollover that is not a direct rollover will be
subject to the 20% withholding, and a 10% additional tax penalty may apply to
any amount not added back in the rollover. The 20% withholding may be recovered
when the participant or Beneficiary files a personal income tax return for the
year if a rollover was completed within 60 days of receipt of the funds, except
to the extent that the participant or spousal Beneficiary is otherwise
underwithheld or short on estimated taxes for that year.
2. OTHER NON-PERIODIC DISTRIBUTIONS (FULL OR PARTIAL REDEMPTIONS)
To the extent not described as requiring 20% withholding in 1 above, the
portion of a non-periodic distribution which constitutes taxable income will be
subject to federal income tax withholding, if the aggregate distributions exceed
$200 for the year, unless the recipient elects not to have taxes withheld. If no
such election is made, 10% of the taxable distribution will be withheld as
federal income tax. Election forms will be provided at the time distributions
are requested. This form of withholding applies to all annuity programs.
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, 1997, a recipient receiving
periodic payments (e.g., monthly or annual payments under an annuity option)
which total $14,850 or less per year, will generally be exempt from periodic
withholding.
Recipients who elect not to have withholding made are liable for payment of
federal income tax on the taxable portion of the distribution. All recipients
may also be subject to penalties under the estimated tax payment rules if
withholding and estimated tax payments are not sufficient to cover tax
liabilities.
Recipients who do not provide a social security number or other taxpayer
identification number will not be permitted to elect out of withholding.
Additionally, U.S citizens residing outside of the country, or U.S. legal
residents temporarily residing outside the country, are not permitted to elect
out of withholding.
7
<PAGE> 37
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., independent accountants, 100 Pearl Street,
Hartford, Connecticut, are the independent auditors for Separate Account TM.
The services provided to Separate Account TM will include primarily the audit
of the Separate Account's financial statements. Financial statements for
Separate Account TM are not available since the Fund had no assets or activity
as of the effective date of this SAI.
The consolidated financial statements of the Travelers Insurance
Company and Subsidiaries as of December 31, 1996 and 1995, and for each of the
years in the three-year period ended December 31, 1996, have been included
herein in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, and upon the authority of said firm as experts in
accounting and auditing.
8
<PAGE> 38
STATEMENT OF ADDITIONAL INFORMATION
SEPARATE ACCOUNT TM
Individual Variable Annuity Contract issued by
The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183
L-_____S (_/97)
40
<PAGE> 39
PART C
Other Information
Item 24. Financial Statements and Exhibits
(a) The financial statements of the Registrant will not be provided
since the Registrant will have no assets as of the effective date
of the Registrant Statement.
The consolidated financial statements of The Travelers Insurance
Company and Subsidiaries and the report of Independent Accountants,
are contained in the Statement of Additional Information. The
consolidated financial statements of The Travelers Insurance
Company and Subsidiaries include:
To be filed by amendment
(b) Exhibits
1. Resolution of The Travelers Insurance Company Board of Directors
authorizing the establishment of the Registrant.
2. Not Applicable.
3(a). Form of Distribution and Management Agreement among the Registrant,
The Travelers Insurance Company and Tower Square Securities, Inc.
3(b). Form of Selling Agreement. To be filed by amendment
4. Variable Annuity Contract. To be filed by amendment
5. Application. To be filed by amendment
6(a). Charter of The Travelers Insurance Company, as amended on October
19, 1994.
6(b). By-Laws of The Travelers Insurance Company, as amended on October
20, 1994.
9. Opinion of Counsel as to the legality of securities being
registered.
10(a). Consent of KPMG Peat Marwick LLP, Independent Certified Public
Accountants. To be filed by amendment.
13. Computation of Total Return Calculations - Standardized and
Non-Standardized. To be filed by amendment.
15. Powers of Attorney authorizing Ernest J. Wright or Kathleen A.
McGah as signatory for Michael A. Carpenter, Jay S. Benet, George
C. Kokulis, Robert I. Lipp, Ian R. Stuart, Katherine M. Sullivan
and Marc P. Weill.
<PAGE> 40
Item 25. Directors and Officers of the Depositor
<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address with Insurance Company
- -------------------------- ----------------------
<S> <C>
Michael A. Carpenter* Director, Chairman of the Board
President and Chief Executive Officer
Jay S. Benet* Director and Senior Vice President
George C. Kokulis* Director and Senior Vice President
Robert I. Lipp* Director
Ian R. Stuart* Director, Senior Vice President,
Chief Financial Officer, Chief
Accounting Officer and Controller
Katherine M. Sullivan* Director and Senior Vice President
and General Counsel
Marc P. Weill** Director and Senior Vice President
Stuart Baritz** Senior Vice President
Jay S. Fishman* Senior Vice President
Elizabeth C. Georgakopoulos* Senior Vice President
Barry Jacobson* Senior Vice President
Russell H. Johnson* Senior Vice President
Warren H. May* Senior Vice President
Christine M. Modie* Senior Vice President
David A. Tyson* Senior Vice President
F. Denney Voss* Senior Vice President
Paula Burton* Vice President
William Hogan* Vice President and Actuary
Donald R. Munson, Jr.* Second Vice President
Ernest J. Wright* Vice President and Secretary
Kathleen A. McGah* Assistant Secretary and Counsel
Principal Business Address:
* The Travelers Insurance Company ** Travelers Group Inc.
One Tower Square 388 Greenwich Street
Hartford, CT 06183 New York, N.Y. 10013
</TABLE>
<PAGE> 41
Item 26. Persons Controlled by or Under Common Control with the Depositor or
Registrant
Incorporated herein by reference to Item 26 to the Registration
Statement on Form N-4, File No. 333-32589 filed July 31, 1997.
<PAGE> 42
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> 43
Item 29. Principal Underwriter
(a) Tower Square Securities, Inc.
One Tower Square
Hartford, Connecticut 06183
Tower Square Securities, Inc. also serves as principal underwriter for the
following :
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 BD for Variable Annuities
The Travelers Fund BD II for Variable Annuities
The Travelers Fund BD III for Variable Annuities
The Travelers Fund BD IV for Variable Annuities
The Travelers Fund ABD for Variable Annuities
The Travelers Fund ABD II for Variable Life Insurance
The Travelers Separate Account QP for Variable Annuities
The Travelers Separate Account PF for Variable Annuities
The Travelers Separate Account PF II for Variable Annuities
The Travelers Fund UL for Variable Life Insurance
The Travelers Fund UL II for Variable Life Insurance
The Travelers Variable Life Insurance Separate Account One
The Travelers Variable Life Insurance Separate Account Two
The Travelers Variable Life Insurance Separate Account Three
The Travelers Variable Life Insurance Separate Account Four
<TABLE>
<CAPTION>
(b) Name and Principal Positions and Offices
Business Address * With Underwriter
------------------ ----------------
<S> <C>
Russell H. Johnson Chairman of the Board Chief Executive Officer,
President and Chief Operating Officer
William F. Scully, III Member, Board of Directors,
Senior Vice President, Treasurer
and Chief Financial Officer
Cynthia P. Macdonald Vice President, Chief Compliance
Officer, and Assistant Secretary
Joanne K. Russo Member, Board of Directors
Senior Vice President
William D. Wilcox General Counsel and Secretary
Kathleen A. McGah Assistant Secretary
Jay S. Benet Member, Board of Directors
George C. Kokulis Member, Board of Directors
Warren H. May Member, Board of Directors
Donald R. Munson, Jr. Senior Vice President
Stuart L. Baritz Vice President
</TABLE>
<PAGE> 44
<TABLE>
<CAPTION>
(b) Name and Principal Positions and Offices
Business Address * With Underwriter
------------------ ----------------
<S> <C>
Michael P. Kiley Vice President
Tracey Kiff-Judson Second Vice President
Robin A. Jones Second Vice President
Whitney F. Burr Second Vice President
Marlene M. Ibsen Second Vice President
John F. Taylor Second Vice President
John J. Williams, Jr. Director and Assistant Compliance Officer
Susan M. Cursio Director and Operations Manager
Dennis D. D'Angelo Director
Thomas P. Tooley Director
Nancy S. Waldrop Assistant Treasurer
</TABLE>
* Principal business address: One Tower Square, Hartford,
Connecticut 06183
(c) Not Applicable
Item 30. Location of Accounts and Records
(1) The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
The undersigned Registrant hereby undertakes:
(a) To file a post-effective amendment to this registration statement as
frequently as is necessary to ensure that the audited financial
statements in the registration statement are never more than sixteen
months old for so long as payments under the variable annuity
contracts may be accepted;
(b) To include either (1) as part of any application to purchase a
contract offered by the prospectus, a space that an applicant can
check to request a Statement of Additional Information, or (2) a post
card or similar written communication affixed to or included in the
prospectus that the applicant can remove to send for a Statement of
Additional Information; and
(c) To deliver any Statement of Additional Information and any financial
statements required to be made available under this Form N-4 promptly
upon written or oral request.
The Company hereby represents:
(a). That the aggregate charges under the Contracts of the Registrant
described herein are reasonable in relation to the services rendered,
the expenses expected to be incurred, and the risks assumed by the
Company.
<PAGE> 45
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant has duly caused this Registration Statement to be signed
on its behalf in the City of Hartford, State of Connecticut, on November 13,
1997.
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
(Registrant)
THE TRAVELERS INSURANCE COMPANY
(Depositor)
By: *IAN R. STUART
-----------------------------------------------
Ian R. Stuart
Senior Vice President, Chief Financial Officer,
Chief Accounting Office and Controller
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 November 13, 1997.
<TABLE>
<S> <C>
*MICHAEL A. CARPENTER Director, Chairman of the Board, President
- ------------------------------------------- and Chief Executive Officer
(Michael A. Carpenter)
*JAY S. BENET Director
- -------------------------------------------
(Jay S. Benet)
*GEORGE C. KOKULIS Director
- -------------------------------------------
(George C. Kokulis
*ROBERT I. LIPP Director
- -------------------------------------------
(Robert I. Lipp)
*IAN R. STUART Director, Senior Vice President, Chief
- ------------------------------------------- Financial Officer, Chief Accounting Officer
(Ian R. Stuart) and Controller
*KATHERINE M. SULLIVAN Director, Senior Vice President and
- ------------------------------------------- General Counsel
(Katherine M. Sullivan)
*MARC P. WEILL Director
- -------------------------------------------
(Marc P. Weill)
</TABLE>
*By: Ernest J. Wright, Attorney-in-Fact
<PAGE> 46
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description Method of Filing
- ------------ ----------- ----------------
<S> <C> <C>
1 Resolution of The Travelers Insurance Company Electronically
Board of Directors authorizing the establishment
of the Registrant.
3 Form of Distribution and Management Agreement among Electronically
the Registrant, The Travelers Insurance Company and
Tower Square Securities, Inc.
3(b) Form of Selling Agreement To be filed by
amendment
4 Form of Variable Annuity Contract. To be filed by
amendment
5 Application. To be filed by
amendment
6(a) Charter of The Travelers Insurance Company, as Electronically
amended on October 19, 1994.
6(b) By-Laws of The Travelers Insurance Company, as Electronically
amended on October 20, 1994.
9 Opinion of Counsel as to the legality of securities being Electronically
registered by Registrant.
10(a) Consent of KPMG Peat Marwick LLP, Independent To be filed by
Certified Public Accountants. amendment
13 Schedule for Computation of Total Return To be filed by
Calculations - Standardized and Non-Standardized. amendment
15 Powers of Attorney authorizing Ernest J. Wright or Electronically
Kathleen A. McGah as signatory for Michael A. Carpenter,
Jay S. Benet, George C. Kokulis, Robert I. Lipp, Ian R.
Stuart, Katherine M. Sullivan and Marc P. Weill.
</TABLE>
<PAGE> 1
EXHIBIT 1
CERTIFICATE
I, ERNEST J. WRIGHT, Secretary of THE TRAVELERS INSURANCE COMPANY,
DO HEREBY CERTIFY that by unanimous consent action of the Board of Directors of
The Travelers Insurance Company effective the 22nd day of October, 1993, the
following resolutions were adopted:
VOTED: That pursuant to authority granted by Section 38a-433a of the
Connecticut General Statutes, the Chairman of the Board, the
President or Chief Investment Officer, or any one of them acting
alone, for the purpose of doing variable life insurance or variable
annuity business, is 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 are authorized to take such action as may
be necessary to register as unit investment trust investment
companies under the Investment Company Act of 1940 the separate
account or accounts to be established to hold shares of investment
companies; 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 one or more
registration statements, 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 Insurance 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 INSURANCE COMPANY at Hartford, Connecticut, this 6th day of November,
1997.
By: Ernest J. Wright
Secretary
<PAGE> 1
EXHIBIT 3a
FORM OF
DISTRIBUTION AND MANAGEMENT AGREEMENT
DISTRIBUTION AND MANAGEMENT AGREEMENT made this ___ day of _____, 1997,
by and among The Travelers Insurance 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 TM for Variable Annuities (hereinafter "Separate
Account TM"), a separate account of the Company established by its President
and Chief Executive Officer pursuant to a resolution of the Company's Board of
Directors on November 5, 1997, 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 TM.
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 TM the administrative expenses of Separate Account TM,
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
TM, 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 TM
or the Contracts with federal and 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 TM for the safekeeping of its cash,
securities and other property; and
(g) the charges and expenses of independent accountants retained by
Separate Account TM.
5. The services of the Company and Tower Square to Separate Account
TM 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 TM) and as such
<PAGE> 2
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 TM an amount per valuation period of
Separate Account TM, 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 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.
<TABLE>
<S> <C>
THE TRAVELERS INSURANCE COMPANY
(Seal)
By:
---------------------------------------------------------
Title:
------------------------------------------------------
ATTEST:
- ----------------------------
Assistant Secretary
THE TRAVELERS SEPARATE ACCOUNT TM
FOR VARIABLE ANNUITIES
By:
---------------------------------------------------------
Title:
------------------------------------------------------
WITNESS:
- ----------------------------
TOWER SQUARE SECURITIES, INC.
By:
--------------------------------------------------------
Title:
-----------------------------------------------------
ATTEST: (SEAL)
- ----------------------------
Corporate Secretary
</TABLE>
-2-
<PAGE> 1
EXHIBIT 6a
CHARTER
OF
THE TRAVELERS INSURANCE COMPANY
Hartford, Connecticut
AS EFFECTIVE
OCTOBER 19, 1994
SECTION 1. James G. Batterson, John L. Bunce, Gustavus F. Davis,
George Sexton, William L. Collins, Elijah H. Owen, James L. Howard, Charles F.
Howard, Alfred E. Burr, Henry Keeney, William H. D. Callender, George S.
Gilman, and all others who may become associated with them as shareholders, as
is hereinafter provided, their successors and assigns forever be and they
hereby are created and made a body corporate and politic by the name of The
Travelers Insurance Company and under that name shall have all the powers
specially granted to it by law and, in addition, all powers granted by the
general statutes as now enacted or hereafter amended, to corporations formed
under the Connecticut Stock Corporation Act.
SECTION 2. The business, purposes and powers of said corporation,
including all those set forth in special acts of the Connecticut General
Assembly pertaining to it, shall be:
(A) Insuring persons against the accidental loss of life, or
personal injury, sustained while traveling by railways, steamboats or
other modes of conveyance;
(B) To insure persons against and to make all and every insurance
connected with accidental loss of life or personal injury sustained by
accident of every description;
(C) To insure persons against loss of life or personal injury
resulting from any cause;
(D) To confer endowments, grant and purchase annuities upon such
conditions and for such periods of time as may be determined by said
corporation;
(E) To issue policies, stipulated to be with or without
participation in profits, and all dividends allocated to such
participating policies, which shall not be claimed and called for
within two years after the same shall have been declared, shall be
forfeited to said company;
(F) To reinsure any and all risks taken under its charter;
(G) To insure persons and corporations against loss on account of
liability to others for personal injuries, fatal or otherwise, or
injury to property connected with personal injuries, resulting from
accidental causes; and
(H) To make all investments which insurance companies are now or
hereafter may be authorized to make under the laws of this state.
SECTION 3. The capital with which the corporation shall commence
business shall be an amount not less than one hundred thousand dollars. The
authorized capital stock of the corporation shall be
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<PAGE> 2
40,000,000 shares of common capital stock of the par value of $2.50 per share.
Said corporation may from time to time increase its capital stock to an amount
not exceeding one hundred fifty million dollars by the issue of additional
shares of stock with the par value then authorized, and is authorized from time
to time to change the par value and number of shares of its issued and
outstanding capital stock, provided the par value shall be not less than Two
Dollars Fifty Cents ($2.50) for each share and the aggregate par value be not
altered by such change.
SECTION 4. The business, property and affairs of the corporation
shall be managed by the chief executive officer and his delegated officers
under the direction of the Board of Directors. The Board of Directors shall be
charged with the following responsibilities and duties: selection,
surveillance and removal of the chief executive officer and, subject to the
provisions of any applicable by-laws, other corporate officers; provision of
periodic statements to the shareholders concerning the operation and financial
status of the corporation; amendment of the charter and by-laws; authorization
or approval of major acquisitions and dispositions of assets; authorization or
approval of mergers, consolidations and reorganizations; the taking of action
with respect to the issuance, acquisition, retirement or cancellation,
redemption or determination of terms, limitations and relative rights and
preferences of the corporation's capital stock or any class thereof; the
incurrence of major corporate indebtedness; declaration of dividends with
respect to outstanding shares of the corporation's capital stock; action with
respect to the dissolution of the corporation; and such other responsibilities
and duties as may be required by law.
SECTION 5. The personal liability to the corporation or its
shareholders of a person who is or was a director of the corporation for
monetary damages for breach of duty as a director shall be limited to the
amount of the compensation received by the director for serving the corporation
during the year of the violation if such breach did not (a) involve a knowing
and culpable violation of law by the director, (b) enable the director or an
associate, as defined in subdivision (3) of Section 33-374d of the Connecticut
Stock Corporation Act as in effect on the effective date hereof or as it may be
amended from time to time, to receive an improper personal economic gain, (c)
show a lack of good faith and a conscious disregard for the duty of the
director to the corporation under circumstances in which the director was aware
that his conduct or omission created an unjustifiable risk of serious injury to
the corporation, (d) constitute a sustained and unexcused pattern of
inattention that amounted to an abdication of the director's duty to the
corporation, or (e) create liability under Section 33-321 of the Connecticut
Stock Corporation Act as in effect on the effective date hereof or as it may be
amended from time to time. This Section 5 shall not limit or preclude the
liability of a person who is or was a director for any act or omission
occurring prior to the effective date hereof on the date of filing of a
Certificate of Amendment amending the Charter of the corporation with the
Secretary of the State of the State of Connecticut. The personal liability of
a person who is or was a director to the corporation or its shareholders for
breach of duty as a director shall further be limited to the full extent
allowed by the Connecticut Stock Corporation Act as it may be amended from time
to time. Any lawful repeal or modification of this Section 5 or the adoption
of any provision inconsistent herewith by the Board of Directors and the
shareholders of the corporation shall not, with respect to a person who is or
was a director, adversely affect any limitation of liability, right or
protection existing at or prior to the effective date of such repeal,
modification or adoption of a provision inconsistent herewith.
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<PAGE> 1
EXHIBIT 6b
BY-LAWS
OF
THE TRAVELERS INSURANCE COMPANY
OCTOBER 20, 1994
ARTICLE I.
SHAREHOLDERS AND SHAREHOLDERS' MEETINGS.
SECTION 1. The annual meeting of the shareholders of The Travelers
Insurance Company shall be held at such time and place as the directors may
appoint.
SECTION 2. Special meetings of the shareholders may be held at such
time and place as may be designated in the notice thereof and may be called at
any time by the Chairman of the Board or the President or by a majority of the
directors.
SECTION 3. At each meeting of the shareholders the Chairman of the
Board, or in his absence the President, or, in the absence of both, such other
person as may be appointed by the Board of Directors, shall act as chairman of
the meeting and the Corporate Secretary shall act as clerk of the meeting, and
in his absence, an Assistant Corporate Secretary, or in the absence of the
Corporate Secretary or an Assistant Corporate Secretary, such company officer
as the Chairman may appoint shall act as clerk of the meeting.
SECTION 4(a). There shall be a minimum of three and a maximum of
twelve directorships and the number of directorships at any time within such
minimum and maximum shall be the number fixed by resolution of the Board of
Directors. At each annual meeting of the company directors shall be elected,
each to hold office until the next succeeding annual meeting of shareholders
following such election or until a successor has been elected and qualified,
except as provided hereafter. Whenever any vacancy shall occur in the Board of
Directors by death, resignation or otherwise, such vacancy may be filled by a
majority of the directors then in office whether or not they constitute a
quorum.
(b). The Board of Directors may increase the number of directorships,
within a minimum of three and a maximum of twelve, and fill any vacancy created
by reason of such increase in the number of directorships, by the concurring
vote of directors holding a majority of the directorships, which number of
directorships shall be the number prior to the vote on the increase. Directors
elected to fill such vacancies shall serve until the next annual meeting of
shareholders and until a successor has been elected and qualified.
(c). Any adult person in good standing in his/her community is
eligible to be a director of the Company.
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SECTION 5. A majority of the shares of voting capital stock
outstanding of all classes shall constitute a quorum for the transaction of
business at such meetings.
ARTICLE II.
DIRECTORS.
SECTION 1. The regular meetings of the directors shall be held at
such place and at such time as the directors may by vote designate. The
directors may authorize the Chairman of the Board or the President to change
the time of any regular meeting.
SECTION 2. Special meetings of the directors may be called at any
time by the Chairman of the Board or the President or by any three directors.
SECTION 3. Written notice by mail shall be given by the Corporate
Secretary of each regular and special meeting of the board and each committee
thereof to all directors or members of the committee, as the case may be, at
least two days before the time appointed therefor or notice to such directors
or committee members may be personally delivered or given by telegraph or
telephone not later than the day before the meeting.
SECTION 4. Not less than one-third of the board shall constitute a
quorum for the transaction of business at any meeting of the board, and at
every meeting the presiding officer shall have the right to vote, but at any
special meeting called by three directors not less than seven directors shall
constitute a quorum.
SECTION 5. The Board of Directors annually at the first meeting of
the board held after the annual election of directors or at some adjourned
meeting thereof by a majority vote of the directors present shall elect from
their own number a Chairman of the Board and may elect from their own number a
President and one or more Vice Chairmen, each to hold office for one year and
until his successor is chosen, and may at any time fill any vacancy which may
occur in said offices for the unexpired term. In the absence of the Chairman of
the Board, the President, if he is a member of the Board of Directors, shall
preside when present at all meetings of the board; in the absence of the
Chairman of the Board and the President, the Board of Directors may choose from
among their own number a Chairman or a President pro tem to preside at its
meetings. Any two or more offices may be held by the same person, except the
offices of President and Corporate Secretary.
SECTION 6. By the same vote but at any time and from time to time the
Board of Directors shall appoint a President (if not elected from their own
number) and may appoint one or more Executive Vice Presidents, Senior Vice
Presidents, a General Counsel, a Corporate Secretary, a Treasurer, an Auditor
and such other officers under appropriate titles as the board may deem
necessary for the proper conduct of the Company's business, to hold office
during the pleasure of the chief executive officer.
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<PAGE> 3
ARTICLE III.
COMMITTEES.
SECTION 1. The Board of Directors by resolution adopted by the
affirmative vote of the directors holding a majority of the directorships shall
annually appoint an Investment Committee and an Audit Committee, the members of
which may be selected from the members of the Board of Directors or otherwise,
and may from time to time appoint and prescribe the duties and authority of
other committees. Appointments to any committee may be revoked and annulled
and new appointments made by the board at any time in its discretion. The
Board of Directors may appoint from among its members two directors as
alternates to each such committee to serve in the order of their appointment
and the chairman of any committee may appoint a director as an alternate to
serve as a member of such committee in the absence or disqualification of any
committee member and any alternate appointed by the Board of Directors.
SECTION 2. The Investment Committee shall consist of not less than
three members. It shall be the duty of the Investment Committee to authorize
or approve each loan or investment transaction made by the Company and to
review the investment policy and program of the Company.
SECTION 3. Not less than two members of the Investment Committee
shall constitute a quorum for the transaction of business at any meeting of the
Committee, and at every meeting the presiding officer shall have the right to
vote.
SECTION 4. The Investment Committee may appoint from among the
officers of the Company or an affiliated company a Management Investment
Committee and assign to the Management Investment Committee, subject to such
limitations as the Investment Committee may from time to time establish, the
review and authorization of loans and investments of the Company.
ARTICLE IV.
OFFICERS.
SECTION 1. The Chairman of the Board shall be the chief executive
officer, charged with the management of the business, property and affairs of
the Company under the direction of the Board of Directors. The Board of
Directors may appoint as the chief executive officer the President or some
other officer, provided that no such appointment shall become effective unless
notice thereof is included in a notice of the meeting at which the change is
made, or such appointment was considered at a meeting of the board at which a
majority of the directors were present held at least twenty-four hours prior to
the appointment. At his discretion, the chief executive officer may act as
Chairman of any Committee of which he is a member. When present, the Chairman
of the Board shall preside at all meetings of the board. He shall be a member
ex officio of all committees, except the Audit Committee. The chief executive
officer may at any time and from time to time appoint such other officers, not
specified in or appointed
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<PAGE> 4
by the Board of Directors pursuant to Section 6 of Article II, under
appropriate titles as he may deem necessary for the proper conduct of the
Company's business to hold office during his pleasure. The chief executive
officer may at his discretion delegate such power of appointment to any of the
officers designated in Sections 5 and 6 of Article II.
SECTION 2. In the absence of the chief executive officer or his
inability to act, the Board of Directors may designate the Chairman of the
Board or the President or such other officer of the Company as it may select to
perform the duties imposed upon the chief executive officer by these by-laws.
SECTION 3. Each officer appointed by the Board of Directors shall be
subject to the direction of and shall have such authority and perform such
duties as may be assigned to him from time to time by the Board of Directors,
the chief executive officer and his delegated officers. Each officer appointed
pursuant to Section 1 of this Article IV shall be subject to the direction of
and shall have such authority and perform such duties as may be assigned to him
from time to time by the chief executive officer and his delegated officers.
SECTION 4. The compensation of all officers, agents and employees of
the Company may be fixed either by the Board of Directors, by a committee
appointed by the board for that purpose or by the chief executive officer or
other officer within the limits of authority conferred upon him by the board or
by such committee.
ARTICLE V.
CORPORATE SEAL.
The corporate seal shall hereafter, as heretofore, consist of the
corporate name in a circle enclosing the word "seal." The Corporate Secretary
shall be the keeper of the corporate seal with authority in him and in each
Department Secretary or Assistant Corporate Secretary or Assistant Department
Secretary to affix the same and attest it by his signature to all sealed
instruments.
ARTICLE VI.
AMENDMENTS.
These by-laws may be altered, repealed or amended and additional
by-laws enacted at any annual or special meeting of the shareholders provided
notice be given of the action proposed in the notice of such meeting, or by
vote of a majority of the entire Board of Directors at a meeting of said board
called for the purpose upon notice to each director of the action proposed to
be taken in regard to said by-laws, provided, however, that Article II, Section
4, and Article III, Section 3 of the by-laws shall not be amended except at a
meeting of the shareholders.
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<PAGE> 1
EXHIBIT 9
November 6, 1997
The Travelers Insurance Company
The Travelers Separate Account TM
for Variable Annuities
One Tower Square
Hartford, Connecticut 06183
Gentlemen:
With reference to the Registration Statement on Form N-4 filed by The
Travelers Insurance Company and The Travelers Separate Account TM for Variable
Annuities with the Securities and Exchange Commission covering Variable Annuity
contracts, I have examined such documents and such law as I have considered
necessary and appropriate, and on the basis of such examination, it is my
opinion that:
1. The Travelers Insurance Company is duly organized and existing
under the laws of the State of Connecticut and has been duly
authorized to do business and to issue variable annuity contracts
by the Insurance Commissioner of the State of Connecticut.
2. The Travelers Separate Account TM for Variable Annuities is a
duly authorized and validly existing separate account established
pursuant to Section 38a-433 of the Connecticut General Statutes.
3. The variable annuity contracts covered by the above Registration
Statement, and all pre-and post-effective amendments relating
thereto, will be approved and authorized by the Insurance
Commissioner of the State of Connecticut and when issued will be
valid, legal and binding obligations of The Travelers Insurance
Company and The Travelers Separate Account TM for Variable
Annuities.
I hereby consent to the filing of this opinion as an exhibit to the
above-referenced Registration Statement and to the reference to this opinion
under the caption "Legal Proceedings and Opinion" in the Prospectus
constituting a part of the Registration Statement.
Very truly yours,
By: Katherine M. Sullivan
General Counsel
The Travelers Insurance Company
<PAGE> 1
EXHIBIT 15
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, MICHAEL A. CARPENTER of Greenwich, Connecticut,
Chairman of the Board, President and Chief Executive Officer of The Travelers
Insurance Company (hereafter the "Company"), do hereby make, constitute and
appoint ERNEST J. WRIGHT, Secretary of said Company, and KATHLEEN A. McGAH,
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 and the Investment Company
Act of 1940 for The Travelers Separate Account TM for Variable Annuities, a
separate account of the Company dedicated specifically to the funding of
variable annuity contracts to be offered by said 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
November, 1997.
/s/Michael A. Carpenter
Chairman of the Board, President
and Chief Executive Officer
The Travelers Insurance Company
<PAGE> 2
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, JAY S. BENET of West Hartford, Connecticut, a director
of The Travelers Insurance Company (hereafter the "Company"), do hereby make,
constitute and appoint ERNEST J. WRIGHT, Secretary of said Company, and
KATHLEEN A. McGAH, 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 and the
Investment Company Act of 1940 for The Travelers Separate Account TM for
Variable Annuities, a separate account of the Company dedicated specifically to
the funding of variable annuity contracts to be offered by said 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
November, 1997.
/s/Jay S. Benet
Director
The Travelers Insurance Company
<PAGE> 3
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, GEORGE C. KOKULIS of Simsbury, Connecticut a director
of The Travelers Insurance Company (hereafter the "Company"), do hereby make,
constitute and appoint ERNEST J. WRIGHT, Secretary of said Company, and
KATHLEEN A. McGAH, 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 and the
Investment Company Act of 1940 for The Travelers Separate Account TM for
Variable Annuities, a separate account of the Company dedicated specifically to
the funding of variable annuity contracts to be offered by said 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
November, 1997.
/s/George C. Kokulis
Director
The Travelers Insurance Company
<PAGE> 4
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, ROBERT I. LIPP of Scarsdale, New York a director of
The Travelers Insurance Company (hereafter the "Company"), do hereby make,
constitute and appoint ERNEST J. WRIGHT, Secretary of said Company, and
KATHLEEN A. McGAH, 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 and the
Investment Company Act of 1940 for The Travelers Separate Account TM for
Variable Annuities, a separate account of the Company dedicated specifically to
the funding of variable annuity contracts to be offered by said 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
November, 1997.
/s/Robert I. Lipp
Director
The Travelers Insurance Company
<PAGE> 5
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, IAN R. STUART of East Hampton, Connecticut a director,
Senior Vice President, Chief Financial Officer, Chief Accounting Officer and
Controller of The Travelers Insurance Company (hereafter the "Company"), do
hereby make, constitute and appoint ERNEST J. WRIGHT, Secretary of said
Company, and KATHLEEN A. McGAH, 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
and the Investment Company Act of 1940 for The Travelers Separate Account TM
for Variable Annuities, a separate account of the Company dedicated
specifically to the funding of variable annuity contracts to be offered by said
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
November, 1997.
/s/Ian R. Stuart
Director, Senior Vice President
Chief Financial Officer,
Chief Accounting Officer and Controller
The Travelers Insurance Company
<PAGE> 6
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, KATHERINE M. SULLIVAN of Longmeadow, Massachusetts,
Director, Senior Vice President and General Counsel of The Travelers Insurance
Company (hereafter the "Company"), do hereby make, constitute and appoint
ERNEST J. WRIGHT, Secretary of said Company, and KATHLEEN A. McGAH, 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 and the Investment Company
Act of 1940 for The Travelers Separate Account TM for Variable Annuities, a
separate account of the Company dedicated specifically to the funding of
variable annuity contracts to be offered by said 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
November, 1997.
/s/Katherine M. Sullivan
Director, Senior Vice President
and General Counsel
The Travelers Insurance Company
<PAGE> 7
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, MARC P. WEILL of New York, New York a director of The
Travelers Insurance Company (hereafter the "Company"), do hereby make,
constitute and appoint ERNEST J. WRIGHT, Secretary of said Company, and
KATHLEEN A. McGAH, 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 and the
Investment Company Act of 1940 for The Travelers Separate Account TM for
Variable Annuities, a separate account of the Company dedicated specifically to
the funding of variable annuity contracts to be offered by said 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
November, 1997.
/s/Marc P. Weill
Director
The Travelers Insurance Company
